INDIVIDUAL CHAPTER ANNUAL TITLE ACCOUNTS AND MANAGEMENT · PDF file62 INDIVIDUAL ANNUAL ACCOUNTS AND MANAGEMENT REPORT ... donations and bequests - ... the deed of change of its corporate

CHAPTER TITLE

INDIVIDUAL ANNUAL

ACCOUNTS AND MANAGEMENT

REPORT

INDIVIDUAL ANNUAL ACCOUNTS AND MANAGEMENT REPORT62

Balance sheet at 31 December 2014(Expressed in thousands of euros)

ASSETS Notes 2014 2013

NON-CURRENT ASSETS 266,266 373,151

Intangible fixed assets 5 24,038 9,579

Patents, licences, trademarks and similar rights 167 254

Goodwill 1,415 1,415

Computer applications 3,619 2,255

Other intangible fixed assets 18,837 5,655

Property, plant and equipment 6 315 28

Technical plant and other items of property, plant and equipment 315 28

Long-term investments in companies of the group and associates 7 233,092 357,975

Equity instruments 7.1 233,092 244,194

Loans to companies 15.1 - 113,781

Temporary financial investments 53 -

Deferred tax assets 13.2 8,768 5,569

Current Assets 175,695 125,757

Trade and other receivables 46,832 92,680

Customers 8 9,301 -

Customers, companies of the group and associates 8.1 and 15.1 35,137 85,355

Sundry debtors 8 2,036 61

Current tax assets 13 - 135

Loans with Public Administrations 13 358 7,129

Short-term investments in group companies and associates 8.2 and 15.1 120,998 15,615

Other financial assets 120,998 -

Temporary financial investments 8.4 6,330 -

Loans to companies 6,330 -

Short-term accruals 394 23

Cash and other equivalent liquid assets 9 1,141 17,439

Liquid assets 1,141 17,439

Total Assets 441,961 498,908

ADVEO Group International, S.A.

INDIVIDUAL ANNUAL ACCOUNTS AND MANAGEMENT REPORT 63

Balance sheet at 31 December 2014(Expressed in thousands of euros)

EQUITY AND LIABILITIES Notes 2014 2013

Equity 97,104 141,405

Own funds 97,533 142,078

Capital 10.1 19,397 18,473

Authorised capital 19,397 18,473

Share premium 10.2 6 6

Reserves 10.3 130,980 132,074

Legal and statutory 3,695 3,695

Other reserves 127,285 128.378

Own shares and equity instruments 10.4 (1,115) (105)

Prior years' profit/(loss) 10.3 (8,369) (1,381)

Prior years' losses (8,369) (1,381)

Profit/(loss) of the fiscal year 3 (43,366) (6,988)

Adjustments for changes in value 10.5 (429) (673)

Hedging transactions (429) (673)

Non-current liabilities 34,564 44,079

Long-term provisions 11 2,324 1,734

Long-term debts 891 641

Financial lease creditors 12.2 891 -

Derivatives 12.3 - 641

Long-term debts with companies of the group and associates 12.4 and 15.1 31,349 41,704

Current liabilities 310,293 313,424

Short-term provisions 11 120 127

Short-term debts 12 141,750 110,997

Bank debt 12.1 135,747 106,935

Financial lease creditors 12.2 440 597

Derivatives 12.3 572 321

Other financial liabilities 12.2 4,991 3,144

Short-term debts with companies of the group and associates 12.4 and 15.1 107,953 155,389

Trade creditors and other payables 60,470 46,911

Suppliers, group companies and associates 12.5 and 15.1 6,054 -

Suppliers 12.5 51,125 42,196

Sundry creditors 12.5 2,200 927

Personnel (accrued wages and salaries) 12.5 186 124

Other debts with Public Administrations 13 905 3,664

Total equity and liabilities 441,961 498,908


Profits and losses account for the fiscal year ending on 31 December 2014(Expressed in thousands of euros)

CONTINUED OPERATIONS

Notes 2014 2013

Net sales figure 14.1 18,613 7,590

Dividends and interests of group companies 14.1 4,632 4,812

Provision of services to other group companies 15.1 8,138 2,778

Provision of services 5,843 -

Own work capitalised as assets 5 1,422 1,351

Supplies 14.2 (45,431) (2,725)

Financial expenses with Group companies 14.2 (5,536) (2,725)

Reduction of interest in group companies 7.1 and 11 (39,895) -

Personnel expenses 14.3 and 14.4 (4,022) (2,386)

Wages and salaries 14.3 (3,683) (2,114)

Social security contributions 14.4 (339) (272)

Other operating expenses (7,608) (2,977)

External services 14.5 (7,597) (2,977)

Taxes (11) -

Depreciation and amortisation 5 and 6 (466) (262)

Impairment and profit/(loss) on disposal of fixed assets - (1,495)

Impairment and losses - (894)

Profits/(losses) on disposal and others - (601)

Other profits/(losses) (10) -

Profit/(loss) from operations (37,502) (904)

Financial revenue 14.6 39 -

From marketable securities and other financial instruments 39 -

From third parties 39 -

Financial expenses 14.7 (9,243) (8,975)

On debts with third parties (9,243) (8,975)

Exchange differences (6) (7)

Financial profit/(loss) (9,210) (8,982)

Profit/(loss) before tax (46,712) (9,886)

Income tax 13.1 3,346 2,898

Profit/(loss) of the fiscal year from continued operations (43,366) (6,988)

Profit/(loss) of the fiscal year 3 (43,366) (6,988)


Statement of changes in equity for the fiscal year ending on 31 December 2014(Expressed in thousands of euros)

A) Statement of recognised revenue and expenses for the fiscal year ending on 31 December 2014

PROFIT/(LOSS) OF THE PROFIT AND LOSS ACCOUNT

Notes 2014 2013

INCOME AND EXPENSE RECOGNISED DIRECTLY IN EQUITY 3 (43,366) (6,988)

By cash flows hedges 10.5 390 806

Grants, donations and bequests -

Tax effect (146) (241)

Total income and expense recognised directly in equity 244 565

Total recognised revenue/expenses (43,122) (6,423)


B) Total statement of changes in equity for the fiscal year ending on 31 December 2014

Authorised capital

(Note 10.1)

Share premium

(Note 10.2)Reserves

(Note 10.3)

Own shares and equity

instruments (Note 10.4)

Profit/(loss) of the

fiscal year (Note 3)

Adjustments for changes

in value (Note 10.5) TOTAL

Balance, end of year 2012 18,473 6 138,873 (754) (1,381) (1,238) 153,979

Total recognised revenue/expenses - - - - (6,988) 565 (6,423)

Transactions with shareholders or owners

- - (6,800) 649 - - (6,151)

Distribution of dividends - - (6,995) - - - (6,995)

Transactions with shares or own equity instruments (net) - - 195 649 - - 844

Other changes in equity - - (1,381) - 1,381 - -

Appropriation of previous fiscal year profit/(loss) - - (1,381) - 1,381 - -

Balance, end of year 2013 18,473 6 130,692 (105) (6,988) (673) 141,405

Total recognised revenue/expenses - - - - (43,366) 244 (43,122)

Transactions with shareholders or owners

924 - (1,093) (1,010) - - (1,179)

Capital increases/(decreases) 924 - (924) - - - -

Distribution of dividends - - - - - - -

Transactions with shares or own equity instruments (net) - - (169) (1,010) - - (1,179)

Other changes in equity - - (6,988) - 6,988 - -

Appropriation of previous fiscal year profit/(loss) - - (6,988) - 6,988 - -

Balance, end of year 2014 19,397 6 122,611 (1,115) (43,366) (429) 97,104


Cash flow statement for the fiscal year ending on 31 December 2014(Expressed in thousands of euros)

CASH FLOWS FROM OPERATING ACTIVITIES

Notes 2014 2013

Profit/(loss) before tax of the fiscal year (46,712) (9,886)

Profit/(loss) adjustment 49,329 6,694

Depreciation and amortisation 5 and 6 465 262

Dividends and financial revenue 14.1 (4,632) (4,812)

Financial expenses 14.7 and 14.2 14,779 11,701

Impairment and losses 7 and 11 39,895 894

Own work capitalised on fixed assets 5 (1,422) (1,351)

Change in fair value of financial instruments 244 -

Changes in current capital 52,580 (53,449)

Debtors and other receivables 45,715 (90,839)

Other current assets (6,699) (7,922)

Creditors and other payables 13,459 45,312

Other current liabilities 105 -

Other cash flows from operating activities - 13,593

Income tax received/(paid) - 13,616

Other payments received/(paid) - (23)

Cash flows from operating activities 55,197 (43,048)

CASH FLOWS FROM INVESTMENT ACTIVITIES

Payments for investments (9,401) (5,675)

Intangible fixed assets (9,103) (5,671)

Property, plant and equipment (298) (4)

Divestment receipts - 3,984

Group companies and associates 7.1 - 3,984

Cash flows from investment activities (9,401) (1,691)


Cash flow statement for the fiscal year ending on 31 December 2014(Expressed in thousands of euros)

CASH FLOWS FROM FINANCING ACTIVITIES

Notes 2014 2013

Receivables and payments from equity instruments (1,010) 829

Acquisitions and disposals from own equity instruments (1,010) 829

Receivable and payments from financial liabilities instruments (61,084) 67,424

Issue 63,386 104,963

Bank debt 63,386 14,220

Debts with group companies and associates - 90,743

Repayment and amortisation of (116,942) (29,000)

Debts with group companies (82,942) -

Bank debt (34,000) (29,000)

Interest payments (7,528) (8,539)

Dividends payment and remunerations of other equity instruments - (6,995)

Dividends 10.3 - (6,995)

Cash flows from financing activities (62,094) 61,258

NET INCREASE/DECREASE OF CASH OR EQUIVALENTS (16,298) 16,519

Cash or equivalents at start of fiscal year 17,439 920

Cash or equivalents at end of fiscal year 9 1,141 17,439


1. COMPANY ACTIVITY

Adveo Group International, S.A. (hereinafter, the Company) is a limited liability company with registered address at #11 Miguel Angel street, 28010, Madrid, incorporated in 1976. On 3 July 2012, the deed of change of its corporate name from Unipapel, S.A to Adveo Group International, S.A. was executed as public document. On May 30, 2014, the address of its registered office was changed to the current one in Madrid.

The activity of the Company is: Purchase/sale, supply, import, export, and provision of services related to stationery products and supplies, computer and office supplies, school and graphic arts materials, as well as the industry and trade of paper and cardboard and its processed products, graphic arts, stationery, office supplies and any other related or similar activity.

Purchase, sale, administration, leasing, ownership or exploitation of any class of real estate or movable property and belongings of industrial and intellectual property.

These activities may also be developed totally or partially, indirectly, by the Company, through the participation in other companies with similar purpose.

In the fiscal year 2014, the Company has included within its corporate purpose the development of brokering activities, acting as a central purchasing operation for the purchase of certain goods of digital office products that are distributed by the various companies of the Group in the European Union. Also, the Company has taken control of the provision of services to suppliers of traditional products from companies in the group, centralising its billing of income by catalogues, input from marketing and other funds received from those vendors with which the Adveo Group has signed European agreements for the purchase and distribution of their goods.

For its part, the Company acts, since fiscal year 2012, as treasurer entity of the Group, and in 2013, it centralised charges for computer services that it receives from a joint venture in the United Kingdom, which are subsequently rebilled to the subsidiaries of the Group in Europe.

These changes in the activity of the Company justify the increase in turnover in the fiscal year 2014, compared to previous years, in which its activity was merely the shareholding and the management of the Group finances.

Adveo Group International, S.A. is the parent company of a group of companies that operate both at the national and

international level, which activities are realised, fundamentally, in the marketing of computer supplies, the marketing of paper and cardboard articles, as well as the marketing of school and office supplies, and in real estate activities.

During the fiscal year 2013, the corporate reorganisation process of the group was closed, leaving a single operational company in each of the countries in which the Group operates (Note 7).

The consolidated financial statements of Adveo Group International, S.A. and its subsidiaries, in accordance with the International Financial Reporting Standards adopted by the European Union, and the consolidated management report of the fiscal year 2014, which present consolidated total assets, a profit from the consolidated fiscal year and a consolidated net amount of the turnover of 545,888, 5,805 and 943,503 thousands of euros, respectively, have been formulated on 13 May 2015 after their initial formulation dated 24 March 2015 by the Board of Directors and shall be subject to the approval of the General Meeting of Shareholders.

The consolidated annual accounts of Adveo Group International, S.A. and its subsidiaries, in accordance with the International Financial Reporting Standards adopted by the European Union, and the consolidated management report of the fiscal year 2013, which present consolidated total assets, a loss from the consolidated fiscal year and a net amount of the turnover of 560,652, 6,016 and 1,069,966 thousands of euros, respectively, have been formulated on 28 March 2014 by the Board of Directors and have been approved by the Ordinary and Extraordinary General Meeting of Shareholders of the Company held on 30 May 2014, and filed with the Madrid Mercantile Register, along with the corresponding audit report.

2. BASIS FOR FINANCIAL STATEMENT SUBMISSION

Financial statements have been prepared in accordance with the General Accounting Plan approved by Royal Decree 1514/2007, issued on 16 November, which has been amended by Royal Decree 1159/2010, issued on 17 September, as well as the rest of the commercial laws in force.

Financial statements have been prepared by the Directors of the Company for their submission to the approval of the General Meeting of Shareholders. It is estimated that such statements will be approved without amendments.

ADVEO Group International, S.A.Report for the fiscal year ending on 31 December 2014


The figures included in the financial statements are expressed in thousands of euros, unless otherwise specified.

(a) True picture

The Financial statements have been prepared on the basis of the Company’s ancillary accounting records, having applied the legal provisions in force concerning accounting with the aim of showing the true picture of assets, financial situation, and profits/(losses) of the Company. The cash flow statement has been prepared in order to truthfully report the origin and use of monetary assets representative of cash and other equivalent liquid assets of the Company.

(b) Comparative information

In accordance with the commercial law and for comparison purposes, in addition to the figures for fiscal year 2014, this document includes with each of the items on the balance sheet, the profit and loss account, of the statement of changes in equity and cash flow statement, the figures corresponding to the previous fiscal year. The report also includes quantitative information of the previous fiscal year, except when an accounting rule specifically states that it is not necessary.

(c) Ongoing business principle

The Company presents at 31 December 2014 a negative working capital by the amount of 134.6 thousands of euros (2013: 187.7 million euros), primarily derived from the funding received for the acquisition of Spicers in the fiscal year 2011. It should be noted that on 31 December 2014, the entirety of this funding received outstanding by the amount of 64 million euros (Note 12.1) has been classified in the short term, since certain financial ratios stipulated in the financial agreement that was in force on 31 December 2014 were not met (Note 12.1). Nevertheless, the above-mentioned loan was repaid in its entirety on 27 January 2015 (Note 19). The cancellation of the funding active on 31 December 2014 will involve a financial expenditure of 2.7 million euros, due to the cancellation of the expenses incurred in its date by the formalisation of the debt and a financial expenditure of 0.6 million euros for the cancellation of the interest rate hedging instruments, which will be charged to the profit and loss account of the fiscal year 2015, according to the accounting regulations in force.

Simultaneously, on 27 January 2015, ADVEO GROUP INTERNATIONAL, S.A. along with several of its subsidiaries have signed a long-term syndicated financing contract, by a total amount of 115 million euros in the form of a loan (by an amount of one hundred million euros) and a commercial revolving credit (by maximum amount of 15 million euros), as indicated in Notes 12 and 19 of this report.

The funds received from the new syndicated financing loan have been assigned according to the financing contract between Adveo France (75 million euros), Adveo Germany (25 million euros) and Adveo Group International (5 million euros), by the part of the revolving credit used as at the date of preparation of these financial statements. Simultaneously, the credits that the Company maintained with Adveo France and Adveo Germany, by 75 and 25 million euros respectively, have been cancelled (Note 7.1).

Upon execution of the new syndicated financing contract, the Directors estimate that the Company and its Group will have sufficient resources to meet their payment obligations under the stipulated deadlines. In addition, the Company has the possibility of obtaining credit resources granted both by the companies of the Group and financial institutions (Notes 12 and 17.3). Moreover, the Directors estimate that, until the maturity date of the financing contract (2020), all ratios and financial levels stipulated in this contract will be fulfilled.

Therefore, the Directors consider it is feasible to comply with the payment obligations in the stipulated time limits and have prepared the financial statements in accordance with the ongoing business principle.

(d) Critical aspects on measuring and estimating uncertainty

In the preparation of financial statements of the Company, the Directors have established estimates to determine the accounting value of some of the assets, liabilities, income and expenditure and on the itemisations of contingent liabilities. These estimates were made on the basis of the best available information at the end of the fiscal year. However, given their inherent uncertainty, future events may arise that require amendments in the coming years, which would be carried out on a prospective basis.

The key assumptions about the future, as well as other relevant data on the estimate of uncertainty on the closing date of the fiscal year, which are associated with a significant risk to assume significant changes in the value of assets or liabilities in the next fiscal year, are the following:


Impairment of non-current assets Valuation of non-current assets, other than financial, requires the preparation of estimates to determine its recoverable value for the purposes of evaluating a possible impairment. To determine this recoverable value, the Directors estimate the future cash flows expected from the assets or cash-generating units of which they are part and use an appropriate discount rate to calculate the present value of those cash flows. Future cash flows depend on the compliance with the budgets of the next five fiscal years, while the discount rates depend on the type of interest of the risk premium associated with each cash-generating unit.

In the fiscal year 2014, a provision for impairment of 39,305 thousands euros on the stake held by the Company on Adveo España, S.A.U. has been endowed, since the value of the stake exceeded that of the cash flows discounted that determine the value in use of the Spanish subsidiary (Note 7.3.1).

In addition, the provision for risks and long-term costs has increased in 590 thousand euros, as a result of the losses recognised in the fiscal year 2014 by the Adveo Digital Systems Portugal Unipessoal, Lda. subsidiary. (Note 11.1).

Note 7 discusses the assumptions used to calculate the value in use of the financial holdings on the group’s company and also includes an analysis of the sensitivity to changes in the assumptions.

Deferred tax assetsDeferred tax assets are recorded for all those deductible temporary differences, tax loss carry-forwards, and tax credit carry-forwards, for which it is likely that the tax group headed by the Company has future taxable profit available which would allow the implementation of these assets. The Directors have to perform significant estimates to determine the amount of deferred tax assets that can be registered, taking into account the amounts and the dates on which future taxable profit would be obtained and the period of reversal of taxable temporary differences. The Company has recorded deferred tax assets on 31 December 2014 in the amount of 8,768 thousand euros (5,569 thousand euros on 31 December 2013) corresponding to the deductible temporary differences and the tax loss carry-forwards. Note 13 discusses the assumptions used to calculate future taxable profit that will allow the implementation of these assets.

TaxationAccording to current legislation, taxes cannot be considered definitely settled until the statements submitted have been

inspected by the tax authorities, or until the limitation period has expired. In the opinion of the Company’s Directors and tax advisers there are no contingencies that could result in a significant amount of liabilities in the event of an audit.

3. DISTRIBUTION OF PROFIT/LOSS

The proposed distribution of profit/loss for the fiscal year 2014 made by the Directors and that is expected to be approved by the General Shareholders Meeting is the following:

BASIS OF DISTRIBUTION 2014

Balance of the profit and loss account (43,366)

Total (43,366)

APPLICATION

To prior years' losses (43,366)

Total (43,366)

Limitations for the distribution of dividendsThe Company is obliged to allocate 10% of the profits of the fiscal year to the legal reserve, until it reaches, at least, 20% of the share capital. This reserve, while not exceeding the limit of 20% of the share capital, is not distributable to the shareholders (Note 10.3).

After the reserves stipulated by Law or Bylaws have been covered, dividends may only be distributed with charge to the profits of the fiscal year, or to unrestricted reserves, if the value of equity is not or, as a result of the distribution, does not turn out to be lower than share capital. For this purpose, profits charged directly in equity cannot be the subject of direct/indirect distribution. If there are losses from previous fiscal years that would make the value of equity of the Company less than the amount of share capital, the profits will go to the compensation of these losses. At the close of fiscal year 2014, the legal reserve amounted to 3,695 thousand euros, representing 19% of the share capital (2013: 3,695 thousand euros, 20% of the share capital prior to increase in 2014).

In any case, an unavailable reserve equivalent to the goodwill that is contained in the Company’s balance sheet asset must be created, earmarking for this purpose a figure of the profit that represents, at least, five percent of the amount of that goodwill. If there is no profit, or this is insufficient, reserves of free disposal shall be used. On 31 December 2014, the Company has in its assets


a goodwill by the amount of 1,415 thousand euros (Note 5), and the amount of the unavailable reserve amounts to 284 thousand euros (2013: 284 thousand euros) (Note 10.3).

3.1 Interim dividend

On 23 February 2015, the Board of Directors has agreed to make an interim dividend distribution of the fiscal year 2014 among the shareholders of Adveo Group International, S.A. at a rate of 0.14 euros gross per share, which has been paid on 23 March, 2015.

This distribution has been authorised by the lenders of the syndicated loan itemised in the Note of Subsequent Events of this report.

3.2 Capital Increase

In accordance with the agreements of the General Shareholders Meeting held on 30 May 2014, an increase in share capital with charge to voluntary reserves has been approved by the amount of 923,653.50 euros, through the issuance of 615,769 new shares with nominal value of one euro and fifty cents (€1.50) each, that have been assigned free of charge to the shareholders of the Parent Company, at a rate of one (1) new share for every twenty (20) of those currently outstanding.

After being fully subscribed, the share capital is increased by an amount of nine hundred twenty-three thousands six hundred and fifty-three euros with fifty cents (€923,653.50), through the issuance of six hundred fifteen thousand seven hundred and sixty-nine (615,769) new shares, with nominal value of one euro and fifty cents (€1.50) each, that will be allocated free of charge to the shareholders of the Company at a rate of one (1) share for every twenty (20) of those that are currently outstanding.

After the capital increase, it has been fixed in the amount of nineteen million three hundred ninety-six thousands seven hundred forty euros (€19,396,740), and it will be represented by twelve million nine hundred thirty-one thousands one hundred sixty (12,931,160) ordinary shares, by a nominal value of one euro and fifty cents ( €1.50) each, constituting the same class and series and fully paid up, and represented by annotations in account.

4. RECORDING AND VALUATION STANDARDS

The main criteria for recording and valuation used by the Company in the development of these financial statements are the following:

4.1 Intangible fixed assets

Intangible fixed assets are valued initially at their cost, either the purchase cost or the production cost.

After initial recognition, intangible fixed assets are valued at cost minus accumulated depreciation and, if appropriate, the accumulated amount of impairment corrections recorded.

For each intangible fixed asset, it is analysed and determined if its useful life is definite or indefinite.

Intangible assets that have a definite useful life are amortised systematically on a straight-line basis depending on the estimated useful lives of property and its residual value. The amortisation methods and periods applied are reviewed in each fiscal year closing and, if applicable, adjusted prospectively. At least at the end of the fiscal year, the existence of impairment signs is assessed, in which case the recoverable amounts are estimated, making the valuation corrections that apply.

Intangible assets with an indefinite useful life are not amortised and, at least annually, are subject to an analysis of its possible impairment. The consideration of indefinite useful life of these assets is reviewed annually.

Trademarks and trade namesTrademarks and trade names may be used for a period of 10 years, so they are amortised on a straight-line basis in this period.

GoodwillGoodwill is initially valued, at the time of purchase, at its own cost, this being the purchase price. Goodwill is not amortised. Instead, the cash-generating unit to which the goodwill have been assigned on the date of purchase is submitted, at least annually, to the verification of its possible impairment and, where appropriate, the impairment loss is recorded.

Impairment losses of the goodwill cannot be reversed in subsequent fiscal years.

Note 5 shows in detail the criteria used to calculate the recoverable value of goodwill.

Computer applicationsThis item includes the costs incurred in connection with computer applications developed by the Company itself, as well as the cost of those acquired from third parties. Their depreciation is carried out on a straight-line basis over its useful life estimated in 6 years, adapting the useful life of the systems to its tax depreciation.


The costs of personnel that has worked in the development of computer applications are included as their highest cost, under the heading “Own work capitalised as assets” of the profit and loss account.

Repairs that do not represent an extension of the useful life and maintenance costs are charged to the profit and loss account in the fiscal year in which they occur.

Other intangible fixed assetsThis item includes the costs incurred in connection with ongoing computer applications developed by the Company itself, as well as the cost of those acquired from third parties. On 31 December 2014, ongoing intangible fixed assets correspond mainly to investments related to the implementation of the new ERP, and other software, operational and management tools, within the Group’s organisational restructuring process.

4.2 Property, plant and equipment

Property, plant and equipment is valued initially at its cost, either the purchase price or the production cost.

After initial recognition, property, plant and equipment is valued at its cost, minus accumulated depreciation and, where appropriate, the accumulated amount of impairment corrections recorded.

Repairs that do not represent an extension of the useful life and maintenance costs are charged to the profit and loss account in the fiscal year in which they occur. Renovation, expansion and improvement costs which give rise to an increase in the productive capacity or a lengthening of the useful life of assets are embodied in the asset value as its highest value, deducting, where appropriate, the book value of the items replaced.

The depreciation of the elements of property, plant and equipment is performed, from the moment in which they are available for its commissioning, on a straight-line basis during their estimated useful life.

The annual percentage used, which is within the intervals physically accepted, is the following:

COEFFICIENT

Technical plant and other items of property, plant and equipment

10 %

In each year-end closure, the Company reviews its residual values, the useful lives and methods of depreciation of property, plant and equipment and, if applicable, they are adjusted prospectively.

At least at the close of the fiscal year, the Company evaluates if there are signs that some property, plant and equipment may be impaired. If there are signs, their recoverable amount is estimated. The recoverable amount is the highest fair value minus the costs of sale and the value in use. When the book value is higher than the recoverable amount, there is an impairment loss. The value in use is the current value of the future cash flows expected, using market interest rates without risk, adjusted for the specific risks associated with the asset.

Impairment losses and their reversal are recorded in the profit and loss account. Impairment losses are reversed when the circumstances that gave rise to them cease to exist, except those pertaining to the goodwills. Impairment reversal is limited by the book value of the asset that would appear if the corresponding impairment had not been previously recognised.

4.3 Leases

The contracts are classified as financial leases when from there economic conditions it is assumed that all risks and benefits of ownership of the asset that is the purpose of the contract are substantially transferred to the lessee. Otherwise, contracts are classified as operating leases.

Company as lesseeAssets acquired through leasing are recorded in accordance with their nature by the lower between the fair value of the asset and the current value at the beginning of the lease of the agreed minimum payments, including the purchase option, entering a financial liability by the same amount. Contingent instalments, cost of services and tax chargeable by the lessor are not included in the calculation of the agreed minimum lease payments. Payments made for the lease are distributed between the financial expenditure and the reduction in liabilities. The total financial burden of the contract is charged to the profit and loss account of the fiscal year in which it is earned using the effective interest rate method. The criteria of depreciation, impairment and removal used for any assets of this nature are also used for these assets.

Operating lease payments are recorded as expenditures in the profit and loss account when earned.

4.4 Financial assets

Classification and valuation


Loans and receivablesCredits from commercial and non-commercial operations, which include financial assets whose charges are determined or determinable, which are not traded in an active market and for which it is estimated that all the disbursement made by the Company will be recovered are recorded in this category, except, where applicable, for reasons attributable to the solvency of the debtor.

In its initial recognition in the balance sheet, they are recognised at fair value, which, unless evidence to the contrary, is the price of the transaction, which is equivalent to the fair value of the consideration given plus transaction costs that are directly attributable.

After initial recognition, these financial assets are assessed at their amortised cost.

However, the credits by commercial operations with a maturity not exceeding one year and that do not have a contractual interest rate, as well as the advances and loans to personnel, the dividends receivable and capital calls on equity instruments, whose amount is expected to be received in the short term, are assessed by their nominal value, when the effect of not updating the cash flows is not significant.

Held-to-maturity InvestmentsThey include debt securities with a fixed maturity date, with charges of determinate or determinable amount, which are traded in an active market and for which the Company has a positive intention and the financial capacity to hold them to maturity.


After initial recognition, these financial assets are assessed at their amortised cost.

Investments in the equity of companies of the group, multi-group and associatesThey include investments in the equity of businesses on which the Company has control (group companies), or joint control through statutory or contractual agreement with one or more partners (multi-group companies), or a significant influence (associates).


In the case of investments in group companies, the criteria included in the standard relating to transactions between

companies of the group (Note 4.18) and criteria to determine the cost of the combination set forth in the standard on business combinations (Note 4.17) are considered, when applicable.

When an investment begins to qualify as group company, multi-group or associate, the cost of this investment will be the book value it should have immediately prior to the company’s qualification. In its case, the prior evaluative adjustments associated with this investment recognised directly in equity, will remain in this until such investment is disposed of or impaired.

In the initial value, the amount of preferential rights of subscription and similar that have been acquired are included.

After initial recognition, these financial assets are valued at cost, minus, where appropriate, the cumulative amount of the impairment losses.

In the case of the sale of preferential subscription rights and similar or segregation of rights to exercise them, the amount of the cost of rights will decrease the book value of the respective assets.

RemovalFinancial assets are removed from the balance sheet of the Company when the contractual rights on the cash flows of the financial assets have expired or when they are transferred, provided that the risks and benefits inherent in its property are substantially transferred in that transfer.

If the Company has not substantially transferred or retained the risks and benefits of the financial asset, this is deducted when control is not retained. If the Company retains the control of the asset, it continues recognising it by the amount to which it is exposed by the changes of the transferred asset, i.e., by its continuing involvement, recognising the associated liability.

The difference between the net received consideration from the attributable transaction costs, considering any new asset obtained minus any liability assumed, and the book value of the transferred financial asset, plus any accumulated amount that has been recognised directly in equity, determines the profit or loss arising from the removal of the financial asset and is part of the profit/(loss) of the fiscal year in which it occurs.

Interests and dividends received from financial assetsInterests and dividends from financial assets accrued after the time of the acquisition are recognised as revenue in the profit and loss account (Note 4.14). Interests are recognised using the effective interest rate method and dividends are recognised when the right to receive them is declared.


For this purpose, in the initial valuation of financial assets, the amount of explicit interests accrued and not expired in the moment, as well as the amount of dividends issued by the competent body until de time of purchase, are recorded independently, on the basis of its maturity. Explicit interests are those that are obtained by applying the contractual interest rate of the financial instrument.

Also, when the dividends distributed proceed unequivocally from profits/(losses) generated prior to the date of acquisition because amounts greater than the benefits generated by the investee since the acquisition have been distributed, they are not recognised as revenue, and reduce the book value of the investment.

4.5 Impairment of financial assets

The book value of financial assets is corrected by the Company under the profit and loss account when there is objective evidence that an impairment loss has occurred.

To determine impairment losses of financial assets, the Company assesses the potential losses of both the individual assets and the groups of assets with similar risk characteristics.

Debt instrumentsThere is an impairment objective evidence in debt instruments, understood as the accounts receivable, credits and debt securities, when after their initial recognition an event occurs that involves a negative impact on their future estimated cash flows.

The Company considers as impaired assets (doubtful assets) those debt instruments for which there is objective evidence of impairment, which mainly relate to the existence of unpaid bills, defaults, refinancing, and to the existence of data demonstrating the possibility of not recovering the totality of the agreed future cash flows or that there is a delay in their collection.

In the case of the financial assets assessed at amortised cost, the amount of impairment losses is equal to the difference between their book value and the present value of future cash flows that is estimated to generate, discounting at the effective interest rate existing at the time of the initial recognition of the asset. For financial assets at variable interest rate, the effective interest rate used is that at the closing date of the financial statements. For trade and other receivables, the Company considers as doubtful assets those balances that have items overdue for more than six months for which there is no payment certainty and the balances of companies that have requested bankruptcy proceedings.

Reversal of impairment is recognised as a revenue in the profit and loss account and is limited to the book value of the financial

asset that would be recorded on the date of reversal of there had been an impairment loss.

Equity instrumentsThere is objective evidence that the equity instruments have impaired when after their initial recognition there is an event or a combination of events that entails that its book value could not be retrieved due to a significant or prolonged decline in fair value.

In the case of equity instruments assessed at cost, such as investments in the equity of companies of the group, multi-group and associates, the impairment loss is calculated as the difference between their book value and recoverable amount, which is the largest amount between fair value minus costs of sale and the current value of future cash flows arising from the investment. Unless proved otherwise, the impairment estimate takes into account the investee company’s equity, adjusted by the existing hidden capital gains on the valuation date.

Impairment losses reversal is recorded in the profit and loss account, limited by the book value that the investment would have on the reversal date if the impairment loss had not been recorded, for the investment in the equity of the companies of the group, multi-group and associates.

4.6 Financial liabilities

Classification and valuationDebits and payablesThey include financial liabilities arising from the purchase of goods and services by the Company’s traffic operations and debits by non-commercial operations that are not derivative instruments.

In their initial recognition in the balance sheet, they are recognised at fair value, which, unless proved otherwise, is the price of the transaction, which is equivalent to the fair value of the consideration received adjusted by transaction costs that are directly attributable to it.

After initial recognition, these financial liabilities are assessed by their amortised cost. Interests earned are recorded in the profit and loss account using the effective interest rate method.

However, the debts by commercial operations with a maturity not exceeding one year and that do not have a contractual interest rate, as well as the expenditures required by third parties on stakes, whose amount is expected to be paid in the short term, are assessed by their nominal value, when the effect of not updating the cash flows is not significant.


RemovalThe Company removes a financial liability when the obligation has been extinguished.

When there is an exchange of debt securities with a lender, provided that they have substantially different terms, the removal of the original financial liability is recorded and the new arising financial liability is recognised. In the same way, a new substantial modification of the current conditions of a financial liability is recorded.

The difference between the book value of the financial liability, or part of it that has been removed, including transaction costs attributable, and in which any non-cash asset transferred or liability assumed is also collected, is recognised in the profit and loss account of the fiscal year in which it occurs.

When there is an exchange of debt instruments that do not have substantially different terms, the original financial liability is not removed from the balance sheet, recording the amount of the commissions paid as an adjustment of its book value. The new amortised cost of the financial liability is determined by applying the effective interest rate, which is the one that equals the book value of the financial liability on the date of modification with the cash flows to be paid according to the new conditions.

For this purpose, it is considered that the conditions of the contracts are substantially different when the lender is the same that granted the initial loan and the current value of the cash flows of the new financial liability, including net commissions, differs in at least 10% of the current value of the cash flows outstanding from the original financial liability, both updated at the effective interest rate of the original liability.

4.7 Hedge accounting

During the fiscal years 2014 and 2013, the Company has conducted operations of cash flow hedge of loans received at variable interest rate from credit institutions to finance the acquisition of Spicers.

Only those hedging operations that efficiently remove some risk inherent to the element or position hedged during the entire foreseen hedging period are designated as hedging operations, which implies that since their hiring it is expected to act with a high degree of effectiveness (prospective effectiveness) and that there is sufficient evidence that the hedge has been effective during the life of the hedged item or position (retrospective effectiveness).

Hedging operations are documented in an appropriate manner, including the way in which their effectiveness is expected to be

achieved and measured, in accordance with the risk management policy of the Company.

To measure the effectiveness of the hedges, the Company performs tests to verify that the differences produced by changes in the value of the flows of the hedged item and its hedge are maintained within the change range of 80% and 125% over the life of the operations, thus fulfilling the forecasts established at the time of hiring.

When at some point, this relationship ceases to be met, the hedging operations cease to be treated as such and are classified to derivatives of negotiations.

For the purpose of valuation, the Company classifies the hedging operations performed as cash flow hedges because these financial instruments cover the risk exposure of the change in cash flows attributable to changes in the interest rates of loans received. To change the variable rates for fixed rates, swaps are hired. The portion of the profit or loss of the hedging instrument, which has been determined as effective hedge, is transiently recognised in equity and charged to the profit and loss account in the fiscal year(s) in which the hedged operation affects the profit/(loss).

4.8 Own shares

Own shares are recorded in equity as minus own funds when they are acquired, and no profit/(loss) is recorded in the profit and loss account by their sale or cancellation. Revenues and expenses from transactions with own shares are recorded directly in equity as reserves.

4.9 Cash and other equivalent liquid assets

This heading includes cash, bank current accounts and deposits and temporary acquisitions of assets that comply with all the following requirements:

• They are convertible into cash.

• At the time of their acquisition, maturity was not exceeding three months.

• They are not subject to a significant risk of value change.

• They are part of the normal treasury management policy of the Company.

4.10 Provisions and contingencies

Liabilities that are indeterminate with respect to the amount or the date on which they are cancelled are recognised in the balance


sheet as provisions when the Company has a current obligation (either by statutory provision, contractual provision, or by an implied or tacit obligation), arisen as a result of past events, that is unlikely to represent an outflow of resources for its liquidation and that is quantifiable.

Provisions are assessed by the current value of the best possible estimate of the amount necessary to cancel or transfer the obligation to a third party, recording the adjustments arising from the update of the provision as a financial expense as it accrues. When it comes to provisions with maturity of less than or equal to a year, and the financial impact is not significant, no discount is performed. Provisions are reviewed at the closing date of each balance sheet and are adjusted to reflect the current best estimate of the corresponding liabilities in each moment.

Compensations to be received from a third party at the time of liquidation of provisions are recognised as an asset, without reducing the amount of the provision, provided that there should be no doubt that the refund is going to be received and not exceeding the amount of the obligation recorded. When there is a legal or contractual bond of externalisation of risk, in virtue of which the Company is not obliged to respond for it, the amount of such compensation is deducted from the amount of the provision.

4.11 Income tax

The expense by income tax of the fiscal year is calculated by adding the current tax, which results from applying the corresponding tax rate to the tax base of the fiscal year minus existing discounts and bonuses, and from the changes produced during this fiscal year in assets and liabilities by deferred taxes recorded. It is recognised in the profit and loss account, except when it corresponds to transactions that are recorded directly in equity, in which case the corresponding tax is also recorded in equity, and in the initial recording of the business combinations in which it is recorded as the other assets of the acquired business.

Deferred taxes are recorded for the temporary differences existing at the date of the balance sheet between the tax base of assets and liabilities and its book values. The amount attributed to an asset for tax purposes is considered as its tax base.

The tax effect of temporary differences is included in the corresponding headings “Deferred tax assets” and “Deferred tax liabilities” of the balance sheet.

The Company recognises deferred tax liabilities for all taxable temporary differences, except, where applicable, for the exceptions provided for in the applicable regulations.

The Company recognises deferred tax assets for all deductible temporary differences, unused tax credits and tax loss carry-forwards, to the extent that it is likely that the Company has future taxable profits available that allow the implementation of these assets, except, where applicable, for the exceptions provided for in the applicable regulations.

In the case of business combinations on which deferred tax assets have not been recognised separately in the initial accounting because they did not meet the recognition criteria, deferred tax assets that are recognised within the period of assessment and that come from new information on facts and circumstances that existed on the date of purchase, will imply an adjustment to the amount of the related goodwill. After the period of assessment, or because of having origin in facts and circumstances that existed on the date of purchase, they will be recorded against profit/(loss) or, if the rule requires it, directly in equity.

On the closing date for each fiscal year, the Company evaluates the deferred tax assets and those that have not been previously recognised. On the basis of such assessment, the Company removes an asset that was previously recognised if its recovery is no longer likely, or records any deferred tax asset that was not previously recognised, provided that it is likely that the Company has future tax profits available that allow their implementation.

Deferred tax assets and liabilities are assessed at the tax rates expected at the time of their reversal, according to the regulations in force adopted, and in accordance with the way in which it is rationally expected to recover or pay the deferred tax asset or liability.

Deferred tax assets and liabilities are not discounted and are classified as non-current assets and liabilities, regardless of the expected date of realisation or settlement.

The Company pays taxes since the fiscal year 2002 under the Schedule of Consolidated Statement of Corporate Income Tax, leading, as parent Company, the group it makes up along with its subsidiaries Adveo España, S.A.U. Monte Urgull, S.L.U. The rights and obligations of subsidiaries, considered individually, with the Public Finance for the Corporate Income Tax, are recorded, as appropriate, as accounts receivable or payable with Adveo Group International, S.A., and the latter is responsible for settling the Corporate Income Tax resulting from the tax group.

4.12 Non-current assets and disposal groups held for sale

Non-current assets held for sale are those whose book value is going to be recovered basically through a sale transaction, rather


than by continuous use. To classify non-current assets or disposal groups as held for sale, they must be available, in their current conditions, for immediate disposal, subject only to the usual and customary terms of sale transactions, being equally necessary that the removal of the asset is considered highly likely.

As at 31 December 2014 and to the date of formulation of these financial statements, there are no non-current assets or disposal groups under this qualification.

4.13 Classification of assets and liabilities between current and non-current

Assets and liabilities are presented in the balance sheet classified between current and non-current. For these purposes, assets and liabilities are classified as current when they are linked to the Company´s normal operation cycle and they are expected to be sold, consumed, realised or liquidated in the course of this cycle; they are different from the previous ones and their maturity, disposal or realisation is expected to take place within a maximum period of one year; they are held for trading purposes or it is cash or other equivalent liquid assets whose use is not restricted for a period exceeding one year. Otherwise, they are classified as non-current assets or liabilities.

4.14 Income and expenses

In accordance with the accrual basis accounting, income and expenses are recognised when they occur, regardless of the date of their collection or payment.

Income earned by the Company in the concept of dividends and interests received from Group Companies and Associates are presented as part of the net amount of the sales figure in accordance with the provisions of Consultation No. 2 of the Official Bulletin of the Institute of Accounting and Audit of Accounts number 79 issued on September 30, 2009.

The income and expenses for the provision of brokerage services as central purchasing body (Notes 1 and 14.1) are presented by the gross margin obtained with these services, since the company does not assume risks and benefits inherent to these services.

4.15 Transactions in foreign currency

The functional and presentation currency of the Company is the euro.

Transactions in foreign currency are translated in their initial assessment at the exchange rate prevailing on the date of the transaction.

Monetary assets and liabilities denominated in foreign currency are translated at the exchange rate prevailing on the balance sheet date. Exchange differences, both positive and negative, that are originated in this process, as well as those that occur when those assets are liquidated, are recognised in the profit and loss account of the fiscal year in which they arise.

Non-monetary items valued at historical cost are assessed at the exchange rate of the transaction date.

4.16 Business combinations

Business combinations in which the Company acquires control of one or more businesses through the merger or division of multiple companies, or by the acquisition of all assets and liabilities of a company or a part that constitutes one or more businesses, are recorded by the method of acquisition, which entails recording, on the date of purchase, assets and liabilities assumed by their fair value, provided that it can be measured with reliability.

The difference between the cost of the business combination and the value of identifiable assets acquired minus the liabilities assumed is recorded as goodwill, if it is positive, or as a profit in the profit and loss account, if it is negative.

Business combinations for which on the closing date of the fiscal year the assessment process necessary for applying the acquisition method has not concluded are recorded using provisional values. These values must be adjusted in a maximum period of one year from the date of purchase. The adjustments that are recognised for completing the initial recording are made retroactively, so that the resulting values are those that would have initially had such information, in accordance with the comparative figures.

4.17 Transactions with related parties

Transactions with related parties are recorded in accordance with the valuation standards detailed above, except for the following transactions:

• Contributions in kind from a business to a company of the group that are assessed, in general, by the book value of the assets delivered in the consolidated financial statements on the date on which the transaction is performed.


• In merger and division transactions of a business, the items purchased are assessed, in general, by the amount that corresponds to them, once the transaction has been carried out, in the consolidated financial statements. The differences that arise are recorded in reserves.The prices of transactions with related parties are properly

supported, so that the Directors of the Company and their tax advisers consider that there are no risks that could cause significant tax liabilities.

4.18 Severance payments

In accordance with the existing labour legislation, the Company is bound to pay severances to those employees whose employment is terminated in certain conditions. Severance payments susceptible of reasonable quantification are recorded as expense in the period in which there is a valid expectation, created by the Company before the third parties involved.

5. INTANGIBLE FIXED ASSETS

The detail and movements of the items that make up the intangible fixed asset are the following:

FISCAL YEAR 2014 (thousands of euros)

Opening balance Recognitions Removals Transfers Ending balance

COST

Patents, licences, trademarks and similar rights 674 - (451) - 223

Goodwill 1,415 - - - 1,415

Computer applications 2,638 1,793 (22) - 4,409

Other intangible fixed assets 5,655 13,182 - - 18,837

Total cost 10,382 14,975 (473) - 24.884

ACCUMULATED DEPRECIATION

Patents, licences and trademarks (420) (25) 389 - (56)

Computer applications (383) (430) 23 - (790)

Total accumulated depreciation (803) (455) 411 - (846)

Net accounting value 9,579 24,038



Opening balance Recognitions Transfers Ending balance

COST

Patents, licences, trademarks and similar rights 451 47 176 674

Goodwill 1,415 - - 1,415

Computer applications 1,705 933 - 2,638

Other intangible fixed assets 1,140 4,691 (176) 5,655

Total cost 4,711 5,671 - 10,382


Patents, licences, trademarks and similar rights (394) (26) - (420)

Computer applications (151) (232) - (383)

Total accumulated depreciation (545) (258) - (803)


5.1 Description of main movements

Recognitions in fiscal years 2014 and 2013 in computer applications correspond essentially to acquisitions of computer licensing and adaptations in existing applications. Recognitions in fiscal year 2014 under Other Intangible Fixed Assets correspond mainly to development of new applications for the Adveo Group, which includes expenses of the own personnel that has worked in the development of new computer applications in the process of development by the company itself for an amount of 1,422 thousand euros (2013: 1,351 thousand euros).

During the fiscal year 2014, the investment in the new Group ERP (SAP) has been centralised in the company, so that charges have been received from companies of the Group by reallocation of software developments by 4,388 thousand euros.

5.2 Goodwill impairment test

Novaline goodwill, acquired in the fiscal year 2009, is attributed to the Distribution business of Adveo Group in Spain, included in the Subsidiary Adveo España, S.A.U. that sells articles linked to commercial rights acquired under this goodwill. Note 7 discusses the assumptions used to calculate the value in use of this financial contribution and includes an analysis of the sensitivity to changes in the assumptions.

5.3 Financial leases

The net book value of intangible assets acquired through a leasing contract as at December 31 is the following:

THOUSANDS OF EUROS 2014 2013

Computer applications – cost 1,707 1,707

Computer applications – accumulated depreciation

(487) (383)

Total 1,220 1,324


Reconciliation between the total amount of minimum future payments and their current value as at December 31 is the following:

THOUSANDS OF EUROS

2014 Minimum future payments

2014 Current value (Note 12.2)

2013 Minimum future payments

2013 Current value (Note 12.2)

Up to one year 440 440 640 597

From one to five years 980 891 - -

More than five years - - - -

Total 1,420 1,331 640 597

5.4 Other information on intangible fixed assets

(a) Goods not assigned to operation

All of the components of the intangible fixed assets in 2014 and 2013 of the Company have been assigned directly to operation.

(b) Assets assigned to guarantees and reversal

No items of intangible fixed assets are assigned to guarantees, or to reversal as at 31 December 2014 and 2013.

(c) Commitments to purchase

At the close of fiscal year 2014, there are firm commitments to purchase items for intangible fixed assets, related to the implementation of a new technological, operational and administrative platform for the whole Adveo Group, by an estimated amount of 15 million euros. In the plans of the Group, this investment is intended to be undertaken between the fiscal years 2015 and 2016 simultaneously between Adveo Group International, S.A. and its European subsidiaries. The central part of this additional investment to be assumed by the parent company of the Group amounts to approximately 3 million euros.

(d) Other substantial information

It is the policy of the Company to hire insurance policies that are considered necessary to cover the potential risks that could affect the items of intangible fixed assets in 2014 and 2013.

The Company is not involved in any litigation that may affect the assets corresponding to 2014 and 2013 described in this note.


The Company had no intangible asset in use amortised as at 31 December 2014 (283 thousand euros in 2013).

Property, plant and equipment under construction purchased to Group companies amounts to 4,388 thousand euros.

There are no items of intangible fixed assets as at 31 December 2014 and 2013 outside the Spanish territory.

6. PROPERTY, PLANT AND EQUIPMENT

The detail and movements of the item that makes up property, plant and equipment are the following:


Opening balanceAdditions and

endowments Ending balance

COST

Other fixtures, tools and furniture 53 297 350

Total cost 53 297 350


Other fixtures, tools and furniture (25) (10) (35)

Total depreciation (25) (10) (35)

Net accounting value 28 315


Opening balanceAdditions and

endowments Ending balance

COST

Other fixtures, tools and furniture 49 4 53

Total cost 49 4 53


Other fixtures, tools and furniture (21) (4) (25)

Total depreciation (21) (4) (25)

Net accounting value 28 28

6.1 Description of main movements

During the fiscal year 2014, additions for the office furniture of the new headquarters of the Company on Miguel Angel street in Madrid have been recorded.

In the fiscal year 2013, there were no significant additions, removals or transfers.


6.2 Other information on property, plant and equipment

(a) Goods not assigned to operation

All of the components of the property, plant and equipment in 2014 and 2013 of the Company have been assigned directly to operation.

(b) Assets assigned to guarantees and reversal

There are no items of property, plant and equipment that are assigned to guarantees or reversal as at 31 December 2014 and 2013

(c) Commitments to purchase

At the close of the fiscal years 2014 and 2013, there are no firm commitments to purchase significant items for property, plant and equipment.

(d) Operating leases

A real estate company outside the Group leases to the Company its central offices on Miguel Angel Street in Madrid. The contract, signed in April 2014, is valid until December 31, 2019, and then it will be automatically renewed on an annual basis, unless any of the parties disagrees with such renewal.

The cost of the contract has amounted to 136 thousand euros in the fiscal year 2014 (2013: 20 thousand euros, which corresponded to the rental of facilities of Adveo España in Tres Cantos).

Minimum future payments of the leasing contract non-payable as at December 31 are the following:


Up to one year 311 20

Total 311 20

(e) Other substantial information

It is the policy of the Company to hire insurance policies that are considered necessary to cover the potential risks that could affect the items of property, plant and equipment in 2014 and 2013.

The Company is not involved in any litigation that may affect the assets corresponding to 2014 and 2013 described in this note.

The fully amortised property, plant and equipment in use as at December 31 is:


Movable assets 3 3

Information processing equipment 3 3

Total 6 6

As at 31 December 2013, the Company did not have items of property, plant and equipment purchased from group companies.

There are no items of property, plant and equipment as at 31 December 2014 and 2013 outside the Spanish territory.


7. LONG-TERM INVESTMENTS IN COMPANIES OF THE GROUP AND ASSOCIATES

The detail and movements of the various items that make up this heading are the following:


Opening balance Mergers Recognitions Removals Ending balance

Long-term equity instruments 250,112 - 45,000 (16,797) 278,315

Long-term loans to companies (Note 15.1) 113,781 - 2,823 (116,604) -

363,893 - 47,823 (133,401) 278,315

Impairment losses (5,918) - (39,305) - (45,223)



Opening balance Mergers Recognitions Removals Ending balance

Long-term equity instruments 248,565 6,758 30,000 (35,211) 250,112

Long-term loans to companies (Note 15.1) 114,357 - 29,007 (29,583) 113,781

362,922 6,758 59,007 (64,794) 363,893

Impairment losses - (6,758) - 840 (5,918)


7.1 Description of main movements in long-term equity instruments

MOVEMENTS OF FISCAL YEAR 2014

Opening balance Recognitions Dividends received Removals Ending balance

Adveo Belgium N.V. 17,245 - - - 17,245

Adveo France, S.A.S. 51,020 - - - 51,020

ADVEO España, S.A.U. 93,156 45,000 (16,797) - 121,359

Monte Urgull, S.L.U. 41,097 - - - 41,097

Adveo Deutschland, GmbH 11,863 - - - 11,863

Adveo Adm. y Servicios, S.L.U. 28,269 - - - 28,269

Adveo International pro, S.A. 6,228 - - - 6,228

ADVEO Italy, S.r.l. 1,229 - - - 1,229

ADVEO Digital Systems Portugal. Lda 5 - - - 5

Total 250,112 45,000 (16,797) - 278,315

Impairment losses

Adveo International pro, S.A. (5,913) - - - (5,913)

ADVEO España, S.A.U. - (39,305) - - (39,305)

ADVEO Digital Systems Portugal. Lda (5) - - - (5)

(5,918) (39,305) - - (45,223)

Net book value 244,194 233,092


The total distribution of the Voluntary Reserves Account of Adveo España, S.A.U. has been approved on 16 December 2014 in the amount of 16,796 thousand euros in favour of its sole shareholder. According to the accounting regulations in force, this dividend has been considered as lowest value of the stake since it corresponds to returns of the initial inputs in Adveo España and its merging companies within the processes of corporate reorganisation carried out by the Group.

This amount is recorded as active dividend receivable from companies of the Group.

Simultaneously, ADVEO GROUP INTERNATIONAL, S.A., has contributed a loan right due and claimable against ADVEO ESPAÑA, S.A.U., which originated from various commercial transactions by which ADVEO GROUP INTERNATIONAL, S.A. has been providing funding in favour of Adveo España, S.A.U. for the performance of its activity, by an amount of 45,000 thousand euros, in accordance with the following details:

• ADVEO GROUP INTERNATIONAL, S.A. contributes a loan of 33,965 thousand euros for the compensation of losses in previous fiscal years according to the balance sheet closed of Adveo España, S.A.U. on 31 December 2013.

• ADVEO GROUP INTERNATIONAL, S.A. contributes a loan of 11,035 thousand euros (the amount remaining to reach 45 million euros) in concept of non-refundable contribution of partners, without involving an increase in share capital, with the aim of increasing the assets and financial solidity of Adveo España, S.A.U., and in anticipation of the coverage of possible losses in which this subsidiary may incur in the future. This amount has diminished the current financial account that

the Company maintains with Adveo España, S.A.U. as indicated in Note 8.

Cancellation of loans to companies of the Group correspond to the short-term reclassification of loans granted to Adveo France S.A.S (87,597 thousand euros) and Adveo Alemania GmbH (29,007 thousand euros), as a result of the renegotiation of the financial debt of the Adveo Group, so that in January 2015 the positions between companies have been cancelled, being replaced by bank financing in the subsidiaries of France (75 million euros) and Germany (25 million euros), as indicated in Note 12.

In both cases, the debtor loan position that existed against Adveo France and Adveo Germany has been offset with the financial debts in current account with both subsidiaries, so that as at 31 December 2014 there is a short-term creditor financial position of 36,107 thousand euros with France and a short-term debtor financial position 18,685 thousand euros with Germany, as indicated in Note 15.1 of the Report.


MOVEMENTS OF FISCAL YEAR 2013

Opening balanceRecognitions and removals

Mergers / Divisions – Spicers

España, SL

Mergers / Divisions – Adveo

España, SA Ending balance

Adveo Belgium N.V. 17,245 - - - 17,245

Adveo France, S.A.S. - 28,773 - 22,247 51,020

ADVEO España, S.A.U. 79,362 - 2,774 11,020 93,156

Monte Urgull, S.L.U. 41,097 - - - 41,097

Adveo Deutschland, GmbH - - - 11,863 11,863

Adveo Administración y Servicios, S.L.U. 30,985 - (2,774) 58 28,269

Adveo International pro, S.A. - - - 6,228 6,228

ADVEO Italy, S.r.l. - - - 1,229 1,229

ADVEO Portugal. Lda - - - 5 5

Spicers Germany, GmbH 33,984 (33,984) - - -

Adveo Digital Systems, S.A.U. 45,892 - - (45,892) -

Total 248,565 (5,211) - 6,758 250,112

Impairment losses

Adveo International pro, S.A. - - - (5,913) (5,913)

ADVEO Italy, S.r.l. - 840 - (840) -

ADVEO Portugal. Lda - - - (5) (5)

- 840 - (6,758) (5,918)


Mergers / Divisions - ItalyOn 28 February 2013, the Company Adveo Administración y Servicios, S.L.U. transferred the assets and liabilities of its subsidiary in Italy at their book value as at 31 December 2012 to the Company of the Group Adimpo Italia, S.R.L., which has taken those assets and liabilities through the capital increase by contribution of assets in kind. This capital increase was entirely subscribed by Adveo Administración y Servicios, S.L.U., who obtained a 95% interest of Adimpo Italia, S.R.L shares. Simultaneously, the company Adimpo Italia, S.R.L. and the aforementioned subsidiary in Italy of Spicers Administración y Servicios, S.L.U. merged under the name Adveo Italy, S.R.L. This partial division and simultaneous merger has not meant any effect in the assessment of the investment in Adveo Administración y Servicios, S.L.U. by Adveo Group International, S.A.

After this transaction in the fiscal year 2013, a value adjustment was released in 840 thousand euros, recorded in previous fiscal years on this investment when considering that the recoverable value as at 31 December 2013 (and that remains unchanged in 2014)

is higher than its net book value. The corresponding revenue was recorded in 2013 as part of the “fixed assets impairment losses” of the profit and loss account.

Mergers / Divisions – Spicers España, S.L.U.Also, the partial division of Adveo Administración y Servicios, S.L.U. was performed on 30 December 2013 and it consisted in the block transfer by universal succession of the distribution economic unit of Spain, carried out through the Company Spicers España, S.L.U., to the recipient company Adveo España, S.A.U. As a result of this transaction, Adveo España increased its reserves in the amount of 2,744 thousand euros, corresponding to the value of the economic unit that is transferred, and Adveo Administración y Servicios, S.L.U. reduced its Equity by that same amount.

Mergers / Divisions – Adveo España, S.A.U.Also on 30 December 2013, the companies Adveo España, S.A.U, Adveo Digital Systems España, S.A.U. and Spicers España, S.L.U. became merged, under the name of Adveo España, S.A.U., as a


result of the division transaction of Adveo Digital Systems España, S.A.U. and the takeover of Spicers España, S.L.U., the first of them retaining the business units of distribution of office and digital products in Spain. As a result of this division transaction, Adveo Group International, S.A. was the recipient of the stakes in the group companies that were held by Adveo Digital Systems España, S.A.U. Therefore, the stake held by Adveo Group International, S.A. in Adveo Digital Systems España, S.A.U. by an amount of 45,892 thousand euros was removed, and the stakes in 100% of the share capital of Adveo France, S.A.S. by an amount of 22,247 thousand euros, in Adveo Deutschland GmbH by an amount of 11,863 thousand euros, in Adveo Italy, S.A.R.L. by an amount of 1,229 thousand euros, in Adimpo International pro, S.A. by an amount of 6,228 thousand euros and in Adveo Digital Systems Portugal Unipessoal, Lda by an amount of 5 thousand euros were recognised. The stakes in the companies Adveo Italy, S.A.R.L., Adimpo International Pro, S.A. and Adveo Digital Systems Unipessoal Portugal, Lda had recorded value adjustments indicated in the chart above which, due to the merger, have also been transferred to Adveo Group International, S.A. Additionally, the stake value in Adveo España, S.A.U has increased in 11,020 thousand euros, corresponding to the value of the business of distribution of computer products transferred from Adveo Digital Systems España, S.A.U. to Adveo España, S.A.U.

Adveo France, S.A.S. On 23 December 2013, the company Adveo France, S.A.S. increased its capital in 30,000 thousand euros by compensation of credits that were signed by Adveo Group International, S.A., increasing their stake value and simultaneously reducing the long-term loan granted to this company after having sold the shares of Spicers France, S.A.S in 2012.

During the fiscal year 2013, a reduction of investment in this company has been also recorded by an amount of 1,226 thousand euros, corresponding to an adjustment of the purchase price.

Removals – sale of Spicers Germany, GmbHOn 1 November 2013, the companies Adimpo Germany, GmbH. and Spicers Germany GmbH were merged under the name of Adveo Germany GmbH, after Adimpo Germany, GmbH purchased the interest held by Adveo Group International, S.A on Spicers Germany, GmbH. The shares of Spicers Germany, GmbH. have been transferred in this transaction.

The price of sale has been formalised in a long-term loan granted by Adveo Group International, S.A. to Adveo Germany, GmbH with a depreciation term to be agreed upon between the

parties, in accordance with the liquidity and profits/(losses) of Adveo Deutschland, GmbH. As at 31 December 2013, the company shall not claim any amount as loan repayment until at least 31 December 2014; therefore, the whole loan has been classified in the long-term. The interest rate is the Euribor to 1 month plus a differential of 3.5%, in line with the market interest. The interests accrued are paid annually. The total amount of interest charged to the profit and loss account for the loan in the fiscal year 2013 has been 422 thousand euros.


7.2 Organisational chart of companies headed by Adveo Group International, S.A.

The organisational chart of the Adveo Group at the close of the fiscal year 2014 is the following:

* Company in liquidation** Joint Venture

The organisational chart of the Adveo Group at the close of the fiscal year 2013 was the following:

ADVEO GROUP INTERNATIONAL, S.A.

ADVEO ESPANA,

S.A.

MONTE URGULL

S.L.U.

ADIMPO INTNAL. Swiitz*

ADVEO DIG. SYSTEMS

PORT. Ltda.

ADVEO FRANCE

S.A.S.

ADVEO DEUTSCH.

GmbHADVEO ADMIN. &

SERVICIOS S.L.ADVEO

BELGIUM N.V.

100% 100% 100% 100% 100% 100%

5%

100% 100%

ADVEO ITALIA Srl

ADVEO NETHERL.

100%95% 50%

100% 10%

90%

93.5%

UNIPAPER ANDORRA S.A. CARIP

SAS

SCI AQUIT.

MIDI PYR. SAS

Venture Connect Ltd **


ADVEO ESPANA,

S.A.

MONTE URGULL

S.L.U.


ADVEO DIG. SYSTEMS

PORT. Ltda.

ADVEO FRANCE

S.A.S.

ADVEO DEUTSCH.

GmbHADVEO ADMIN. &

SERVICIOS S.L.ADVEO

BELGIUM N.V.

100% 100% 100% 100% 100% 100%

5%

100% 100%

ADVEO ITALIA Srl

ADVEO NETHERL.

100%95% 50%

100% 10%

90%

93.5%UNIPAPER

ANDORRA S.A. CARIP SAS

SCI AQUIT.

MIDI PYR. SAS

Newincco 1136 Ltd

95%UNIDEX SARL

(Morocco)

99.9%UNIESPA S.A.

(Portugal)

100%UNIPAPEL FRANCE

SARL

ENVEL OFFSET S.A. (France)

PRO GROUP100%


7.3 Information on group companies

The information relating to the stakes in group companies, both direct and indirect (2014: approximately 99% of the total cost at group level, the same as at the close of 2013), is as follows:

a) Group companies - direct shareholdings

2014

Name Address Activity % of StakeNet book value of

the stake Share Capital ReservesProfit/(loss) of the Fiscal Year Share premium

Prior years' profit/(loss)

Total Own Funds

Profit/(loss) from Operations Dividends paid

Monte Urgull, S.L.U.Avda. Artesanos, 28; 28760 Tres Cantos (Madrid)

Real estate and holding and management of securities, shares, etc. 100% 41,097 40,260 3,901 561 - 575 45,296 22 -

Adveo EspañaAvda. Artesanos, 28; 28760 Tres Cantos (Madrid)

Manufacturing and marketing of paper and cardboard articles for mailing, processed paper products for school use and file and office items; and management and holdings in foreign companies

100% 82,054 12,562 47,512 (9,044) 63,500 (33,965) 80,565 (6,768) 16,797

Adveo Administración y Servicios, S.L.

Avda. Artesanos, 28; 28760 Tres Cantos (Madrid)

Purchase and sale of stationery and office products, office supplies, office materials, office furniture, office electronic supplies and computer consumables.

100% 28,270 2,029 - 181 17,825 7,488 27,523 -

Adveo Deutschland, GMBH

Schlagwiesen 1 - 90610 Winkelhaid-Nuremberg, Germany.

Purchase and sale of all kind of office supplies, stationery, office materials, office electronic supplies and computer consumables.

100% 11,863 50 - 3,644 12,271 3,836 19,801 4,507 -

Adveo Belgium, N.V. Europalaan 69, Deinze B-9800, Belgium


100% 17,245 781 4,988 1,674 - - 7,443 2,610 -

Adveo Italy, S.r.l.Via dell´ industria, 31 – 29015 Castel San Giovani (PC) - Italy


5% 1,229 200 10,985 3,597 74 14,856 5,299

Adveo International Pro Chemin de Valmont 216-224, Nyon (Switzerland) Marketing of computer consumables 100% 315 130 171 - - (5) 296 - -

Adveo Digital Systems Unipessoal, Lda.

Quinta da Fonte, Rua Dos Malhoes. Edificio Pedro I. Paso de Arcos (Portugal)

Marketing of computer consumables 100% - 5 158 (590) - (1,884) (2,311) (576) -

Adveo France SAS

Allée des Impressionnistes 47, Roissy Charles de Gaulle, C.P. 93420 – Villepinte Paris, France.


100% 51,020 62,303 769 9,746 - 19,690 92,509 19,303 -

Total 233,093 118,320 64,484 9,769 93,596 (4,191) 285,978 24,397 16,797


7.3 Information on group companies

The information relating to the stakes in group companies, both direct and indirect (2014: approximately 99% of the total cost at group level, the same as at the close of 2013), is as follows:

a) Group companies - direct shareholdings

2014




Total Own Funds



Real estate and holding and management of securities, shares, etc. 100% 41,097 40,260 3,901 561 - 575 45,296 22 -



100% 82,054 12,562 47,512 (9,044) 63,500 (33,965) 80,565 (6,768) 16,797




100% 28,270 2,029 - 181 17,825 7,488 27,523 -




100% 11,863 50 - 3,644 12,271 3,836 19,801 4,507 -



100% 17,245 781 4,988 1,674 - - 7,443 2,610 -



5% 1,229 200 10,985 3,597 74 14,856 5,299

Adveo International Pro Chemin de Valmont 216-224, Nyon (Switzerland) Marketing of computer consumables 100% 315 130 171 - - (5) 296 - -




Adveo France SAS



100% 51,020 62,303 769 9,746 - 19,690 92,509 19,303 -

Total 233,093 118,320 64,484 9,769 93,596 (4,191) 285,978 24,397 16,797


2013




Total Own Funds



Real estate and holding and management of securities, shares, etc. 100% 41,096 40,260 3,901 862 0 0 45,023 (195) -



100% 93,156 12,562 19,309 (24,552) 63,500 (9,412) 61,407 (8,012) -




100% 28,267 2,029 - 4,053 17,808 1,847 25,737 4,750 -




100% 11,864 50 - 3,836 12,271 - 16,157 4,125 -



100% 17,244 781 3,121 1,867 - - 5,769 2,902 -



5% 1,229 200 10,063 1,351 - (355) 11,259 2,692 -

Adveo International Pro Chemin de Valmont 216-224, Nyon (Switzerland) Marketing of computer consumables 100% 316 130 171 (11) - 17 307 (11) -




Adveo France SAS



100% 51,022 62,303 468 9,980 - 10,231 82,982 21,713 -

Total 244,194 118,320 37,191 (3,341) 93,579 1,157 246,907 27,256 -


2013




Total Own Funds



Real estate and holding and management of securities, shares, etc. 100% 41,096 40,260 3,901 862 0 0 45,023 (195) -



100% 93,156 12,562 19,309 (24,552) 63,500 (9,412) 61,407 (8,012) -




100% 28,267 2,029 - 4,053 17,808 1,847 25,737 4,750 -




100% 11,864 50 - 3,836 12,271 - 16,157 4,125 -



100% 17,244 781 3,121 1,867 - - 5,769 2,902 -



5% 1,229 200 10,063 1,351 - (355) 11,259 2,692 -

Adveo International Pro Chemin de Valmont 216-224, Nyon (Switzerland) Marketing of computer consumables 100% 316 130 171 (11) - 17 307 (11) -




Adveo France SAS



100% 51,022 62,303 468 9,980 - 10,231 82,982 21,713 -

Total 244,194 118,320 37,191 (3,341) 93,579 1,157 246,907 27,256 -


b) Group companies - indirect shareholdings

2014

Name Address Activity % of Stake Share Capital ReservesProfit/(loss) of

the fiscal year Share premiumPrior years'

profit/(loss)Shareholder

contributionsTotal Own

FundsProfit/(loss) from

OperationsDividends

paid

Unipaper Andorra, S.A. (Unipaper)

Avda. dÉnclar, 26; Sta. Coloma (Principat dÁndorra)

Marketing of various products 93.50% 96 298 (37) 0 (230) 127 (36)

Carip, S.A.S.

Allée des Impressionnis-tes 47, Roissy Charles de Gaulle, C.P. 93420 – Villepinte Paris, France

Wholesale and retail of all kinds of office supplies, stationery, office materials, office electronic supplies and computer consumables.

100% 228 23 1077 0 6708 - (8,036) 1482

SCI Aquitane Midi Pyrenees, S.A.S.


Management of the real estate of the Group in France 100% 2 0 175 0 607 - 784 174

Adveo Nederland, B.V.Splijtbakweg, 17, Almere-Buiten 1333 HC, Netherlands.


100% 68 1,170 303 412 0 - 1,953 393

2013






OperationsDividends

paid


Avda. dÉnclar, 26; Sta. Coloma (Principat dÁndorra) Marketing of various products 93.50% 96 298 (37) 0 (230) 127 (36)

Uniespa-Companhia espanhola de Papelearia e Artes Graficas, S.A. (Uniespa)

Avda. Almirante Gago Coutinho 68-A; Lisboa (Portugal) Marketing of various products 100% 150 348 (147) (995) 239 (405) (148)

Unipapel France, S.A.R.L. Avenue Víctor Hugo,11, Paris (France) Marketing of various products 100% 2,734 (4) (1,069) - 1,661 0

Unidex, S.A.R.L. Rue Pasquier, 17, Casablanca (Morocco) Marketing of various products 95% 2,000 16,276 4,458 - 22,734 4,452

EnvelÓffset, S.A.Parc dáctivité du Moulin, 19-21 ; Route de Pontault – CD21, 77680 Roissy en Brie (France)

Purchase, sale and printing of all kinds of mailing supplies 100% 358 36 (405) (391) - (402) (375)

Carip, S.A.S.Allée des Impressionnistes 47, Roissy Charles de Gaulle, C.P. 93420 – Villepinte Paris, France


100% 228 23 1077 0 6708 - (8,036) 1482


Allée des Impressionnistes 47, Roissy Charles de Gaulle, C.P. 93420 – Villepinte Paris, France


Adveo Nederland, B.V. Splijtbakweg, 17, Almere-Buiten 1333 HC, Netherlands.


100% 68 1,170 303 412 0 - 1,953 393

PRO Group, N.V. Europalaan, 69 Deinze B-9800, Belgium

Management of the real estate of the Group in Netherlands and Belgium. 100% 62 (30) (5) 0 0 - 26 (5)


b) Group companies - indirect shareholdings

2014






OperationsDividends

paid


Avda. dÉnclar, 26; Sta. Coloma (Principat dÁndorra)

Marketing of various products 93.50% 96 298 (37) 0 (230) 127 (36)

Carip, S.A.S.



100% 228 23 1077 0 6708 - (8,036) 1482




Adveo Nederland, B.V.Splijtbakweg, 17, Almere-Buiten 1333 HC, Netherlands.


100% 68 1,170 303 412 0 - 1,953 393

2013






OperationsDividends

paid


Avda. dÉnclar, 26; Sta. Coloma (Principat dÁndorra) Marketing of various products 93.50% 96 298 (37) 0 (230) 127 (36)

Uniespa-Companhia espanhola de Papelearia e Artes Graficas, S.A. (Uniespa)

Avda. Almirante Gago Coutinho 68-A; Lisboa (Portugal) Marketing of various products 100% 150 348 (147) (995) 239 (405) (148)

Unipapel France, S.A.R.L. Avenue Víctor Hugo,11, Paris (France) Marketing of various products 100% 2,734 (4) (1,069) - 1,661 0

Unidex, S.A.R.L. Rue Pasquier, 17, Casablanca (Morocco) Marketing of various products 95% 2,000 16,276 4,458 - 22,734 4,452

EnvelÓffset, S.A.Parc dáctivité du Moulin, 19-21 ; Route de Pontault – CD21, 77680 Roissy en Brie (France)

Purchase, sale and printing of all kinds of mailing supplies 100% 358 36 (405) (391) - (402) (375)

Carip, S.A.S.Allée des Impressionnistes 47, Roissy Charles de Gaulle, C.P. 93420 – Villepinte Paris, France


100% 228 23 1077 0 6708 - (8,036) 1482


Allée des Impressionnistes 47, Roissy Charles de Gaulle, C.P. 93420 – Villepinte Paris, France


Adveo Nederland, B.V. Splijtbakweg, 17, Almere-Buiten 1333 HC, Netherlands.


100% 68 1,170 303 412 0 - 1,953 393

PRO Group, N.V. Europalaan, 69 Deinze B-9800, Belgium

Management of the real estate of the Group in Netherlands and Belgium. 100% 62 (30) (5) 0 0 - 26 (5)


c) Associates - indirect shareholdings

THOUSANDS OF EUROS 2014

Name Address Activity% of

StakeShare

Capital Reserves


Fiscal YearTotal Own

Funds

Profit/(loss) from Operations

Dividends paid

Venture Connect, Ltd

Sawston, Cambridge CB22.3JG; United Kingdom

Information technology support Group Spicers UK and Adveo Continental

50% - 84 222 306 272 -


Name Address Activity% of

StakeShare

Capital Reserves


Fiscal YearTotal Own

Funds

Profit/(loss) from Operations

Dividends paid

Venture Connect, Ltd

Sawston, Cambridge CB22.3JG; United Kingdom

Information technology support Group Spicers UK and Adveo Continental

50% - 84 222 306 272 -

None of the companies of the group and associates above are listed on the stock exchange.

Profits/(losses) of the companies of the group and associates listed in the preceding tables correspond in their entirety to continuous operations.

7.3 Impairment tests

7.3.1 Investment in Adveo España, S.A.U.

Adveo España, S.A.U. has had a few after-tax losses in the fiscal year 2014 by 9,045 thousand euros (2013: 24,552 thousand euros), mainly due to the drop in sales of digital business and the internal reorganisation and restructuring process of the company after the sale of the transformation business and the change in computer systems; this latter aspect has hampered the normal course of operations of the Company.

After this sale, Adveo España, S.A.U. has kept the business of distribution of traditional office and computer products, whose net loss of taxes in the fiscal year 2014 has amounted to 8,374 thousand euros (2013: 9,041 thousand euros).

On the basis of these profits/(losses), the possibility that the book value of the investment in Adveo España, that after the dividend received and the contributions listed on Note 7.1. amounts to 121,359 thousand euros, is not recoverable has

been analysed. To do this, the Directors of the Company have estimated the recoverable amount of the investment from the value in use of the distribution business indicated above.

On the basis of the estimation of this recoverable value, it has been considered necessary to record a value adjustment by amount of 39,305 thousand euros on this investment.

To estimate the value in use of the distribution business, cash flow projections have been used. These projections are based on the Strategic Plan approved by the Board of Directors of Adveo Group International, S.A. for the next 5 years (2015-2019). The discount rate applied to the cash flow projections is 8.56% (2013: 10.23%), and the cash flows beyond the 5-year period are extrapolated using a growth rate of 1% (2013: 1.0%).

The growth rates for the turnover range from 5% for the fiscal year 2015 to an average of 17% for the fiscal years 2016-2019, while the average growth of the operation profit/(loss) for the entire projected period is around a mean of +125%, considering that the starting point are operating losses of approximately 5.5 million euros at the end of fiscal year 2014.

The risk rates used are of 2.75% (Risk free asset) and 6% (Risk Premium) respectively, with a Beta of 1.3, considering the average risk of the business in Spain, while the average cost of borrowed funds has been estimated at 2.40% on the basis of the funding contracts existing at present.


Sensitivity to changes in variables On the basis of the impairment test performed, the company has estimated a recoverable value lower than 39,305 thousand euros at the net book value of the financial investment. This amount has been provisioned in the financial statements as at 31 December 2014.

The key variables used in the impairment test are the long-term growth rates and the cash flow discount rates. The effect on the estimate of the value in use of a change in these variables, by themselves, is summarised in the following table:

THOUSANDS OF EUROS

Effect on impairment valuation

Estimates 2014 Range used Range - Range +

Long-term growth rates (-0.25%/ +0.25%) 2,506 (2,735)

Discount rate(-0.5%/ +0.5%)

(7,206) 6,381

7.3.2 Other financial investmentsThe main assumptions used to estimate the current value of cash flows resulting from the investment in the rest of the Group companies are the following, which are based on the strategic plan of the Company.

• Discount rate after taxes: France (9.20%), Germany (8.06%), Italy (11.19%) and Benelux (10.43%). The discount rates used for the fiscal year 2013 were: France (9.76%), Germany (8.77%), Italy (8.80%) and Benelux (10.03%).

• A 5-year projection period has been considered based on the strategic plan of the Group adopted by the Board of Directors (2015-2019).

• For the cash flows relating to subsequent periods a growth rate of 1% in nominal terms has been considered.Based on the impairment test performed, the company has not

considered it necessary to record provisions for impairment on these shares.

7.4 Compliance with the provisions of section 155 of the Law on Corporations

All companies with direct or indirect participation of more than 10% are aware of this situation, as it has been expressly notified to them by Adveo Group International, S.A.

7.5 Other relevant information about investments in the equity of group companies

On 29 December 2011 Adveo Group International, S.A. signed a contract of guarantee with eight financial institutions that granted the syndicated loan for the acquisition of Spicers.

The guarantee companies of these loan contract are the following: Adveo España, S.A.U; Monte Urgull, S.L., and Adveo Italy, S.r.l. During the fiscal year 2013, Adveo France, S.A.S. and Adveo Deutschland GmbH were incorporated as guarantee companies. Guarantees relating to this loan are the usual on the market for a loan with these characteristics.

These guarantees expired after the cancellation of the syndicated loan on 27 January 2015.

In the formalisation of the new contract of syndicated financing for the Adveo Group, a guarantee contract has been signed with the following Group entities: Adveo Deutschland GmbH, Adveo France SAS, Adveo Italy, S.r.l. Adveo España, S.A.U., Monte Urgull, S.L.U, Adveo Digital Systems Portugal Unipessoal, Lda, being the accredited entities Adveo Deutschland GmbH, Adveo France SAS and Adveo Group International, S.A. itself.

8. FINANCIAL ASSETS

On 31 December 2014 and 2013, all financial assets, with the exception of long-term investments in companies of the group and associates (Note 7), correspond to short-term loans and items with their corresponding breakdown in the balance sheet. The fair value of these financial assets does not differ from the book value.

8.1. Trade and other receivables

The customer balance as at 31 December 2014 corresponds mainly to the centralised billing of services (production of catalogues, input from marketing and other agreements) to European suppliers of traditional products, related to the distribution contracts of the Group and the production of the general catalogue of the fiscal year 2015.

The customer balance of group companies and associates as at 31 December 2014 corresponds entirely to the re-invoicing to group companies for purchases from suppliers HP, Unipapel and Xerox on the occasion of the performance of the Company as central purchasing body for products from these suppliers for the entire Group (Notes 1, 12.5 and 15).

As at 31 December 2014 and 2013, the balance of trade and other receivables does not present any impairment value adjustment.

8.2. Short-term investments in group companies and associates


The amount in this heading as at 31 December 2014 amounts to 120,998 thousand euros (31 December 2013: 15,615 thousand euros) and includes mainly balances with companies of the group for current transactions and dividends receivable (Note 15.1). As at 31 December 2014, the Company has recorded a dividend receivable of 16,796 thousand euros, by Adveo España, S.A.U.

This balance has been reduced in 45 million euros at the end of fiscal year 2014 as a result of the contribution made in favour of Adveo España, S.A.U. described in note 7.1. of this report.

8.3. Other relevant information

(a) There are no securities, loans, or other similar financial investments subject to guarantees as at 31 December 2014 and 2013, except for those mentioned above.

(b) As at 31 December 2014 and 2013 all financial investments are implemented in euros, so there is no risk of exchange differences.

(c) As at 31 December 2014 and 2013 there are no firm commitments of purchase of financial investments or other securities.

(d) No securing guarantees of loans granted by the Company have been received in fiscal years 2014 and 2013.8.4. Loans to companies

The detail and movements that make up this heading are the following:


Opening balance -

Recognitions 6,330

Ending balance 6.330

The total balance corresponds to a loan granted to the Company Unipapel, S.L. as at 12/31/2014.

This loan, which earns an annual EURIBOR interest of more than 100 basic points, will be amortised in 6 payments, between April and September 2015.

9. CASH AND OTHER EQUIVALENT LIQUID ASSETS

The composition of this heading as at 31 December is the following:

MILES DE EUROS 2014 2013

Cash - 8

Current call accounts 1,141 17.431

Total 1,141 17,439

Current call accounts accrue the market interest rate for this type of accounts in 2014 and 2013.

There are no availability restrictions of these balances.

10. EQUITY

10.1 Issued capital

In accordance with the agreements of the General Shareholders Meeting held on 30 May 2014, an increase in capital stock with charge to voluntary reserves has been approved by the amount of 923,653.50 euros, through the issuance of 615,769 new shares with nominal value of one euro and fifty cents (€1.50) each, that have been assigned free of charge to the shareholders of the Company, at a rate of one (1) new share for every twenty (20) of those currently outstanding.

After this capital increase, equity has been fixed in the amount of nineteen million three hundred and ninety-six thousand seven hundred forty euros (19,396,740 euros), and will be represented by twelve million nine hundred thirty-one thousand one hundred sixty (12,931,160) ordinary shares (2013: 12,315,391 shares) , by a nominal value of one euro and fifty cents (1.50 €) each, constituting the same class and series and fully paid up, and represented by entries in account, admitted at official listing on the Stock Market in Madrid and Valencia.

Shareholders who are legal entities with a direct stake, equal to or greater than 5% are the following:

FISCAL YEAR 2014

% of stake

QMC II Iberian Capital Fund, FIL 10,580%

Gestión de Inversiones Rimusa, S.L. 6,160%

FISCAL YEAR 2013

% of stake

Nmas1 Asset Management SGIIC, S.A. 5,065 %

Gestión de Inversiones Rimusa, S.L. 6,160 %

QMC II Iberian Capital Fund, FIL 5,517 %


10.2 Share premium

There has been no movement in the share premium in the fiscal years 2014 and 2013.

10.3 Reserves

The detail and movements of the various items that make up the reserves are the following:

FISCAL YEAR 2014 (Thousands of euros)

Opening balanceDistribution of

profits/(losses) CapitalAcciones

propias Saldo final

Legal reserve 3,695 - - - 3,695

Goodwill reserve (Note 3) 284 - - - 284

Voluntary reserves 128,094 - (924) (169) 127,001

Prior years' losses (1,381) (6,988) - - (8,369)

Total 130,692 (6,988) (924) (169) 122,611


Opening balance Distribution of profits/(losses) Own shares Ending balance

Legal reserve 3,695 - - 3,695

Goodwill reserve (Note 3) 213 71 - 284

Voluntary reserves 134,965 (7,066) 195 128,094

Prior years' losses - (1,381) (1,381)

Total 138,873 (8,376) 195 130,692

Interim dividendAs indicated in Note 19, on 23 February 2015, the Board of Directors of the Company has agreed to distribute between the shareholders of ADVEO Group International, S.A., as interim dividends from the fiscal year 2014, the amount of 0.14 euros gross per share.

Goodwill reserveThis reserve is unavailable while the goodwill indicated in Note 5 is recorded in the balance sheet of the Company.

10.4 Own shares

The movement of own shares in value and number recorded is the following:

FISCAL YEAR 2014

Opening balance

Recogni-tions Removals

Ending balance

Value (in thou-sands of euros)

105 4,399 (3,389) 1,115

Number of shares:

7,519 284,793 (210,408) 81,904

FISCAL YEAR 2014

Opening balance

Recogni-tions Removals

Ending balance

Value (in thou-sands of euros)

754 3,227 (3,876) 105

Number of shares:

68,157 254,282 (314,920) 7,519


At the end of fiscal year 2014, the Company holds 81,904 own shares, equivalent to 0.63% of the total, whose planned final destination is their disposition (2013: 7,519 own shares, equivalent to 0.06% of the total, with the same final destination).

The Company has signed with a financial intermediary a contract of liquidity, which entered into force on 16 July 2012. All the movements listed above have their origin in the aforementioned contract, having performed the corresponding communications to the National Commission of the Securities Market in accordance with the Circular Communication 3/2007, Fourth Rule, paragraph 2b.

10.5 Adjustments for changes in value

The detail and movements of the adjustments for changes in value are the following:


Assets opening balance / (liability)

Income / (expenses)

Ending balance

Cash flow hedges (Note 12.3)

(962) 390 (572)

Tax effect 290 (146) 143

Total – net (672) 244 429


Assets opening balance / (liability)

Income / (expenses)

Ending balance

Cash flow hedges (Note 12.3)

(1,768) 806 (962)

Tax effect 531 (241) 290

Total – net (1,237) 565 (672)

11. PROVISIONS AND CONTINGENCIES

11.1 Provisions

The detail of long and short-term provisions as at 31 December is the following:


Long-term provision for risks and costs 2,324 1,734

Short-term provision for severance payments 120 127

Total 2,444 1,861

The movements in these headings are the following:

2014 (Thousands of euros)

Opening balance

Endowments / (Applications)

Ending balance

Long-term provision for risks and costs

1,734 590 2,324

Short-term provision for severance payments

127 (7) 120

Total 1,861 2,444

2013 (Thousands of euros)

Opening balance

Endowments / (Applications)

Ending balance

Long-term provision for risks and costs

- 1,734 1,734

Short-term provision for severance payments

151 (24) 127

Total 151 1,861

Long-term provision for risks and costsThis provision corresponds entirely to the amount foreseen by the Company to contribute to re-establish the equity balance of the Company Adveo Portugal, Lda.

Short-term provision for severance paymentsThe amount recorded corresponds mainly to potential severances to be paid to certain employees. The provision that is kept in the balance sheet as at 31 December 2014 covers the cost of certain severances to be liquidated in the short-term.

11.2 Contingent liabilities

During the fiscal year 2013 and 2012, the Company has been notified of four resolutions of the National Competition Commission, affecting two sanctioning proceedings initiated as a result of alleged violations of article 1 of the Competition Law and 101 of the Treaty on the Functioning of the European Union. However, in three


of these resolutions, the Company has been exempted from the payment of any fines that could have been imposed by the Board of Directors because the requirements in article 65 of the Law on the Protection of Competition were present.

With regard to the fourth resolution, related to the export activity of envelopes, a fine has been imposed on the Company by 2,013 thousand euros. Against this resolution, the Company has pursued an administrative appeal before the National Court, which was fully estimated, thereby negating the sanction imposed. The resolution of the National Court has been the subject of appeal before the Supreme Court on the part of the Bar of the State.

In the opinion of the Directors of the Company and their legal advisers, no significant amount of liabilities is expected to finally materialise for the Company as a result of these cases.

The Company is party, along with its subsidiary Adveo España, S.A.U. and other eight competing companies (all of them involved in one of the sanctioning cases above, relating to alleged breaches of competition, the one relating to the manufacture of envelopes) in seven civil proceedings initiated before different Courts of First Instance in Madrid and Barcelona by many other companies that claim, on the one hand, the acknowledgement of the existence of a cartel in the market for the manufacture of paper envelopes in all the national territory and, on the other hand, on the basis of this statement, that the defendants are sentenced to pay compensation for damages. The total amount claimed severally to the defendants is approximately 5.9 million euros. These proceedings are in their early stages, mainly, in the stage of responding the complaints.

In the opinion of the Directors of the Company and their legal advisers, the risk of these claims is not serious because of the following reasons: (i) damage claims on the basis of an administrative sanctioning resolution that is not final, as it was appealed before the National Court; (ii) the calculation of the alleged damage claimed on a methodology that could be rebutted; (iii) the particular position of the Company as a company that obtained an exemption from the payment of the penalty in the prior administrative sanctioning procedure.

In the opinion of the Directors of the Company and their legal advisers, there is no any other litigation or open procedure that involves a likely output of resources.

12. FINANCIAL LIABILITIES

As at 31 December 2014 and 2013, the financial liabilities correspond entirely to loans and payables with their corresponding breakdown

in the balance sheet. The fair value of these financial liabilities does not differ significantly from their book value.

12.1 Debits and payables – bank debts

The detail of bank debts as at 31 December is the following:


Syndicated loan – short-term debt 63,584 95,884

Financial confirming 6,400 -

Bank loans 7,000 5,000

Loan policies 58,763 6,051

Total 135,747 106,935

Syndicated financing contract Upon the acquisition of the business in Continental Europe of the group Spicers from DS Smith in the fiscal year 2011, the Company has formalised a syndicated financing contract dated 6 July 2011 amended and consolidated on 22 December 2011, prior to the takeover of Spicers, with several financial institutions (Caixabank, S.A. (agent bank), Banca Cívica, S.A., Banco Bilbao Vizcaya Argentaria, S.A., Banco Pastor, S.A., Banco de Sabadell, S.A., Banco Santander, S.A., Bankia, S.A. and Credit Industriel et Commercial, S.A.) as accrediting entities by an amount of 145,000 thousand euros. On 29 December 2011, this amount became available and was used as part of the payment in the purchase of Spicers (Note 7.1). The annual interest rate applied is the market standard for similar transactions.

Until 27 January 2015, date on which this contract has been cancelled in advance, the amortisation of this loan was made by amounts of 10% of the principal every 6 months, beginning in July 2012 and with final maturity on 6 July 2016, at which time 20% of the remaining principal will be amortised. Therefore, the first 10% (14.5 million euros) was amortised during the fiscal year 2012, a total amount of 30.0 million euros was amortised during the fiscal year 2013, including an amount of 1 million euros of mandatory early amortisation. 34.0 million euros, 29.0 million ordinary euros and 5.0 million euros have been amortised in the fiscal year 2014 as a result of the income received after the sale of the industrial business of Adveo España.

Therefore, an amount of 66,371 thousand euros gross was outstanding as at 31 December 2014 from the expenditure incurred directly attributable to the funding.


As at 31 December 2014, the value at an amortised cost of the loan includes an amount of 2,787 thousand euros (2013: 4,556 thousand euros) corresponding to the expenditure directly attributable to the funding outstanding to be assigned to the profit and loss account. In the fiscal year 2014 of the expenditure attributable to the funding, 1,763 thousand euros have been assigned to the profit and loss account (Note 14.7) (1,751 thousand euros in 2013).

In connection with this financing contract, the Company had the obligation to comply with certain financial ratios and levels and to give to the agent bank of the syndicated loan certain financial information on the companies that are members of the Adveo group, at an individual and consolidated level, as well as to provide a report of the auditors of the Parent Company relating to the review of the calculation of these financial ratios and levels, on the basis of the audited consolidated financial statements of the group at the end of the fiscal year.

This loan has been completely cancelled on 27 January 2015, date on which ADVEO GROUP INTERNATIONAL, S.A. along with several of its subsidiaries have signed a long-term syndicated financing contract by a total amount of 115 million euros in the form of a loan (by an amount of 100 million euros and a commercial revolving credit by a maximum amount of 15 million euros).

The above financing operation has been signed by ADVEO with six first-tier financial entities and its purpose is to cover corporate needs of ADVEO and/or its subsidiaries that are also borrowers in the operation (France and Deutschland along with ADVEO itself).

With the taking out of this funding, the syndicated loan signed by ADVEO in 2011 for the acquisition of Spicers was immediately cancelled, incurring in early cancellation expenses by an amount of 3.3 million euros that have been recognised for accounting purposes in January 2015, in accordance with the accounting regulations currently in force.

The loan has been agreed on under standard terms and conditions for this type of market operations, and has its depreciation planned in a five-year term, with partial six-monthly payments, beginning in July 2016. The revolving Credit will remain in effect throughout the same five-year term.

From the principal signed on 27 January 2015, only 5 million euros (those corresponding to the revolving credit) have been available for Adveo Group International, while the subsidiaries Adveo France, S.A.S. and Adveo Deutschland GmbH have borrowed amounts by 75 and 25 million euros, respectively.

According to the estimates made by the Board and the Directors, it is expected that the Company will comply with all the financial ratios and levels until the final maturity of the loan.

Other short-term debts with credit institutions In the fiscal year 2014, the company has formalised two credit lines with two banks, by amounts of 5 and 2 million euros, with respective maturity in May and August 2015, earning a market interest rate.

In addition, since the fiscal year 2013, the Company has subscribed with different financial institutions certain loan policies. As at 31 December 2014, the Company has had available from these credit lines a total amount of 58,763 thousand euros (2013: 6,051 thousand euros). These credit lines yield a market interest and have a maturity of less than a year.

The total limits of the credit policies available by Adveo Group International S.A. as at 31 December 2014 amount to 177 million euros (2013: 156 million euros).

The detail of the debt with credit institutions by maturity date is the following:


2014 - 106,935

2015 135,747 -

2016 - -

2017 - -

2018 - -

135,747 106,935

After the renewal of the debt described in Notes 12.1 and 19, the debt maturity at the Group level will be extended for a period of five years until 2019.

Interests accrued outstanding as at 31 December 2014 and 2013 amount to 16 thousand euros and 17 thousand euros, respectively.

12.2 Debits and payables – other

The amount of 891 thousand euros recorded under the heading “Financial lease creditors” corresponds mainly to financial leases of certain computer equipment of the Company, with a maturity of 4 years. From the same contract, there are short-term maturities by 440 thousand euros.

The detail of financial leases by maturity is the following:



2014 - 597

2015 440 -

2016 348 -

2017 348 -

2018 195 -

Total debts by financial lease (Note 5.3) 1,331 597

The amount recorded under the heading “Other short-term financial liabilities” corresponds mainly to debts with suppliers of fixed assets in the development of new computer applications for the Group by an amount of 4,690 thousand euros (2,432 thousand euros as at 31 December 2013) and to the outstanding salaries and allowances to Directors, by a total amount of 215 thousand euros (622 thousand euros as at 31 December 2013). In accordance with the provisions of article 32 of the By-laws, the Directors receive a fee for daily subsistence allowance for their attendance at Board meetings and related Committees, and a share of the profits that is estimated in 5% of the consolidated profit before tax, with deduction of the overall amount of the attendance fees. They are recorded as expenses by “Other services” (Note 14.5).

12.3 Hedge derivatives

Hedge derivatives for the purchase of Spicers GroupOn 16 January 2012, the Company raised public contracts of hedge instruments of the interest rate with several financial institutions (Caixabank, S.A., Banca Cívica, S.A., Banco Bilbao Vizcaya Argentaria, S.A., Banco Pastor, S.A., Banco de Sabadell, S.A., Banco Santander, S.A., Bankia, S.A. and Credit Industriel et Commercial, S.A.) in order to cover the cash flows by changes in interest rates of the syndicated loan in relation to the acquisition of Spicers (Note 12.1). The purpose of those derivatives is to transform part of the cash flows of the loan subscribed at variable interest rates into fixed cash flows. The Company will receive payments on variable interest rate and pay a fixed rate. These are financial instruments linked to the syndicated loans, and their amortisation and final maturity are the same as those of the loan. The conditions of the hedging instrument and the hedged instrument match, and the hedge is effective.

The notional amount of these financial instruments as at 31 December 2014 amounted to 66.3 million euros. The fair value of these financial instruments as at 31 December 2014, estimated on the basis of the cash flows discount method, using the curves of future interest rates, is a liability by an amount of 572 thousand

euros (962 thousand euros in 2013), of which 572 thousand euros (2013: 321 thousand euros) are classified in the short-term, the value of long-term liability being zero, as it was settled on 27 January 2015 (2013: 641 thousand euros in the long-term).

12.4 Debts with group companies and associates

At the end of the fiscal year 2014, the debt with group companies and associates in the short and long-term amounts to 31,349 thousand euros (2013: 41,704 thousand euros) and 104,202 thousand euros (2013: 155,389 thousand euros), respectively, with the following detail (see also note 15.1):

LONG-TERM DEBT (thousands of euros) 2014 2013

Loan Adveo España, S.A.U. – funding acquisition Spicers

15,599 15,599

Other loans Monte Urgull, S.L.U. 15,750 26,105

31,349 41,704

SHORT-TERM DEBT (thousands of euros) 2014 2013

Loan Monte Urgull, S.L.U. 17,605 7,250

Current accounts 90,348 148,139

107,953 155,389

All loans accrue a market interest rate. The detail of the debt with group companies and associates by

maturity is the following:


2014 - 155,389

2015 107,953 -

2016 31,349 41,704

139,302 197,093

12.5 Trade and other receivables

The composition of this heading as at 31 December is the following:



Suppliers 51,125 42,196

Suppliers Group companies and Associates (Note 15.1)

6,054 -

Sundry creditors 2,200 927

Personnel (accrued wages and salaries) 186 124

Current tax liabilities - -

Other debts with Public Administrations (Note 13)

905 3,664

Total 60.470 46.911

The balance of suppliers as at 31 December 2014 corresponds mainly to suppliers HP and Unipapel S.L. on the occasion of the performance of the Company as purchasing centre for products of these suppliers for the entire Group (Notes 1 and 8).

12.6 Information on delays in payment to suppliers in business operations

The average payment period of the Company during the fiscal year 2014 has been of 101 days (98 days in 2013).

13. TAX POSITION

The detail of balances related to tax assets and liabilities as at 31 December is the following:


Deferred tax assets 8,768 5,569

Current tax assets - 135

Loans with Public Administrations

VAT – Germany 358 6,411

VAT - 718

Total current assets 358 7,264

Other debts with Public Administrations (Note 12.5)

VAT 699 3,041

Income tax 181 601

Social Security 25 22

Total liabilities 905 3,664

According to the legal provisions in force, tax assessments cannot be considered definite until they have been inspected by the Tax

Authorities or the four-year limitation period has passed. The companies that make up the tax group headed by Adveo Group International, S.A. have all tax charges to which they are subject for the last four years open to inspection. The Directors of the Company, as well as their tax advisers, believe that from these years open to inspection, no contingent liabilities will be derived that are significant for the financial statements as a whole of each of the companies of the tax group.

13.1 Corporation Tax calculation

Reconciliation between the net amount of income and expenses for the fiscal year and the tax base (tax profit/(loss)) of the Corporate Tax is the following:


FISCAL YEAR 2014 (Thousands of euros) Profit and loss accountIncome and expenses directly

charged to equity

Increases Decreases Total Increases Decreases Total

BALANCE OF INCOME AND EXPENSES OF THE FISCAL YEAR

Continued operations (43,366) 244

244

CORPORATE INCOME TAX

Continued operations 3,346 (146)

(146)

Balance of income and expenses of the fiscal year before tax (46,712) 390

Permanent differences 39,895 39,895 (390) (390)

Temporary differences

Arising in the fiscal year 8,054 8,054

Arising in prior fiscal years - -

Tax base (tax profit/(loss)) (1,237)

FISCAL YEAR 2013 (Thousands of euros) Profit and loss accountIncome and expenses directly

charged to equity

Increases Decreases Total Increases Decreases Total

BALANCE OF INCOME AND EXPENSES OF THE FISCAL YEAR

Continued operations (6,988) 565

(6,988) 565

CORPORATE INCOME TAX

Continued operations 2,898 (242)

2,898 (242)

Balance of income and expenses of the fiscal year before tax (9,886) 807

Permanent differences - - - (807) - (807)

Temporary differences

Arising in the fiscal year 5,437 - 5,437 - -

Arising in prior fiscal years - - - - -

Tax base (tax profit/(loss)) (4,449)

Permanent differences in the fiscal year 2014 are consistent with the provisions of portfolio endowed on the stakes in Adveo España, S.A.U. and Adveo Portugal. Lda, in accordance with Notes 7.1. and 11 of these financial statements.

Temporary differences of the fiscal years 2014 and 2013 correspond mainly to non-deductible financial expenses in the fiscal year as a result of the tax legislation in force in Spain that increase the tax base in 7,914 thousand euros (2013; 4,467 thousand

euros), with an effect on the quota of 2,375 thousand euros (2013: 1,340 thousand euros) and to the amount of non-deductible depreciation in the fiscal years in the amount of 140 thousand euros (effect in quota of 42 thousand euros).

The expense / (income) for the tax on profits is broken down as follows:



Profit and loss account

Expense / (Income)

Income recognised by Corporation Tax (current fiscal year)

(2,046)

Adjustment by reduction of tax rate in Spain

1,245

Deductions taken in the fiscal year (2,545)

Cash tax expense / (income) (3,346)



Expense / (Income)

Income recognised by Corporation Tax (current fiscal year)

(2,898)

Deductions and tax base adjustments -


Reconciliation with the revenue recognised at the end of the fiscal year by corporation tax is the following:



Expense / (Income)

Balance before tax – Profit / (loss) (46,712)

Theoretical tax burden (tax rate 30%) – Expense / (income)

(14,014)

Permanent differences 11,968

Deductions applied in the fiscal year -




Expense / (Income)

Balance before tax (9,886)

Theoretical tax burden (tax rate 30%) (2,898)

Permanent differences -

Deductions applied in the fiscal year -


The tax rate reduction adjustment results from adjusting the negative Tax Bases of previous fiscal years, those arising in the fiscal year itself, and temporary differences from the cash

tax rate in force in the fiscal year 2014 of 30% up to the rate of 25% applicable in Spain starting in 2016, considering that these negative tax bases and temporary differences shall be recoverable by the Consolidated Fiscal Adveo Group in Spain from the fiscal year beginning on 1 January 2016.

The deduction of 2,545 thousand euros taken in the fiscal year 2014 results from applying a rate of 18% at a base of 14,140 thousand euros, corresponding to the part of the dividend receivable from Adveo España (note 8.3) which comes from the reserves prior to the purchase of Adimpo España in the fiscal year 2009. Therefore, it is a deduction for double taxation of reserves attributable to Adveo España, S.A.U. generated in the headquarters of Adimpo España, S.A.U. prior to its acquisition.

This deduction is referred to by the tax law in the articles 30.4 (e) TRLIS (Revised Corporate Income Tax Law) and 30.6 TRLIS, and is consistent with the amount paid by the former owner of Adimpo S.A, on the occasion of its transfer in 2009.


Current tax - -

Withholdings (33) (135)

Interim payment - -

Tax group companies consolidated taxation effect

- -

Corporate Income Tax payable / (returnable) (33) (135)


13.2 Deferred tax assets

The detail and movements of the various items that make up the deferred tax assets are the following:


Changes reflected in

Opening balance

Profit and loss account Equity

Other adjustments

in profits and losses

Ending balance

DEFERRED TAX ASSETS

Negative tax bases 2,614 (372) - (374) 1,869

Hedge derivative 290 - (146) (24) 120

Financial expense deductibility 2,505 2,374 - (813) 4,066

Deduction double taxation - 2,545 - - 2,545

Other temporary differences 160 41 - (33) 168

Total 5,569 4,589 (146) (1,244) 8,768

Other adjustments corresponds to the adjustment on deferred tax assets due to the modification of the type of general levy of the Corporate Income Tax, which passes from current 30% to 28% in 2015 and to 25% in subsequent fiscal years, under Law 27/2104, of 27 November.


Changes reflected in

Opening balance

Other adjustments

Profit and loss account Equity

Ending balance

DEFERRED TAX ASSETS

Negative tax bases 1,279 - 1,335 - 2,614

Hedge derivative 531 - - (241) 290

Financial expense deductibility 1,165 - 1,340 - 2,505

Deduction double taxation 36 (99) 223 - 160

Other temporary differences 160 41 - (33) 168

Total 3,011 (99) 2,898 (241) 5,569

As at 31 December 2014, the Company has tax loss carry-forwards by an amount of 7,475 thousand euros (2013: 8,712 thousand euros). The tax group, from which the company is the head, as at 31 December 2014, has tax loss carry-forwards by an amount of 45,714 thousand euros (2013: 28,985 thousand euros). In addition, as at 31 December 2014, the Company has temporary differences pending reversal by a total amount of 6,525 thousand euros (2013: 2,955 thousand euros).

Deferred tax assets by tax loss carry-forwards as at 31 December 2014 and 2013 of the tax Group in Spain are originated primarily from the extraordinary losses in the fiscal years 2013 and 2014 arising from the industrial business, which was finally sold in March 2014, and from the corporate reorganisation undergone by the group in Spain during these fiscal years, which are not expected in the future; as well as from the centralised


assumption of financial costs related to the acquisition of the Spicers Group, which has not been tax deductible in the fiscal years 2013 and 2014, in accordance with the limitations of deductibility provided for in article 20 TRLIS (Revised Corporate Income Tax Law).

The Management has evaluated the recoverability of deferred tax assets based on an estimate of the tax benefits that are expected to be obtained by each of the companies that make up the consolidated tax Group in Spain in the next seven fiscal years (estimates are considered to be sufficiently reliable for this period) on the basis of the strategic plan 2015-2019. The period of reversal of taxable temporary differences has also been analysed, identifying those that accrue in the fiscal years in which tax loss carry-forwards can be used. Based on this analysis, the companies that are members of the consolidated tax group in Spain have recorded deferred tax assets corresponding to the total tax loss carry-forwards, and deductible temporary differences, because it is considered likely that sufficient future tax benefits will be generated for their application within the period allowed by accounting regulations in force.

14. INCOME AND EXPENSES

14.1 Net amount of sales figure

The detail of this heading as at 31 December is the following:


Interest on loans to group companies (Note 15.1)

4,632 4,812

Provision of services to group companies (Note 15.1)

8,138 2,778

Management support services 5,843 -

Total 18,613 7,590

Management support services performed vis-a-vis third parties collect revenue by centralisation of purchasing processes, management of rappels and production of catalogues from the Company, which are invoiced to suppliers of products that are marketed by the other Group companies.

14.2 Supplies

The detail of supplies as at 31 December is the following:


Interest of debts with group companies (Note 15.1)

5,536 2,725

Impairment of investments in group companies (Note 7.1 and 11)

39,895 -

Total 45,431 2,725

14.3 Wages, salaries and similar items

The detail of wages, salaries and similar items as at 31 December is the following:


Wages and salaries 3,683 2,061

Compensations - 53

Total 3,683 2,114

14.4 Social security contributions

The detail of social security contributions as at 31 December is the following:


Social Security 339 200

Other social security contributions - 72

Total 339 272

14.5 External services

The detail of external services as at 31 December is the following:


Rents and royalties 1,171 122

Independent professional services 5,227 1,399

Insurance premiums 55 54

Bank services and similar 154 114

Advertising, propaganda and public relations 207 122

Other services (Note 12.2) 783 1,166

Total 7,597 2,977

14.6 Financial revenue

The detail of financial revenue as at 31 December is the following:



Third party interest

Other financial revenue 39 -

Total 39 -

14.7 Financial expenses

The detail of financial expenses as at 31 December is the following:


Interests on debt to third parties

Loans and credits with financial institutions 7,480 7,224

Other financial expenses (Note 12.1) 1,763 1,751

Total 9,243 8,975

They correspond mainly to the interests of the syndicated loan and credit lines indicated in Note 12.1.

14.8 Transactions in foreign currency

Virtually all of the transactions in the fiscal years 2014 and 2013 have been made in euros.

15. TRANSACTIONS WITH RELATED PARTIES

Related parties with which the Company has made transactions during the fiscal years 2014 and 2013, as well as the nature of that relation, are the following

Name Fiscal year of relation Nature of relation

Adveo España, S.A.U. 2014 and 2013 Subsidiary

Monte Urgull, S.L.U. 2014 and 2013 Subsidiary

Other companies of the Adveo Group 2014 and 2013 Subsidiaries

Directors 2014 and 2013 Advisers

Senior management 2014 and 2013 Directors

The impact of expenses charged by the Company in 2014 and 2013 to other companies of the group is based on costs incurred in a centralised way, which are charged to each company of the group on the basis of resources earmarked to each one of them.

Transactions made with related parties in 2014 and 2013 correspond to transactions of the normal activities of the Company and financing transactions indicated in Note 12 of this report, and they are made at market prices, which are similar to those applied to unrelated entities.


15.1 Related entities

Balances with related entities as at 31 December are the following:

FISCAL YEAR 2014

Dividend receivable companies

of the Group (Note 8.2)

Other financial assets, group

(Note 8.2)

Customers, group

companies and associates

(Note 8.1)

Suppliers, group

companies and associates

(Note 12.5)

Debts, group companies and associates l/p

(Note 12.4)

Debts, group companies and associates c/p

(Note 12.4)

Adveo Portugal - 2,101 5 - - -

Adveo France (Note 7) - - 10,839 2,151 - 36,107

Adveo International Pro - 3 - - - -

Monte Urgull, S.L.U. - - 61 - 15,750 20,330

Adveo España 16,796 82,471 10,513 1,085 15,599 20

Enveloffset - - - - - -

Adveo Administración y Servicios, S.L.U. - - - - - 7,076

Adveo Netherland - - 4 15 - 1,402

Adveo Deutschland, Gmbh (Note 7) - 18,685 12,216 1,250 - -

Adveo Italia, S.R.L - - 1,448 467 - 34,887

Carip, S.A.S - - - - - 8,131

Adveo Belgium, N.V - 942 51 1,086 - -

Total 16,796 104,202 35,137 6,054 31,349 107,953

FISCAL YEAR 2013

Other financial assets, group

(Note 8.2)

Credits Group companies and associates l/p

(Note 7.1)

Customers, group companies and

associates (Note 8.2)

Debts, group companies and associates l/p

(Note 12.4)

Debts, group companies and associates c/p

(Note 12.4)

Adveo Portugal - - - - 4

Adveo France (Note 7) 84,774 9,172 - 41,945

Adveo International pro 3 - - - -

Monte Urgull, S.L.U. 62 - 61 26,105 9,763

Adveo España 15,550 - 40,490 15,599 45,788

Enveloffset - - - - 1

Adveo Administración y Servicios, S.L.U. - - (149) - 1,116

Adveo Netherland - - - - 1,001

Adveo Deutschland, Gmbh (Note 7) - 29,007 26,913 - 18,141

Adveo Italia, S.R.L - - 8,868 - 27,581

Carip, S.A.S - - - - 9,384

Spicers Belgium, N.V - - - - 665

Total 15,615 113,781 85,355 41,704 155,389


Revenues and expenses of the transactions with related entities are the following:

REVENUE (Thousands of euros)

Fiscal Year 2014 Management support services (Note 14.1) Interest on loans (Note 14.1)

Adveo France, S.A.S 2,641 3,077

Adveo Italy, S.R.L 734 -

Adveo España, S.A.U. 2,182 451

Monte Urgull, S.L.U. 609 -

Adveo Digital Systems Portugal. Lda 47 -

Adveo Administración y Servicios, S.L.U 8 -

Adveo Nederland, B.V. 53 -

Adveo Deuthschland, GMBH 1,509 1,053

Carip, S.A.S 1 -

Adveo Belgium, N.V 354 51

Total 8,138 4,632

As indicated in Note 1 of the report, in the fiscal year 2014, the Company has begun an intermediation activity, acting as the central purchasing body for the acquisition of certain goods of digital office products that are distributed by the various companies of the group in the European Union. The volume of purchases made in the fiscal year 2014 has amounted to 231,437 thousand euros, (2013: 122,552 thousand euros, only in the second half of the fiscal year) which has been entirely re-billed to the various companies of the Group without any “mark-up” on the part of the Company. In accordance with the accounting policy referred to in note 4.14, the revenue and expenditure of this activity has been compensated and is not part of the net amount of turnover of the Company.

REVENUE (Thousands of euros)

Fiscal Year 2013 Management support services (Note 14.1)

Dividends received (Note 14.1)

Interest on loans (Note 14.1)

Adveo France, S.A.S 702 - 3,864

Adveo Italy, S.R.L 234 - -

Adveo España, S.A.U. 596 - 351

Monte Urgull, S.L.U. 608 - -

Adveo Digital Systems Portugal. Lda 17 - -

Adveo Administración y Servicios, S.L.U 73 - 17

Adveo Nederland, B.V. 31 - -

Adveo Deuthschland, GMBH 379 - 498

Carip, S.A.S 2 - -

Adveo Belgium, N.V 136 - 82

Total 2,778 - 4,812


EXPENDITURE (Thousands of euros)

Ejercicio 2014 External services Interest on loans (Note 14.2)

Monte Urgull, S.L.U. - 773

Adveo España 582 875

Carip, S.A.S - 147

Adveo Netherland - 21

Adveo Deuthschland, GMBH - 1,004

Adveo France, S.A.S - 1,713

Adveo Italia, S.R.L - 866

Adveo Administración y Servicios - 137

Total 582 5,536

EXPENDITURE (Thousands of euros)

Ejercicio 2013 External services Interest on loans (Note 14.2)

Monte Urgull, S.L.U. 20 833

Adveo España - 724

Carip, S.A.S - 6

Adveo Netherland - 2

Adveo Deuthschland, GMBH - 65

Adveo France, S.A.S - 788

Adveo Italia, S.R.L - 285

Adveo Administración y Servicios - 22

Total 20 2,725

15.2 Directors and senior management

RemunerationThe detail of the remunerations earned by the members of the Board of Directors and senior management of the Company is the following:


Directors

Fixed remuneration 435 435

Variable remuneration 152 375

Other remunerations 401 424

Total 988 1,234

The remunerations of the members of the Board in the fiscal year 2014 amounted to 988 thousand euros, with the following breakdown: (i) 435 thousand euros (2013: 435 thousand euros) are fixed remuneration; and (ii) 152 thousand euros (2013: 375 thousand

euros), attributable in this case exclusively to Directors who perform executive functions, are part of variable remuneration. Per diem of the Board has amounted to 401 thousand euros (2013: 424 thousand euros).

In addition, the remunerations earned in the fiscal year 2014 by the other members of senior management amounted to 1,042 thousand euros in fixed remuneration and 324 thousand euros in variable remuneration (2013: 909 thousand euros in fixed remuneration and 256 thousand euros in variable remuneration).

As at 31 December 2014 and 2013, there were no advance payments given to members of the Board of Directors. No credits have been granted any member of the Board of Directors during the fiscal years 2014 and 2013.

There is no commitment or obligation undertaken by the Company as at 31 December 2014 and 2013 with the members of the Board of Directors in relation to pensions or guarantees.

As at 31 December 2014, the insurance hired by the Company for the members of the Board of Directors, under the concept of “life insurance”, has an insured capital of 690 thousand euros,


approximately (2013: 1,590 thousand euros). The amount of premiums paid in the fiscal year 2014 has amounted to 11 thousand euros (2013: 13 thousand euros).

The Board of Directors of the Company, at its meeting held on 22 June 2013, approved the establishment of a Long Term Incentives Plan in shares in favour of some managers of the Company, who will be invited to participate in the Plan, whose basic terms are described in the corresponding communication of the relevant fact dated 5 July 2013. According to this communication, the plan would have 1 January 2013 as start date, and its assessment period will end on 31 December 2015. However, as at the date of formulation of the financial statement, the plan has not yet entered into force.

Situation of conflict of interestIn compliance with article 229 of the Corporations Law (hereinafter, CL), the following are the situations of conflict of interest of the Company notified by Directors:

a) Direct or indirect stakes of the Directors and related persons referred to in article 231 of the CL in the capital of companies with the same, similar or complementary type of activity that constitutes the social purpose of the Company, and the positions and functions they hold in them.

FISCAL YEAR 2014

Name or trade name of the Director Trade name of the group entity % of stake Position

Juan Antonio Hernández-Rubio Muñoyerro (Chairman of the Board of Directors)

Adveo España., S.A.U. Monte Urgull, S.L.U.

0.00%0.00%

Director, ChairmanDirector, Chairman

Millán Álvarez-Miranda Navarro (Chief Executive Officer)

Adveo España., S.A.U. Adveo Digital Systems Portugal Unipessoal, Lda.Adveo Italy, S.R.L.Monte Urgull, S.L.U.

0.00%

0.00%0.00%0.00%

Chief Executive Officer, Member

ManagerDirector, ChairmanChief Executive Officer, Member

Gestión de Inversiones Rimusa, S.L. Adveo España., S.A.U. 0.00% Director, Member

Eladio Bezares MunillaAdveo España., S.A.U. Monte Urgull, S.L.U.

0.00%0.00%

Vice-chairman Director, Member

Ricardo Muguerza Uralde Monte Urgull, S.L.U. 0.00% Director, Secretary

b) Other situations of conflict, direct or indirect, with the interest of the Company

The Directors or persons acting on behalf of them have not done business with the Company or with companies of the group outside the regular activities or in conditions that are not normal in the market.


Changes in the Board of DirectorsDuring the fiscal year 2014 there have not been changes in the composition of the Board of Directors of the Company.

The following changes occurred in the fiscal year 2013: Mr. Juan Antonio Hernández-Rubio Muñoyerro replaced Mr. Juan Antonio Lázaro as Chairman of the Board of Directors. Mr. Juan Antonio Hernández-Rubio Muñoyerro held the position of Vice-chairman and proprietary director until the General Meeting of Shareholders of 2014 Mr. Eladio Bezares Munilla holds the position of Vice-chairman since 2014.

16. THIRD-PARTY GUARANTEES AND COMMITMENTS

As at 31 December 2014, the Company has secured commitments through guarantees granted by financial institutions in favour of different official bodies for an amount of 5,240 thousand euros (2013: 2,240 thousand euros).

On the occasion of the syndicated loan received in 2011 (Note 12), the Company has signed a contract of guarantees of compliance with its obligations to the lenders. The guarantees granted in the contract have been detailed in Note 7.5.

17. INFORMATION ABOUT THE NATURE AND LEVEL OF RISK ARISING FROM FINANCIAL INSTRUMENTS

The risk management policies of the Company are established by the Audit Committee and have been approved by the Board of Directors of the Company. On the basis of these policies, the Department of Finance and the Department of Management Control have established a series of procedures and controls that allow them to identify, measure and manage the risks arising from the activity with financial instruments.

The activity with financial instruments exposes the Company to credit, market and liquidity risk.

17.1 Credit risk

The credit risk is caused by the possible loss caused by the failure to comply with the contractual obligations of third parties with which the Company contracts, that is to say, by the possibility of not recovering the financial assets in the amount recognised and the time limit set.

The maximum exposure to credit risk as at 31 December is the following:


Long-term financial investments - -

Trade and other receivables 46,832 92,680

Short-term financial investments - -

Cash and other equivalent liquid assets 1,141 17,439

Total 47.973 110.119

The Company believes that there is a credit risk only on the investment activities, given that the operational activities are carried out, almost in its entirety, with companies of the group, and the rest is materialised in credits with Public Administrations.

In relation to the investment activities, the policies of the Company establish that the Treasury Department can perform the following investments:

• ]With the authorisation by Financial Management, investments in short-term financial products that are associated to a limited risk profile at country risk (public debt) and financial institution risk (promissory notes/bank bonds).

• Loans and credits to companies of the group and third parties, as well as the acquisition of shares, must be approved by the Board of Directors.

17.2 Market risk

Market risk exists due to the possible loss caused by changes in fair value or future cash flows of a financial instrument due to changes in market prices. Market risk includes the risk of interest rate, exchange rate and other price risks.

Interest rate risk Interest rate risk occurs by the possible loss caused by changes in fair value or future cash flows of a financial instrument due to changes in market interest rates. In this sense, the policy of the Company is to contract hedging instruments in relation to variable rate loans contracted, so that it is not exposed to this risk. The exposure of the Company to the risk of changes in interest rates occurs due to the loans granted and received by companies of the group and financial institutions (Notes 7 and 12) in the short and long term at variable interest rates.


Exchange rate risk and other price risksManagers consider that the Company is not subject to risks by exchange rate or other price risks because:

• It does not perform significant transactions in currencies other than euro.

• The Company does not have stakes in listed shares, with the exception of its own shares, nor in financial products subject to high volatility in the prices.

17.3 Liquidity risk

Liquidity risk is caused by the possibility that the Company cannot have liquid funds, or access to them, in sufficient quantity and at the right cost, to cope at all times with its payment obligations. The aim of the Company is to maintain the necessary liquidities available. If necessary, the Company has the financial support of other companies of the group, in addition to credit policies not allocated, as indicated in Note 12.1.

18. OTHER INFORMATION

18.1 Personnel structure

The average of persons employed by the Company, distributed by categories, is the following:

FISCAL YEAR 2014

Men Women Total

Senior management 6 - 6

Middle management 6 4 10

Administrative personnel - 4 4

Total 12 8 20

FISCAL YEAR 2013

Men Women Total

Senior management 8 1 9

Middle management 2 3 5

Administrative personnel - 2 2

Total 10 6 16

In 2014, the average number of employees had increased in four persons compared to 2013, resulting in six registrations and two cancellations during the fiscal year 2014.

In 2014, the Board of Directors is comprised of 9 men (2013: 9 men).

18.2 Audit fees

Fees earned for services rendered by the auditor are the following:


Audit services 120 120

Other works of review and audit 6 6

Total 126 126

In the fiscal years 2014 and 2013 no fees have been earned for services provided by other companies that are part of the same international network of the auditor of the Company.

18.3 Environmental Information

There are no significant systems, equipment or facilities incorporated to property, plant and equipment in 2014 and 2013 whose purpose is the minimisation of environmental impact, protection or improvement of the environment.

The Company has not incurred in significant expenses in 2014 and 2013 related to the protection or improvement of the environment.

The Directors estimate that there are no significant contingencies related to the protection and improvement of the environment, not considering it necessary to record any provision in this regard in 2014 and 2013.

19. EVENTS SUBSEQUENT TO CLOSING

According to the breakdown in note 12, on 27 January 2015, the syndicated financing formalised in the fiscal year 2011 has been early cancelled and a new one has been taken with the conditions that are detailed in the above-mentioned note.

According to the breakdown in Note 10.3, on 23 February 2015, the Board of Directors of the Company has agreed to distribute between the shareholders of ADVEO Group International, S.A. -as interim dividends from the fiscal year 2014- the amount of 0.14 euros gross per share, which has been authorised by the accrediting entities of the syndicated loan.

In addition to the above, as at the date of the formulation of these financial statements, no other adjustments that could alter them or be subject to breakdown in these financial statements have been disclosed.


Management report of thefiscal year 2014

Management report for the fiscal year 2014 The ADVEO Group, whose header is ADVEO GROUP INTERNATIONAL, S.A., had as at 31 December 2014 the following structure:

* Company in liquidation** Joint Venture


ADVEO ESPANA,

S.A.

MONTE URGULL

S.L.U.


ADVEO DIG. SYSTEMS

PORT. Ltda.

ADVEO FRANCE

S.A.S.

ADVEO DEUTSCH.

GmbHADVEO ADMIN. &

SERVICIOS S.L.ADVEO

BELGIUM N.V.

100% 100% 100% 100% 100% 100%

5%

100% 100%

ADVEO ITALIA Srl

ADVEO NETHERL.

100%95% 50%

100% 10%

90%

93,5%

UNIPAPER ANDORRA S.A. CARIP

SAS

SCI AQUIT.

MIDI PYR. SAS

Venture Connect Ltd **


Investments in group companiesThe detail of investments in group companies of ADVEO GROUP INTERNATIONAL, S.A. as at 12/31/2014 and its evolution throughout the fiscal year 2014 is the following:

COST

Opening balance Recognitions Dividends received Removals Ending balance

Adveo Belgium N.V. 17,245 - - - 17,245

Adveo France, S.A.S. 51,020 - - - 51,020

ADVEO España, S.A.U. 93,156 45,000 (16,797) - 121,359

Monte Urgull, S.L.U. 41,097 - - - 41,097

Adveo Deutschland, GmbH 11,863 - - - 11,863

Adveo Adm. y Servicios, S.L.U. 28,269 - - - 28,269

Adimpo International pro, S.A. 6,228 - - - 6,228

ADVEO Italy, S.r.l. 1,229 - - - 1,229

ADVEO Digital Systems Portugal. Lda 5 - - - 5

Total 250,112 45,000 (16,797) - 278,315

Impairment losses

Adveo International pro, S.A. (5,913) - - - (5,913)

ADVEO España, S.A.U. - (39,305) - - (39,305)

ADVEO Digital Systems Portugal. Lda (5) - - - (5)

(5,918) (39,305) - - (45,224)


All the Group companies are 100% controlled, directly or indirectly.On 16 December 2014, the total distribution of the voluntary

Reserve Account of Adveo España, S.A.U. has been approved in the amount of 16,796 euros in favour of its sole shareholder. Simultaneously, ADVEO GROUP INTERNATIONAL, S.A., has contributed a credit considered due and payable by ADVEO ESPAÑA, S.A.U., which originated in various commercial operations by which ADVEO GROUP INTERNATIONAL, S.A. has been providing funding in favour of the Company for the realisation of its activity, by an amount of 45,000 thousand euros, in accordance with the following details:

• ADVEO GROUP INTERNATIONAL, S.A. contributes the loan by 35,965 thousand euros for the compensation of losses of previous fiscal years according to the balance sheet closed of Adveo España, S.A.U. on 31 December 2013.

• ADVEO GROUP INTERNATIONAL, S.A. contributes the loan by 11,035 thousand euros (amount remaining to reach 45 MM€) in concept of non-refundable shareholders contribution, without entailing a capital stock increase, in order to increase the asset and financial solidity of Adveo España S.A.U., and in

anticipation of the coverage of possible losses in which that subsidiary may incur in the future.

PersonnelAs at 31 December 2014, the staffing table of the Company was composed of twenty persons who were in charge of the following management functions: Corporative, Financial and Administrative, Human Resources, Legal and Information Systems of the Group, as well as Relationship with Investors.

Treasury stockAs at 31 December 2014, ADVEO Group International, S.A. had in treasury a total of 81,904 own shares, which valued at quote of the closing of the fiscal year represent a value of 1,115 thousand euros. ADVEO Group International, S.A. has a Liquidity Contract signed with a financial intermediary. The movements of the treasury stock are broken down in note 10.4 of the report.

The Company has authorisation of the General Board to acquire own shares within the limits imposed by the legislation on the matter.


Risk management policiesThe information on the nature and level of risk arising from financial instruments and other risk management policies is broken down in note 17 of the report.

Profit/(loss) of the fiscal year and foreseeable development of the Company.

The main figures of the profits/(losses) account are:


Net sales figure 18,613 7,590

Profit/(loss) from operations (37,502) (904)

Financial profit/(loss) (9,210) (8,982)

Profit/(loss) before tax (46,712) (9,886)

Taxes 3,346 2,898

Net profit/(loss) (43,366) (6,988)

The profit/(loss) before tax of the fiscal year 2014 has been negatively affected mainly due to the value adjustment by 39,305 thousand euros on the book value of the investment in Adveo España S.A.U.

For the fiscal year 2015, a substantial improvement is expected in the profit/(loss) before taxes, with the incorporation in Adveo Group International of a greater volume of activity in the intermediation of commercial products, leaving a margin of marketing in the Group holding company. A reduction in the level of financial costs is also expected with respect to the fiscal year 2014. Dividends in stakes in Group companies are also likely to be taken.

Research and development activities The Company has not been active in the area of research during the fiscal year 2014. The Company has performed development activities of its computer applications by capitalising the corresponding costs listed in note 5 of the report.

Events subsequent to closing

• Early depreciation of the syndicated loan 2011 and taking of new syndicated financing:

On 27January 2015, Adveo Group International, S.A. and its subsidiaries have formalised a new long-term syndicated financing contract in the banking market by a total amount of 115 million euros in the form of a loan, amounting to 100 million euros, and a commercial revolving credit, by a maximum amount of 15 million euros, thus providing for a total nominal amount of 105 million euros.

The above financing operation has been signed by the ADVEO Group with six first-tier banks, and its purpose is to cover the corporate needs of ADVEO GROUP INTERNATIONAL, S.A. and/or its subsidiaries borrowers in the operation (France and Germany).

The immediate cancellation of the above-mentioned loan signed by the Company in 2011 for the acquisition of Spicers has been undertaken with the decision of this funding.

The loan has been agreed on under standard terms and conditions for this type of market operations, and has its depreciation planned in a five-year term, with partial six-monthly payments, beginning in July 2016. The revolving Credit will remain in effect throughout the same five-year term.

• Interim dividend of the dividends of the fiscal year 2014: On 23 February 2015, the Board of Directors of the Company has agreed to distribute between the shareholders of ADVEO Group International, S.A., as interim dividends from the fiscal year 2014, the amount of 0.14 euros gross per share, which has been authorised by the accrediting entities of the new syndicated loan.

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