Reference Document

Transcription

Reference Document

Reference Document
Contents
Page 5
Editorial
Jean-Michel AULAS - Chairman
Page 7
Page 8
Strategy and outlook
Patrick BERTRAND - Chief Executive Officer
Employees: skills and customers intimacy
Page 10
Technologies: progress through innovation
Page 12
Products: brands and verticals
Page 20
Customers: users testimonials
Page 22
Key Figures
Page 24
The Stock Market
Page 27
Management Report
Year-End Financial Statements
Other Information
2
Better you are,
3
Cegid Training Center - Lyon
better we are
4
Let’s make
progress
together!
Every day, in order to live and grow, companies have to surpass
themselves, take on new challenges and provide their best to
their customers, employees, shareholders and partners.
For over twenty years now, Cegid, European software publisher, has been developing an ambitious
industrial strategy, incorporating the spirit of conquest, technological innovation, local proximity
to its customers and stringent compliance with financial equilibriums; and all of this within the
framework of ambitious and responsible social dialog, so that the Group’s 2,000 employees can be
ever the more so involved and provide high levels of performance.
Thanks to this constant strive for excellence, every day Cegid helps its 80,000 customer sites,
companies and entrepreneurs to produce, analyze and optimize their information sytems regardless
of the size of their business, their function and their geographical location.
Cegid’s development is also articulated around strategic partnerships concluded with the major
worldwide suppliers of technology such as Microsoft, IBM and Oracle. By integrating in this way into
all of the major ecosystems in the market, the group’s customers can choose technology that is the
most modern and best adapted to their needs and use Cegid solutions easily.
So, with its employees and partners, its sound financial structure and coherent industrial strategy,
the Cegid group, top French publisher of enterprise business solutions, has a lot of advantages that
it can use to provide support to its customers in their strategy for capturing markets in France and
abroad and thus continue its development in the years to come.
Jean-Michel Aulas
Chairman
5
6
Top French publisher
of enterprise business software
€224 M in sales
Top 10 in Europe (PAC)
2,000 employees
80,000 user sites
Cegid,
Clear strategy and ambitious outlook
Patrick Bertrand
Chief Executive Officers
In 2005, the Cegid group imposed itself at the top of
the line as a publisher of enterprise business solutions
in France. Backed with this success and the excellent
results recorded in 2005, Cegid now wants to accelerate
its growth in France and internationally, by taking the
concrete expectations of its customers into account…
customers who want to rely on a solid IT partner in
order to reinforce their competitiveness in a context
where the competition is stiff.
A flexible and secure hosting and service policy, indepth knowledge of their profession with a large range
of software that meets the users’ expectations, local
presence that is indispensable for constructive and
constant dialog, and support in their development
internationally: as many exact needs expressed by the
customers as Cegid wants to respond to.
Cegid’s development for the years to come is articulated
around four strategic axes.
Develop a Publisher/Hoster model for management
solutions
Cegid’s offering makes use of modern technology,
incorporating into a single software approach, all of
the latest innovations in business intelligence, and
pertaining to collaborative efforts and the Internet.
This technology makes it possible for Cegid to
provide its customers with an ERP, Cegid Business,
as well as referenced solutions on the market in terms
of Corporate Performance Management, Human
Resources Management and Finance/Taxation. This
technological advance and Ccmx’s expertise in terms of
hosting allows the entire offering, traditionally offered in
Insourcing mode (installed at the customer’s), to now be
offered with the most appropriate method of access for
the operations of the customer: Insourcing, outsourcing
(hosted solution) or ASP (leasing mode) with reversibility
among the various access methods. This development
provides the company with an undeniable competitive
advantage by simplifying installation and deployment
of enterprise solutions for the Group’s customers.
Satisfy the professional stakes of our customers
Since it was created, the Cegid group has taken into
account the core business dimension of its customers
by verticalizing its offering of business software aimed
in particular at the following business sectors: audit and
chartered public accountants, fashion professionals,
manufacturing companies, services, retail, construction,
hotel-restaurant or specialized businesses. Cegid
intends to continue and develop this approach by
profession. The recent acquisition of GTI Industrie and
PMI Soft, specialized publishers in the area of industry
manufacturing, bear witness to this strong ambition.
Reinforce our local presence with our customers
Geographical nearness is the key to a close-working
relationship between Cegid and its customers. In
order to further develop this local presence, Cegid has
supplemented its network of 39 sales agencies by an
indirect network which enjoyed a lot of development
in 2005, and today the number of resellers/integrators
has reached 160. Beyond that, over 7,000 members of
the Chartered Accountant Profession, customers of the
Group, can advise their customers on setting up Cegid
solutions. Cegid would like, through the development
of these distribution networks, that each customer in
the Group be in contact with a local contact.
Develop our presence internationally
Our customers are going international. We need to be
at their side and support them in their growth. Cegid
solutions have already been deployed in over 1,400
sites in over 30 countries via our subsidiaries in Spain
and in the United States or via our distributors in
Germany, Austria, Switzerland, Italy and soon in China.
The offering, which was already available in English,
Spanish, Italian, Portuguese and German, is now
available in Mandarin Chinese. In 2006, Cegid is going
to reinforce this presence abroad. The Group wants to
be close to its customers which are deploying abroad
and in 2006 we will continue our initiatives to support
them.
In 2006, the Group benefits from increased financial
soundness, from 2,000 motivated and skilled employees,
from referenced financial and technological partners
and from excellent expertise on the needs of « MiddleMarket » companies and groups of companies.
Beyond this, Cegid can rely on an installed base of more
than 80,000 customer sites, representing a recurring
revenue portfolio of over €100 million a year, and on true
know-how in terms of external growth and integration
of companies to accelerate the growth of the Group in
France and internationally and play a front-stage role
among the European publishers.
7
Employees
Skills and customer intimacy
In order to assist you in day-to-day processing, but also
to help you see further into the future, Cegid puts the skills
of 2,000 employees, 39 local agencies, 160 resellers and
support for its customers abroad at your disposal.
Skills
2,000 employees
Cegid is constantly developing the skills of its employees on two fronts, so that they can
provide the best answers to the needs that have been expressed in all the functional areas
of the offering and so that they can master the expectations involved with the various
businesses in which the customers are engaged.
Skills on two fronts in order to ensure encompassing service
8
Research
and development
Sales
New technologies, quality, outsourcing
and functional skills.
Sales, pre-sales and knowledge of
the customer’s professional sectors.
Customer
support
Roll-out
and integration
570
410
Assistance, maintenance, logistics and
services that are tailored to each core
profession.
Training, consulting, configuration
and specialization by business
sector.
420
480
Local services
39 sales offices
The Cegid group is located in all the major cities of
France and has developed a large sales network for
direct distribution of its solutions.
This sales approach favors the knowledge of the
professional sectors of the Group’s customers.
These 39 offices provide comprehensive service and a
single point of contact to meet the customer’s needs:
assistance with software, on-site or off-site training,
project management, sales and roll-out of network and
system platforms, hardware maintenance, customized
financing solutions.
7,000
accounting firms that
use Cegid solutions can also provide
recommendations to their customers in
the choice and use of enterprise business
solutions.
Over
160 resellers
and integrators
As a supplement to business sector-specific offerings
and the direct presence that the Group has, its 160
resellers that have been certified by Cegid have thorough
knowledge of their regional markets.
This network is made up of:
•Cegid Reseller-Consultants: system integrators or VARs,
specialized in enterprise software, who would like to
enhance their offering,
9
•Cegid Specialized Resellers: these are publishers of
business software that would like to add to their vertical
offering.
These resellers have expertise and are certified in
management and consulting, which guarantees proper
integration and roll-out of Cegid solutions for their
customers.
Sales offices
Resellers / integrators
Support
Worldwide
Cegid supports its companies abroad.
1,400 customer sites in over
30 foreign countries, a multilingual
roll-out and hotline team, a range
that incorporates local specifics and
languages.
New-York Madrid Barcelona Frankfort Milan Zurich…
Technologies
Progress through innovation
The IT development « as a service », the need to transform data
into pertinent information, the rapid take off enjoyed by the new
technologies... all of these are factors that need to be considered
in order to get high-performance use out of an information
system. Integrating these trends while still concentrating on its
original business sector is a necessity for businesses, and Cegid
understands this well.
Databases, operating systems,
client-server or Web Access...
everything is possible.
Cegid Business Platform
10
All of Cegid’s offering is designed using a development and integration platform called Cegid
Business Platform, which ensures homogeneity in the applications’ functional ergonomics. It
incorporates the latest technological breakthroughs in the market (rich client, applications server,
integrated BI, portals, mobility, etc.) and also allows Cegid’s solutions to be incorporated into the
customer’s existing tools via web services. Right from the start, solutions developed with Cegid
Business Platform benefit from built-in communication with the major collaborative and office
software suites on the market (Microsoft Office, Open Office, Star Office, Lotus Notes…), and are
compatible with all the environments (Windows,
Linux, OS400…), databases (Oracle, SQL Server,
DB2…), applications servers and deployment
models (Client / Server, « interactive terminal »
L
or « rich client » distributed architecture).
Q
S
MS
2
IBM DB
Server
Oracle
s
Window
Unix
Linux )
00
I5 (OS/4
usiness
Cegid B
Platform
Cegid
Web
Access
al
Tradition
Client
Server
Rich
Client
Thanks to the «rich client» concept and Cegid
Web Access technology the
Cegid Business offering can be
accessed remotely through a simple
connection (via standard telephone
line, ADSL, ISDN, etc.). One-click
updates, information available to
everyone in real-time... Cegid Web Access simplifies,
makes reliable and accelerates exchanges of the
company’s data.
Cegid
Web
Access
Operational management,
business intelligence,
collaborative process/portal:
3 dimensions directly built into
Cegid’s solution
rative
Collabo
n
io
s
dimen
that
access
Unique
ed
ersonaliz
can be p
Cegid solutions meet the needs of companies and groups by
first of all providing management for the flow of operational
data which guarantees proper operation of the company,
but also by transforming the data into pertinent information
thanks to decision-support applications, and by delivering
this information directly to the end user proactively via a
collaborative portal.
n
Decisio
rt
o
p
p
su
n
dimensio
onal
Operati
n
io
dimens
These modular and integrated solutions combine the
operational, decision-support and collaborative dimensions
within a single «business software package» offering, sparing
companies from integration that otherwise is often expensive
and cumbersome.
d and
Structure BI.
d
integrate
rs
Indicato g.
rin
and stee
ent
managem
Financial urces
reso
t
Human
en
anagem
ement
Sales m
t
n manag
agemen
Productio elationship Man
R
er
m
to
Cus
A user-oriented
information system
Choose the way you want to access
your information:
Insourcing, Outsourcing, ASP
11
Traditionally offered via Insourcing mode (installed at the customer’s), all of Cegid’s
offering is also available in Outsourcing mode (solution that is hosted and administered
by Cegid) and in ASP mode (application leasing).
Insourcing
Entreprise
business
software
Multichannel
information availability
Each company can
select a model and change it,
simply and transparently, as their
needs change.
(at customer site)
Outsourcing
(hosted)
ASP
(leased)
Publisher/hoster, Cegid offers companies a way
to use their applications via a high-performance,
mutualized and secure hosting platform which
takes into account their entire information system
and their internal organizational processes. Since
they don’t have to worry about integrating and
operating the information systems, the company
can concentrate fully on its core business.
Products
Brands and verticals
The Cegid group designs, hosts and rolls out management
solutions that meet the needs of all the functional management
departments in the company. These solutions are adapted
to each business sector and to each size of company.
Generic
ERPs
ERP business
sectors
Best of breed
solutions
12
Cegid Business Line
ACCOUNTING
FASHION
Cegid Business Suite
MANUFACTURING
HOspitality
Cegid Business Place
RETAIL
CONSTRUCTION
SERVICES
TRADING
CLEANING
Corporate Performance
Management
Finance & Taxation
Human
Resources
Cegid BI
Cegid FCRS
Cegid Etafi Conso
Cegid Etafi
Start rh
RHPlace
RHSourcing
Integration, modularity and
decision-support approach:
Generic ERPs
Cegid has capitalized on its advances in technology and the functional skills that the
various companies in the group have, as well as their experience with companies, in order
to offer Cegid Business. Cegid Business is a modular ERP that, through its architecture,
meets collaborative, decisional and operational expectations.
Extensive functional coverage
Customer
Relations
t
Managemen
Production
t
Managemen
Project
t
Managemen
Sales
t
Managemen
Accounting
Finance
Cash Flow
Fixed Asset
Management
Payroll
Human
Resources
Moreover, Cegid Business takes into consideration the size, means and the management
needs of all types of businesses. Thanks to its modularity and its ability to evolve, it adapts
to the growth of companies and thus supports their development.
Cegid Business Place is designed
for Medium and Large-Sized Businesses
(independents or subsidiaries of groups).
Cegid Business Suite is aimed at SMBs
(€7.5 million to €40 million in sales).
Cegid Business Line responds to
the needs of very small businesses
(less than €7.5 million in sales).
The advantages of Cegid Business
Steering and management indicator library, automation of tasks and processes,
alerts, self service, collaborative portal that can be personalized, EDM,
mobile solutions, e-business…
13
Professional issues and
users’ needs that are
proper to each business
sector:
Verticals ERPs
Chartered Accountants
The Cegid group is an important partner of Chartered Accountants, statutory and internal
auditors, as well as Certified Management Associations and Centers.
Thanks to the diversity and modularity of its solutions, the Group is able to offer its
customers a range of functions covering all work performed by Chartered Accountant
firms: reviews and accounting documents, tax documents, social documents, consulting,
personal taxation, audit and statutory auditing, agency management, eWS customer
relationship managment and services platform…
With the most innovating product ranges on the market, Cegid Expert, Ccmx Expert and
Quadra Expert, the Cegid group is today the leading provider of IT solutions for Chartered
Accountants.
Cegid, Ccmx and Quadratus also offer solutions for Certified Management Associations
and Centers.
14
Thanks to this close-working relationship that has been in place for 20 years now with
Chartered Accountants, Cegid has today become a real specialist in business solution,
always striving to respond to the needs of structures of all sizes, from the artisan to corporate
entities. Certified Public Accounts have understood the interest in recommending Cegid
group solutions to their customers. While assisting them in increasing customer loyalty,
this prescription improves productivity of the employees in the accounting firm and their
customers, making it easier to exchange data between Certified Public Accountants and
Companies and allows them to develop new consulting work with value added.
The communications platform
and on-line services of the
accounting firm for its customers
Via a simple Internet connection, Certified Public Accountants can make a set
of on-line services available to their business customers that allow them to work
together optimally: from immediate on-line restitution of documents drafted by the
accounting firm, up to complete shared management in ASP mode.
In this way, 24 hours a day, 7 days a week, the company has access to:
•its private area that contains all of the accounting, tax, social documents,
correspondence, management reports… archived, sorted and protected,
•the Cegid Business Line on-line management solution that incorporates
accounting and sales management.
Today Cegid is the only company in the market that is able to make business
solutions via the Internet available to companies, offered by Certified Public
Accountants.
Fashion
Cegid Business Mode is an integrated and modular solution for all those involved in the
sector: contractors, order givers, manufacturers, traders, representatives & agents, store
managers, franchisors & franchisees, affiliated commissioned agents and multi-brand
retailers.
Cegid Business Mode, a solution for professionals in the fashion industry, material goods
for individuals, and in particular ready-to-wear clothing for men, women, and children,
sports items, shoes - leather goods - luggage, lingerie - swimwear, fashion accessories.
Cegid Business Mode is the only offering that combines and integrates modules for
manufacturing, sales, Supply Chain Management, centralized control of store networks,
management and collection at sales outlets.
Retail
Cegid Business Retail responds to every aspect of the specialty retail sector by offering
a unique, coherent and scalable information system for managing a single sales outlet or
a chain of stores… for jewelry, perfumery-beauty, miscellaneous accessories, arts of the
table, hardware stores, home improvement…
Cegid Business Retail makes use of Cegid Back Office, for centralized control of a network
of sales outlets, and Cegid Front Office, for management and collections in the sales
outlets.
15
Manufacturing
With its Industry One (GTI Industrie), PACKPMI (PMI Soft) and Cegid Business Industry
Manufacturing (Cegid) offerings, the group’s solutions cover all the sectors in manufacturing:
industrial sub-contracting, automotive, electronics, material goods, aeronautics, mechanics,
plastics, surface treatment, etc. These solutions are adapted to the various business and
industrial organizational processes: sales management, production management, Supply
Chain Management, PLM (Product Lifecycle Management).
With these different offerings, manufacturing companies are sure to find the solution
that is right for them regardless of their budget or size, from the smallest to the largest
company.
Hospitality
16
Selling, reserving, welcoming, serving food, invoicing, purchasing, maintaining, verifying
and analyzing; professions in the tourism sector are rich and varied.
Yield Management, touch-sensitive invoicing, reservations, collections, sequencing and
traceability: the company’s Cegid Business Hotel, Cegid Business Restaurant and Cegid
Business Caterer offerings, the first ERP dedicated to these professions, incorporate the
special needs of each business sector.
Construction
Engineering studies, quotes, fast estimates, invitations to tender, invoicing… these are
a few of the strategic documents of a construction company, around which Cegid has
developed a modular and integrated offer, which is at the forefront of technology.
Cegid Business BTP helps control labor costs and construction site inputs, and helps in
negotiating the best prices with suppliers and in making sound decisions.
Cegid Business BTP incorporates the essential special needs of the industry: engineering
studies and quotes, site management, purchases and inventories, recovering invitations
to tender, laptop estimate management, monitoring interventions…
Trading
Sales, procurement, inventories, items, customers and suppliers, prices and discounts,
EDI or Internet links for remote sites, e-business, subsidiary brands, barcode processing,
etc.
Cegid Business trading is a complete and integrated solution that seamlessly manages
the entire Procurement-Sales chain and handles the requirements of any business that
manages the flow of goods: traders, mass retailing suppliers, purchasing pools, etc.
Services
For all businesses whose work requires project tracking, Cegid’s offer is a one-stop
solution handling billing, procurement, time recording, scheduling and reports, in order to
provide a complete picture of each project so that the customer can focus on productivity
and profitability.
Cleaning
Custom-designed for the cleaning industry, QuadraPROPRETE is a global management
tool which incorporates all the parameters specific to this business sector and provides
precise profitability analysis. QuadraPROPRETE tracks all individual cases, one-time
projects, equipment used and products consumed and provides an accurate status of
the activity. Reducing data-entry time and the risk of errors and providing fast access to
information, QuadraPROPRETE participates in improving the performance of businesses
in this sector.
17
Taxation, Human Resources, Corporate
Performance Management: three areas
of expertise
Best of breed solutions
Cegid Etafi, the reference in taxation
With the ever-changing requirements pertaining to the communication of financial
information and the quantity of legal requirements on the rise, having a financial and tax
information system is now a necessity for businesses. Cegid’s finance & taxation offering
provides a complete and high-performance response in terms of financial and tax returns
(Etafi and Profin), tax returns (Editaxe and Etafi –TVA), EDI electronic returns (Etafi.fr),
archival (Fisc’archiv), tax consolidation (Etafi-IF) and reporting.
18
95 of the top 100 French groups and 70% of companies that
must declare electronically use a Cegid tax solution.
RH Place, recognized know-how
in human resources
Incorporating all of the professions pertaining to payroll and human resources, Cegid’s
solutions participate in rationalizing and in adding security to administrative tasks. In this
way, they allow companies to go back to concentrating on what’s important: Human Capital
optimization, with the implementation of innovating HR services. Its solutions are available
externally, from hosting the information system to externalizing payroll and HR processing.
Cegid - Ccmx
Top 3 of human resources
solutions publishers in France
(PAC survey - May 2005)
19
Corporate Performance Management, a new solution for performance
management and control
In order to meet the control and analysis needs of groups, Cegid has designed a complete
range dedicated to Corporate Performance Management, making use of tools for consolidating,
reporting and Business Intelligence:
Consolidation and Reporting: Cegid Fcrs and Cegid Business Etafi Conso offer applications
for financial, legal (IFRS, CRC) and management consolidation.
Business Intelligence: Cegid Business Intelligence meets needs pertaining to budget
elaboration, reporting (financial, HR, production, etc.) and analysis for facilitating the decision
making which is indispensable for controlling the business.
Cegid has an offering
that meets the needs of
companies, regardless of
their size, their industry and
the scope of their project.
Customer
Testimonial…
80,000 sites make use of a Cegid solution
From the smallest company to corporate entities, Cegid’s solutions adapt to each
customer.
With their extensive functional coverage, they take into consideration the size,
industry and functional department of each company by offering the products and
services that correspond to it.
From the smallest company to the largest groups
Claude Le Berre, Manager of AOMP, specializing
in tools for wood for professionals and the
general public with 7 employees.
Elisabeth Borouchaki, Accounting and Taxation
Manager for the Gallimard Group, 1,000 employees.
Gilles Chaffard, Technical Manager of Erowa
Distribution, subsidiary of a tool-manufacturing
company with 300 employees.
Joël Perbet, Consolidation Manager for Lactalis
(Président, Bridel, Lactel…), number one dairy company
in Europe with over 20,000 employees.
Cegid Business Suite is an open product that
“grows
with the company and that can evolve with
Fcrs changed our business. The Group,
“asCegid
a whole, has gained an incomparable degree of
us as needed. The flow of information between the
various modules allows us to monitor our business
better. We work in highly-competitive sectors and it
is indispensable for us to be able to know at any time
where we are in our order books .
visibility pertaining to the figures and its capacity
thanks to reliable, detailed and easy-to-read
reporting .
Through their reliability, robustness and userwere looking for a functionally-rich solution
“
friendliness, Cegid’s products are totally in line with
“thatWewould
cover our sales management and our
the issues that we have to face .
accounting. The solution was simple to implement.
”
In just a few days, our new business software was up
and running .
”
20
”
”
Solutions adapted to
each sector…
Ralph RICHES, General Manager of Renato Nucci,
top-of-the-line ready-to-wear clothing.
Fabienne Mongin, Manager of A.L.E.S., fire safety.
objective was clear: with Cegid, go beyond
Many software publishers are able to offer
“theOurperformance
“accounting
and functionality of the old system
or payroll software. But very few are
and procure an open yet secure information system.
Cegid’s solution was able to evolve and respond to all
of our needs. Today, Cegid is a leader in the fashion
market. I didn’t make the wrong choice .
”
Frédéric SANCHEZ, Sales Director for NIMOTEL,
hotel establishment.
really capable of conforming to the constraints of a
profession and offer a solution that really meets the
needs. In the construction sector where we operate,
Cegid is today able to offer solutions that are almost
custom-made or, in any case, represent the top-ofthe-range in turn-key solutions .
”
Frédéric Allègre, General Manager of Comptoir
de Famille, accessories and furniture for home
decorating.
with Cegid’s sales teams was good and
“weContact
For our manufacturing, we needed an information
worked together in total confidence. Our contact
“system
with a maximum number of short cuts. In our
spoke the same language as we do, understood our
stores, we regularly have promotions. Cegid Business
needs and had the required professional skills .
”
provides us with the degree of reactivity that we need
in our busines .
”
… and equipped with extensive functional
coverage.
Philippe BARBIER, Tax Manager, Groupe Suez
Denis SCHMITT, IS Manager for BURGER, joinery
company.
the economic and functional stakes, security
“asWith
With Cegid Produflex, we were able to optimize
well as issues connected with the Sarbanes Oxley
“
time
management in our workshops. At any given
laws becoming more and more prominent each year,
moment,
we are able to check that our sales prices
it had become indispensable for us to choose a
are
always
in correlation with our costs .
partner that could meet our expectations favorably.
”
That is why, among other reasons, we chose to go
Eric FERLIN, Payroll Department and Personnel
with the Cegid group .
Administration Manager – HRMS Manager for
”
Botanic, chain specialized in gardening
Jean-Christophe FLAUD, Production Manager of
Groupe Nautique PONCIN YACHTS.
Beyond simple manufacturing and Sales
“Management,
we wanted to implement an integrated
business software that was capable of handling
data from our engineering department that works
with CATIA (Dassault Systèmes CAD software). So
we purchased the entire Cegid Business Industry
Manufacturing ERP .
”
employees, 3 to 5 store openings a
“yearWithand1,800
the need for over 700 seasonal employment
contracts per year, HR management has its job
cut out for it in order to support the growth of the
company. Based on or HRMS RH Place, we have
sought out maximum performance by favoring
automated processing, document dematerialization
and control tools for administrative management but
also for human resources management… .
”
21
2005 Key figures
Customers of all sizes
with specific business needs
Cegid takes into consideration the size and means of all types of companies and offers
solutions and services that are adapted. The offering’s modularity and ability to evolve
makes it possible to meet the needs of all companies, from the smallest company to the
largest corporation, and to support them as they grow and develop.
Less than 50 employees
53 %
51 to 500 employees
34 %
Over 500 employees
13 %
Sales invoiced by size of company (excl. Accounting)
Thanks to its vertical offer that incorporates the specific needs of professionals, Cegid’s
customers can be found in all the major business sectors.
22
Accounting
37 %
Services, Trading
31 %
Fashion, Retail
10 %
Manufacturing
10 %
Hospitality - Construction
6 %
Other Activities
6 %
Sales invoices per business sector
of total sales
The recurrent sales portfolio represents at December 31, 2005 an amount
that exceeds €100 million, which is nearly 45% of total sales.
The steady growth in recurrent sales demonstrates the loyalty and
satisfaction of the Cegid group’s customers.
100.7
In eM
Loyal customers
45%
2005
Development of Outsourcing
+17%
6.4
2004
7.5
2005
In eM
Cegid’s offerings that are available in Outsourcing and ASP modes
have enjoyed much growth. Making the offering available through
these modes makes for true differentiation in the market of
management solutions which is constantly changing.
Growth in business activity
For fiscal year 2005, consolidated sales stand at €224.3 million, up 56.7% compared to
2004. At constant scope, consolidated sales grew 3.6%. The more than 4% growth in
“Software and related services” sales has improved the gross margin (81.8% of sales in
2005 compared to 79.7% in 2004).
+57%
224.3
143
76.5
In eM
0.3
Like-for-like basis
Changes in scope
142.7
147.8
2004
2005
Profits up sharply
Current operating income of €21.3 million, at December 31, 2005 grew 68%.
Operating
marging
21.3
12.4
8.7%
2004
Published
12.7
8.9%
2004
IFRS
Net income
(group share)
9.5%
9.8
8.0
In eM
Income from
ordinary
activities
23
0.7
2005
IFRS
2004
Published
2004
IFRS
2005
IFRS
Improvement in 2005 « gearing »
At December 31, 2005, gearing, or the « net debt » (€50.5 million) to « consolidated equity » (€123.8
million) ratio, is 40.7% (45.9% at December 31, 2004) after taking into account investment and
financing pertaining to the buy-out of Ccmx in November 2004.
The
Stock
Market
Share price multiplied by 5 in 3 years
+35% in 2005
Cegid share
With +35% in growth, the share has once again recorded excellent performance with
regards to the IT sector as a whole. Over the beginning of 2006, the share has continued
this upward trend with a gain of 19% between January 1 and April 28.
As in 2004, trading volumes in 2005 remained high, with a volume of traded shares equal
to the float (number of public shares) which is a monthly average of 361,780 shares.
45.00
700,000
40.00
600,000
35.00
30.00
25.00
400,000
20.00
300,000
Closing price €
Number of shares traded
500,000
15.00
200,000
10.00
100,000
5.00
0
03
n-
Ja
04
05
n-
n-
Ja
Ja
0
06
nJa
Share price
IT CAC (FR)
The BSAR
The Cegid BSAR (Bond with Redeemable Share Warrant), issued in March 2004, is an
additional instrument for investing in the Cegid group and its middle-term development
outlook.
300 000,00
300,000
12
250,000
250 000,00
10
200,000
200 000,00
8
150,000
150 000,00
6
100,000
100 000,00
4
50 000,00
50,000
BSAR closed trade
24
2
0
4
r-0
Ma
5
r-0
Ma
6
r-0
Ma
0
Share price
Distribution of capital
at April 30, 2006
Number of shares
ICMI
% capital
% of voting rights
1,761,500
20.5
33.1
54,680
0.7
0.6
21,939
0.2
NA
1,496,716
17.4
14.5
Eurazeo
797,429
9.3
7.7
Ulysse / Tocqueville
377,920
4.4
3.6
Free float
4,112,616
47.5
40.5
TOTAL (3)
8,622 ,800
100.0
100.0
(1)
Executives
(2)
Treasury shares
(liquidity contract)
Apax
ICMI, active holding company of the Cegid group, is 99.97% owned by Mr. Jean-Michel Aulas.
The following are regarded as executives: the Chairman, the General Manager and the Directors. However, the percentage owned by two of the directors
(ICMI and Eurazeo) is indicated separately in this table. Finally, one of the companies included in the APAX mutual fund, Apax Partners, is a director of Cegid
and owns only one management share.
(3)
This number includes shares created following the exercise of options under the 2001 and 2002 plans and the exercise of BSAR up until April 30, 2006.
(1)
(2)
A dynamic
dividend distribution policy
Cegid traditionally reconciles a growth
profile with an active distribution policy
allowing to increase the loyalty of its
shareholders and to thank them for their
confidence over time.
Amount distributed in €M
7,00
Net dividend per share in €
2,50
2,00
5,00
1,50
4,00
3,00
1,00
2,00
0,50
1,00
0,00
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
net dividend per share
Amount distributed in €M
6,00
Dividend per share proposed at the General 25
Shareholders’ Meeting of June 2, 2006:
€0,85.
0,00
Financial communication
Cegid’s policy is to provide periodic financial information through financial
notices published in the economic and financial press to announce its sales
figures, results or any other important corporate event, and via meetings
held under the auspices of organizations such as the SFAF. A reference
document is also available upon request or may be downloaded from its
website: www.cegid.com.
The General Shareholders’ Meeting is held annually in June. Various financial
documents in English and in French, as well as general information about
the Group, are available on its website: www.cegid.com.
General characteristics
Stock Market
ISIN stock
code
Eurolist Paris
Compartment B
FR0000124703
Reuters Bloomberg Segment
CEGI.PA
CGD FP
NextEconomy
FTSE
9537
Software
Indices
Small 90, Mid and Small
190 et ITCAC
2005 Fiscal Year
Management Report
Year-End Financial Statements
Other Information
This English translation is for the convenience of English-speaking readers. However, only the
French text has legal value. Consequently, the translation may not be relied upon to sustain
any legal claim, nor should it be used as the basis of any legal opinion. Cegid SA expressly
disclaims all liability for any inaccuracy herein.
28
2005 Cegid Reference Document
Contents
General Information
Concerning the issuer ........................................................................................................................................ 31-32
Concerning the share capital ............................................................................................................................. 33-41
Stock Exchanger ................................................................................................................................................ 39-40
Dividend ................................................................................................................................................................. 41
Information policy ................................................................................................................................................... 41
Information about the issuer’s business,
recent developments and outlook
Management report .......................................................................................................................................... 42-58
Simplified Group organizational chart ........................................................................................................................ 59
Highlights ......................................................................................................................................................... 60-61
Recent developments and outlook ....................................................................................................................... 62-63
Property - Financial situation - Earnings
Consolidated Financial Statements ..................................................................................................................... 64-88
Auditors’ Report on the Consolidated Financial Statements ........................................................................................ 89
Parent Company Financial Statements ............................................................................................................... 90-104
Auditors’ Report on the Parent Company Financial Statements ................................................................................. 105
Auditors’ Special Report on Regulated Agreements ........................................................................................... 106-110
Corporate Governance
Chairman’s report in application of Article L.225-37 of the French Commercial Code ........................................... 111-113
Auditors’ Report on the Chairman’s Report .............................................................................................................. 114
Directors and Officers ..................................................................................................................................... 115-117
Documents regarding General Shareholders’ Meetings of June 2, 2006
Board of Directors’ Report to the Special and General Shareholders’ Meeting ..................................................... 118-120
Board of Directors’ Report on the program to repurchase shares (AMF authorization No. 05-408) ...................... 121-122
Description of the program to repurchase company shares to be authorized by
the Ordinary Shareholders’ Meeting of June 2, 2006................................................................................................ 123
Auditors’ Report on the reduction of capital by the retirement of treasury stock ........................................................ 124
Auditors’ Special Report on the free allocation of future shares
for the benefit of salaried members of personnel and executive officers .................................................................... 124
Auditors’ Report on the issue of share warrants ...................................................................................................... 125
Auditors’ Special Report on the authorizations to increase or reduce the capital
during a takeover bid or exchange concerning the company’s securities ..................................................................... 126
Auditors’ Report on the increase in capital without pre-emptive subscription rights reserved
for members of an employee stock ownership plan .................................................................................................. 127
Text of resolutions .......................................................................................................................................... 128-132
Persons responsible for the reference document and auditing of the financial statements......... 133
Table of concordance ...................................................................................................................................... 135
This reference document was filed in French with the Autorité des Marchés Financiers on
May 23, 2006 in accordance with articles 211-1 to 211-42 of the General Regulations of
the Autorité des Marchés Financiers. It may be used in support of a financial transaction
provided it is supplemented by a transaction note approved by the Autorité des Marchés
Financiers.
29
30
General information
Concerning the issuer
General information about the company
Company name: SA Cegid
Headquarters: 52 quai Paul Sédallian - 69009 Lyon,
France.
Legal form
SA Cegid is a French Corporation with a Board of Directors
governed by the laws and regulations in force and in particular
by the new articles of the French Commercial Code as well
as by its bylaws.
Applicable law
French law.
Incorporation date and term
The company was created on August 26, 1983 for a term of
ninety-nine years from the date of its registration in the Trade
and Companies Register, unless extended or dissolved before
term.
Corporate Purpose (article 2 of its bylaws)
The purpose of the company, both in France and abroad
is to:
Sell and provide information technology services,
Design, produce and sell software and software
packages,
Provide training and assistance of any kind to users of
software, software packages and computer hardware,
Conduct any kind of information technology activity regarding
managing the accounting profession and businesses,
Conduct any kind of industrial, sales and research activity
related to electronic and information technology products,
including in particular the fabrication, purchase, sale, trade
and maintenance of said products and equipment and,
more generally, provide any service in the electronic and
information technology fields,
Purchase, sell and operate any kind of information system,
be it hardware or software,
Trade any kind of information technology equipment as
well as all kinds of peripheral equipment in the information
technology business,
Trade information technology programs,
Trade office supplies and accessories.
For this purpose, the company may:
Create, acquire, sell, trade, take or provide leases with or
without commitment to sell, manage and operate directly
or indirectly, all industrial and commercial establishments,
plants, jobsites, premises of any kind, moveable property
and equipment,
Obtain or acquire all production patents, licenses, processes
and brands, exploit, sell or contribute them and grant any
operating licenses in all countries,
And generally conduct all kinds of sales, industrial, financial,
moveable and immovable property transactions that relate
directly or indirectly to the company purpose, are useful to
it or are likely to facilitate its fulfillment.
Commercial and corporate trade register and codes
LYON RCS 327 888 111
NAF Code: 722 C
ISIN Code: FR 0000124703
Location where company documents can be consulted
The bylaws, accounts, reports and minutes of Shareholders’
Meetings can be consulted at the headquarters: 52 quai Paul
Sédallian, 69009 Lyon, France.
Fiscal year
The financial year commences January 1 and ends
December 31 every year.
Statutory distribution of earnings (Article 31 of the
bylaws)
The net revenues each year, less general overheads and other
corporate expenses, including depreciation and provisions,
constitute the net earnings or losses for the year.
The amounts recorded in legal reserves are deducted
first from the net earnings each year minus prior losses,
if applicable. As such, five percent (5%) is deducted to
constitute the legal reserve fund; this deduction ceases
to be mandatory when the said fund reaches one tenth of
the share capital; it becomes mandatory again when, for
any reason whatsoever, the legal reserve falls below this
percentage.
Distributable earnings consist of the net earnings for the
year less prior losses and the amounts recorded as reserves
according to the law, plus retained earnings.
Based on the Board of Directors’ proposal, a Shareholders’
Meeting can distribute all or part of the net earnings to
shares as dividends, allocate them to reserve or capital
amortization accounts or carry them forward as retained
earnings.
The Shareholders’ Meeting ruling on the accounts for the
year has the option of granting each shareholder, for all or
part of the distributed dividend, the option of receiving the
dividend as cash or as shares. An Ordinary Shareholders’
Meeting may also decide to pay the dividend in kind.
The Shareholders’ Meeting can decide to use the reserves
available to it to pay a dividend on shares. In this case, the
decision indicates expressly which items the deductions
are made from.
Notwithstanding, other than the case of a reduction in
capital, no distribution can be made to shareholders when
the shareholders’ equity is, or would become following such
distribution, less than the amount of the share capital
plus reserves that the law or bylaws prohibit from being
distributed.
Court of jurisdiction
The Commercial Court of Lyon.
Shareholders’ Meetings (articles 21 to 29 of the bylaws)
Notice of meeting (article 21)
«The notice of meeting is delivered by a prior notice published
in the BALO thirty days before the Meeting date and by a
notice published in a journal of legal announcements in the
headquarters’ department and in the BALO fifteen days
before the Meeting date.»
Access to Meetings - Powers (article 23)
«Every shareholder has the right to participate in Shareholders’
Meetings and to participate in the deliberations personally or
by proxy, irrespective of the number of shares he possesses,
upon providing simple proof of his identity and depositing his
shares in the form and within the timeframe mentioned in
the notice of meeting, provided however that this timeframe
cannot exceed five days before the Shareholders’ Meeting. A
shareholder can be represented by his spouse or by another
shareholder.»
31
General information
Concerning the issuer
Conditions for exercising voting rights
Statutory thresholds
Article 11 of the bylaws: «In addition, every shareholder that
acquires at least 2% of the share capital or any multiple
of this percentage must inform the company within fifteen
days by registered letter with acknowledgement of receipt
sent to the headquarters. If such shares are not declared
under the aforementioned conditions, the shares exceeding
the fraction that should have been declared are deprived of
their voting right as provided for by law, provided that one or
more shareholders holding at least 5% of the share capital
make such request during the Shareholders’ Meeting».
Voting rights
The Special Shareholders’ Meeting of May 12, 1986
implemented a double voting right for shares registered in
the name of the same shareholder for at least two years. The
Special Shareholders’ Meeting of June 23, 1989 increased
the necessary registered timeframe to benefit from a double
voting right from two years to at least four years.
Article 25 of the bylaws: «The voting right attached to shares
is proportional to the share of capital they represent. Each
share carries the right to one vote. Notwithstanding, a
double voting right is granted under the legal conditions to
shares that have been registered for at least four years in
the name of the same shareholder.»
The double voting right ceases for any share that is converted
to a bearer share or transferred, other than any transfer in
the share register following family succession or donation.
In the event that free shares are allocated, they benefit from
a double voting right four years after they are registered in
the name of the shareholder.
Double voting rights may be suppressed via a decision of
the Special Shareholders’ Meeting after ratification of the
Special Meeting of beneficiaries.
32
General information
Concerning the share capital
Statutory conditions for modifying the capital (article 7 of
the bylaws)
The share capital can be increased by any methods and
manners authorized by law.
Amount of subscribed capital, number and classes of shares
that represent it
At December 31, 2005, the share capital amounted to
€8,157,987.25 divided into 8,587,355 shares with a face
value of €0.95 each, fully paid up.
Following the exercise of share options (2001 and 2002
Plan), and the exercise of Cegid SA share warrants, the
share capital at the date of the Board Meeting that has
acknowledged the increase in capital resulting from the
exercise of stock options and from the exercise of BSAR,
which was March 13, 2006, was increased by a nominal value
of €60,667.95 through the creation of 63,861 new shares
with a face value of €0.95 each. The capital then amounted
to €8,162,395.25, divided into 8,591,995 shares with a
face value of €0.95 each, and fully paid up.
Un-issued authorized capital
The Special Shareholders’ Meeting of June 8, 2005 decided
to authorize the Board of Directors to:
Issue marketable securities and increase the share
capital while maintaining shareholders’ pre-emptive
share subscription rights pursuant to the provisions of
article L.225-129 of the French Commercial Code, for
a term of twenty-six months up to a nominal amount of
€80 million.
Increase the share capital by incorporating reserves,
earnings or premiums. This authorization was granted
for a term of twenty six months and up to an amount of
80 million euros.
Issue securities without shareholders’ pre emptive
subscription rights pursuant to the provisions of Articles
L.225-129, L.225-129-2, L.225 -135, L.225-136, L.22891, L.228-92 and L.228-93 of the French Commercial
Code. This authorization was granted for a term of twentysix months up to a nominal amount of €80 million euros.
Increase the issue amounts in cases of excess demand,
pursuant to the provisions of Article L.225-135-1 of the
French Commercial Code up to 15% for each issue and at
the same price as that retained for the initial issue.
Issue shares and miscellaneous securities and freely fix
their issue price pursuant to the provisions of Article L.225
-136 1°) of the French Commercial Code up to 10% of the
80 million euro ceiling. This authorization was granted for
a term of twenty six months.
Increase the capital up to 10% of the capital in order to
compensate contributions in kind, pursuant to the provisions
of Article L.225-147 of the French Commercial Code and
for a term of twenty six months.
Grant, pursuant to the provisions of Articles L.225-177
and following of the French Commercial Code, subscription
and/or purchase share options to the benefit of members
of personnel and/or executive officers of the companies in
the Group. This authorization was granted for a term of
thirty eight months.
Allocate, pursuant to the provisions of Articles L.225-1971 of the French Commercial Code, free of charge existing
shares or future shares. This authorization was granted
for a term of thirty eight months.
Use, pursuant to the provisions of Article L.225-129-3 of
the French Commercial Code, the authorizations to issue
and reduce capital during a takeover bid concerning the
company’s securities.
Pledges Cegid SA shares registered in the share register
At March 31, 2006, 313,207 Cegid SA shares, registered
in the share register, are pledged as security, including
primarily security given by ICMI SAS in favor of the Banque de
l’Économie and Lyonnaise de Banque as security for medium
term loans.
The loans taken out by ICMI will mature in 2007 and 2009.
3.6% of Cegid SA’s capital is pledged as security.
Assets pledged as security
At March 31, 2006, Cegid SA had not pledged any assets
as security.
Other securities providing access to capital
1) 1999 OCEANE type bond issue
In November 1999 Cegid issued a convertible bond that can
be exchanged for New or Existing shares with the following
main characteristics:
Gross revenues from the issue: €35.4 million.
Number of bonds issued: 172,500 convertible bonds.
Issue price: €205.20.
Entitlement and settlement date: November 5, 1999.
Bond term: 6 years and 57 days on the settlement date.
Annual interest: 2.50% or €5.13 per bond payable in
arrears January 1 each year.
Gross yield to maturity at the settlement date in case of
non-conversion: 5.62% at the settlement date.
Normal redemption: fully redeemed at January 1, 2006 by
redemption at a price equal to €250.80, or 122.22% of
the bonds’ par value.
Listing: the issued convertible bonds as well as the shares
that will result from the bonds’ conversion are listed on the
premier Marché (ISIN code FR0000180887).
In prior fiscal years, Cegid SA purchased on the stock
market and then cancelled 26,581 bonds. In 2004, Cegid
SA recorded a conversion request covering 15 bonds. Based
on the conversion rate, Cegid issued 61 shares and paid
a balance of €1.82. No repurchases were carried out in
fiscal year 2005. At December 31, 2005 145,904 bonds
were in circulation.
Redemption: Cegid fully redeemed at term of January 2,
2006 for a total amount of €36.6 million instead of €43.3
million at loan issue.
The use at December 31, 2005 of confirmed bank credit
lines allowed the financial structure of the group to not be
modified at this date.
Securities not representing capital
None.
33
General information
2) Bonds with Redeemable Share Warrants («OBSAR; Obligations
à Bons de Souscription d’Actions Remboursables»)
In March 2004 Cegid issued bonds with Redeemable
Share Warrants (OBSAR) that have the following main
characteristics:
Gross revenue from the issue: €44.1 million.
Number of bonds issued with Redeemable Share Subscription
Warrants: 2,004,546 bonds (the «Bonds») with a nominal
unit value of €22 were issued with Redeemable Share
Subscription Warrants (the «BSAR»; Bons de Souscription
d’Actions remboursables) (together the «OBSAR»)
representing a total nominal value of €44,100,012.
OBSAR
Nominal unit value of the bonds: the nominal unit value of
the Bonds is €22.
Bond issue price: the par value, payable in a single payment
on the settlement date.
Entitlement and settlement date: March 3, 2004.
Nominal interest rate.
The Bonds will bear interest at the 3-month EURIBOR
rate minus 0.20% per year payable quarterly in arrears
on June 3, September 3, December 3 and March 3 each
year commencing on June 3, 2004.
Normal redemption: the Bonds will be redeemed in whole
on March 3, 2009 by redemption at par value of €22 per
Bond.
Early redemption
- The company may elect:
* At any time, by purchase on the stock market, over
the-counter or via takeover bids without limit to price
or quantity.
* At each Interest Payment Date beginning March 2,
2004 through to March 3, 2009, in whole or in part, at
an early redemption price equal to the par value plus the
Amount of Interest corresponding to the Interest Period
ending on the redemption date.
- Redemption is mandatory in the event:
* the company decides to redeem the BSARs in advance
pursuant to paragraph “2.5.6. Early Redemption of the
BSARs at the company’s option” of the transaction
note.
* At least 77% of the BSARs have been exercised at the
request of their holders or repurchased and cancelled by
the company.
The company will redeem all outstanding Bonds in circulation at
an early redemption price equal to the par value plus the interest
incurred up to the date established for the redemption, which
shall be no later than two months after the publication date of
the notice to BSAR holders of the BSAR redemption.
Early redemption in case of default
The Bonds shall become due, pursuant to paragraph 2.2.7.6.
«Early redemption of Bonds in case of default» of the
transaction note, in case the company or one of its major
subsidiaries defaults, as defined in paragraph 2.2.7.6.
Covenants
The issue agreement includes the usual provisions in terms of
covenants (net financial debt / shareholders’ equity, net financial
debt / EBIDA, etc.
Gross yield to maturity
Spread of less than 0.20% from the 3-month EURIBOR.
Bond term
At the planned settlement date, namely March 3, 2004,
the total term was 5 years.
34
Bond listing
The Bonds were listed on the Premier Marché of Euronext
Paris as of March 3, 2004 under ISIN code number
FR0010061846.
BSAR
Number of BSARs attached to each bond
One (1) BSAR is attached to each Bond. Consequently,
the issue covered 2,004,546 BSARs after the OBSAR
extension clause was exercised at 5%.
Exercise parity – Exercise price
One (1) BSAR can subscribe one (subject to planned
adjustments) new Cegid share at a price of €28.44
payable in cash. BSAR holders shall pay their subscription
in cash.
Exercise period
The BSARs can be exercised any time from March 3, 2004
to March 3, 2009.
BSARs that have not been exercised by March 3, 2009 shall
become null and void and lose all of their value.
Redemption of BSARs at the company’s option
The company may, at its option any time from March 3,
2007 to the end of the Exercise Period, call all of the
outstanding BSARs in circulation at a price of €0.01.
However, such early redemption shall only be possible if the
arithmetic mean, calculated over ten consecutive trading
days that the share is quoted, chosen by the company
among the twenty trading days preceding the publication
date of the early redemption notice, of the products (1) of
the closing price of Cegid’s share on the Premier Marché
of Euronext Paris and (2) the Exercise Parity in force at
each of the dates, exceeds €35.55.
Repurchases and cancellation of BSARsR
BSARs can be repurchased and cancelled at any time on
the stock market, over-the-counter or via takeover bids
without limitation for the price or the quantity. BSARs
repurchased in this way will be cancelled.
Listing of BSARs
The BSARs were listed on the Euronext Paris’ Premier
Marché as of March 3, 2004 under ISIN code number
FR0010061853.
Entitlement to shares subscribed by exercising the BSARs
The new shares subscribed by exercising the BSARs shall
bear entitlement as of the first day of the financial year
during which the BSARs were exercised and the subscription
price paid.
Since the Board of Directors’ Meeting of March 23, 2005
that acknowledged the previous conversions and up until
December 31, 2005, 12 share subscription warrants had
been exercised at a price of €28,44 per share, which
resulted in the creation of 12 new Cegid shares. Since
January 1, 2006, 140 share subscription warrants have
been exercised under the same conditions. At March 31,
2006, there are 2,004,546 outstanding bonds in circulation
and 2,004,330 BSARs.
3) Cegid SA share option plans
There are currently two Cegid SA share option plans in force.
The Board of Directors created them on January 24, 2001
and December 20, 2002 under the authorization given by
the Special Shareholders’ Meeting of June 14, 2000.
Board of Directors share option plan – January 24,
2001
This plan originally covered 44,915 options with rights to
44,915 shares. In view of the division of the share’s face
value by four as approved by the Special Shareholders’
Meeting of December 9, 2003, the total number of options
granted stands at 179,660.
General information
At March 31, 2006, after taking into account the options
exercised and the loss of beneficiary status for some original
beneficiaries, 45,136 options with rights to 45,136 Cegid
shares can still be exercised.
Board of Directors share option plan – December 20,
2002
This plan originally covered 21,300 options with rights to
21,300 shares. In view of the division of the share’s face
value by four as approved by the Special Shareholders’
Meeting of December 9, 2003, the total number of options
granted stands at 85,200.
At March 31, 2006, after taking into account the options
exercised and the loss of beneficiary status, 34,000
options with rights to 34,000 Cegid shares can still be
exercised.
4) Ratio adjustment
Cegid, following the General Shareholders’ Meeting of June
8, 2005 that decided to distribute a dividend, in part taken
from the other reserves item, adjusted the Convertible bond
«OCEANE» ratio. The new ratio stands at 4,008 shares with
a par value of 0.95 euros each for a bond of 205.20 euros
at par value.
The OBSAR loan (2004) as well as the Cegid share option
plans, implemented by the Board of Directors on January 24,
2001 and December 20, 2002 did not require any adjustment
in ratio or in subscription price.
Note that except for the OBSAR loan and these two Cegid
share option plans, at March 31, 2006, there are no other
securities that are likely to grant access to the capital of
Cegid.
Table of changes in share capital
Potential dilution of capital
at 03/31/2006
Number
of shares
Number of Cegid shares
at 03/31/2006
8,593,915
Potential exercise of all BSARs
issued in March 2004
2,004,330
18.8
79,136
0.7
2,083,466
19.5
Potential exercise of options
granted to employees
SUB TOTAL
TOTAL
Dilution
as %
10,677,381
35
General information
Table of changes in share capital
Date
Variations in capital
(in FF and in €)
Transactions
Nominal
1983
1983
1986
1986
Creation
Issue
IBCC/Cegid merger
Mandatory Bond
Conversion
1986
Partial incorporation
of bond discount
1986
Share’s face value
divided by 4
Personnel subscription
(share option plan)
1986
1986
1987
1988
1988
Number of shares
Incorporation
of reserves or
Bond discount discounts
12,800 FF
14,674,000 FF
14 553 600 FF
Cumulative
Total
Total
capital
100 FF
100 FF
100 FF
100 FF
2,500
12,500
2
3,190
2,500
15,000
15,002
18,192
250 000 FF
1 500 000 FF
1 500 200 FF
1 819 200 FF
100 FF
145,536
163,728
16 372 800 FF
654,912
16 372 800 FF
664,862
16 621 550 FF
25 FF
248,750 FF
3,825,775 FF
25 FF
9,950
Issue
831,075 FF
Issue
8,726,300 FF
CCMC takeover bid by 2,335,775 FF
way of an exchange of
securities
Exercise A and B
150 FF
warrants
55,682,025 FF
32,233,695 FF
25 FF
25 FF
25 FF
33,243
698,105
349,052 1,047,157
93,431 1,140,588
17 452 625 FF
26 178 925 FF
28 514 700 FF
10,850 FF
25 FF
6 1,140,594
28 514 850 FF
3,097,941 FF
25 FF
25 FF
13,411 1,154,005
162,334 1,316,339
28 850 125 FF
32 908 475 FF
25 FF
74,953 1,391,292
34 782 300 FF
1994
1997
Share options
Cegid Informatique
merger
335,275 FF
4,058,350 FF
1997
Cegid Environnement
Mayntenance merger
1,873,825 FF
1997
1998
1999
Mandatory bond
conversion
464,900 FF
11,994,420 FF
25 FF
18,596 1,409,888
35 247 200 FF
Servant Soft takeover
bid by way of an
exchange of securities
Mandatory bond
conversion
702,825 FF
22,912,095 FF
25 FF
28,113 1,438,001
35 950 025 FF
1,785,775 FF
46,072,995 FF
25 FF
71,431 1,509,432
37 735 800 FF
1,750 FF
1,579,300 FF
57,750 FF
40,745,940 FF
25 FF
25 FF
70 1,509,502
63,172 1,572,674
37 737 550 FF
39 316 850 FF
1999
1999
2000
Share options
Mandatory bond
conversion
2000
Conversion of the capital
reduction into euros
2000
2002
Share options in euros
Cancellation of treasury
shares - capital
reduction
Share’s face value
divided by 4
2003
2004
2005
2006 (*)
(*)
36
250,000 FF
1,250,000 FF
200 FF
319,000 FF
Nominal
value
(17,653.94) €
4,560 €
(327,655) €
150,938 €
(7,651,704) €
Capital increase Share 2,365,467,70 € 53,608,967,98 €
options
6,612 €
77,952 €
Exercise BSARs
60,80 €
1,759.36 €
Share options
132,769.15 € 1,960,254.80 €
Exercise BSARs
11.40 €
329.88 €
Share options
6,099.00 €
105,288.00 €
Exercise BSARs
133.00 €
3,848.60 €
(17,653,94) €
3.80 €
1,572,674 5,976,161.20 €
3.80 €
3.80 €
1,200 1,573,874 5,980,721.20 €
(86,225) 1,487,649 5,653,066.20 €
0.95 €
5,950,596 5,653,066.20 €
0.95 € 2,489,966 8,440,562 8,018,533.90 €
0.95 €
6,960 8,447,522 8,025,145.90 €
0.95 €
64 8,447,586 8,025,206.70 €
0.95 € 139,757 8,587 343 8,157,975.85 €
0.95 €
12 8,587 355 8,157,987.25 €
0.95 €
6,420 8,593 775 8,164,086.25 €
0.95 €
140 8,593 915 8,164,219.25 €
At March 31, 2006.
General information
Current distribution of capital and voting rights
Shareholding at March 31, 2006
Shareholders
ICMI (1)
Executives
(2)
Treasury shares (3)
APAX (venture capital mutual investment fund)
EURAZEO
Ulysse/Tocqueville dividend
Number of shares
% of capital
Number of votes
% of voting rights
1,761,500
20.50
3,419,892
33.10
60,518
0.71
63,077
0.61
14,601
0.17
1,496,716
17.41
1,496,716
14.49
797,429
9.28
797,429
7.72
377,920
4.40
377,920
3.66
Free Float
4,085,231
47.53
4,175,631
40.42
TOTAL (4)
8,593,915
100.00
10,330,665
100.00
ICMI, director company of the Cegid group, is held 99.97% by Mr. Jean-Michel AULAS.
The Chairman, General Manager and Directors are considered to be Management. However, the percentage held by two of the directors
(ICMI and Eurazeo) is listed separately in this table. Finally, among the companies comprising the APAX venture capital fund, APAX Partners is
the director of Cegid and it only holds one director’s share.
(3)
Treasury stock held by Cegid under the terms of the liquidity agreement.
(4)
The total takes into account the shares created for share options exercised in the 2001 and 2002 plans and BSAR exercised up to March 31,
2006.
(1)
(2)
The percentage held by employees at December 31, 2005, is listed in the management report on page 53 of this Reference
Document.
Note that the company requested a survey on the Identifiable Bearer Securities that was carried out at February 6, 2006. The
results of this study show that the shareholding is composed of 12,596 bearer shares and 252 nominative shares.
Changes in the capital distribution over the past three years
Shareholders
ICMI (1)
% in shares at
12/31/2003
28.45 (3)
Cegid treasury shares
0.59
Executives (2)
0.34
% of voting
rights
43.37
% in shares at
12/31/2004
20.94 (3)
% of voting
rights
33.60
0.45
0.27
APAX (venture capital
mutual investment fund)
EURAZEO
% in shares at
12/31/2005
20.51
% of voting
rights
33.17
0.32
0.09
0.07
0.91
0.78
17.74
14.78
17.42
14.52
9.44
7.86
9.29
7.73
Employees’ Option Plans
0.39
0.30
NS
NS
1.35
1.27
Chartered Accountants
0.63
1.06
0.41
0.67
0.32
0.53
Free Float
TOTAL
69.6
55.00
50.93
43.02
49.88
42.00
100.00
100.00
100.00
100.00
100.00
100.00
) At December 12, 2005, Mr. Jean-Michel AULAS held 99.97% of ICMI representing 99.96% of the voting rights.
The Chairman, General Manager and Directors are considered to be Management. However, the percentage held by two of the directors
(ICMI and Eurazeo) is listed separately in this table. Finally, among the companies comprising the APAX venture capital fund, APAX Partners is
the director of Cegid and it only holds one director’s share.
(3)
Including share held by ICMI under the terms of the liquidity agreement, noting that ICMI has been out of the liquidity agreement since
May 31, 2005.
(1)
(2)
37
General information
On April 5, 2005, the Caisse des Dépôts et Consignation
informed Cegid that it had dropped below the statutory share
capital threshold of 2% and declared that it held 1.99% of
the capital and 1.67% of the voting rights at this date.
ICMI a declared - following the combined effects of the
exercise of Cegid SA share options, of acquisitions and Cegid
SA share transfer transactions that took place under the
terms of the liquidity agreement, and of ICMI’s withdrawal
from the liquidity agreement on May 31, 2005 – that it had
dropped below, on May 31, 2005, the threshold of a third
of the voting rights of Cegid and held 20.54% of the capital
and 33.16% of the voting rights.
On October 4, 2005, the Caisse des Dépôts et Consignation
informed Cegid that it had risen above the statutory share
capital threshold of 2% of the capital and declared that it
held 2% of the capital et 1.66% of the voting rights at this
date.
On March 14, 2006, the Caisse des Dépôts et Consignation
capital threshold of 2% of voting rights and declared that
it held 2.46% of the capital and 2.05% of the voting rights
at this date.
Note that as part of the contribution of Ccmx Holding shares
to Cegid by Ccmx Holding’s shareholders, Cegid and these
shareholders signed a draft agreement on June 23, 2004,
the terms of which were described in the document that
was registered with the AMF under number E.04-193
dated October 27, 2004. In addition, APAX Partners and
Eurazeo on the one hand and ICMI on the other signed a
voting agreement on June 23, 2004, the terms of which
are shown in the aforementioned document.
There were 10,330,665 voting rights at March 31, 2006.
The company has a program to repurchase its own shares,
authorized under number 05-428 by the Autorité des
Marchés Financiers on May 20, 2005, which authorizes
the company to acquire up to 10% of the total number of
shares comprising the share capital at June 8, 2005.
The General Shareholders’ Meeting on June 2, 2006 will
be called upon to vote on a new share repurchase plan, for
which the terms are presented on page 123 of this Reference
Document, noting that since Law No. 2005-842 of July 26,
2005, for the confidence and modernization of the economy,
the approval procedure for the repurchase plan transaction
note has been suppressed.
No significant variation has occurred between the date the
table was prepared and the date the reference document
was filed.
At March 31, 2006, to the company’s knowledge, the
administration and management bodies held 30.81% of the
capital representing 41.7% of the voting rights.
Natural persons and legal entities that, directly or
indirectly, can exercise control over the issuer at
March 31, 2006
Identity: ICMI + Mr. Jean-Michel AULAS
Percentage of capital held: 20.80%
Percentage of voting rights held: 33.37%
38
General information
Market share
The Cegid share (ISIN Code 0000124703) is listed on Eurolist (Euronext Paris) Compartment B and is referenced in the Small
90, Mid and Small 190 and ITCAC indexes. CEGID is among the companies listed in the Euronext’s «NextEconomy» segment
(FTSE 9537 Software).
2004
Month
High € Low €
2005
Volume
Capital High € Low €
€M
2006
Volume
Capital
€M
High € Low €
Volume
Capital
€M
January
23.25
16.81
424,077
8.30
31.95
24.05
491,063
14.09
35.50
32.08
269,082
9.28
February
24.50
21.81
328,005
7.60
33.50
30.20
377,179
12.05
36.00
34.03
278,625
9.76
March
23.80
20.40
268,412
5.90
35.40
30.26
537,525
17.82
40.00
32.00
549,122
20.21
April
23.97
22.20
313,732
7.10
34.90
29.18
291,672
9.59
41.64
38.81
408,828
16.32
May
23.90
20.70
104,114
2.29
31.90
27.35
468,321
13.52
June
26.94
21.42
306,601
7.64
31.90
27.60
444,246
12.85
July
27.80
25.10
248,153
6.52
30.74
26.80
348,489
10.30
August
26.50
23.10
149,871
3.60
30.19
28.28
145,552
4.22
September
25.14
20.80
171,965
3.94
33.75
26.81
541,741
16.88
October
23.40
20.90
214,365
4.69
33.90
30.00
227,591
7.40
November
24.75
22.10
276,632
6.61
33.60
29.50
251,349
7.78
December
24.59
23.91
181,642
4.42
34.75
32.16
216,627
7.28
2,987,569
68.61
1,505,657
55.57
Total
4,341,355 133.78
Source : Euronext.
Convertible bond «OCEANE» (Code ISIN 0000180887) - November 1999 - has not been listed on Eurolist (Euronext Paris)
since 12/30/2005. On 01/02/2006, in accordance with the transaction note, this was redeemed at term at a unit price equal
to 250.80 euros.
2004
2005
Month
High €
Low €
Volume
January
243.00
239.99
1,017
February
243.00
240.50
1,038
March
242.70
240.10
April
246.00
240.80
May
246.00
June
245.30
July
High €
Low €
Volume
0.20
250.00
244.00
481
0.12
0.25
247.05
245.00
316
0.08
955
0.23
248.60
247.07
264
0.07
828
0.20
254.00
246.05
2,711
0.68
243.00
213
0.05
252.30
250.00
253
0.06
243.10
836
0.20
253.00
251.00
2,336
0.59
249.00
245.00
490
0.12
252.00
248.10
300
0.08
August
248.45
245.80
789
0.20
252.00
251.00
200
0.05
September
250.00
246.00
448
0.11
252.50
230.00
123
0.03
October
253.99
248.00
335
0.08
252.50
248.50
1,044
0.26
November
252.00
249.90
361
0.09
252.00
248.20
277
0.07
December
252.01
250.35
521
0.13
254.00
248.50
1,151
0.29
7,831
1.86
9,456
2.38
Total
Capital €M
Capital €M
Source : Euronext.
39
General information
Redeemable share subscription warrant (ISIN code 0010061846) – March 2004 – is listed on Eurolist (Euronext Paris).
2004
Month
High € Low €
2005
Volume
€M
2006
Volume
€M
Volume
Capital
€M
January
87.96
87.60
433
0.04
94.90
93.96
212
0.02
February
90.20
87.20
521
0.05
94.50
93.56
1,357
0.13
March
100.00
84.70
3,606
0.30
89.20
89.20
800
0.07
95.50
94.00
1,989
0.19
April
90.00
89.90
2,058
0.19
89.25
89.22
2,899
0.26
95.81
95.81
1
0.00
May
89.01
88.15
179
0.02
89.50
88.62
1,025
0.09
June
88.14
87.26
113
0.01
92.50
90.01
108
0.01
July
90.00
90.00
9,434
0.85
96.00
94.10
60
0.01
August
90.00
90.00
5,387
0.15
94.30
94.30
1,296
0.12
September
90.40
88.02
1,690
0.20
94.30
94.12
2,165
0.20
3,559
0.34
October
-
-
-
-
94.10
94
1,965
0.18
November
89.83
89.83
550
0.05
94.40
94.40
150
0.01
December
90,.60
89.72
1,197
0.11
95.85
94
4,822
0.45
24,214
1.88
16,244,
1.49
Total
Source : Euronext.
Redeemable share subscription warrant (ISIN Code 0010061853) – March 2004 – is listed on Eurolist (Euronext Paris).
2004
Month
High € Low €
Volume
2005
€M
Volume
2006
€M
Volume
Capital
€M
January
5.42
3.05
317,418
1.45
8.07
7.41
166,486
1.32
February
7.18
5.48
214,288
1.35
8.69
7.66
126,474
1.05
March
4.38
3.28
174,785
0.61,
8.17
6.87
209,312
1.58
9.89
6.78
279,964
2.50
April
3.49
2.88
54,022
0.17
8.04
7.00
67,933
0.53
10.94
9.30
263,449
2.74
836,373
7.61
May
3.45
2.82
10,472
0.03
7.80
5.00
134,400
0.81
June
3.89
2.50
99,378
0.37
6.75
5.20
102,170
0.61
July
3.97
3.25
35,890
0.13
6.75
5.30
69,249
0.42
August
3.25
2.80
14,306
0.04
6.57
5.40
71,005
0.40
September
3.29
2.50
28,193
0.07
7.39
5.30
120,252
0.81
October
3.25
2.60
12,582
0.04
7.40
6.63
56,073
0.39
November
3.50
3.00
28,413
0.09
7.40
6.61
79,384
0.55
December
3.15
2.85
32,390
0.10
7.80
7.00
165,585
1.23
490,431
1.65
TOTAL
1,607,069, 10.13
Source : Euronext.
40
General information
Dividends
The table below provides a comparison of the amount of
dividends paid for the past five fiscal years. Dividends that are
not claimed within five years of their availability for payment
are barred and turned over to the State.
Financial Year
Net
50%
Gross
Dividend / Dividend Dividend/
Share
Tax Credit
Share
For 2001
0.57 €
0.28 €
0.86 €
For 2002
0.57 €
0.28 €
0.86 €
0.80 €
0.40 €
1.20 €
For 2003
(1)
For 2004
0.80 €
For 2005 (2)
0.85 €
Fiscally, according to the provisions in force since January 1,
2005, this dividend will not be accompanied by a dividend tax
credit. However, it will give shareholders who are natural persons
the right to a 50% abatement on taxable profit based on the entire
dividend distributed.
(2)
Payment of the dividend is subject to shareholders’ approval at a
Shareholders’ Meeting that will be held June 2, 2006. The amount
distributed as a dividend among the shareholders who are natural
persons is fully eligible for the 40% allowance provided for in Article
158 of the General Taxation Code amended by the finance law for
2006 of December 30, 2005.
(1)
Information Policy
The company’s financial information policy is designed to
inform the market regularly, especially following Board of
Directors meetings approving the annual and half-yearly
financial statements and the publication of quarterly sales,
at press conferences, SFAF (French Society of Financial
Analysts) meetings and in published press releases. The
company also publishes legally required notices in the Bulletin
des Annonces Légales Obligatoires (BALO).
Cegid has participated in the following events:
SFAF meetings: March 2005 and September 2005,
Meetings organized throughout 2005 by CM-CIC Securities,
account keeper, and by the various stock market companies
that follow the information technology sector and medium
size companies.
At the same time, Cegid’s management has had several
individual contacts in the form of meetings and/or
telephone interviews with French and foreign managers
and analysts.
The various press releases, plus all information concerning
the company’s business, are available in French and English
on Cegid’s website:
http://www.cegid.com/societe_investisseur.asp
41
Management Report
Ladies, Gentlemen and Shareholders,
We have called this Shareholders’ Meeting to report to you
on the Company and Group’s business activities for the year
ended December 31, 2005 and submit for your approval
the annual financial statements for 2005 and the earnings
allocation.
The year’s main event
FY 2005 is the first full 12-month period for the new
group comprised of Cegid and Ccmx which was acquired
in November 2004. Ccmx’s integration was initiated on
that date, but this was considerably slowed by proceedings
filed by a third party against the decision of the Ministry
of Economy and Finance who authorized the concentration
operation between Cegid and Ccmx.
Despite this context, the positioning of your Group and its
ability to quickly implement the first cost synergies, have
made it possible to significantly improve operating results and
to maintain a balanced financial structure. 2005 therefore
allowed the Cegid group to confirm its position at the top
French supplier of management solutions for middle market
companies and to display an overall activity level which ranks
it in Europe’s top ten publishers.
Considerable growth in business and income
Growth in sales and improvement in gross margin
FY 2005 is the first period following the merger between Cegid
and Ccmx which took place in November 2004. Consolidated
sales, standing at €224.3 million and including in particular
Ccmx’s contribution of €82.9 million, are up nearly 57%
compared to 2004. This sharp rise was accompanied by
qualitative growth in the business which resulted in increasing
the gross margin in 2005 (nearly 81.8% at December 31,
2005 compared to 79.7% at December 31, 2004). The
period has also resulted in growth in the recurring income
portfolio which at December 31, 2005 an amount exceeding
€100 million, which is nearly 45% of total sales. Among
the recurring business, Cegid’s Sourcing offer is up sharply
(+17%) and makes for true differentiation in the management
solutions market.
Sharp growth in current operating income
The reduction in fixed costs initiated right at the time of the
merger with Ccmx and the improvement in the overall gross
margin has allowed the group at December 31, 2005 to
boast current operating income up 68% compared to that
observed at December 31, 2004.
Solid financial structure
The ratio “net financial indebtedness” (€50.5 million) /
“consolidated shareholders’ equity” (€123.8 million) ratio
(“gearing”) at December 31, 2005 is 40.7% (45.9% at
December 31, 2004), after investments in fiscal year
2005 and financing for the acquisition of Ccmx that was
carried out in November 2004 which in particular resulted
in financing Ccmx’s net debt of about €37 million. On January
2, 2006, Cegid fully redeemed the convertible bond that can
be exchanged for new shares (OCEANE - issued in 1999 for
€43.3 million) for a total amount of €36.6 million. Usage at
December 31, 2005 of the confirmed bank lines of credit
for the middle term did not result in a modification of the
group’s financial structure at that date.
42
A fiscal year 2005 dedicated to the operational
implementation of the new Cegid-Ccmx group
which was greatly penalized by legal proceedings
The operational implementation of the new Cegid-Ccmx
group continued over the course of the first quarter of
2005 along the lines of actions that were initiated right
from the approval of the acquisition of Ccmx Holding by
Cegid by the shareholders of Cegid present at the Special
Shareholders’ Meeting of November 16, 2004. These actions
in particular have resulted in the constitution of a Group
Management Committee, of an Economic and Social Unit
and the announcement of an organizational plan for the
new Group.
In parallel, after the closing of the fiscal period for Ccmx at
March 31, 2005, it was decided to set up an operational
organization for the new Group articulated around the
following 4 orientations for development:
Chartered Accountants and small businesses, with an offer
based on Cegid, Ccmx and Quadratus brands
Vertical Business Markets: verticalized IT solutions ailed
at major business areas, regardless of the size of the
company concerned: Fashion, Retail, Industry, Hospitality,
Distributors and Traders, Services, Construction, Cleaning,
etc.
Medium-sized business (independents and group
subsidiaries): with the «Cegid Business» ERP which meets
all of the functional needs (Accounting - Finance - Taxation,
Payroll/HR, Sales Management, CRM…)
Groups and Corporate Entities: leading solutions in the
areas of Human Resources with the RH Place offering, in
CPM (Corporate Performance Management) with the FCRS,
Etafi Conso and Open Executive offering, and applications
concerning taxation (Etafi and Profin).
Implementing this organization as well us continuing with the
reduction with the new Group’s fixed costs was slowed down
greatly by a lot of legal action initiated, starting on March 31,
2005, by the Fiducial group and in particular the appeal to
the ruling of the Ministry of Economy and Finance authorizing
Cegid to take control of Ccmx.
These cases and those that followed afterwards created
uncertainty pertaining to the future of the new Group
concerning the internal organization as well as in its relations
with third parties.
Because of this, during the merger suspension period, which
only came to an in February 2006, Cegid was not in a position
to implement all of the actions that would tend to reduce
operating expense, improve the business’ break-even point
and in the development of sales activity.
This situation also penalized the development of the group
internationally where strategic initiatives were not able to be
concluded in this context of uncertainty.
In the software publishing sector marked by a sharp increase in
concentration transactions, these procedures have therefore
delayed the constitution of a French group that is capable of
taking on its international competitors, who are very active
in the business software market for small and medium-sized
businesses.
So the delay in implementing the merger with Ccmx has
resulted in a large amount of prejudice for the Group.
The winding up of these legal proceedings resulting in a
favorable ruling from the Council of State dated February
13, 2006, will now allow the Cegid group to complete, in
2006, the merger activities between the two companies and
Management Report
to implement harmonization efforts pertaining to the sales
policy for product ranges aimed at Ccmx’s customers.
Product ranges and Technologies: new offerings
and recognized competence
The Group continued in parallel its strategy of capturing
new markets by offering new products based on the various
technologies used, particularly with the extension of existing
partnerships with Microsoft and IBM.
Launching of the Cegid Business offer
During the second half of the year, Cegid launched the Cegid
Business offer, a new generation of management solutions
for middle market companies and subsidiaries of groups.
Cegid Business is based on the Cegid Business Development
Platform.
It has built-in all of the operational modules of the ERP, as
well as decisional functions and easy access to information
via a portal.
The operational part is covered by a modular ERP (Cegid
PGI) which addresses all of the management needs of the
company (accounting and finance management, fixed assets,
payroll-HRM, sales management, business management,
CRM, production management, etc.).
The decisional dimension incorporates reporting and analysis
tools (hypercubes, report generators, etc.). Cegid Business
also includes tools for modeling processes, simulation and
workflow which allows the core processes to be steered
and automated.
Finally, la dimension collaborative allows the information to be
organized via a portal, by creating virtual work areas, organized
either by field (accounting and financial management, sales
management, Human Resources Information System (HRIS,
etc.), or by profession (fashion, industry, trading, services,
retail, hospitality, construction, etc.).
With the Cegid Business range, Cegid takes into account
the size and means of all types of companies and provides
solutions and services that are adapted to their management
needs.
Thanks to its modularity and its capacity to evolve, Cegid
Business can indeed be adapted to the growth of companies
and thus accompany their development. The offering is made
up of 3 software suites:
Cegid Business Line which meets the management needs of
Small Companies (less than €7.5 million in sales).
Cegid Business Suite is for Small and Medium-sized businesses
(from €7.5 million to €40 million in sales).
Cegid Business Place is aimed at Medium and Large-sized
businesses (independents or subsidiaries of groups). This
offering is provided in insourcing mode (software at customer
site), outsourcing (application hosted), or in ASP mode (hosted,
mode today adopted by over 2,000 small and medium-sized
businesses that are customers in the Group).
Recognized technological choices
In July 2005, in front of over 6,500 Microsoft partners,
Cegid participated in the “Microsoft WorldWide Partner
Conference” and confirmed its position in the management
software market, its research and development policy
based on Microsoft technologies. At that time, Cegid
announced that it was reinforcing its technological potential
by incorporating a new development team specializing in
the world of «.net».
Cegid moreover received several awards that marked
its development and its place in the world of publishing
management software for middle market companies.
On March 20, 2005, Cegid received the “Architecture
and SME Information System” aware from the AFNET
for its contribution to the performance of SMEs. This
trophy, which rewards a manufacturer/publisher for its
product or services offering geared towards or specially
developed for SMEs, was received by Cegid as a token of
recognition for the investments made in terms of research
and development.
The Cegid PGI ERP has been recognized as of pedagogical
interest by the Ministry of Education, Higher Education and
Research. Within the framework of the Cegid Education
program, this label allows the Cegid PGI ERP to be referenced
in all pedagogical supports and educational institutions (middle
schools, high schools, faculties, etc.).
These distinctions reward the strategic choices and the
position of Cegid.
Within the context of increasing concentration transactions
in the business software publishing sector, Cegid that has a
number of advantages in order to pursue its external growth
strategy in France and take initiatives aimed at providing it
with active presence internationally in the geographical zones
where is customers are located.
Consolidated income and business
The Group’s 2005 consolidated financial statements were
prepared in accordance with European Regulation 16062002, according to the IFRS accounting standards and the
interpretations published by the IASB and IFRIC and adopted
by the European Commission on December 31, 2005.
Consolidated income statement
Consolidated sales in 2005 stood at €224.3 million (€143.0
million in 2004). The contribution to consolidated sales
made by Ccmx (integrated as of December 1, 2004) is
€82.9 million. The impact of other changes in consolidation
scope is not significant (€0.02 million).
EBIDA, which reflects gross cash flow, was €39.4
million, which represents 16.2% of sales (€27.4 million in
2004).
Current operating income stands at €21.3 million (€12.7
million in 2004) after accounting for €14.8 million in
amortization and provisions. Ccmx’s contribution to
current operating income is about €7 million. Growth in
operating profitability, 9.5% of sales at December 31, 2005
compared to 8.9% in 2004, is the result, as early as 2005,
of the efforts in reducing operating expense and the search
for synergies initiated right from the start of the merger
with Ccmx and this, despite the postponement of some of
these efforts in the context of legal proceedings that the
Group was up against. The impact, on the period, of the
modifications in the methods for evaluating and amortizing
development costs is up€3.6 million.
Operating income stands at €19.6 million (€2.2 million in
2004 as IFRS standards and €12.4 million expressed in
43
Management Report
French standards) after taking into account the capital gains
primarily connected with the sale of the building located in
Toulouse (€0.4 million) and a net additional allowance to the
provision (€2.2 million) for reorganization. This additional
provision is primarily linked to the postponement of the
organizational plan presented in December 2004, due to
the legal proceedings initiated as an appeal to the Cegid/
Ccmx merger. Note that operating income at December
31, 2004, determined according to the IFRS referential,
recorded in particular an allowance to the provisions for
reorganization for €11 million. Within the framework of
the closing of the books in 2004 and in accordance with
the French standards that were applied at that time, this
amount was integrated into the calculation of goodwill
observed for Ccmx.
The financial result includes the financial revenue from cash
investments, interest on financing Ccmx’s debt, interest
due on the Convertible bond «OCEANE», the taking into
account as a financial expense the redemption premium
for the Convertible bond «OCEANE» due to its redemption
on January 2, 2006 and the corresponding reversal of the
provision for the redemption premium that was booked
previously. The financial result also takes into account
interest due on the OBSAR loan and the additional interest
booked in the framework of restating this loan according
to IFRS standards.
The company tax rate retained for calculating deferred
taxes is 34.43% at December 31, 2005 compared to
34.93% in 2004. The amount of deferred taxes stands
at €19.5 million and is mainly connected with Ccmx’s tax
losses, prior to fiscal year 2005.
The minorities share includes the share of minority
shareholders of Cegid Services and HCS.
Net income results in a profit of €9.8 million (€0.7 million
in 2004 in IFRS standards and €8.0 million in French
standards). The 2004 net results restated as IFRS includes
the after-tax amount of the provision for reorganization. The
impact of the incorporation into the consolidation scope of
Ccmx on consolidated net income for the fiscal period was
€2.3 million.
Consolidated balance sheet at December 31, 2005
Shareholders’ equity before distribution was €123.8
million (including €5.4 million for minority shareholders).
After taking into account medium term bank loans, the
OBSAR bond and provisions for contingencies and losses,
permanent capital stood at €223.4 million. Fixed assets
at December 31, 2005 stood at €208.3 million including
€33 million in development costs and €146.9 million in
goodwill.
Cegid group’s net cash at December 31, 2005 stood at
€62.4 million. Net financial debt was €50.5 million, after
taking into account the financing for Ccmx’s debt for €29.9
million (€37 million in 2004). The net financial debt to
consolidated shareholders’ equity ratio at December 31,
2005 is 40.7% taking into account the financing of external
growth carried out during fiscal year 2004. As such, your
Group continues to have a balanced financial structure.
1999 bond issue
In November 199, Cegid SA issued a convertible bond that
can be exchanged for new or existing shares (OCEANE), with
the following main characteristics:
Gross revenues from the issue: €35.4 million,
Number of bonds issued: 172,500 convertible bonds,
Issue price: €205.20,
Entitlement and settlement date: November 5, 1999,
Bond term: 6 years and 57 days on the settlement date,
44
Annual interest: 2.50% or €5.13 per bond payable in
arrears after January 1 each year,
Gross yield to maturity at the settlement date in case of
non-conversion: 5.62% at the settlement date,
Normal redemption: fully redeemed at January 1, 2006 by
redemption at a price equal to €250.80; or 122.22% of
the bonds’ par value,
Listing: the convertible bonds (ISIN code: FR0000180887)
resulting from the issue as well as the shares that will result
from the conversion of bonds, are listed on the Eurolist of
Euronext Paris.
During prior fiscal periods, Cegid SA had purchased on the
stock market and then cancelled 26,581 bonds. In 2004,
Cegid SA recorded a conversion request covering 15 bonds.
Based on the above conversion rate, Cegid issued 61 shares
and paid a balance of €1.82. No repurchase on the stock
market was carried out in fiscal year 2005. There were
145,904 convertible bonds in circulation at December 31,
2005.
Redemption: Cegid fully redeemed the bonds on the due
date of January 2, 2006 for a total amount of €36.6 million
compared to the bond issue of €43.3 million.
The use at December 31, 2005 of confirmed lines of bank
credit allowed the financial structure of the group to remained
unchanged at that date.
Bonds with Redeemable Share Warrants (OBSAR)
Income from this issue has allowed Cegid to diversify its
sources of financing and to refinance existing lines while still
extending the maturity of its debt.
Cegid has therefore equipped itself with the means to
continue its development, in particular via its external growth
strategy:
Amount of issue: €44.1 million
Number of bonds issued with Redeemable Share Subscription
Warrants: 2,004,546 bonds (the “Bonds”) with a nominal
unit value of €22 were issued with Redeemable Share
Subscription Warrants (the “BSAR”) (together the “OBSAR”)
representing a total nominal value of €44,100,012.
OBSAR
Par value of the bonds: €22.
Bond issue price: the par value, payable in a single payment
on the settlement date.
Entitlement and settlement date: March 3, 2004.
Nominal interest rate: the Bonds will bear interest at the
3-month EURIBOR rate minus 0.20% per year payable
quarterly in arrears on June 3, September 3, December
3 and March 3 each year commencing on June 3, 2004.
Normal redemption: the Bonds will be redeemed in whole
on March 3, 2009 by redemption at par value of €22 per
Bond
Early redemption:
- The company may elect:
* at any time, by purchase on the stock market, overthe-counter or via takeover bids without limit to price
or quantity.
* at each Interest Payment Date beginning March 2, 2004
through to March 3, 2009, in whole or in part, at an early
redemption price equal to the par value plus the Amount
of Interest corresponding to the Interest Period ending
on the redemption date.
- Redemption is mandatory in the event:
* the company decides to redeem the BSARs in advance
pursuant to paragraph “2.5.6. Early Redemption of the
BSARs at the company’s option” of the transaction
note.
Management Report
* at least 77% of the BSARs have been exercised at the
request of their holders or repurchased and cancelled by
the company.
The company will redeem all outstanding Bonds in circulation
at an early redemption price equal to the par value plus
the interest incurred up to the date established for the
redemption, which shall be no later than two months after
the publication date of the notice to BSAR holders of the
BSAR redemption.
Early redemption in case of default:
The Bonds shall become due, pursuant to paragraph
2.2.7.6. «Early redemption of Bonds in case of default»
of the transaction note, in case the company or one of
its major subsidiaries defaults, as defined in paragraph
2.2.7.6.
Covenants: the issue agreement includes the usual provisions
in terms of covenants (net financial debt / shareholders’
equity, net financial debt / EBIDA, etc.).
Gross yield to maturity: spread of less than 0.20% from
the 3-month EURIBOR.
Bond term: at the planned settlement date, the total term
was 5 years.
Bond listing: the Bonds were listed on Euronext Paris’
Premier Marché (now Euronext Paris’ Eurolist) as of March
3, 2004 under ISIN code number FR0010061846.
BSAR
One (1) BSAR is attached to each Bond. Consequently, the
issue covered 2,004,546 BSARs after the OBSAR extension
clause was exercised at 5%.
Exercise parity - Exercise price: One (1) BSAR can subscribe
ONE (subject to planned adjustments) new Cegid share at
a price of €28.44 payable in cash. BSAR holders shall pay
their subscription in cash. The distribution of reserves to
be submitted for approval to the Shareholders’ Meeting
on June 2, 2006 would lead to a modification in this
relationship, which would change from 1 to 1.02.
Exercise period: The BSARs can be exercised any time from
March 3, 2004 to March 3, 2009.
BSARs that have not been exercised by March 3, 2009
shall become null and void and lose all of their value.
During fiscal year 2004, 64 BSAR were exercised and
resulted in the creation of 64 new Cegid SA shares.
During fiscal year 2005, 12 BSAR were exercised and
resulted in the creation of 12 Cegid SA shares.
From January 1, 2006 to March 23, 2006, 140 BSAR
were exercised and resulted in the creation of 140 Cegid
SA shares.
Redemption of BSARs at the company’s option: the company
may, at its option any time from March 3, 2007 to the end
of the Exercise Period, call all of the outstanding BSARs
in circulation at a price of €0.01. However, such early
redemption shall only be possible if the arithmetic mean,
calculated over ten consecutive trading days that the share
is quoted chosen by the company among the twenty trading
days preceding the publication date of the early redemption
notice, of the products of the closing price of Cegid’s share
on the Euronext Paris’ Eurolist and the Exercise Parity in
force at each of the dates, exceeds €35.55.
Repurchases and cancellation of BSARs: BSARs can be
repurchased and cancelled at any time on the stock market,
over-the-counter or via takeover bids without limitation for
the price or the quantity. BSARs repurchased in this way
will be cancelled.
Listing of BSARs: the BSARs were listed on the Euronext
Paris’ Premier Marché as of March 3, 2004 under ISIN
code number FR0010061853.
Entitlement to shares subscribed by exercising the BSARs:
the new shares subscribed by exercising the BSARs shall
bear entitlement as of the first day of the financial year
during which the BSARs were exercised and the subscription
price paid.
At December 31, 2005, 2,004,546 bonds and 2,004,470
BSAR were in circulation.
Note that other than the BSAR and shares that are likely to
be exercised within the framework of the share option plans
approved by the Board of Directors on January 24, 2001 and
December 20, 2002, there were no other securities that can
provide access to Cegid’s capital at December 31, 2005.
Cash flow table
Cash flow increased 13% to €27.4 million (€24.3 million
in 2004).
A considerable improvement in working capital of €8.2 million
was observed (-€10.3 million in 2004). Cash from operations
thus reached €35.7 million.
After taking into account financing for investments made
up primarily of investment for developing for the business
software ranges (€23 million), of dividends paid and drawing
on confirmed middle-term lines of credit, cash at December
31, 2005 stood at €62.4 million (€18.2 million at December
31, 2004).
This available cash made it possible to provide redemption
of €37.3 million (including interest) for the Convertible bond
«OCEANE» which took place on January 2, 2006.
Cegid SA
Situation and business during the year
Sales for the year were €131.9 million. This also includes
that realized by the Servant Soft, Magestel and Logam
businesses operated by Cegid SA under a lease management
agreement, and that of Data Bretagne, Technilog Informatique
and NS Informatique which were merged into Cegid, effective
retroactively to January 1, 2003 for Data Bretagne and to July
1, 2003 for Technilog Informatique and NS Informatique. Profit
before tax was €3 million and net income was €2.5 million.
Financial structure
Shareholders’ equity was €103.8 million. Net cash was
€36.2 million at December 31, 2005. It includes €36 million
in lines of credit drawn upon to cover the redemption of
the Convertible bond «OCEANE» carried out on January 2,
2006.
Change in accounting methods
Application on January 1, 2005 of CRC regulation 2002-10
relative to the amortization and depreciation of assets did
not have any impact on the financial statements.
However, application of CRC regulation 2004-06 relative
to the definition, booking and evaluation of assets had for
effect to cancel a portion of the expense to be booked over
several periods (see paragraph 2.11 of the notes to the
parent company financial statements).
Developments at subsidiaries
Main operational subsidiaries
Subsidiaries of Cegid SA
Ccmx
45
Management Report
Note that Ccmx and its subsidiaries were incorporated into
the consolidation scope on December 1, 2004. Ccmx and
its subsidiaries, for which the closing date was March 31 of
each year, will close its books for the first time on December
31, 2005. The duration of the period ended December 31,
2005 for Ccmx and its subsidiaries is exceptionally a duration
of 9 months.
Sales for the period of Ccmx stand at €61.2 million. Current
operating income is €2.9 million and net income is 2.1 million,
after taking into account a net allowance for the provision for
reorganization of €2.2 million connected to the taking into
consideration of the consequences of the postponement of
the implementation of the reorganization plan for the new
group due to the appeal filed by Fiducial Informatique and
Fiducial Expertise.
Quadratus
Sales for the period stand at €15.6 million (€14.7 million in
2004). Current operating income before taxes is €3.4 million
(€2.8 million in 2004) and net income is €2.2 million (€1.8
million in 2004). Shareholders’ equity stands at €3.9 million
and net cash at December 31, 2005 is €3.7 million, after
payment in 2005 of a dividend of €1.7 million to Cegid SA.
Synaptique
Sales for the period stand at €0.5 million (€0.5 million in
2004). Current operating income is €0.2 million, which is
38% of sales, and net income is €0.1 million. Synaptique
underwent an asset merger with Cegid, effective December
31, 2005.
Cegid Corporation
Cegid Corporation is an American incorporated company
created in July 2001, for which Cegid SA holds 100% of
the capital.
Cegid España
Cegid España is a Spanish incorporated company, with a capital
of €300,000 that was created in February 2002 and whose
capital is held 75% by Cegid SA.
The purpose of these two companies is to market Cegid’s
software packages, especially in the Fashion sector with
in particular the accompaniment in these regions of major
international customers of Cegid that have local sites here.
These two companies have not yet reached their operating
breakeven point but are an essential element in the dynamics
and local presence for the subsidiaries of major accounts located
abroad. The impact of the two companies on consolidated
operating profit is -€0.6 million in 2005.
Subsidiaries of Ccmx
Fcrs
Fcrs is developing a business software publishing activity in
the field of legal consolidation and management reporting.
Sales for Fcrs stand at €0.9 million, current operating income
is €0.2 million and net income is €0.4 million. Since January
1, 2006, the Fcrs business has been operated by Ccmx under
a lease management agreement.
Aspx
ASPX did not have any operational activity during the period
ended December 31, 2005. Its results are not significant.
Reflection carried out in order to allow the development of
the company continued during the period.
46
Management Report
Subsidiary of Servant Soft
CBI
CBI publishes business software in the reporting and business
control field (Business Intelligence). Sales are €3 million (€2.8
million in 2004) up 4%.
This growth was achieved while improving the operating
profitability. Current operating income stood at €0.5 million
(€0.3 million in 2004), and net income is €0.5 million (€0.2
million in 2004).
Within the framework of simplifying the Group’s legal
structures, CBI had its assets merged with those of Servant
Soft, retroactively from a tax point of view at January 1, 2005.
CBI activity starting on January 1, 2006 is incorporated into
that of Cegid due to the lease management agreement of
Servant Soft by Cegid since January 1, 2000.
Other companies that are incorporated into the
consolidation scope
Servant Soft
After Cegid SA took on Servant Soft’s business under a lease
management agreement, approved by the Shareholders’
Meeting of December 22, 1999, Servant Soft’s sales of €1.2
million are primarily comprised of the lease management
royalty paid by Cegid SA. Servant Soft’s net profit was €2.3
million. This income includes a merger premium of €1.1
million when the assets of CBI were merged with Servant
Soft, carried out on December 31, 2005.
Apalatys
Apalatys is a 100% owned subsidiary of Cegid SA. Its only
business is its exclusive license to Cegid SA to use and
operate its software library and software development lab.
Its sales in 2005 amounted to €1.5 million for net profit of
€1.1 million. Apalatys’s assets were absorbed into those of
Cegid, effective December 31, 2005.
Magestel
Magestel is a 100% owned subsidiary of Cegid SA. Its only
business is leasing its business to Cegid SA. Cegid’s Board
of Directors approved a lease management agreement on
July 23, 2002. It had net income in 2005 of €0.1 million for
net profit of 0.1 million.
47
Management Report
Logam
Logam is a 100% owned subsidiary of Cegid SA. Its only
business is leasing its business to Cegid SA. Cegid’s Board
of Directors approved a lease management agreement on
January 7, 2004. Sales in 2005 were €0.2 million for net
profit of €0.1 million. Logam’s assets were absorbed into
those of Cegid, effective December 31, 2005.
ALP
ALP is a 100% owned subsidiary of Cegid SA that was
incorporated into the scope of consolidation as of October 1,
2003. Sales for the period amount to €0.3 million, profit before
tax stands at e0.1 million and net profit is €0.1 million.
CGO Informatique
CGO Informatique is a 100% owned subsidiary of Cegid SA.
Its only business is leasing its business to Cegid SA.
This lease management was approved by Cegid’s Board of
Directors on December 22, 2004. Sales in 2005 were €0.03
million for net profit of -€0.01 million.
Cegid Services
Cegid SA holds 69.47% of Cegid Services directly and indirectly.
Cegid Services is a holding company whose assets are comprised
exclusively of €18.1 million of cash. Profit before tax is €0.3
million and net income is €0.2 million.
Holding Cegid Services (HCS)
Cegid SA holds 43.66% of HCS, whose sole business is
managing its investment in Cegid Services. Its assets are
comprised of cash of €0.1 million and a 24.42% stake in
Cegid Services.
Research and development activity
During FY 2005, Cegid continued its investments in research
and development.
The past year was marked by:
The launch of Cegid Business:
- An global management solution bringing together 3
dimensions: operational, decisional and collaborative/portal.
Built on the Cegid Business Development Platform, this
solution has built-in all of the operational modules of the
ERP, as well as decisional functions and easy access to
information using a portal. Cegid Business now offers
complete management of multi-companies. The various
subsidiaries, legal entities or sites can share the same
database and use a single referential.
- The new version of the Sales Management module allows
open and sequenced orders to be taken for greater flexibility
in delivery management. It is also enhanced with advanced
features for preparing dispatches, pre-shipment expenses
and carrier rates, and benefits from ABC classification of
inventories.
- Business Management integrates the notion of a team for
resource management. It also offers automatic synchronization for the scheduling of resources and management
of multi-level approvals.
- The new version of Cegid Accounting/Finance has
been enhanced with multi-axis analytic key-entry, a
loan installment calculator, finer transaction purge and
improvement handling of pro rata VAT. The Cash Flow option
allows management of commission on transactions and
the management of OPCVM (Mutual investment securities
organizations).
48
- The new version of Cegid Business Servantissimmo
conforms to regulation #2002-10 of the CRC and to IAS/
IFRS standards and now has an inventory management
module via barcodes.
- Human Resources Management completes the Training
option, which now handles the Individual Right to Training
(DIF), allows training information to be archived and provides
follow-up on the budget, needs management, requests and
registrations. Cegid Human Resources Management also
offers complete archival pf all the variations and changes
of the employee (coefficients, indexes, statutes, etc.).
- Cegid Customer Relations Management (CRM) now has
an Electronic Document Management option, and a new
module for Computerized Telephone Coupling in CRM, as
well as management for the call history and lost calls,
allowing the hang up rate to be monitored.
The range has been enhanced, notably pertaining to the
following products:
- HRIS offering: the three dimensions of the Cegid ERP
were also developed for version 6 of RH Place iSeries and in
particular developments were mainly oriented on ergonomics,
the adding of a Business Intelligence “profession”, and finally
the opening of the RH Place portal to technologies other
than that of IBM (Open Source technologies (Java base). Of
course, the impact of the IAS/IFRS standards pertaining to
the HRIS has been incorporated into the offering.
- Corporate Performance Management (CPM) offering:
The consolidation offer around Cegid Fcrs which, now
strong with the development that has been done, is the
only consolidation offer dedicated to the decision-making
platform for Oracle 10g OLAP and Etafi Conso which has
benefited from functional extensions particular pertaining
to the management of IAS/IFRS standards and for the
availability of a network version or via Web Access and
the launch of a new solution for preparing budgets with
Cegid Planning.
- Evolution of the taxation offering with Editaxe 2, Fiscarchive
and Audi EDI.
- Chartered Accountant Range: The new version of Cegid
Expert which is enhanced with new modules (Computerized
Telephone Coupling, Marketing, Management of legal
requirements). Moreover, the new Expert Winner Evolution
range combining Ccmx Expert Winner production products
and the Internal Management products and Bureau Cegid
Expert allow, for Ccmx customers, easy migration to the
future convergence range and finally a new version of
eWS which now integrates the “Cegid Business Line” and
QuadraEXPERT management solutions.
- Industrial offer: launch of the new offering: “Cegid Business
Place Industry Manufacturing”, information system dedicated
to the “Automobile”, “High Tech Electronics”, “Equipment
Manufacturers” and “Industrial Sub-contracting” sectors
and functional enhancement with the “On-demand Planning”
module for the Cegid Supply Chain Management (SCM)
industrial solution which allows companies to calculate
forecasts and consequently schedule production.
€19.5 million was capitalized in 2005, and €15.3 million
was allocated for amortization in the financial statements at
December 31, 2005. Research and Development investments
represented 8.7% of consolidated sales in FY 2005.
Management Report
Changes in Cegid SA’s capital and
investments
Changes in Cegid SA’s capital
Following the exercise of 139,757 share options and the
exercise of 12 BSAR, your company’s capital at December 31,
2005 stood at 8,157,987.25 euros divided into 8,587,355
shares with a face value of € 0.95.
Changes in investments
The details of percentages of equity held in the Group’s
various subsidiaries is shown in the consolidated appendix
and the table of subsidiaries and investments
The main changes in 2005 were the following:
At December 31, 2005 Cegid SA increased its stake in
HCS’s capital from 40.90% to 43.66%.
Cegid SA increased its stake in Synaptique’s capital from
95.02% to 100%.
Three companies, all held 100% by Cegid SA, Logam
Informatique SAS, Apalatys SAS and Synaptique SA, were
dissolved via an asset merger effective December 31,
2005.
CBI, a subsidiary held 100% by Servant Soft SA, underwent
a merger of assets, effective from a tax point of view on
January 1, 2005.
Sustainable development and human resources
Number of employees
Employees of the various companies included in the Group’s
scope of consolidation break down as follows:
12/31/05
Cegid SA
Ccmx
(1)
Fcrs (1)
Quadratus
CBI
CGO Informatique
12/31/04
12/31/03
1,188
1,168
1,220
716
785
6
6
128
115
114
20
28
27
11
(2)
Logam (3)
26
Cegid Corporation
2
1
Cegid España
4
3
4
Synaptique
3
3
3
2,067
2,120
1,394
TOTAL
Integrated into the consolidation scope at December 1, 2004
Integrated into the scope on August 1, 2004 and lease managed
by Cegid SA as of July 1, 2005
(3)
Logam’s business operated by Cegid SA under a lease management
agreement as of January 1, 2004
(1)
(2)
The consolidated companies had an average of 2,050
employees in 2005 (1,431 in 2004 and 1,385 in 2003).
In order to ensure success for the new Cegid-Ccmx group,
the following actions were carried out during the period:
Implementation of common operational organizations,
especially with sales teams.
Accompaniment of the new organization by efforts in
developing skills of employees on the products and
technologies that are common to the new Group. For
2005, the training plan represents almost 52,000 hours
of training which is an investment of over €2.4 million.
Reinforcing of internal mobility via the development of
integration paths and the elaboration of professional
history.
With a view on homogenous management of Human
Resources for Cegid and Ccmx and in the extension of the
creation of the Economic and Social Unit, thought has been
given on the set up of a common status.
The employee structure by type of employment contract
is as follows:
12/31/05 12/31/04 12/31/03
CDI
(permanent contract)
2,015
2,083
1,361
CDD
(fixed-term contract)
52
37
33
2,067
2,120
1,394
TOTAL
In addition, temporary employment represented 992 days
worked, or less than 0.2% of the hours worked (0.07% in
2004).
The Group dismissed 63 employees, strictly for individual
reasons.
Organization of working hours
Group companies have implemented provisions regarding the
organization and reduction of working hours. This reduction
is organized based on the existing regulatory and contractual
provisions through the agreements on annual working days,
reduced working hour (RTT) days and collective hours, except
for Executive Management.
A total of 911 overtime hours were paid in 2005 (1,385
in 2004) corresponding primarily to the seasonality of the
Telephone Assistance business.
Absenteeism has evolved as shown below:
Reasons
(in calendar days)
2005
2004
2003
Sickness
Work and travel
accident
18,108
484
12,946
383
11,261
287
5,665
538
8,706
5,381
5,019
5,821
985
488
513
672
28,283
19,198
17,080
12,696
Maternity
Other leave
TOTAL
2002
“Work and travel accidents” includes accidents that occurred
while working as well as those that occurred during the
commute from home to work. In 2005, there were 25 work
accidents representing 306 days off work fro respectively
26 work accidents and 122.5 days off work in 2004.
In accordance with regulations, plans for the prevention
of professional risks are carried out within the various
CHSCT.
49
Management Report
Compensation
The Group’s compensation system incorporates, for the
vast majority of employees, a fixed part and a variable part
determined according to the realization of direct goals that
are proper to the professions exercised by the employees
in question.
The principles for variable compensation were adapted during
the period in order to favor development for the Group
and especially starting in the second quarter for the sales
teams resulting from the sales organization implemented
on March 31, 2005.
Changes in compensation primarily take place by individual
increases and compensation bonuses related to the business
activity.
The consolidated gross payroll(1) has progressed as follows
(in thousands of euros):
2005
2004
2003
2002
2001
74,621
47,249
43,417
39,164
36,108
(1)
Total payroll and NIC return pro rata to the period integrated in the
consolidated financial statements.
Some companies in the Group benefit, in view of systems that
were set up in the past, employee profit sharing agreements,
a Company Savings Plan (CSP) and a legal profit sharing
agreement. Concerning the CSP the matching contribution
represented 477 thousand euros for FY 2005(1) (351
thousand euros for 2004), with the total amount paid being
344 thousand euros for Quadratus (295 thousand euros in
2004) and for profit sharing, 483 thousand euros for Cegid
and Quadratus (356 thousand euros in 2004).
(1)
Exceptional increase of 30% for Cegid for 2005.
Professional relations and collective agreements
Within the extension of the recognition of the Economic
and Social Unit the collective bargaining agreements for
Cegid and Ccmx were abandoned aiming to implement, after
discussion with the social partners, a collective status that
is common to the two companies that make up the Economic
and Social Unit.
The step in harmonizing the collective statutes, delayed by
the legal proceedings pertaining to the Council of State, has
materialized by a first collective agreement on a common
benefit plan.
Health and safety
The health and safety measures are satisfactory for all Group
companies. The CHSCT present in the Cegid group perform
their duties in this area.
Training
In the Group there were 7,443 days of training for 4,715 trainees.
The training policy is focused on research and development,
changes in technology and product mastery.
The total investment for FY 2005 was €2.4 million.
Disabled personnel
The Group employs 23 disabled persons that are recognized as
disabled by COTOREP (technical committee for occupational
counseling and reclassification), representing 25 units for
an obligation of 78 units.
Social services
Social services includes expenses for catering (restaurant
coupons), employee benefit plans and contributions to
personnel’s representative bodies.
€3.96 million was distributed for FY 2005.
Subcontracting
The Group primarily used subcontracting to cope with peaks
of activity in specific areas of expertise (specific training) and
for specialized work (cleaning, maintenance work, etc.).
Territorial impact and regional development
The Group is present throughout France with a major
concentration in the Rhone-Alpes region (nearly 1,000
employees) and the Ile-de-France region (more than 400
employees). This presence is enhanced by international
development (United States and Spain).
Partnerships-Sponsorship
The Cegid Group continued its partnership actions in the
cultural, sports and general interest fields.
In 2005, the Cegid group maintained its support for
associations whose missions include, in particular, promoting
youth in integration through sports and professional training.
Cegid also accompanied associations whose mission is to
facilitate the welcoming and accommodation of families
with hospitalized children and to make progress in medical
research.
General environment
Given its business activity (provision of services and
intellectual creation), the Group’s business does not have a
direct and significant impact on the environment.
Major events that have occurred since the
end of the financial year
The Council of State, in its decree handed down on February 13,
2006 confirmed the legality of the takeover of Ccmx (ex Ccmx
Holding) by Cegid SA. The authorization that resulted from a
decision of the Ministry of the Economy, Finance and Industry
dated October 19, 2004, was appealed in from of the Council
of State. Before making a final decision, the Council of State
decided to seize the Competition Board in order to examine the
concentration transaction. The Council of State followed the
recommendation of the Competition Board dated December 14,
2005 thus rejected definitively the cancellation request filed by
Fiducial Informatique and Fiducial Expertise.
External growth
On March 13, 2006, Cegid acquired 100% of the shares of
GTI Industrie and 80% of the shares of PMI Soft (1), publishers
and distributors of management software for industrial
companies. Via this transaction, Cegid confirms its position
as a leading reference in the field of management software
for small and medium-sized industrial companies (with over
50 employees) and very small industrial companies (with less
than 50 employees).
20% subject to successive purchases between January 1, 2007
and June 30, 2009 at the latest.
(1)
50
Management Report
GTI Industrie and PMI Soft develop, publish and distribute
vertical management solutions aimed at Mid-Market industrial
companies.
Risk factors
Total annual sales for GTI Industrie and PMI Soft are nearly
€6.5 million with very good operating profit (20% based on
results of the latest period ended December 31, 2005). The
50 employees and the customer base of over 600 small and
medium-sized industrials will reinforce the presence of Cegid
in this activity sector.
The nature of Cegid’s business activities does not create
significant environmental risks.
These acquisitions represent many strategic and operational
advantages and allow Cegid to:
Reinforce the «Industry Manufacturing» offer and provide
solutions in the new segments such as aeronautics,
mechanics, plastics, electronics, surface treatments, etc.
as well as solutions adapted to the needs of very small
industrial companies;
Consolidate its presence in the market of management
solutions for small and very small industrials: double the
installed base with more than 1,300 sites under contract,
activity volume up sharply in this segment (pro-forma sales
of about €21 million) and increase in recurring revenue;
Continue the current partnership initiated between GTI
Industrie and SAP: GTI Industrie established a partnership
with SAP over two years ago. Within this framework, it has
developed a complete solution for production management
aimed at the industry sector marketed under the name
Industry One. This solution, property of GTI Industrie, is
complementary and integrated into SAP Business One,
SAP’s management solution for small-sized industries and
companies (less than €30 million in sales). SAP and GTI
Industrie will continue to market Industry One from GTI
Industrie via their approved network of resellers.
Foreseeable developments and outlook
The favorable end to the long legal proceedings initiated by
Fiducial Informatique and Fiducial Expertise will allow Cegid
to complete the merger operations between Ccmx and Cegid.
In the context of the software publishing sector marked by
the sharp increase in concentration transactions, these
procedures indeed delayed the constitution of a French group
capable of standing up to its competitors internationally,
which are very active in the management software market
aimed at small and medium-sized companies.
The improvement in the product mix and the continued strive
for rigorous cost control should allow Cegid, in a context of
more sustained economic growth, to see in 2006, further
growth in its current operating income and consequently in
its operating profit.
The goal of your Group in 2006 is to continue operations
with external growth in France and also to take initiatives
aiming at ensuring it an active presence internationally in the
geographical zones where its customers are located.
Environmental risks
Insurance risks
The Cegid Group protects itself against the consequences
of the main risks related to its activities by resorting to
insurance policies covering primarily civil liability, property
and casualty and business operating losses as a result of
a disaster.
All of these policies were concluded, both in France and
abroad, with reputable insurance companies, in consultation
with the Cegid Group’s insurance broker. At January 1,
2006, the level of coverage of the main potential risk was
as follows:
Property & casualty and resulting business operating
losses: €49.9 million.
General civil liability: €6 million.
Fraud and malicious damages: €1.5 million.
The Cegid Group’s self-insured claims history consists
primarily of the deductibles applied per claim. The amount
covered by the Cegid Group in 2005 was not significant.
The Cegid Group paid approximately €1 million in premiums
for FY 2005.
Market risks
The Cegid Group companies did not use interest or exchange
rate hedging instruments in 2005.
The Group is not exposed significantly to foreign currency
exchange risks. The marketable securities item in the
consolidated financial statements primarily includes
monetary and regular investment products where the capital
is guaranteed.
Indebtedness risks
The issue agreements for the Convertible bond «OCEANE»
and the OBSAR bond specify all of the provisions and
commitments related to this kind of bond.
In addition, Cegid negotiated with its main banks confirmed
bank lines of credit with an average term of five years and
straight-line repayment. At December 31, 2005, there was
€57.2 million of drawdown authorizations on these lines
of credit. On this date, €36 million of these lines of credit
was in use.
These credit agreements include the usual clauses in terms of
early repayment and covenants, including in particular:
Immediate rightful enforceability of the claim in case of
compulsory or voluntary liquidation.
Optional enforceability of the claim in case of non-payment
at maturity of an amount due under the agreement(s) and
in case of non-payment of a contribution or uncontested
taxation.
Cegid also undertook to respect the following covenants:
- net financial indebtedness / net situation less than 1.
- net financial indebtedness / EBITDA less than 3.
The Group has respected these provisions to date and
intends to respect them.
51
Management Report
Disputes and exceptional items
Schedule of financial assets and liabilities at
December 31, 2005
In thousands of €
Amount
Rate
Cegid-Ccmx Merger
Due Date
Debts one year or less
38,619
Fixed rate Convertible
bond «OCEANE»
37,340
2.50%
2006
72
Euribor
3 month
-0,20
Base Euribor
2005
OBSAR variable rate
bonds
Variable rate debt
1,207
Debts from 1 to 5
years
75,172
OBSAR variable rate
bonds
39,172
Variable rate debt
36,000
Euribor
2009
3 month
+0,20
Base Euribor Average term
TOTAL
113,791
In thousands of €
1 year or From 1 to 5 More than
less
years
5 years
Financial liabilities
38,619
Financial assets
63,337
Net position before
management
24,906
(75,172)
24,906
(75,172)
Off balance sheet
Net position after
management
(inc. variable rate:
-€12,926 thousand)
1,207
1%
365D/365D
Fiducial Informatique and Fiducial Expertise have also filed an
emergency suspension request, via the Council of State on
April 18, 2005, in order to obtain suspension of the decision
of October 19, 2004 of the Ministry of the Economy, Finance
and Industry.
The decree, rendered on May 19, 2005, by the Emergency
Judge pronounced the temporary suspension, while waiting
for the final judgment, of the decision made by the Ministry of
the Economy, Finance and Industry on October 19, 2004. The
Emergency Judge entrusted the Ministry with the task of defining
the methods for implementing this decree. This decree did not
put into question the contribution of Ccmx Holding shares to
Cegid, carried out on November 16, 2004, nor the transactions
that were carried out since this date.
The Emergency Judge of the Council of State rejected the request
presented on June 27, 2005, by the Ministry of the Economy,
Finance and Industry due to the nearness of the date of the
audience of the final decision scheduled for July 6, 2005.
Sensitivity
(in €000s)
12
The Financial Department uses an integrated information
system to manage the Group’s daily cash flow. A weekly
report of the net cash flow situation is established, which
is used to monitor changes in indebtedness and invested
cash flow.
Other risks
In terms of technology, Cegid primarily uses tools based
on market technologies developed by major publishers and
suppliers of operating systems and databases. The resulting
constraints for Cegid are mostly due to the need to adapt
product lines based on new versions released to the market
and obligations to maintain products.
52
Administrative Procedures
In April 2005, the Council of State informed Cegid and Ccmx
(ex Ccmx Holding) of the existence of an appeal formulated by
Fiducial Informatique and Fiducial Expertise against the decision
rendered on October 19, 2004 by the Ministry of the Economy,
Finance and Industry, authorizing the concentration transaction
made up of the acquisition of control of Ccmx Holding by Cegid
in view to have this decision reversed.
The Ministry of the Economy, Finance and Industry field, on June
27, 2005, an appeal with the Emergency Judge of the Council of
State in order to put an end to the suspension that was ordered
on May 19, 2005.
75,172
Net position 1% variation Average term
to be renewed from Issuer’s outstanding
before 1
short term before the end
year (after
rate
of the next
management)
financial year
Fiducial Expertise and Fiducial Informatique filed, during fiscal
year 2005, various proceedings against Cegid and Ccmx with
the Council of State as well as with Legal Courts.
The Council of State decided on July 20, 2005 a decree before
becoming law, by deciding to seize the Competition Board in
order to examine, under the same conditions as provided for in
Article 430-6 of the French Commercial Code, the concentration
transaction as it was notified to the Ministry of the Economy,
Finance and Industry.
Fiducial Informatique and Fiducial Expertise filed on September 27,
2005, a request with the Council of State, so that the latter
order the Board of Competition to respect the principle of the
contradictory notion within the framework of the dossier.
Via a decree rendered on October 19, 2005 the Council of State
rejected the request as interpretation of Fiducial Expertise and
Fiducial Informatique filed on September 27, 2005.
On November 24, 2005 Fiduciaire Nationale d’Expertise
Comptable and Fiducial Informatique filed a request with the
Emergency Judge of the Council of State aiming to force Cegid
to suspend execution of the decisions that were approved at the
General Shareholders’ Meeting on June 8, 2005, to appoint an
ad hoc mandate, to designate a temporary director, to force
Cegid and Ccmx to do nothing that would be of a nature to
reinforce the irreversible nature of the transaction and to appoint
a management observer.
Via a decree dated December 12, 2005, the Council of State
reverted the case to the Court of Conflict.
Management Report
After a final audience, dated February 6, 2006, the Council of
State rendered, on February 13, 2006, a decree confirming the
legality of the takeover by la Cegid of Ccmx. The Council of State
followed the recommendation of the Competition Board dated
December 14, 2005 that definitively rejecting the cancellation
request filed by Fiducial Informatique and Fiducial Expertise.
Procedure with the Legal Courts
Fiduciaire Nationale d’Expertise Comptable and Fiducial
Informatique commenced proceedings on June 2, 2005,
against Cegid, Ccmx and Ccmx holding, at the President
of the Commercial Court of Lyon, with hour by hour
development, in order to obtain: the adjournment of Cegid’s
General Shareholders’ Meeting, scheduled for June 8, 2005,
the appointment of an ad hoc director within Cegid and
a temporary director within Ccmx Holding and de Ccmx,
prohibition for Cegid to reinforce the irreversible nature of
the transaction.
The Commercial Court of Lyon, in its decision of June 7, 2005,
rejected the requests presented by Fiduciaire Nationale
d’Expertise Comptable and Fiducial Informatique. Fiduciaire
Nationale d’Expertise Comptable and Fiducial Informatique
were sentenced to each pay each of the companies Cegid
and Ccmx the some of €3000 in terms of Article 700 of
the NCPC.
On June 14, 2005 Fiduciaire Nationale d’Expertise Comptable
and Fiducial Informatique, appealed the ruling of the
Commercial Court of Lyon on June 7, 2005.
The Lyon Court of Appeals, in its ruling of November 8,
2005 declared the Emergency Judge to be incompetent
in terms of jurisdictions of an administrative nature. The
Appeals Court confirmed the amount allocated in terms of
Article 700 of the NCPC by the Commercial Court of Lyon
and added a sentence for Fiduciaire Nationale d’Expertise
Comptable and Fiducial Informatique to pays Cegid and Ccmx
the sum of €2000 each.
Other litigation
Litigation involving in particular commercial and employee
disputes and certain disputes that have been served a
summons have led to diverse provisions designed to cover
the estimated risk based on internal analyses and analyses
with the Group’s advisors.
To the company’s knowledge, there are no other exceptional
items or disputes at this date that could substantially
affect the Group’s business, assets, financial situation or
income.
Stock market
The Cegid share (ISIN code FR0000124703) is listed on
Euronext Paris’ Eurolist (compartment B) and is referenced
in the Small 90, Mid and Small 190 and ITCAC indexes.
Cegid is one of the companies listed in the Euronext’s
“NextEconomy.”
The share price at December 31, 2005 was €33.00 (€24.44
at December 31, 2004), which is up 35%. 4,341,355 shares
were traded in 2005 (2,987,569 in 2004) out of a total
of 8 587 355 shares that comprised the share capital at
December 31, 2005.
Volume and price of Cegid’s share
(FR0000124703) during FY 2005
600,000
No Cegid Group customer represents more than 2% of
its consolidated sales. There is no particular dependency
on Group suppliers, other than those resulting from the IT
market’s structure and especially those mentioned in the
«risk factors» paragraph above.
350,000
35.0
300,000
500,000
30.0
250,000
400,000
600,000
25.0
40.0
300,000
500,000
20.0
35.0
350,000
200,000
300,000
150,000
15.0
30.0
250,000
200,000
400,000
100,000
10.0
25.0
200,000
100,000
5.0
20.0
300,000
50,000
150,000
0
0.0
15.0
200,000 janu.-05 febr.-05 mar.-05
Volume
apr.-05
may-05
jun-05
jul.-05
aug.-05 sept.-05 oct.-05
nov.-05
Volume
may-05
jun-05
jul.-05
nov.-05
96.0
5.0
0.0
94.0
dec.-05
Price
0
janu.-05
92.0
6,000
94.0
5,000
88.0
2,000
92.0
86.0
4,000
90.0
1,000
84.0
3,000
88.0
82.0
0
Volume
may-05
jun-05
jul.-05
nov.-05
dec.-05
86.0
Price
1,000
84.0
0
82.0
janu.-05 febr.-05 mar.-05
Volume
apr.-05
may-05
jun-05
jul.-05
nov.-05
dec.-05
Price
53
febr.-05 mar.-05
Volume
96.0
90.0
3,000
apr
Price
50,000
4,000
apr.-05
febr.-05 mar.-05
Volume
10.0
Volume and price of the OBSAR bond
(FR0010061846) during FY 2005
apr.-05
janu.-05
100,000
100,000
6,000
0
5,000 janu.-05 febr.-05 mar.-05
0
dec.-05
Price
2,000 janu.-05 febr.-05 mar.-05
Dependency on customers and suppliers
40.0
Price
apr
.-05 oct.-05
.-05 oct.-05
Management Report
Volume and price of the BSAR
(FR0000180887) during FY 2005
40.0
350,000
35.0
300,000
General Regulations of the AMF supplemented by the AMF
instructions 2005-06 and 07 of 2-22-2005.
9.0
8.0
7.0
30.0
250,000
6.0
25.0
200,000
5.0
20.0
4.0
150,000
15.0
3.0
100,000
10.0
5.0
0.0
nov.-05
dec.-05
2.0
50,000
1.0
0
0.0
janu.-05
febr.-05 mar.-05
Volume
96.0
94.0
92.0
90.0
88.0
86.0
84.0
82.0
nov.-05
dec.-05
apr.-05
may-05
jun-05
jul.-05
nov.-05
dec.-05
Price
Purchase and/or sale by the company of its
shares
Shares purchased and/or sold under the authorization given
by the Shareholders’ Meeting of June 8, 2005
Pursuant to the authorization given by the Ordinary
Shareholders’ Meeting on June 8, 2005 and the information
note issued concerning the implementation of a program to
repurchase company shares (AMF authorization No. 05-428
dated May 20, 2005), Cegid SA did not directly or indirectly
purchase or sell any shares during the period. Under the
terms of the liquidity agreement, 14,601 Cegid treasury
shares were held by Cegid at March 31, 2006.
In addition, under a previous authorization of the Shareholders’
Meeting of June 15, 2001, renewed by the seventh resolution
approved by the Shareholders’ Meeting of June 8, 2005,
authorizing Cegid to repurchase its own shares up to 10%
of the total number of shares comprising the share capital,
and in particular to ensure the share’s liquidity, your company
concluded a liquidity agreement with CMCIC Securities on
August 31, 2001. In view of the liquidity agreement, for
fiscal year 2005, 429,941 Cegid shares were acquired at
an average price of €30.91 and 440,794 shares were sold
at an average price of €30.28. The amount of negotiating
fees was €23,000. At December 31, 2005, the share of
Cegid shares held by Cegid was 27,430 shares. The value
of these 27,430 shares evaluated at purchase price was
€905,190.
This agreement was covered by an annual report published
March 17, 2006 on the website of the Autorité des Marchés
Financiers.
The financial information regarding this agreement is
mentioned in the appendix to the parent company financial
statements.
Authorization to give the Board of Directors to acquire shares
under the provisions of Articles L.225-209 to L.225-212 of
the French Commercial Code
We propose that during the Shareholders Meeting you
authorize the Board of Directors to acquire shares under
the provisions of articles L.225-209 to L.225-212 of the
French Commercial Code and regulation No. 2273/2003 of
the European Commission dated December 22, 2003 and
the measures provided for in Articles 241-1 to 241-8 of the
54
The maximum purchase price shall not exceed €65 per
share. The program’s maximum amount shall therefore be
€54,911,383 in view of the 14,601 treasury shares held by
Cegid at March 31, 2006.
Employees’ stake in Cegid SA capital
It should be noted that employees’ stake in Cegid’s capital
is primarily the result of the different share options and/or
share warrants that Cegid SA has granted.
The Board of Directors approved a Cegid SA share option
plan on January 24, 2001, based on the authorization of the
Special shareholders’ Meeting of June 14, 2000. This plan
involved 503 beneficiaries and included a total of 44,915
shares. In view of the division of the share’s face value by four
on December 9, 2003 this represented 179,660 options
with rights to 179,660 Cegid shares. In view of certain
beneficiaries’ loss of status as an employee of the company
and Group companies and the 35,381 options that have been
exercised since March 23, 2005, date on which the previous
Board of Directors acknowledged the previous increase in
capital, and the Board of Directors of March 13, 2006, this
plan now includes 45,136 options with rights to 45,136 Cegid
shares that could still be exercised.
The Board of Directors approved another Cegid SA
share option plan on December 20, 2002, based on the
authorization of the Special Shareholders’ Meeting of June
14, 2000. This plan involved 19 beneficiaries and included a
total of 21,300 shares. In view of the division of the share’s
face value by four on December 9, 2003 this represented
85,200 options with rights to 85,200 actions Cegid. In view
of certain beneficiaries’ loss of status as an employee of the
company and Group companies and the 24,000 options that
have been exercised since March 23, 2005, date on which
the previous Board of Directors acknowledged the previous
increase in capital, and the Board of Directors of March 13,
2006, this plan now includes 34,000 options with rights to
34 000 Cegid shares that could still be exercised.
Pursuant to the provisions of article L.225-184 of the
French Commercial Code, a special report will give you the
information required by law.
79,136 options could still be exercised under the 2001 Plan
and 2002 Plan at the date of the Board of Directors Meeting
that closed the accounts for FY 2005. Assuming that all of
these options are exercised, the current number of shares
comprising the share capital will be diluted by 0.9%.
In addition, note that at December 31, 2005 employees
held, through a company mutual fund, 24,080 Cegid shares
representing 0.28% of the share capital.
Expenses that are not deductible for tax
purposes
Pursuant to the provisions of article 233 of the General
Taxation Code, you are informed that Cegid SA’s financial
statements for the past financial year take into account
expenses of €53,757 that cannot be deducted from taxable
earnings as defined in the provisions of article 39.4 of the
same Code.
Management Report
Composition of share capital at December 31,
2005
To our knowledge, the main shareholders of Cegid SA at
December 31, 2005 were as follows:
Shareholders
ICMI (1)
Executives (2)
Treasury shares
Apax
(Venture capital mutual
investment fund)
% of shares
% of voting
rights
20.51 %
33.17 %
0.91 %
0.78 %
0.32 %
17.42 %
14.52 %
9.29 %
7.73 %
Ulysse/Tocqueville Dividend
4.40 %
3.67 %
TOTAL
After deducting all expenses and amortization, Cegid SA’s
financial statements that were presented to you show income
of €2,525,691.67 allocated to the retained earnings account,
which changes from -€3,006,162.81 to -€480,471.14. We
will propose that you allocate the legal reserve €5,626.00
from the “Other reserves” item.
We will propose that the General Shareholders’ Meeting
distribute a dividend of €0.85 per share from the “Other
Reserves” and “Issue premium, merger”, items as follows:
Allocate the sum of ...............................€7,078,322.30
from the “Other Reserves (1)” item
Allocate the sum of ................................ €224,873.45
from the “Issue premiums, merger (1)” item
Which for 8,591,995 shares (2) ............... €7,303,195.75
Eurazeo
Free Float
Allocation of income
47.15 %
40.13 %
100.00 %
100.00 %
This composition of share capital takes into account the Cegid SA
share options exercised up to December 31, 2005.
(1)
At 12/31/2005 Mr. Jean-Michel AULAS held 99.97% of ICMI
representing 99.96% of the voting rights.
(2)
The chairman, general manager and directors are considered to be
Management. However, the percentage held by directors (ICMI and
Eurazeo) is listed separately in this table. Finally, among the companies
comprising the APAX venture capital fund, APAX Partners is the director
of Cegid and it only holds one director’s share.
On April 5, 2005, the Caisse des Dépôts et Consignation
informed Cegid that it had dropped below the statutory share
capital threshold of 2% and declared that it held 1.99% of
the capital and 1.67% of the voting rights at this date.
ICMI a declared - following the combined effects of the
exercise of Cegid SA share options, of acquisitions and Cegid
SA share transfer transactions that took place under the
terms of the liquidity agreement, and of ICMI’s withdrawal
from the liquidity agreement on May 31, 2005 - that it had
dropped below, on May 31, 2005, the threshold of a third
of the voting rights of Cegid and held 20.54% of the capital
and 33.16% of the voting rights.
On October 4, 2005, the Caisse des Dépôts et Consignation
capital threshold of 2% of the capital and declared that it
held 2% of the capital et 1.66% of the voting rights at this
date.
The GSM decides that, in the case where the dividend is paid,
the company would hold some of its own shares, the income
corresponding to the unpaid dividends on these shares would
be allocated to the «retained earnings» account.
In accordance with the measures of Article 2.8.1 of the bond loan
contract for Redeemable Share Subscription Warrants (BSAR) the
shares issued following the exercise of the BSAR shall bear entitlement
on the first day of the financial year during which falls the request to
exercise and the payment of the subscription price. The shares issued
following the exercise of BSAR carried out after December 31, 2005
shall not confer rights to the benefit of the dividend paid for fiscal year
2005.
The dividend will be paid on June 7, 2006. The GSM acknowledges that
the sum distributed as a dividend between the individual shareholders
is entirely eligible for the 40% tax provided for in Article 158 of the
General Tax Code amended by the finance law for 2006 of December
30, 2005.
The Shareholders’ Meeting grants full power, as it is needed, to the
Board of Directors to make an adjustment in the conversion ratio and
if needed in the subscription price of the share options granted by the
Board of Directors of January 24, 2001 and December 20, 2002.
The Shareholders’ Meeting grants full power, as it is needed, to the Board
of Directors to make, up until the date of anticipated redemption of the
BSAR, an adjustment to the parity for exercising the BSAR, according to
the measures provided for in the transaction note pertaining to the issue
of redeemable share subscription warrants approved on February 23,
2004 by the Autorité des Marchés Financiers as number 04-120.
(2)
Notwithstanding the exercise of subscription options to Cegid
shares, currently in effect, which could take place up until the day of
the Shareholders’ Meeting.
(1)
Pursuant to the provisions of article 135-6e, modified by
decree 67-236 dated March 23, 1967, hereafter you will
find the table of distribution of dividends that took place over
the last three fiscal years.
On March 14, 2006, the Caisse des Dépôts et Consignation
capital threshold of 2% of voting rights and declared that
it held 2.46% of the capital and 2.05% of the voting rights
at this date.
During FY 2005, ICMI transferred 26,568 BSAR (FR
0000180887) for an amount of €139,294, Mr. JeanMichel AULAS transferred 98,093 BSAR for an amount of
€628,270 and Mr. Patrick BERTRAND transferred 49,000
BSAR for an amount of €294,435.
55
Management Report
Dividends paid for the previous three financial years
Financial Year
2004 (€)
2003 (€)
2002 (€)
Number of shares
8,576,090
5,950,596 1,487,649(1)
Net dividend
per share
0.80
0.80
2.30
50% tax credit
per share
0.40
0.40
1.15
Total per share
Total net dividend
(1)
1.20
1.20
3.45
6,860,872
4,760,476
3,421,593
Before division of the share’s face value by 4.
Director’s fees
We propose that you authorize the payment of director’s fees for the financial year underway up to a maximum of €100,000.
Compensation of executive officers
You are reminded that since 1999 Messrs Jean-Michel Aulas and Patrick Bertrand have been employees of ICMI. In
this capacity, they collect the majority of their remuneration from ICMI, which invoices Cegid for general management
services in the areas of strategy, marketing, sales and finance. Since this company acts as a management holding company,
Mr. Aulas and Mr. Bertrand exercise their duties in the Group’s various companies. ICMI also provides financial, accounting
and legal services. It has six employees. Cegid recorded fees of €2,496 thousand for ICMI’s services in FY 2005 (€2,070
thousand in 2004).
Managers’ compensation includes a fixed part and a variable part determined based on the Cegid Group’s consolidated
income. The amount of compensation and benefits of any kind paid by ICMI, your company and its subsidiaries for FY
2005 to Mr. Jean-Michel AULAS, was €405 thousand for the fixed part (1) (€370 thousand in 2004) and €365 thousand
for the variable part (€291 thousand in 2004) and to Mr. Patrick BERTRAND €322 thousand for the fixed part(1) (€267
thousand in 2004) and €170 thousand for the variable part (€95 thousand in 2004). 24,000 Cegid SA share options
were granted to Mr. Jean-Michel AULAS (exercised on April 5, 2005) and 22,004 (exercised on March 15, 2005) to
Mr. Patrick BERTRAND.
The amount of compensation paid to the other executive officers corresponds exclusively to director’s fees and is as follows:
APAX PARTNERS . ...........................................€2,000
EURAZEO ........................................................€2,000
Mr Jean-Luc LENART .......................................€2,000
Mr Robert VERNET ........................................ €10,000
Mr Jacques MATAGRIN ....................................€8,000
Mr Franklin DEVAUX . ..................................... €10,000
Mr Yves DEFOIN ..............................................€8,000
Mr Lucien DEVEAUX ........................................€8,000
(1)
The fixed part includes the annual gross salary, benefits in kind, bonuses, director’s fees, article 83, company car.
The company has made no other commitments benefiting its executive officers.
56
Management Report
57
Management Report
List of functions exercised by the executive officers in other companies during FY 2005
First and last name of
company name of the
executive officer
Date of first Date of first
appointment appointment
Main
Main function
function
exercised
exercised in outside the
the company company
Other mandates and functions
exercised in any company
Mr. Jean-Michel AULAS
June 20, 1983 Shareholders’ Meeting
approving the 2009
financial statements
PCA
CEO Olympique
Lyonnais Groupe
ICMI represented by
Mr. Patrick BERTRAND
September 14, Shareholders’ Meeting
1983
approving the 2009
DIRECTOR
DGA Administration
Finance
approving the 2007
approving the 2009
November 4, 1997 Shareholders’ Meeting
approving the 2008
DIRECTOR
Mr. Jean-Luc LENART
November 16, Shareholders’ Meeting
2004
approving the 2009
DIRECTOR
Senior Advisor Bryan Director Cegid, Director and Member of Supervisory
Garnier & Co
Board Imagination SA, Director and Member of
Supervisory Board Appia SA, Chairman Aclam SARL,
Chairman Les Sources SC
Mr. Jacques MATAGRIN
approving the 2007
DIRECTOR
Manager Noirclerc Director Cegid, Director Le Tout Lyon et Le Moniteur
Fenetrier Informatique Judiciaire SA, Director OL Groupe, Chairman ATF,
Director Eurazis, Director and Chairman Association
Olympique Lyonnais, Chairman-CEO OL Voyages,
Chairman Noirclerc Fenetrier Informatique-NFI, Chairman
JM Investissement, Chairman SCI Duvalent, REP P
Association Olympique Lyonnais to the BD of Société
Olympique Lyonnais
Apax Partners represented
by Mr. Edgard MISRAHI
2004
approving the 2009
DIRECTOR
GM Société Européenne Kleber SA, Director Webraska
Mobile Technologies, Chairman Webraska Mobile
Technologies, Membre of Supervisory Board Hubwoo.
com, Director Antalis TV, REP P de Apax Partners SA au
CA de Arkadin, REP P de Apax Partners SA to the BD of
Cegid SA, President and Member of Executive Committee
Fintel SAS, Member of Supervisory Board Amboise
Investissement SCA
Mr. Michel REYBIER
May 21, 1997 Shareholders’ Meeting
approving the 2008
DIRECTOR
Chairman Domaines Reybier, Chairman MJ France,
Director GIE Helipart, Director Pebercan, REP P société
Company Morasto Jalop BV to the BD of Aéroport
du Golfe de Saint-Tropez, Chairman SCI LAM, REP P
Company Morasto Jalop to the BD of Reybier & Partners
Investment SAS, REP P MJ France Chairman of SAS
Goulee
Eurazeo represented
by Mr. Gilbert SAADA
2004
approving the 2009
DIRECTOR
Mr. Robert VERNET (6)
1983
approving the 2009
financial statements (6)
DIRECTOR
Mr. Yves DEFOIN
Mr. Franklin DEVAUX
Mr. Lucien DEVEAUX
Chairman Cegid, Chairman HCS, Chairman Ccmx SA(1),
Director and Chairman ICMI, Director and Chairman
Cegid Services, Chairman Apalatys(3), Chairman-CEO
OL Groupe, Chairman-CEO SASP Olympique Lyonnais,
Chairman-CEO Ccmx Holding(2), Director OL Voyages,
REP P Servant Soft to the BD of CBI(3), Director
Quadratus, Chairman SCI Tersud,
GM Cegid SA, REP P ICMI to the BD of Cegid SA, GM
Ccmx SA(4), DGD Ccmx(5), Director Ccmx Holding, Director
HCS, Chairman CBI, Chairman Quadratus, Chairman
Aspx, Chairman Fcrs, Director Synaptique(3), Director
Servant Soft, Director Expert & Finance, Director and
Vice-Pdt Figesco, MCS Alta Profits
None
DIRECTOR
Director Cegid, Director Aéro Club de France, Director
Fondation Nicolas Hulot, Director Securigate
DIRECTOR
Director Cegid, GM FRD Holding SAS, GM RFD
Participations SAS, GM Grange Tambour Participations
SAS, Membre Directoire Deveaux SA, GM Armand Thiery
SAS, Chairman of Supervisory Board of Ecce SA, Chairman
Devlocation, Chairman Tissage De Montagny, Chairman
SCI Philip II, Chairman SCI Philip I, Chairman SCI Du Foie,
Director Lyonnaise De Banque
GM Eurazeo
Member of the Executive Board of Eurazeo SA, REP P
of Eurazeo to the BD of LT Participations SA, REP P of
Eurazeo to the BD of Cegid SA, Director Eutelsat SA,
Director Eutelsat Communications SA, Director BlueBirds
Participations SA (Luxembourg), Chairman RedBirds
Participations SA (Luxembourg), Chairman Clay Tiles
Participations SARL (Luxembourg)
ADM Creations Robert Director and Honorary Chairman Creations Robert Vernet
Vernet
(SAS), Director SA Rive Droite Immobilière, Chairman
SCI Vendôme Parc, Chairman SCI Verbel, Chairman SCI
Antibe Salis
Up until March 25, 2005, date on which Ccmx SA was absorbed by Ccmx Holding.
Became Ccmx starting on March 25, 2005 following the absorption of Ccmx SA by Ccmx Holding and following the change in name.
(3)
Up until November 28, 2005, date of dissolution via asset merger.
(4)
From November 16, 2004 to March 25, 2005, date on which Ccmx SA was absorbed by Ccmx Holding which became Ccmx.
(5)
Since May 9, 2005.
(6)
Resigned on March 23, 2006
(1)
(2)
58
Simplified group Cegid organizational chart at March 31, 2006
(representing the main subsidiaries)
Cegid
Ccmx
100%
Fcrs
100%
Aspx
100%
Quadratus
100%
Cegid
Corporation
100%
HCS (2)
44.59%
24.42%
Cegid
España
75%
Cegid Services (2)
58.80%
GTI
Industrie
100%
PMI Soft (1)
80%
ALP
100%
(1)
(2)
20% subject to successive purchases between January 1, 2007 and June 30, 2009 at the latest.
Holding company with no operating activity.
59
Highlights
1983
2000
1986
Listing of Cegid SA on the Second Marché.
2001
Creation of Cegid, specialized in the design and development
of business software and the delivery of “turnkey” information
systems to accounting firms, auditing firms and small and
medium-sized enterprises and industries.
Creation of Cegid Kalamazoo Entreprises (corporate
business activity offering).
Creation de ITI : Computer Equipment Maintenance
business.
1987
Creation of Cegid Services in partnership with members
of the accounting profession to provide new consulting
services.
Issue of a bond with share warrant offering (OBSA).
1989
Transfer by Cegid SA to its subsidiary, Cegid Informatique
(formerly Cegid Kalamazoo Enterprises) of its business
servicing CPAs.
Cegid SA becomes a management holding company of its
operating subsidiaries, which are grouped into two divisions:
information technology and services.
Transfer of Cegid SA’s share to the securities listing of the
French monthly settlement market.
Listing of ITI’s share on the Lyon over-the-counter
market.
Listing of DEI’s share (computer supplies and consumables)
on the Lyon over-the-counter market.
1995
Takeover merger of DEI by ITI, which becomes Cegid
Environnement Maintenance.
1996
Cegid becomes the leading French provider of automated
solutions for Chartered Accountants (source: AVISO studyApril 1996).
Acquisition by Cegid Informatique of Silicone Informatique
and Silicad.
1997
Takeover merger by Cegid Informatique of Silicone
Informatique and Silicad.
Takeover merger by Cegid SA of its key operating subsidiaries
(Cegid Informatique and CEM).
Issue in July of a convertible bond offering in the amount
of FRF 103.1 million.
Acquisition of Orli and Amaris.
1998
Acquisition of Alphabla and Apalatys.
Acquisition of a 34% equity interest in Synaptique.
Takeover merger by Cegid SA of its Alphabla, Orli and
Amaris subsidiaries.
Operation of the Servant Soft business by Cegid SA under
a lease-management agreement.
Increase in the Group’s equity interest in Synaptique from
34% to 80%.
Acquisition of 100% of C-Line’s shares and takeover merger
of this company by Cegid SA.
Creation of Cegid Business Intelligence by a spin-off of
Servant Soft’s Reporting & Business Intelligence division.
Creation in July 2001 of Cegid Corporation (USA), whollyowned subsidiary of Cegid SA.
2002
2002 Creation in February 2002 of Cegid España, a 75%
subsidiary of Cegid SA.
Increase in the equity interest in Synaptique from 80 to
85%.
Acquisition of 100% of Magestel’s shares and operation
of the business by Cegid SA under a lease-management
agreement.
2003
Acquisition of 100% of the shares of Quadratus and its
distributors, Data Bretagne, Technilog and NS Informatique.
and merger by Cegid SA.
90%.
Acquisition of 100% of the shares of Logam and ALP.
Transfer of Cegid’s head office.
2004
Operation of Logam by Cegid SA under a lease-management
agreement.
Sale of the “office supplies and IT consumables” activity to
Liogier.
Issue of a bond with redeemable share warrant offering
(OBSAR) for 44.1 million euros.
Cegid - Ccmx merger: Announcement of the creation of the
French leader and top-level actor in the European market
of management solutions aimed at companies.
Acquisition of CGO Informatique (Fashion).
95%.
Effective takeover of Ccmx Holding by Cegid SA and
implementation of a new management team.
2005
Sale of the Datamer business.
Operation of CGO Informatique by Cegid SA under a leasemanagement agreement.
Acquisition of CSSI’s business (distribution of Quadratus
software).
100%.
1999
Acquisition of Servant Soft: reserved capital increase
followed by an exchange/tender offer, and then by a share
buyback offer followed by a squeeze-out.
Issue in November of a convertible bond offering (Convertible
bond «OCEANE») in the amount of 35.4 million euros.
60
Highlights
Focus 2005
A new organization
In order to be in sync with market expectations, to be more
reactive and to reinforce its local relations with its customers,
the Cegid Ccmx group adopted a new organization based on
three Operational «Business Units»:
«Accounting / Small and medium-sized industries and
businesses» which provides an offering aimed at Chartered
Accountants and small companies around the Cegid, Ccmx
and Quadratus brands.
«Middle market / Company Groups» with: an ERP adapted
to SMBs (independents of group subsidiaries) with 50
to 2000 employees, solutions for major companies and
groups in terms of Human Resources, taxation and
Corporate Performance Management.
«Sectoral Companies» provides professional solutions
aimed at the sectors of Fashion, Hospitality, Construction,
Retail… regardless of the size of the company.
A new visual identity
The new logo combines graphical items, and reflects the
culture of the two entities.
The “Better you are,
Better we are” signature
emphasizes Cegid’s desire
to fit in with dynamics
that make its growth indissociable from the success of its
customers and colleagues.
A new generation of management solutions:
Cegid Business
Strong growth in results despite a difficult legal
context
The takeover of Ccmx Holding by Cegid SA, authorized by the
Ministry of the Economy, Finance and Industry on October
19, 2004, was disputed in front of the Council of State and
commercial jurisdictions. These legal proceedings were in
2005 a heavy handicap for Cegid in its process of merging
with Ccmx.
Despite this overall difficult context, consolidated sales
in 2005 stand at €224.3 million, up 56.7% compared to
2004. In parallel to the growth in sales, the favorable trend
pertaining to the product mix, growth in the gross margin
as income, as well as optimized management of overheads,
result in current operating income of €21.3 million which is
up 68% at December 31, 2005.
Cegid takes the «Digital and Competitiveness
Trophy»
Cegid was rewarded by the AFNET, the French speaking
association of users of the net, for its contribution to the
performance of SMEs, thanks to its management solutions
dedicated to companies.
Reinforced technological partnership with
Microsoft
Cegid participated in the “Microsoft WorldWide Partner
Conference” which took place from July 8-10, 2005 in
Minneapolis with over 6,500 Microsoft partners. This
was the opportunity for Cegid to confirm its position in
the management software market and its research and
development policy based on Microsoft technologies.
Cegid Business goes beyond the basic functions of an ERP, by
transforming the company’s data into pertinent information
thanks to Business Intelligence applications, and by delivering
this information directly to the end user via a collaborative
portal. Cegid Business is available in 3 ranges which adapt
to each company size.
61
Recent developments and outlook
Recent developments
Changes in the activity and in current operating
income during the 1st quarter of 2006
First-quarter sales for 2006 stand at €53.2 million compared
to €54,4 million in the first quarter of 2005 (Impact involving
changes in the consolidation scope: GTI Industrie and PMI
Soft integrated on March 1, 2006: €0.5 million).
This change can be explained in particular by the low amount
of activity in the month of January and February 2006 that
were still impacted by the absence of harmonization in the
product range sales policy for customers of Ccmx, finally
made possible by the favorable decision of the Council of
State on February 13, 2006. The first quarter of 2006
moreover experienced a considerable drop in the sale of
computer hardware. Furthermore, note that activity in the
first quarter of 2005 was the result of strong growth in the
economy, with the first civil quarter of 2005 being the last
quarter in the 2004-2005 fiscal year for Ccmx. Orders since
the month of March are up considerably compared to that
observed over the first two months. Sales for the month of
March 2006 are up, on a current basis of comparison, by
nearly 5% compared to sales in March 2005.
and take advantage of the excellent professionalism of the
teams in place.
These acquisitions allow Cegid to:
Reinforce the “Industry Manufacturing” offer, on of the
major axes for verticalization in the Cegid offering, and
provide solutions in the new segments such as aeronautics,
mechanics, plastics, electronics, surface treatments, etc.
as well as solutions adapted to the needs of very small
industrial companies;
Consolidate its presence in the market of management
solutions for small and very small industrials, double the
installed base with more than 1,300 sites under contract,
activity volume up sharply in this segment (pro-forma sales
of about €21 million) and increase in recurring revenue;
Continue the current partnership initiated between GTI
Industrie and SAP for over two years now. Within this
framework, it has developed a complete solution for
production management aimed at the industry sector
marketed under the name Industry One. This solution,
property of GTI Industrie, is complementary and integrated
into SAP Business One, SAP’s management solution for
small-sized industries and companies (less than €30 million
in sales). SAP and GTI Industrie will continue to market
Industry One from GTI Industrie via their approved network
of resellers.
With sales in “software and associated services” stable in
relation to March 31, 2005 and growth in recurring sales,
the product mix is improving considerably in the first quarter
of 2006.
Cegid reinforces its management team in
order to accelerate growth in France and
internationally
This results in growth in the gross margin which stands
at 84% (81.8% on the average for 2005). This change,
combined with the reduction in operating expense resulting
from the reorganization measures taken in 2005, lead to
a monthly activity break even point that is down sharply
compared to the first quarter of 2005.
Didier SERRAT, 49 years old, former student at the National
School of Administration, a graduate of the Paris Institute
of Political Studies and engineer for a very small industrial
company, reporting to Patrick BERTRAND, General Manager
of the Cegid group, chaired by Jean-Michel AULAS, will have for
mission, as “Administration - Finance - Business Development”
Assistant General Manager, to reinforce the structures and
the resources that are needed for growth in the Group and
for its profitability, and to steer the implementation of the
external growth strategy, nationally and internationally.
This improvement in the basic indicators already makes it
possible to observe, at March 31, 2006, growth in current
operating income estimated to be about +25% compared
to the first quarter of 2005, and therefore to confirm the
objectives of new growth in current operating income for
fiscal year 2006.
Acquisition of GTI Industrie and PMI Soft
Cegid, during the month of March 2006, acquired GTI
Industrie and PMI Soft, publishers and distributors of
management solutions for industrial companies.
Through this transaction, Cegid reinforces its position as
a reference in the field of management software for small
industrial companies (over 50 employees) and very small
industrial companies (less than 50 employees).
GTI Industrie and PMI Soft develop, publish and distribute
management solutions aimed at Middle Market industrial
companies.
Total annual sales for GTI Industrie and PMI Soft are nearly
€6.5 million with very good operating profit (20% based on
results of the latest period ended December 31, 2005). The
50 employees and the customer base of over 600 small and
medium-sized industrials will reinforce the presence of Cegid
in this activity sector.
He will join the Management Committee which in particular
includes Christophe RAYMOND (former student of the École
Normale Supérieure Ulm and Doctor in Nuclear Physics)
“Techniques and Research and Development”, Assistant
General Manger and Bertrand BOULET (graduate of the École
Supérieure des Mines de Douai), «Sales and Operations»
Assistant General Manager.
Reinforcing of financial means
The Cegid group is finalizing the set up of middle-term bank
financing for an amount that is far greater to that of the
bilateral lines of credit in place today. It will make it possible
to refinance these lines as well as financing general needs
and investment in the Group such as new external growth
transactions.
This reinforcement of financial flexibility, in the context of
enlarging the existing banking pool, will accompany and will
ensure the Cegid group in its ambitious strategy for growth
in France as well as abroad.
The managers of GTI Industrie and PMI Soft as well as all
of the colleagues will continue their activities at Cegid in
order to exploit the synergies connected with the merger
62
Outlook
Cegid,
A clear strategy and an ambitious outlook
In 2005, the Cegid group has imposed itself as the leader
in publishing computerized management solutions in France.
Backed with this success and the excellent results recorded
in 2005, Cegid now wants to accelerate its growth in
France and abroad, by taking the concrete expectations
of its customers into account, who want to rely on a solid
computing partner in order to reinforce their competitiveness
in an extremely competitive context.
A flexible and secure hosting and service policy, in-depth
knowledge of their profession with a large range of software
that meet the users’ expectations, local presence that is
indispensable for constructive and constant dialog and an
accompaniment in the development internationally: as many
exact needs expressed by the clients as Cegid wants to
respond to.
Cegid’s development for the years to come is articulated
around for strategic axes.
Develop an Publisher/Hoster aspect for
management solutions
Cegid’s offering makes use of modern technology, incorporating
into a single software approach, all of the latest innovations in
decision-making, and pertaining to collaborative efforts and
the Internet. This technology makes it possible for Cegid to
provide its customers with an ERP, Cegid Business, as well
as referenced solutions on the market in terms of Corporate
Performance Management, Human Resources Management
and Finance / Taxation.
of the Chartered Accountant Profession, customers of the
Group, can advise their customers on setting up Cegid
solutions. Cegid would like, through the development of these
distribution networks, that each customer in the Group be
in contact with a local contact.
Develop our presence internationally
Our customers are going international. We need to be at their
side and accompany them in their growth. Cegid solutions
have already been deployed in over 1,400 sites in over 30
countries via our subsidiaries in Spain and in the United States
or via our distributors in Germany, Austria, Switzerland, Italy
and soon China. The offer, which is already available in English,
Spanish, Italian, Portuguese and German… is now provided
in mandarin Chinese. In 2006, Cegid is going to reinforce
this presence abroad. The Group wants to be close to its
customers which are deploying abroad and in 2006 will
continue its initiatives to accompany them.
In 2006, the Group benefits from increased financial
soundness, from 2,000 motivated and skilled employees,
from reference financial and technological partners and
from excellent expertise on the needs of “Middle-Market”
companies and groups of companies.
Beyond this, Cegid can rely on an installed base of more
than 80,000 customer sites, representing a recurring
revenue portfolio of over €100 million a year, and on true
know-how in terms of external growth and integration of
companies to accelerate the growth in the Group in France
and internationally and play a front-stage role among the
European publishers.
This technological advance and Ccmx’s expertise in terms
of hosting allows the entire offering, traditionally offered in
Insourcing mode (installed at the customer’s), to now be offered
with the mist appropriate method of access for the operations
of the customer: Insourcing, Outsourcing (hosted solution) or
ASP (rental mode) with reversibility among the various access
methods. This development provides the company with an
undeniable competitive advantage by simplifying installation
and deployment of management solutions for the Group’s
customers.
Meet the professional stakes of our customers
Since it was created, the Cegid group has taken into account
the core profession dimension of its customers by verticalizing
its offering of business software aimed in particular and
the following business sectors: audit and chartered public
accountants, fashion professionals, industry-manufacturing,
services, retail, Construction, hotel-restaurant or specialized
businesses. Cegid intends to continue and develop this
approach by profession. The recent acquisition of GTI Industrie
and of PMI Soft, specialized publishers in the area of industry
manufacturing, bear witness this strong ambition.
Reinforce our presence with our customers
Geographical nearness is the key to close-working relationship
between Cegid and its customers. In order to further develop
this local presence, Cegid has supplemented its network with
39 sales agencies by an indirect network which enjoyed a lot
of development in 2005 to today reach the number of 160
distributors/integrators. Beyond that, over 7,000 members
63
Consolidated Financial Statements - Assets
(in thousands of euros)
Goodwill
2005
IFRS
2004
IFRS
2004
French GAAP
2003
French GAAP
146,938
143,957
4,398
4,715
33,022
28,829
28,829
21,595
Intangible assets
Development costs
Business value (goodwill )
-
-
146,400
54,799
964
1,225
1,225
2,187
25
1,433
1,433
706
Technical facilities, equipment and industrial supplies
1,656
1,041
1,041
882
Other tangible assets
4,078
4,357
4,357
4,234
531
529
529
43
18
18
18
18
Loans
767
607
607
609
Other long term investments
842
673
582
284
19,455
22,752
22,752
139
208,296
205,421
212,171
90,211
1,412
1,867
1,867
2,041
34
11
11
24
1,511
1,652
1,652
1,765
55,076
53,624
53,624
36,022
(1)
Other intangible assets
Tangible assets
Buildings
Long-term investments
Investments and related receivables
Other fixed securities
Deferred tax assets
NON-CURRENT ASSETS
Inventories
Raw materials
Unfinished goods and services
Trade goods
Trade receivables and similar accounts
Other receivables and prepaid items
Receivables from personnel
370
347
347
179
2,029
1,738
1,738
1,389
Income-tax receivables
233
2,769
2,769
Other receivables
874
600
600
1,419
Prepaid expense
1,763
2,957
4,490
2,816
61,916
18,246
19,273
16,264
1,421
401
401
2,611
CURRENT ASSETS
126,639
84,212
86,772
64,530
TOTAL ASSETS
334,935
289,633
298,943
154,741
Sales tax receivables
-
Miscellaneous
Marketable securities
Cash
(1)
64
Line item eliminated from IFRS presentation
Consolidated Financial Statements - Liabilities & shareholders' equity
Share capital
2005
IFRS
2004
IFRS
2004
French GAAP
2003
French GAAP
8,158
8,025
8,025
5,653
Share premium account
78,814
76,854
76,854
23,165
Consolidated reserves
15,377
21,404
24,911
22,661
Net income for the year
9,827
691
7,951
7,335
Other shareholders’ equity
6,237
6,237
-
-
118,413
113,211
117,741
58,814
5,373
5,448
5,448
5,533
SHAREHOLDERS’ EQUITY - GROUP SHARE
Minority interest / shareholders’ equity
Minority interest / earnings
TOTAL MINORITY INTERETS
TOTAL SHAREHOLDERS’ EQUITY
40
31
31
247
5,413
5,479
5,479
5,780
123,826
118,690
123,220
64,594
Bonds
Convertible bonds «OCEANE» (portion < 1 year)
-
33,556
30,688
30,691
OBSARs (portion >1 year)
39,172
37,809
44,158
-
Other long-term debt (portion > 1 year)
36,000
113
113
4,033
Deferred tax liabilities
1,850
2,838
1,327
236
Provisions for pension obligations
3,658
3,254
3,254
-
80,680
77,570
79,540
34,960
4,775
5,679
9,298
4,345
15,987
15,133
15,133
1,727
969
498
498
858
-
-
-
NON-CURRENT LIABILITIES
Provisions
Provisions for risks
Provisions for charges
Long-term debt (portion < 1 year)
Overdrafts, bank borrowings
Convertible bonds «OCEANE» (portion < 1 year)
Sundry borrowings
Trade payables and equivalent
37,341
310
1,219
412
251
23,352
24,463
24,463
19,634
29,298
28,278
28,278
14,848
866
1,555
1,555
688
5,825
6,278
6,278
1,939
896
407
407
1,281
Tax and employee-related liabilities
Employees
Other tax and employee-related liabilities
Sales tax payables
Income tax payables
Payables on fixed assets
741
501
501
1,237
Other current liabilities
3,217
2,850
2,850
2,498
Unearned revenue
6,852
6,512
6,512
5,881
CURRENT LIABILITIES
130,429
93,373
96,183
55,187
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY
334,935
289,633
298,943
154,741
65
Consolidated Financial Statements - Income Statement
2005
IFRS
% of
sales
2004
IFRS
% of
sales
% of
sales
2003
French
GAAP
100.0% 130,058
% of
sales
SALES
224,305 100.0% 142,993 100.0%
143,110
Goods and services purchased
(40,914)
18.2% (28,994)
20.3%
(29,047)
20.3%
(26,645)
20.5%
GROSS PROFIT
183,391
81.8% 113,999
79.7%
114,063
79.7% 103,413
79.5%
Capitalized expenditures
19,533
8.7%
100.0%
14,862
10.4%
14,862
10.4%
14,885
11.4%
External expenses
(44,734)
19.9% (28,111)
19.7%
(27,375)
19.1%
(26,328)
20.2%
VALUE-ADDED
158,190
70.5% 100,750
70.5%
101,550
71.0%
91,970
70.7%
(3,261)
2.3%
(3,261)
2.3%
(2,491)
1.9%
50.5% (70,053)
49.0%
(70,053)
49.0%
(63,109)
48.5%
39,411
17.6%
27,436
19.2%
28,236
19.7%
26,382
20.3%
1,573
0.7%
853
0.6%
743
0.5%
618
0.5%
(4,827)
2.2%
Operating grants
-
Taxes other than income tax
-
(5,472)
Personnels costs
(113,307)
GROSS OPERATING INCOME
Other income from ordinary activities
Other expenses of ordinary activities
2.4%
-
12
(1,533)
1.1%
(1,046)
0.7%
(692)
0.5%
6.6% (14,058)
9.8%
(15,494)
10.8%
(15,121)
11.6%
21,349
9.5%
12,698
8.9%
12,439
8.7%
11,187
8.6%
445
0.2%
453
0.3%
-
-
-
-
Depreciation, amortization and provisions
(14,808)
INCOME FROM ORDINARY ACTIVITIES
Capital gains and losses on disposals
Other operating income or expense
(2,218)
1.0% (11,000)
7.7%
OPERATING INCOME
19,576
8.7%
2,151
1.5%
12,439
8.7%
11,187
8.6%
(4,937)
2.2%
(2,358)
1.6%
(1,338)
0.9%
(1,452)
1.1%
82
0.1%
82
0.1%
321
0.2%
(2,276)
1.6%
(1,256)
0.9%
(1,131)
0.9%
472
0.3%
2,201
1.7%
(2)
Financial debt expense(2)
Other financial income and expense
(2)
NET FINANCIAL EXPENSE
(43)
(4,980)
2.2%
EXTRAORDINARY PROFIT OR LOSS(1)
PRE-TAX INCOME
Income tax
Amortization of goodwill
(1)
14,596
6.5%
(125)
0.1%
11,655
8.1%
12,258
9.4%
(4,729)
2.1%
847
0.6%
(3,356)
2.3%
(4,360)
3.4%
(317)
0.2%
(317)
0.2%
-
-
Total consolidated net income
9,867
4.4%
722
0.5%
7,982
5.6%
7,581
5.8%
Consolidated net income, Group share
9,827
4.4%
691
0.5%
7,951
5.6%
7,335
5.6%
Minority Interest
(1)
(2)
66
2004
French
GAAP
40
31
31
247
Line item eliminated from IFRS presentation
New line item in IFRS presentation
Consolidated Financial Statements - Consolidated cash flow statement
2005
IFRS
Net income
9,827
691
7,951
7,335
40
31
31
247
17,993
24,054
16,794
14,829
Minority interests
Net depreciation, amortization and provisions
Capital gains and losses
CASH FLOW FROM OPERATING ACTIVITIES
Restatement of deferred expense
Inventories
Receivables
Other receivables
Payables
2004
IFRS
2004
2003
French GAAP French GAAP
(445)
(453)
(453)
(203)
27,415
24,323
24,323
22,208
-
-
(1,875)
(1,084)
573
968
968
1,137
(1,415)
(13,180)
(13,180)
6,818
3,350
5,200
5,570
(572)
(1,111)
(634)
(634)
565
Other payables
6,839
(2,650)
(1,139)
(782)
CHANGE IN WORKING CAPITAL REQUIREMENT
8,236
(10,296)
(8,415)
7,166
35,651
14,027
14,033
28,290
(22,634)
(104,065)
(104,065)
(33,859)
(2,506)
(1,106)
(1,106)
(2,983)
(219)
(672)
(579)
(104)
NET CASH FROM OPERATING ACTIVITIES
Acquisitions of intangible assets
Acquisitions of fixed assets
Acquisitions of financial investments
Disposals of fixed assets
NET CASH FROM INVESTING ACTIVITIES
Change in shareholders’ equity
Other change in shareholders’s equity
Dividends paid to shareholders of the parent company
Dividends paid to minority shareholders of consolidated companies
Issuance of OBSAR bonds
Drawdowns under medium-term lines of credit
Other changes in long-term debt
2,304
1,690
1,690
3,549
(23,055)
(104,153)
(104,060)
(33,397)
2,093
56,062
56,062
-
-
5,301
-
-
(6,838)
(4,760)
(4,760)
(3,422)
(22)
(169)
(169)
(95)
-
37,809
44,100
36,000
-
-
-
390
(4,037)
(4,037)
538
NET CASH FROM FINANCING ACTIVITIES
31,623
90,206
91,196
(2,979)
CASH AT BEGINNING OF YEAR
18,150
18,070
18,016
26,102
CHANGE IN CASH
44,219
80
1,169
(8,086)
CASH AT YEAR-END(1)
62,369
18,150
19,185
18,016
Cash includes drawdowns of €36M under medium-term confirmed lines of credit. These funds were applied to the redemption of €37,413k
in Convertible bond "OCEANE" on January 2, 2006.
(1)
67
Consolidated Financial Statements
Statement of changes in shareholders' equity
Changes in shareholders' equity
Share capital
SHAREHOLDERS’ EQUITY AT JANUARY 1, 2004
Share
premium
account
Reserves
& retained
earnings
5,653
23,165
28,670
2,365
53,609
2
2
7
79
86
2004 net income
Other
shareholders’
equity
691
Capital increase (1)
Conversion of 64 BSARs into Cegid shares
Options exercised by employees
Deferred tax on OBSAR restatment
(1)
Allocation of 2003 consolidated net income
SHAREHOLDERS’ EQUITY AT DECEMBER 31, 2004
(8)
6,237
Change in liquidity contract
8,025
76,854
(319)
(319)
(2,079)
(100)
(101)
(4,760)
(4,760)
6,237
9,827
Options exercised by employees
(2)
133
2,093
(3)
(4)
Allocation of 2004 consolidated net income
8,158
113,211
9,827
1,960
Exchange differences
Shareholders’ equity at December 31, 2005
6,237
(2,079)
22,095
2005 net income
Other changes
691
(8)
Other shareholders’ equity (OBSARs) (1)
Other changes
57,488
55,974
Exchange differences
Change in liquidity contract
-
Total
78,814
(38)
(38)
257
257
(99)
(99)
(6,838)
(6,838)
25,204
6,237
118,413
Capital increase resulting from exercise of 12 BSARs in March 2005 and 139,757 options by Cegid employees.
Impact of applying IAS 39 to the OBSAR bonds issued in March 2004.
(3)
Impact of applying IFRS 2 to shares held in treasury in the context of Cegid’s liquidity contract.
(4)
Impact of early application of the IAS 19 amendment, net of tax.
(1)
(2)
Changes in minority interests
Opening Balance
Net income for the period
5,479
2004
5,780
40
31
Dividend paid by the consolidated subsidiaries
(22)
(169)
Change in scope of consolidation (1)
(84)
(163)
5,413
5,479
Total
(1)
68
2005
Changes in the scope of consolidation related to Cegid Services, HCS and Synaptique.
Consolidated Financial Statements - Net income per share
2005
IFRS
2004
IFRS
2004
French GAAP
2003
French GAAP
8,587,355
8,447,586
8,447,586
5,950,596
Before taxes
21.35
12.70
12.44
11.19
After taxes
16.62
13.54
9.08
6.83
Before taxes
2.49
1.50
1.44
1.30
After taxes
1.94
1.60
1.05
0.79
Net income (Group share) (in € M)
9.82
0.69
7.95
7.33
Net earnings per share (Group share) (in €)
1.14
0.08
0.93
0.85
Fully diluted net earnings per share (Group share) (in €) (1)
0.92
0.06
0.75
1.08
Total distribution (in € M)
7.30 (2)
6.82
6.82
4.76
Distribution per share (in €)
0.85
0.80
0.80
0.80
Number of shares at December 31, 2005
Consolidated income
Net income (in € M)
Net income per share (in € M)
Net dividend
(1)
(2)
(2)
Assuming 86,116 subscription options and 2,004,470 BSARs are exercised.
Dividend proposed at the General Share holders’ Meeting of June 2, 2006.
69
Consolidated Financial Statements - Notes
The consolidated financial statements at December 31,
2005 were approved by the Board of Directors on March 23,
2006.
1 Significant events in FY 2005
1.1 Cegid-Ccmx merger :
Fiducial disputes the takeover of Ccmx Holding
The takeover of Ccmx Holding by Cegid SA, which was
authorized by the Minister of the Economy, Finance and
Industry on October 19, 2004, was brought before the
Council of State following an objection by Fiducial Expertise
and Fiducial Informatique.
In a ruling issued on July 20, 2005, the Council of State
decided, before addressing the substance of the case, to
refer the matter to the French Competition authority in order
to examine the merger transaction.
The judgment of the French Competition authority was
sent to the Council of State on December 14, 2005 and
concluded that the merger resulting from Cegid’s acquisition
of Ccmx is not of a nature to affect competition in the market
involved.
The Council of State finally ratified the takeover on February
13, 2006.
These legal proceedings slowed down the process of
incorporating Ccmx into the Cegid group and had a negative
impact on the Group’s operating profitability.
1.2 First-time publication of the Group’s financial
statements according to IFRS
In accordance with European regulation #1606/2002
dated July 19, 2002, the consolidated financial statements
published for FY 2005 were drawn up in accordance with the
accounting standards stipulated by the IASB (International
Accounting Standards Board) that apply to FY 2005 and as
approved by the European Union. International accounting
standards comprise IFRS (International Financial Reporting
Standards) and IAS (International Accounting Standards),
as well as their interpretations.
Comparative financial information (FY 2004) has been drawn
up according to the same standards and interpretations.
The recommendation of the CESR (Committee of European
Securities Regulators) dated December 30, 2003 on the
transition to IFRS, encouraged issuers to publish a quantified
impact of the change in accounting standards as early as
possible . In order to abide by this recommendation, the
Cegid group, in the reference document filed with the AMF
on May 31, 2005 and listed as number D.05-807, published
its approach to the 2004 financial statements under IFRS
standards. Some of the standards selected in this document
were considered to be of little significance:
IAS 16: the low impact of the changes on the depreciation
period for fixed assets was not retained,
IAS 32-39: discounting of loans and deposits was not
applied, due to the low degree of impact,
IAS 39: reporting of the OBSAR loan differs from that
previously presented; by applying this standard, evaluation
of the liability component took place after evaluating the
equity component. The latter was estimated after an initial
analysis based on the first price quoted for the BSAR; this
estimate was then revised, based on an average price
which was considered to be more appropriate. Moreover,
the impact on deferred taxes relating to this treatment
was retained.
Taking the comments above into account, the financial
statements presented in the section entitled “switching to
IFRS” (note 14) include bridge tables for statements that
comply with regulation 99.02 to the consolidated financial
70
statements drawn up according to the provisions set forth
in IFRS 1 “first-time adoption of IFRS” :
Bridge table of the opening balance sheet at January 1,
2004 under French standards to the opening balance sheet
under IFRS standards,
Bridge table of the closing balance sheet at December 31,
2004 under French standards to the 2004 closing balance
sheet under IFRS standards,
Shareholders’ equity reconciliation table at January 1, 2004
and at December 31, 2004 (IFRS),
Bridge table of the 2004 results under French standards
to the 2004 results under IFRS standards,
Recompilation of the changes in cash flow table for 2004
in IFRS format.
1.3 Variations in the consolidation scope and
acquisitions in the period :
Changes in the consolidation scope for FY 2005 are as
follows :
Cegid SA’s holding in the capital of HCS changed from
40.90 % at December 31, 2004 to 43.66% at December
31, 2005,
Logam, Apalatys and Synaptique were dissolved by merging
their asset bases with that of Cegid SA on December 30,
2005,
CBI was dissolved by merging its asset base with that of
Servant Soft SA on December 30, 2005,
Ccmx Holding absorbed Ccmx SA, following approval at the
Shareholders’ Meeting on March 25, 2005 (taking effect
retrospectively on April 1, 2004). Following this transaction,
Ccmx Holding was renamed Ccmx SA,
Ccmx acquired additional holdings in Fcrs. Since May 2005,
it has held 100% of this company,
Fcrs and Ccmx SA changed their closing date. Their financial
year now ends on December 31.
The consolidation scope table at December 31, 2005,
including changes in the percentages of control and the
consolidation methods, is provided in note 4.
Significant transfers and acquisitions for the year are as
follows :
Acquisition of going concerns and business software :
- In July 2005, the Cegid group reinforced its technological
potential with the addition of a new development team
specializing in the “.net” arena. The work of this team
primarily involved components for the calculation and
verification of financial and tax statements, workflow,
statistics and analysis. This transaction took place
through acquiring the business and software.
- In July 2005, Cegid SA acquired business software specialized
in organizational management.
- In the first half of 2005, Quadratus acquired a going concern
(in the south west region) of 250 customers representing
approximately €200K in recurring contracts.
Sale of the building located in Toulouse
The building in Toulouse, property of SCI Tersud, was sold
on December 21, 2005 for a transfer price of €1,180k exc.
tax (representing a net book value of €457K).
2 Presentation of Financial Statements
Cegid decided to apply the recommendations of the Conseil
National de la Comptabilité (French National Accounting
Board) n°2004-R.02 dated October 27, 2004 pertaining to
the formats of the income statement, balance sheet, cash
flow statement and changes in shareholders’ equity. This
recommendation complies with the principles set forth in
IAS 1 Presentation of financial statements.
2.1 Income statement
Taking the type and practice of the business into account,
presenting the income statement by type of income and
expense has been maintained, since this was preferred to
a functional presentation.
The major changes affecting the income statement are :
The notion of current operating income and operating
income,
The notion of net financial cost of borrowing, which includes
income from cash flow and interest expenses on financing
operations, and the notion of other financial income and
expenses, which groups together items of financial income
which are not of an operational nature,
The removal of exceptional items.
2.2 Balance Sheet
The main modifications concern :
Reclassifying business as goodwill and allocation of
cumulated depreciation on gross values of business goodwill
at January 1, 2004,
Allocating assets and liabilities as current and non
current,
Taking minority interests into account in shareholders’
equity.
2.3 Cash flow statement
The only modification to net cash flow as a result of the change in
standards is the impact of the liquidity agreement (see chapter
14), the only differences in relation to the previous presentation
involve more detailed indications and reclassification.
2.4 Change in shareholders’ equity
The bridge tables from French standards to IFRS are covered
in note 13.
2.5 Notes to the consolidated financial statements
All of the information contained in the notes to the statements
is restated in IFRS format.
The financial statements are presented in thousands of
euros and are compiled by Cegid and its subsidiaries. All of
the companies in the Group closed their books on December
31, 2005.
3 Rules - accounting methods and
consolidation methods
The information and detailed notes hereafter were prepared
based on standards and interpretations that were in force
on December 31, 2005.
The significant accounting rules and methods and the
consolidation methods used to draw up the consolidated
financial statements are summarized below.
The accounts for FY 2004 were restated according to
IFRS, as selected for the preparation of the 2005 annual
statements. The transition balance sheet at January 1, 2004
was issued in accordance with IFRS 1 pertaining to the first
time the IFRS standards are adopted. The consolidated
annual financial statements are issued in accordance with
the general principles set forth by the IAS 1 standard :
Compliance with all applicable standards,
Consistency of methods and presentation,
Operating continuity,
Material information,
True image,
Comparative information,
Compensation rule.
The main options selected within the framework of first-¬time
adoption of IFRS standards and their impact compared to
the French standards previously used are given in notes 3.1
to 3.9 of these notes.
Use of estimated values
The drawing up of financial statements that comply with
the conceptual framework of the IFRS standards requires
estimates and assumptions to be made that have an impact
on the amounts that appear in the financial statements.
The principle items affected by the use of estimates and
assumptions are intangible asset impairment tests, deferred
taxes and provisions, especially the provision for retirement
benefit commitments. These estimates are based on the
best information available to management on the date the
accounts are closed. Divergences in the estimates and
assumptions used could impact the amounts that are posted
to the financial statements.
Consolidation methods
Companies for which the Group holds the majority of voting
rights, whether directly or indirectly, are consolidated using
the full consolidation method. Jointly controlled companies
are consolidated via proportionate consolidation. Companies
in which the Group has a notable influence and a percentage
of voting rights in the neighborhood of 20% are consolidated
using the equity method. Companies over which the Group has
no control and no notable influence are not consolidated.
The list of companies included within the Group’s scope of
consolidation is provided in note 4.
Conversion of foreign company financial statements
Items expressed in the currency of foreign companies are
converted as follows :
The income statement is converted at an average annual
exchange rate,
Balance sheet accounts are converted at the accounts
closing date rate except for capital and reserves, which
remain at the historical rate,
Differences resulting from these conversions are recorded
in a special reserve account that is part of shareholders’
equity.
Segment information
IAS 14 on segment information requires that the company’s
performance be analyzed based on primary and secondary
segments corresponding firstly to the business and secondly,
geography.
Given the highly integrated character of its business, the Cegid
group considers that it is single-segment and furthermore
that geographical information is not pertinent.
Consequently, the Group is applying IAS 14 by publishing
segment information limited to the distribution of sales by
business segment and type.
71
3.1 Non-current assets
3.1.1 Intangible assets
a) Goodwill
IFRS 3- Business combinations & goodwill
Combinations after January 1, 2004.
Business combinations are recorded according to the way
in which they were acquired, in accordance with IFRS 3 Business combinations.
The first time a company is consolidated, its assets and
liabilities are evaluated at fair value.
The difference between the acquisition cost of securities
and the overall evaluation at fair value of the assets and
liabilities identified on the date of acquisition is recorded
as goodwill.
Analysis of goodwill is finalized within a period of one year
starting from the date of acquisition. When the acquisition
cost is less than the fair value of the identified assets
and liabilities, the difference is immediately recorded as
income.
In accordance with the option provided by IFRS 1, business
combinations that took place before January 1, 2004 have
not been restated.
Commercial goodwill from allocations of the difference for
a first time consolidation that was previously carried out
under French standards have been grouped together with
goodwill.
According to IFRS 3 “Business Combinations” and IAS 36
revised, acquisition goodwill is not amortized. Its value is
“frozen” at its net book value under French standards at
December 31, 2003.
Since acquisition goodwill is an intangible asset with an
indefinite useful life, it must be tested annually for impairment
according to IAS 36 revised (see note 3.1.3 for a description
of the use of loss of value tests).
b) R&D Expenses
According to IAS 38, research expenditure is recorded
as expenses and development costs are capitalized only
after technical and commercial feasibility of the asset for
sale or use have been established and the company can
demonstrate :
Its intention and financial and technical capability to
complete the development project,
It is probable that the future economic benefits that are
attributable to the development costs will accrue to the
company and,
The cost of the asset thus created can be measured
reliably.
R&D costs incurred by the Cegid group within the framework
of its publishing activity (creation of marketable professional
software) primarily involve the development of applications
and are subject to individualized monitoring.
Their value is determined on the basis of direct salary
expenses plus social security expenses, on the one hand,
and operating expenses calculated using a coefficient
determined on the basis of an average of actual expenses
of the departments involved, on the other.
Changes in estimated values have been taken into account,
starting on October 1, 2004, pertaining to the amortization
period for R&D expense. Since then, the following methods
have been used:
72
Expenditure relating to the new PGI range, for which
agreements have recently been signed with Microsoft
in 2003 and IBM in September 2004, which make for
new items for consideration that extend the life of this
range, have resulted in a prospective modification in the
amortization period using the linear method over 5 years
starting on October 1, 2004. Taking the life cycle of the
expenditure into account, this method results in the view
that the total life expectancy for a range is about 5 years.
This period is economically justified due to constant product
enhancements, as these new features increase the product
lifespan,
Projects other than PGI continue to be amortized using the
straight line method over 3 years. This amortization period
involves initial expenditure as well as later development
costs (evolving product maintenance),
Configuration expenditure pertaining to special edition
products of the Etafi and Profin types is amortized using the
straight line method over one year starting on January 1,
2005.
For FY 2005, the impact of this estimation change on current
operating income is about €3.6 million.
Costs relating to projects not yet completed are recorded as
intangible assets in progress and are not amortized. These
projects are nevertheless monitored and can be impaired
if applicable.
The Group did not select the option provided by the IAS
23 standard which allows incurred financial expense to be
incorporated into fixed asset costs during the development
period.
c) Software purchased
Software is depreciated over one to five years.
3.1.2 Fixed assets
Fixed assets are recorded at their acquisition cost (purchase
price, associated fees and other expenses). They have not
been revaluated.
Depreciation is calculated using the straight line method
according to the useful life that the Group expects :
- Buildings ......................................................... 25 yrs
- Fixtures and building facilities . ................... 3 and 9 yrs
- Computer hardware ............................. 3 yrs and 4 yrs
- Office equipment ................................................ 5 yrs
- Office furniture .................................................. 8 yrs
- Hardware and equipment .................................... 5 yrs
- Tryrsport equipment . ........................... 3 yrs and 4 yrs
Residual values are generally considered to be zero.
Items pertaining to finance leases are recorded as fixed
assets when these contracts effectively transfer all of the
risks and advantages inherent to owning these items to
the Group.
Lease contracts in which the risks and advantages are
not transferred to the Group are considered as simple
leased items. Payments pertaining to simple leases are
recorded as straight line expenses over the duration of
the contract
An analysis of the Cegid group’s lease contracts in force
at December 31, 2005 did not reveal the existence of any
finance lease contracts.
3.1.3 Impairment tests for fixed and intangible assets
3.1.5 Deferred taxes
According to IAS 36 “Impairment of Assets,” the value
in use of intangible and fixed assets must be tested for
impairment as soon as there are signs of a loss of value.
This test is performed at least once a year for assets with
an indefinite useful life (acquisition goodwill and business
software development costs).
In accordance with standard IAS 12, deferred taxes that
correspond to timing differences between the consolidated
accounting for assets and liabilities and the tax bases are
recorded using the liability method. Deferred tax debits are
recognized when their future realization appears likely at a
date that can be reasonably determined.
For this test, fixed assets are grouped in homogenous groups
of assets (Cash Generating Units or CGU) that generate cash
inflows from continuing use that are largely independent of
the cash inflows from other assets or groups of assets.
Future tax breaks that stem from the use of deficit tax
deferrals (including amounts that can be permanently
deferred) are recognized only when they are likely to be
recovered.
The value in use of these units is determined based on the
present value of its forecast cash flows (the discount rate
is determined after taxes and without taking the company’s
level of indebtedness into account). Final value is determined
by discounting to infinity a nominative cash flow using a
growth rate to infinity that corresponds to the business
sector. When this value is less than the net book value of
the CGU, the difference is recorded as a loss of value and
charged first of all to acquisition goodwill.
Deferred tax debits and credits are not discounted.
Deferred tax debits and credits are compensated within the
same fiscal entity, i.e. company or tax group.
Deferred taxes calculated on items allocated to shareholders’
equity are recorded under shareholders’ equity
Losses of value related to acquisition goodwill are irreversible
while losses of value related to other intangible and fixed
assets can, if applicable, be reversed in the event that there
are indications of a recovery in value.
In such cases, the reversal of the provision is limited to the
net book value the asset would have had if there had been
no loss of value.
Due to the highly integrated character of its business,
the Cegid group is single-segment and mono-CGU. The
impairment test of assets must therefore be conducted on
all of the Group’s intangible and fixed assets.
The methods used to determine assets’ value in use are
based on valuing future cash flows using the Discounted
Cash Flow method. This valuation covers a five-year period.
The discount rate is determined according to the business’
risk profile.
3.1.4 Non-consolidated securities and other financial
assets
According to IAS 39, securities in non-consolidated companies
are classed as securities available for sale. They are initially
recorded at their historical acquisition cost, then at fair
value, when it can be determined reliably. Securities in nonconsolidated subsidiaries are recorded on the balance sheet
at the acquisition cost that the Group feels represents their
fair value, in the absence of an active market.
For listed securities, fair value corresponds to the market
price on the day the accounts are closed.
When fair value cannot be reliably determined, securities are
maintained at cost less any depreciation. In this case, the
recoverable value is determined according to the Group’s
share in net assets, expected future profitability and the
development prospects for the entity in which the investment
is held.
Loans granted to collector organizations as part of a
mandatory construction effort, deposits and guarantees
paid are not discounted as recommended in standard IAS
39, due to their insignificant amount.
This item includes management financial assets included in
the liquidity agreement signed by Cegid. For treatment of
self-held shares covered by the agreement, refer to note
3.2.5.
73
3.2 Current assets
3.2.5 Share-based payments
3.2.1 Stocks
IFRS 2 Share based payments
The standard defines the methods for evaluating and
recording stock options.
According to IAS 2 “Stocks,” the cost of stocks should
include the purchase price, transportation, handling and
other costs directly attributable to the acquisition of finished
products, net of any sales rebates, trade discounts and
financial discounts.
For inventories of computer equipment, the NRV (Net
Realizable Value) corresponds to the estimated sales price
of the goods, less any cost necessary to carry out such a
sale,
Inventories of raw materials (assemblies and subassemblies)
used to perform standard replacements as well as those of
spare parts used for hardware maintenance are determined
according to the following methods :
-The gross value of the assemblies and subassemblies
includes the purchase price and related expenses,
-A provision for impairment is set up based on the NRV of
the item. If applicable, an additional provision is recorded
to take into account the value in use, based in particular
on the portfolio of current contracts.
3.2.2 Receivables
Receivables are initially valued at fair value which most often
corresponds to their face value. A provision is set up when
the inventory value is less than the book value.
3.2.3 Cash flow
This includes liquidities and bank current accounts.
Short term investment securities are recorded at their
acquisition cost. Their valuation at year end for mutual funds
(SICAV and Mutual Investment Funds) is based on the last
known redemption price.
The value of listed securities is determined based on the
average share price during the last month of the financial
year.
If the value resulting from the above valuation methods is
less than the historical acquisition cost, a provision is set
up. This provision, however, is not created if the associated
unrealized capital loss can be offset by unrealized capital
gains on securities of the same kind.
In case of transfers involving securities of the same type
that confer the same rights, the entry price of the securities
transferred was estimated using the ”first in/first out“
method.
3.2.4 Self-ownership of securities
IFRS 2 Self-ownership of securities
The Group is following a policy of Cegid SA share buy-back
pursuant to a mandate given by the Shareholders’ Meeting
to the Board of Directors. The primary objective of the share
repurchase program is to manage Cegid’s share as part of
a liquidity agreement. This agreement includes Cegid SA
securities, Sicav investments and cash and near cash.
Self-owned shares within the framework of the agreement
are recorded as a deduction to shareholders’ equity at their
acquisition cost.
Amounts corresponding to cash and securities covered by
the liquidity agreement are recorded as financial assets. The
revenues and expenditures related to the sale of treasury
shares do not flow through the income statement but are
directly charged to shareholders’ equity.
74
Since the granted benefit involves share options granted
to employees and executive officers, it must be recorded
as personnel expenses and offset against shareholders’
equity.
Since stock option plan No. 1 was granted before November
7, 2002, no restatement is required for the opening IFRS
balance sheet. The same is true for plan No. 2, granted
after November 7, 2002, but whose rights are acquired as
of January 1, 2005.
The Cegid group’s Company Savings Plan does not grant
specific benefits to employees other than the matched
contributions that are already recorded as personnel
expenses. Consequently, no restatement is required in this
respect.
3.2.6 Provisions
In accordance with standard IAS 37, booked provisions are
recorded according to the evaluation of the corresponding
risk and expense on a case by case basis. A provision is
recorded each time the Group’s management becomes aware
of a legal or implicit obligation that results from a past event,
which could give rise to an outlay in resources without an at
least equivalent expected compensation in return. Provisions
are allocated to current and non current assets according to
the expected term of the risk. Provisions with terms greater
than one year are discounted, if the impact is significant.
3.3 Non-current liabilities
3.3.1 Retirement benefit commitments
IAS 19 “Employee Benefits” and amendment IAS 19 :
Post-employment personnel benefits (end of career
indemnities) are recorded as a provision for contingencies
and losses in the consolidated financial statements.
As of FY 2004, the Cegid group made provisions to apply
CNC (French National Accounting Board) Recommendation
No. 03-R-01 dated April 1, 2003 in order to comply with
the provisions of IAS 19.
In addition, FY 2004 was affected by the signature of an
additional clause to the Syntec collective agreement, which
lifts the ceiling on rights and modifies costs related to past
services. The Cegid group opted to spread these costs over
the average residual life of the services to be rendered.
The methods of valuing retirement benefit commitments
prescribed by IAS 19 do not present any divergence with
the methods used by the Group.
While the financial statements for FY 2005 follow the same
method of evaluation, the Group has nevertheless decided to
anticipate the amendment to standard IAS 19, allowing actuarial
gains and losses to be recorded under shareholders’ equity.
The companies in the Cegid group have recorded a provision
corresponding to the amount of the commitments of the
companies relative to members of staff as well as corporate
officers, for all commitments relating to retirement,
pension, supplemental pension benefits, retirementrelated indemnities and allocations. The amount of these
commitments is calculated based on current salaries by
estimating the indemnities that will be paid to employees at
the time of voluntary retirement, weighted by the following
coefficients :
Expected salary reviews,
Retirement age (currently set at 65 years),
Changes in the number of employees, for which the estimate
is based on the life expectancy statistics issued by INSEE
(French government statistics office) and on a staff turnover
rate based on statistical observations,
The discount rate is 3.75% on December 31, 2005 (4 %
on December 31, 2004).
This provision for retirement indemnities is not subject to
social contributions.
3.3.2 OBSAR Loan
IAS 32-39 Financial instruments :
The Group has decided to apply standard IAS 32 and 39,
for its opening IFRS accounts, including restatement of the
OBSAR bond.
It should be recalled that in March 2004 Cegid issued
€44.1 million of Bonds with Redeemable Share Subscription
Warrants.
The OBSAR issue involved the sum of €44,100k representing
2,004,546 bonds with a par value of €22, earning interest
annually at the EURIBOR 3-month rate minus 0.20%. Since
each bond is linked to a BSAR (redeemable share subscription
warrant), 2,004,546 BSAR were therefore issued. Each
BSAR grants subscription rights to a Cegid SA share at a
price of €28.44 from March 3, 2004 until March 3, 2009.
The bonds (ISIN code FR0010061846) and the BSAR (ISIN
code FR0010061853) have been quoted separately on the
Premier Marché of the Paris Stock Exchange since March 3,
2004.
As of December 31, 2005, there are 2,004,546 bonds and
2,004,470 BSAR in circulation.
The features of these bonds and warrants are described in
the General Information section of this document.
IAS 32 defines an equity instrument as a security that
confers access to a company’s capital.
The OBSAR bond is of this type of instrument. In this context,
IAS 32 requires that the liability component and the equity
component of an instrument that confers access to the
company’s capital be recorded separately. The following
valuation principle applies to these two components :
The equity component is valued (calculated using an average
of the first prices quoted in the Market for Bonds with
Redeemable Share Subscription Warrants),
Valuation of the liability component through the difference
between the fair value of the liability and that of the equity
component.
The issue fees were broken down pro rata between these
two components.
The equity component is kept in shareholders’ equity until the
instrument expires and is never recorded in income.
The Cegid group does not make use of derivative financial
instruments within its business.
3.4 Current liabilities
3.4.1 Convertible bond «OCEANE»
In November 1999, Cegid SA issued an OCEANE bond that
could be converted and exchanged for new shares with a
redemption premium of €35.397 million (172,500 bonds
each with a par value of €205.20) bearing interest at a rate
of 2.5% for a maximum term of 6 years and 57 days.
As of December 31, 2005, there were 145,904 bonds in
circulation.
The OCEANE bond was redeemed on January 2, 2006
for an amount including the redemption premium of
€36,592,723.20.
A provision for risk is recorded for the term of the loan in
order to cover the estimated expense of the redemption
premium including taxes.
The principle of a linear provision prorated over time was
used, taking the number of bonds still in circulation into
account.
The provision for redemption premium of €4,436,322 was
entirely written back on December 31, 2005.
Since it has matured, this loan has not been restated within
the framework of applying the IFRS standards. The latter
was classified under current liabilities primarily because of
its term (redemption on January 2, 2006), a premium of
€45.60 per bond was paid which is a nominal of €250.80,
leading to an actuarial yield of 5.62 %.
3.4.2 Accruals - Unearned revenue
When invoices related to software support and hardware
maintenance contracts, in particular, involve both the current
year and future years, unearned revenue is recorded based
on the principle of matching the revenue to the year in
question.
3.5 Off balance sheet commitments
Under the “information feedback” procedures in force within
the Group, reporting has been set up aiming, amongst other
things, at detecting off balance sheet commitments and
determining their type and purpose :
Commitments guaranteed by personal securities
(endorsements and guarantees),
Commitments guaranteed by actual securities (mortgages,
bonds, collateral securities, liens),
Simple leases,
Investment and purchase commitments.
3.6 Information concerning related parties
IAS 24 Related party disclosures
Note 12 in these notes, in accordance with standard IAS 24,
provides a complete account of all transactions between the
Cegid group, its parent company ICMI SAS – 52, quai Paul
Sédallian – 69009 LYON and its subsidiaries.
3.7 Income statement components
3.7.1 Income from ordinary activities
The Cegid group’s current accounting principles record sales
based on the following criteria :
The event that generates the sale of software packages,
hardware and software is the delivery to the customer,
Service expenses are invoiced as the service is
completed,
Recurring sales are taken into account pro rata to the
period they occur in.
3.7.2 Income from ordinary activities
The main activity in the Group is the publication, marketing
and distribution of professional management software and
services and associated products. Income from ordinary
75
activities stems from these activities, resulting from
recurrent and non recurrent transactions.
3.7.3 Other operating income and expenses
Other operating income and expenses is used in particular
to record the following items :
Income from the disposal of assets,
Reorganization costs,
Expenses relative to non recurring disputes arising
from events that are not part of the Group’s ordinary
activities,
Any other income or expense that, due to its nature,
cannot be included in the Group’s ordinary activities
or the significance of which would affect the degree of
comparability of income from ordinary activities from one
period to another, and which would not provide an accurate
assessment of the Group’s performance.
3.7.4 Financial income
Net financial income as defined by recommendation
#2004-R.02 includes :
Net financial cost of borrowing, i.e. cash flow income and
interest expenses on financing operations. 2005 financial
income incorporates the additional costs generated when
applying standard IAS 39 (interest expenses calculated at
the effective interest rate),
Other financial income and expenses, i.e. other income
related to dividends, income from transfers of other
financial assets and expenses involving the impairment
of non consolidated securities, other financial discounting
expenses and other financial expenses.
3.8 Intra Group transactions and accounts
* All intra Group transactions have been eliminated with
internal transactions and reciprocal debts and credits being
cancelled. Where applicable, restatements of homogeneity
in relation to the Group standards were carried out on the
financial statements of some subsidiaries.
* Transfer of capitalized movables or computer hardware
within the Group :
The transfer prices were recorded under the acquiring
company’s fixed assets, since reverting to the original
values in order to eliminate additional asset values would
result in expenses disproportionate to the impact of
such corrections, especially concerning the amount of
depreciation. Moreover, the operations in question were
limited and carried out under favorable conditions.
3.9 Earnings per share
Consolidated net earnings per share are calculated based on
the weighted average number of shares during the year.
Diluted net earnings per share takes into account the possible
conversion of the redeemable stock warrants issued in March
2004 and stock options, an instrument that gives the right
to deferred access to the company’s capital.
76
4 Scope of consolidation
Company
Head office
Siren #
Activity
Number of
%
%
%
months in the Ownership Interests Interests
consolidated 2005
2005(2)
2004
financial
statements
(*)
Cegid SA
Lyon
327888111
Business software
development
12
--
--
--
--
Ccmx SA
Lyon
410218010
Business software
development
12
100.00
100.00
100.00
IG
Fcrs SA
Lyon
412552317
Business software
development
12
100.00
100.00
51.00
IG
Aspx SA
Lyon
430048462
Business software
development
12
100.00
100.00
100.00
IG
Quadratus SA
Luynes
382251684
Business software
development
12
100.00
100.00
100.00
IG
CBI SA
Lyon
434428991
Business software
development
12
100.00
100.00
100.00
IG
Synaptique SA
Lyon
341281392
Business software
development
12
100.00
100.00
95.02
IG
Cegid Corporation
New York
Business software
distribution
12
100.00
100.00
100.00
IG
Cegid España
Madrid
Business software
distribution
12
75.00
75.00
75.00
IG
Alp SARL
Lyon
440580553
Business software
distribution
12
100.00
100.00
100.00
IG
Apalatys SARL
Lyon
397512146
Business software
development
12
100.00
100.00
100.00
IG
Cegid Services SAS
Lyon
341097616
Holding
12
58.81
69.47(1)
68.80
IG
CGO informatique sas
Lyon
323872721
Business software
development
12
100.00
100.00
100.00
IG
Dirfi EURL
Lyon
432391928
Business software
development
12
100.00
100.00
100.00
IG
Etafi EURL
Lyon
432392041
Business software
development
12
100.00
100.00
100.00
IG
Holding Cegid Services SA
Lyon
441182772
Holding
12
43.66
43.66
40.90
IG
Logam’Informatique SAS
Lyon
419598016
Business software
development
12
100.00
100.00
100.00
IG
Magestel SARL
Lyon
339067092
Business software
development
12
100.00
100.00
100.00
IG
Mon expert-comptable EURL
Lyon
432388502
Business software
development
12
100.00
100.00
100.00
IG
Servant Soft SA
Lyon
318762192
Business software
development
12
100.00
100.00
100.00
IG
Tersud SCI
Lyon
381101021
Real estate
12
100.00
100.00
100.00
IG
FC: Fully consolidated.
(1)
Cegid SA owns 43.66 % of the capital of HCS which in turn owns 24.42 % of Cegid Services.
(2)
See section on Changes in scope.
77
5 Pro forma consolidated comparative data
The pro forma data below represents the IFRS statements restated with the sole acquisition of Ccmx for FY 2005 and 2004.
They do not include variations due to changes in estimates that are mentioned in note 1.3. As with the pro forma data presented
in the 2004 reference document, since data for civil year 2004 is not available for Ccmx, Fcrs and Apax, the pro forma below
was compiled by extracting these companies from the 2004 and 2005 consolidated financial statements.
IFRS income statement (in thousands of euros)
2005
2004
140,321
(25,423)
14,035
(30,376)
(3,228)
(69,053)
26,276
534
(11,416)
14,326
134,162
(26,498)
14,368
(27,470)
(3,072)
(66,001)
25,489
(396)
(13,870)
11,222
OPERATING INCOME
14,723
11,675
FINANCIAL INCOME
(4,071)
(2,192)
INCOME BEFORE TAXES
Taxes
10,652
(3,094)
9,482
(2,360)
Consolidated net income
7,558
7,122
Net income: Group share
7,518
7,091
40
31
SALES
Stock purchases and variations
External charges
Taxes and similar payments
Personnel expenses
EBITDA
Other income and expense from ordinary activities
Allowances for depreciation and reserves
INCOME FROM ORDINARY ACTIVITIES
Net income: minority shares
Assets (IFRS)
Net Amount Net Amount
12/31/05
12/31/04
Liabilities (IFRS)
Capital
Goodwill
60,785
59,545
Intangible assets
28,738
24,538
4,471
4,882
59,430
59,068
16
612
Fixed assets
Financial assets
Deferred tax debits
8,158
8,025
Premiums
79,493
76,854
Reserves
21,197
21,440
7,518
7,091
Profit or loss
SHAREHOLDERS’EQUITY-GROUPSHARE
Minority interests
SHAREHOLDERS’ EQUITY
Financial liabilities (Part +1 year)
Deferred tax credits
Retirement benefits provision
NON-CURRENT ASSETS
78
Net Amount Net Amount
12/31/05
12/31/04
6,237
6,237
122,603
119,648
5,414
5,479
128,017
125,127
75,172
71,365
1 850
2,838
1,506
1,089
78,529
75,291
Provisions for risk
1,077
1,146
1,043
965
153,441
148,645
Stock, goods and services in progress
2,750
3,047
43,131
34,319
Debt (portion at -1 year)
38,361
1,078
18,279
18,308
30,537
30,745
89,297
52,241
295,843
252,660
Other receivables and accruals
33,391
48,372
Accounts payable
Cash and equivalents
63,130
18,278
Other current liabilities and suspense
accounts
CURRENT ASSETS
142,402
104,015
CURRENT LIABILITIES
Total assets
295,843
252,660
Total liabilities
6 Notes to the balance sheet
6.1 Changes in non current assets
Goodwill
Changes in the period are broken down as follows :
Cegid SA (1)
Apalatys
(1)
Magestel
Quadratus (1)
Logam Informatique
(1) & (2)
Alp (2)
Cgo Informatique
Servant Soft
Fcrs (2)
Ccmx SA (3)
TOTAL
12/31/04
Changes in scope
Increases
12/31/05
331
28,823
22,998
5,494
3,151
(3,151)
-
-
1,125
-
-
1,125
16,042
-
200
1,643
(2,343)
700
238
-
10
16,242
248
477
-
-
477
13,871
-
-
13,871
356
-
590
946
84,056
-
1,150
85,206
143,957
-
2,981
146,938
The goodwill item includes the reclassification of net goodwill in the IFRS opening balance sheet and goodwill resulting from business combinations. Variations in scope observed with Cegid are linked to the General Transfer of Assets of 2005 and to the increases in acquisitions of
going concerns (see note 1.3 ).
(2)
The increases observed are linked to the additional acquisition of securities from consolidated companies and to payments of acquisition price
additionals
(3)
The increase in Ccmx goodwill is linked to revising the evaluation of goodwill in the 12-month period that followed the acquisition.
(1)
The value of goodwill was subject to a review within the framework of closing the consolidated statements, according to the
method covered in point 3.1.3 of chapter 3 Rules – Accounting methods and consolidation methods. A discount rate after
taxes of 9.5% and an infinite growth rate of 2.5 % were used. This estimate for FY 2004 and 2005 did not reveal the need
to perform any depreciation.
Intangible assets
Changes over the period are broken down as follows :
(figures in thousands of euros)
Research and development expenses
Concessions, Patents
12/31/04
Increases
Decreases
12/31/05
135,998
19,539
(17,992)
137,545
5,065
835
(2,027)
3,873
(615)
13
628
GROSS AMOUNTS
141,691
20,374
(20,634)
141,431
(107,170)
(15,335)
(17,982)
(104,523)
(4,453)
(499)
(2,036)
(2,916)
(11)
(6)
(111,640)
(15,834)
20,029
(107,445)
30,051
4,540
(605)
33,986
Concessions, Patents
DEPRECIATION
NET AMOUNT
(17)
79
Fixed assets
12/31/04
Increases
Decreases
12/31/05
Gross Amounts
Depreciation
30,794
(23,963)
2,506
(2,266)
(13,436)
12,125
19,864
(14,104)
NET AMOUNT
6,831
240
(1,311)
5,760
Increases
Decreases
12/31/05
(74)
837
Investment and other financial assets
12/31/04
Interest and receivables from interests
911
18
-
-
18
(382)
-
74
(307)
547
-
-
548
1,331
373
(24)
1,680
(52)
(26)
8
(70)
OTHER FINANCIAL ASSETS
1,279
347
(16)
1,610
NET LONG-TERM INVESTMENT
1,826
347
(16)
2,158
Impairment
FINANCIAL INVESTMENT
Other long-term investments
Impairment
Details of securities (non consolidated companies)
OL Group
Amount of shareholders’
equity at 12/31/05
Securities
% of holding
34,785
500
0.80%
Itool
nc
292
34.20%
Other securities
nc
45
ns
Gross Total
837
Provisions
(307)
NET TOTAL
531
6.2 Changes in current assets
Changes concerning provisions - assets
12/31/04
Increases
Decreases
Stocks and goods in progress
1,534
1,313
(1,927)
920
6,875
1,743
(2,710)
5,908
Other receivables
TOTAL
80
12/31/05
57
50
(34)
73
8,466
3,106
(4,671)
6,901
Maturity of receivables
Balance at 12/31/05
up to 1 year
Loans, deposits and guarantees (Fixed Assets)
Receivables and accruals
1,609
60,346
60,346
TOTAL
61,955
60,346
more than 5
years
1 to 5 years
1,609
-
1,609
Decreases
12/31/05
Cash and equivalents
(in thousands of
euros)
Historical cost
12/31/05
Market value
12/31/05
SICAV shares (1)
Provisions
61,916
-
61,916
-
TOTAL
61,916
61,916
(1)
Investments only in ”money market“ SICAV or FCP mutual funds or investments with guaranteed capital.
6.3 Other changes
Changes in deferred tax credits/debits
12/31/04
Increases
Deferred tax debits
22,752
2,073
(5,370)
19,455
2,838
375
(1,362)
1,850
The amount of unrecorded tax debits at closing is 1260 thousand euros (1881 thousand euros at 12/31/04).
6.4 Notes on Shareholders’ equity
Tables pertaining to changes in shareholders’ equity are provided in the first section: Financial statements.
6.5 Provisions
Employee related lawsuits
12/31/04
Increases
Decreases
Utilization
Not used
12/31/05
1,624
363
(173)
(117)
1,697
822
296
(76)
(140)
902
Retirement indemnity
3,254
731
(520)
(9)
3,456
Redemption Premium (1)
3,617
818
(4,435)
-
-
11,361
2,760
(632)
(198)
13,290
Other
6,964
736
(2,038)
(627)
5,035
TOTAL
27,682
5,704
(7,874)
(1,091)
24,420
Customer lawsuits
Tax disputes
Reorganization Plan (2)
40
40
See section 3.4.2, treatment of the OCEANE. The balance for this provision at 12/31/04 was reclassified as OCEANE liability when
presented as IFRS standard.
(2)
For FY 2005, this item includes an additional provision concerning future expenses following the entry of Ccmx group into the consolidation
scope.
(1)
81
6.6 Maturity of debts
Balance at 12/31/05
up to 1 year
Emprunt OBSAR
39,172
Convertible bond «OCEANE»
and other financial debts
38,619
38,619
Middle term lines of credit
Trade payables
Tax and employee related liabilities
Other liabilities and accruals
36,000
23,352
37,625
10,070
23,352
37,625
10,070
184,838
109,666
TOTAL
more
than 5 years
1 to 5 years
39,172
36,000
75,172
-
7 Notes to the income statement
7.4 Financial Income
7.1 Distribution of Sales
By type of activity
IT management solutions
Maintenance and installations
Computer supplies and consumables
2005
2004
183,175
111,940
30,336
22,671
-
324
Distribution of Hardware (1)
6,572
4,840
Misc.
4,222
3,219
224,305
142,993
TOTAL
(1)
Direct hardware sales not integrated into an IT solution.
Income from disposal of VMP
OBSAR Interest
Additional OBSAR interest
OCEANE interest
Net financial provisions - mainly
OCEANE
OCEANE redemption premium
Interest expenses on loans and other
borrowings
2005
376
2004
798
(888)
(700)
(1,363)
(1,084)
(748)
(748)
3,658
(592)
(5,952)
(20)
(32)
(4,937)
(2,358)
34
99
Other financial expenses
(77)
(17)
OTHER FINANCIAL INCOME AND
EXPENSES
(43)
82
(4,980)
(2,276)
2005
2004
Tax liability
Deferred tax
Tax refunds
Allowances and reinstatements of
provisions for taxes
Exit tax
TOTAL
(2,573)
(2,155)
1,766
(1,905)
(532)
FINANCIAL COST OF BORROWING
By activity sector
2005
2004
CPA
82,343
51,655
Companies
82,286
46,566
Industry - Manufacturing
22,890
16,417
Fashion
Construction - Café Hotel
Restaurant - Retail
19,632
17,523
17,154
10,832
224,305
142,993
TOTAL
7.2 Divestment capital gains and losses
Divestment capital gains and losses are primarily the
result of the sales of the Tersud building and the sale of the
DATA MER business by Cegid SA in January 2005.
7.3 Other operating income and expense
Other operating income and expense includes foreseeable
reorganization expenses following the merger of the Cegid
and Ccmx structures. The change in the provision for
reorganization in the consolidated financial statements is
€2,218 K for FY 2005.
82
Other financial income
FINANCIAL INCOME
7.5 Taxes
Tax allocation
(351)
(4,729)
175
847
9 Notes on off balance sheet commitments
Tax burden
Accounting income before tax
9.1 Commitments received
2005
Theoretical tax
Impact of permanent differences
(4,938)
(33.83)%
(553)
(3.79)%
88
0.60%
35
0.24%
621
4.25%
18
0.12%
(4,729)
(32.40)%
Impact of tax rate differences
Taxes on prior periods and IFA (annual fixed rate tax)
Allocation of prior period deficits
Misc.
CORPORATE INCOME TAX
8 Notes on employee breakdown
The average number of employees in the Group can be broken
down as follows :
2005
Management
1,160
Non-management
890
TOTAL
2,050
The number of employees at December 31, 2005 is
distributed across the companies in the Group as follows :
2005
2004
1,188
1,168
Quadratus
128
115
Ccmx (1)
716
785
6
6
Cegid
Fcrs (1)
CGO Informatique
Commitments received as liability and asset guarantees
concerning the acquisitions of companies
Commitments subject to
limitations
2005
2006
2007
8,786
8,786
100
Bank lines of credit
(in thousands
of euros)
2005
2006
2007
2008
2009
Drawdown
57,154 47,515 35,067 22,620 1,433
authorizations
Inc. drawings used 36,000
Credit arrangements, generally made for a period of five
years, provide for annual straight line depreciation and
include various standard provisions relative to covenants
(net financial debt/equity, net financial debt/EBIDA, etc.)
and standard clauses relative to acceleration of maturity.
At December 31, 2005 the Group is respecting these
measures.
9.2 Commitments given
Bank Guarantees
up to 1
year
Guarantees
127
1 to 5
years
741
Total
more than
at
5 years 12/31/05
749
1,617
Lease commitments
up to 1
year
1 to 5
years
7,462
20,165
Total
more than
at
5 years 12/31/05
-
11
20
28
Synaptique (2)
3
3
(1)
Cegid Corporation
2
1
Cegid España
4
3
2,067
2,120
These commitments concern 40 sites in France including a
9-year commitment for the premises in Lyon and for a part of
the premises in Annecy and long-term computer equipment
and vehicle hire contracts.
CBI
(2)
TOTAL
(1)
Companies included in the consolidation scope in 08-2004 (CGO)
and 12-2004 (Ccmx and Fcrs).
(2)
Companies merged on 12-30-2005.
(1)
Leases
payable (1)
8,400
36,027
Not discounted.
Other commitments
Price supplements and
agreements
2006
2007
> 2007
513
1,288
150
Concerns acquisitions of intangible fixed assets and
partnership agreements.
83
10 Notes on relations with related parties
Cegid group is fully consolidated in the ICMI Group (52, Quai Paul
Sédallian- 69009 LYON). Details of relations for 2005 between
Cegid and ICMI and its subsidiaries is the following :
In thousands of euros
12 Directors’ fees
For FY 2005, gross remuneration allocated to members of
the administrative bodies amounted to €101K (directors’
fees) and for members of Management bodies, belonging to
the Group Management Committee (refer to its membership
in the note on Corporate governance) this amounted to
€2,230K.
Long-term receivables (gross value)
33
TOTAL
33
We remind you also that since 1999, Jean-Michel AULAS and
Patrick BERTRAND have been salaried employees of ICMI.
They receive in this capacity most of their remuneration
from ICMI which invoices Cegid SA in particular for General
Management assistance services.
Operating liabilities
843
13 Events subsequent to the year end closing
TOTAL
843
13.1 Council of State approval
Receivables
Liabilities
Dont
entreprises liées
In thousands of euros
Operating expense
General Management Fees
2,496
Other external charges
436
TOTAL
2,932
Operating income
General overheads
256
TOTAL
256
13.2 External growth
On March 13, 2006, Cegid acquired 100 % of the shares of
GTI Industrie and PMI SOFT, publishers and distributors of
11 Auditor’s fees
Fees paid to auditors and
GRANT THORNTON
their collaborators
Amount
%
Audit
Auditing of the financial
statements, certificate of the
year end and consolidated
Related assignments
127 100%
SUBTOTAL
127 100%
Total annual sales for GTI Industrie and PMI SOFT is nearly
€6.5 million with excellent operating profit (20 % based
on the results of the latest financial year ended December
31, 2005).
MAZARS
Amount
The Council of State, in a ruling made on February 13, 2006
confirmed the legality of the Ccmx takeover (ex Ccmx Holding
by Cegid SA). The authorization resulting from a decision by
the Minister of Economy, Finance and Industry on October 19,
2004, had been contested before the Council of State. Before
addressing the substance of the case, the Council of State
had decided to refer the matter to the French Competition
authority in order to examine the merger transaction. The
Council of State followed the opinion given by the French
Competition authority, thus rejecting definitively the request
for cancellation filed by Fiducial Informatique and Fiducial
Expertise.
%
193
90%
21
10%
214 100%
Other services
Legal, fiscal, social services
IT
Other
SUBTOTAL
TOTAL
84
-
-
127 100%
-
-
214 100%
14 Reconciliation of 2004 financial statements (between french and ifrs standards)
In compliance with the AMF recommendation regarding financial communication during the transition period, the Group has
decided to present a quantified assessment of the impact of converting to IFRS for the 2004 financial statements published in
the reference document filed with the AMF on May 31, 2005 under reference number D.05-807. However, the Group reserved
the right to modify certain accounting options and methods implemented in this publication. The information presented below
represents the final reconciliation of the 2004 financial statements in IFRS format.
Income Statement reconciliation – December 31, 2004
FY 2004
Sales
Purchases consumed
Gross margin
Capitalized production
Current operating income and expense
Explanatory note
ref (1)
Note 5
Note 5
Note 2 & 3
Operating profit before tax and
exceptional items
Other operating revenue and expense
Divestment capital gains and losses
Operating profit
Financial income/expense
Income tax
Amortization of goodwill
Minority interests
Note 4
Note 6
Note 4 & 6
Net Income
(1)
French
standards in
IFRS format
143,110
(29,047)
114,063
14,862
(116,486)
Restatements Reclassifications
303
20
142,993
(28,994)
113,999
14,862
(116,163)
12,439
303
(44)
12,698
19
453
12,911
(1,256)
(3,356)
(317)
(31)
(11,000)
(19)
(10,697)
(1,084)
4,204
317
(64)
64
(11,000)
453
2,151
(2,276)
848
(31)
(7,260)
-
7,951
-
(117)
53
(64)
Restated
according to
IFRS
691
The explanatory notes are provided at the end of the chaptere.
85
Balance Sheet reconciliation – January 1, 2004
Notes below
NON-CURRENT FIXED ASSETS
90,211
Restatements Reclassifications Opening IFRS
-
-
90,211
Acquisition goodwill
Note 4
4,715
54,799
59,514
Intangible assets
Note 4
78,581
(54,799)
23,782
Tangible assets
5,822
5,822
954
954
Deferred tax debits
139
139
CURRENT ASSETS
64,530
Stocks
Cash flow
-
63,423
3,830
36,022
36,022
Note 2 & 3
5,803
(490)
5,313
Note 1
18,875
(617)
18,258
154,741
(1,107)
-
153,634
64,594
(1,326)
-
63,268
Total assets
CONSOLIDATED SHAREHOLDERS’ EQUITY
Capital
Premiums
Consolidated income and reserves
(1,107)
3,830
Note 1, 2 & 3
Group share of shareholders’ equity
Minority interests
5,653
5,653
23,165
23,165
29,996
(1,326)
-
(28,670)
58,814
(1,326)
-
57,488
219
-
35,770
5,780
5,780
35,551
OCEANE
30,691
30,691
4,034
4,034
Other financial debts (Part +1 year)
Retirement commitments
CURRENT LIABILITIES
236
Note 3
590
54,596
236
219
-
809
-
54,596
Provisions
5,482
5,482
Financial debt (Part - 1 year)
1,109
1,109
Trade payables and similar accounts
19,634
19,634
Other debts and accruals
28,371
28,371
Total liabilities
86
French
standards in
IFRS format
154,741
(1,107)
-
153,634
Balance Sheet reconciliation – December 31, 2004
Notes below
NON-CURRENT FIXED ASSETS
French
standards in
IFRS format
212,171
(6,748)
(6,841)
Acquisition goodwill
Note 4
4,398
Intangible assets
Note 4
176,455
Note 5
1,735
Misc. Notes
22,752
Tangible assets
Deferred tax debits
86,772
Stocks
205,421
146,400
143,957
(146,400)
30,055
6,830
93
1,828
22,752
(2,562)
-
84,212
3,530
FY 2004
IFRS
-
6,830
CURRENT ASSETS
Restatements Reclassifications
3,530
53,624
53,624
Misc. Notes
9,945
(1,535)
8,410
Note 5
19,674
(1,027)
18,647
Total assets
298,943
(9,310)
-
289,633
CONSOLIDATED SHAREHOLDERS’ EQUITY
123,220
(4,530)
-
118,690
Cash flow
Capital
Premiums
Own shares
Reserves and goodwill
Income
Note 1
See Income
Statement
-
(936)
(936)
24,911
7,951
(2,571)
(7,260)
22,340
691
6,237
6,237
117,741
Minority interests
79,540
Convertible bond «OCEANE»
-
113,211
5,479
(4,780)
30,688
Note 6
44,158
Misc. Notes
1,327
Other financial debt (Part +1 year)
(6,291)
2,810
77,570
2,869
33,556
(58)
37,809
113
Retirement commitments
3,253
CURRENT LIABILITIES
96,183
Provisions
Financial debt (part to -1 year)
(4,530)
5,479
8,025
76,854
Note 6
Group share of shareholders’ equity
OBSAR loan
8,025
76,854
1,511
113
2,838
3,254
-
(2,924)
93,373
24,429
(3,617)
20,812
910
693
1,716
Trade payables and similar accounts
24,463
24,463
Other debts and accruals
46,382
46,382
Total liabilities
298,943
(9,310)
-
289,633
87
Reconciliation of 2004 financial flow changes 2004 from the French standard format to IFRS format
Group income
2004
Restated
7,951
Minority interests - Income
Depreciation and Provisions and eliminations of income and expense without
impact on cash flow
Divestment capital gains and losses
16,794
CASH FLOW FROM OPERATING ACTIVITIES
24,323
Changes in inventory
Changes in customers
Changes in other receivables
Changes in accounts payable
Changes in other liabilities
CHANGES IN OPERATING WORKING CAPITAL
CHANGE IN CASH FLOW RESULTING FROM THE ACTIVITY
24,323
(453)
968
(13,180)
5,200
(1,139)
(1,511)
(2,650)
(10,290)
(6)
(10,296)
14,033
(6)
14,027
(634)
(634)
(104,065)
Transfers or reductions in fixed assets
1,690
(104,060)
56,062
Changes in other shareholders’ equity
Issue of OBSAR bond loan
-
1,505
(579)
Dividends paid to minorities
24,054
(13,180)
(1,106)
Dividends paid to parent company shareholders
691
7260
968
3,695
2004
IFRS
31
(453)
Acquisitions of financial assets
Capital increase
(7,260)
31
Acquisitions of tangible assets
CHANGE IN CASH FLOW RESULTING FROM INVESTMENT
IFRS
Restatements
(104,065)
(1,106)
(93)
(672)
1,690
(93)
(104,153)
-
56,062
5,301
5,301
(4,760)
(4,760)
(169)
(169)
44,100
(6,291)
37,809
Drawing on medium-term lines of credit
Reduction in financial debt
(4,037)
(4,037)
CHANGE IN CASH FLOW RESULTING FROM FINANCING
91,196
OPENING CASH BALANCE
18,016
Net change in cash flow
1,169
(1,089)
80
CLOSING CASH BALANCE
19,185
(1,035)
18,150
(990)
90,206
18,070
Note 1: All self-owned Cegid SA shares are charged to shareholders’ equity. The share of liquidity and Sicav included in the liquidity agreement
is reclassified as a financial asset.
Note 2: Expenses amortized over several periods by the Cegid group did not fulfill the asset recognition criteria, impacting shareholders’ equity
at January 1, 2004 by €490k.
Note 3: Effects related to bringing retirement commitments into conformity had an impact of €219k on the IFRS opening balance sheet at
January 1, 2004.
Note 4: According to IFRS 3 “Business Combinations” and IAS 36 revised, acquisition goodwill is no longer depreciated. Its value is “frozen”
at its net book value based on French standards at December 31, 2003. Ccmx’s acquisition goodwill was restated according to IFRS for FY
2004, by posting a reorganization provision of €7.2 million net of tax to income, which was recorded in Ccmx’s accounts in December 2004.
This resulted in negative acquisition goodwill of €7.4 million (€0.3 million according to French standards) that was charged to the “business
goodwill” item shown in the Cegid group’s consolidated financial statements.
Note 5: Application of standard IAS 18 led to reclassifications between sales, purchases and financial income and expenses; the impact of
these reclassifications on income is zero.
Note 6: Restatement of the OBSAR loan according to standard IAS 39; impact on 2004 income 2004 is € -534k net of taxes.
88
Property – Financial Situation – Earnings
Auditors’ Report on the Consolidated Financial Statements
Ladies and Gentlemen and Shareholders,
In accordance with the terms of our appointment at the Annual Shareholders’ Meeting, we have audited the attached consolidated
financial statements of Cegid SA for the year ended December 31, 2005.
The Board of Directors is responsible for these consolidated financial statements. Our responsibility is to express an opinion
on them based on our audit. These statements were prepared for the fist time in accordance with the IFRS referential as
adopted in the European Union. For the purposes of comparison, they include the data relative to fiscal year 2004 restated
according to the same rules.
1 Opinion on the consolidated financial statements
We conducted our audit in accordance with professional standards applicable in France. Those standards require that we
plan and perform an audit to obtain reasonable assurance that the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management
to prepare the financial statements, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed below.
We certify that the consolidated financial statements, with regard to the IFRS referential as adopted in the European Union,
are fair and provide a true image of the assets, financial situation, as well as the results of all of the people and entities included
in the consolidation.
2 Justification of opinion
In accordance with the measures of Article L.823-9 of the French Commercial Code pertaining to the justification of our opinions,
we call your attention to the following items:
Asset depreciation tests
At each closing, the company performs a goodwill impairment test, according to the methods described in note “6.1 Changes
in non current assets” of the financial statements. We have audited the methods for implementing this impairment test as
well as the cash flow forecasts and hypotheses used and we have verified that note “6.1 Changes in non current assets” in
the financial statements provides appropriate information.
Development expenses
Paragraph “3.1.1 Development expenses chapter” of the financial statements covers the principles concerning the activation
of development expenses.
Within the framework of our appreciation of the accounting rules and principles followed by your Group, we have audited the
appropriateness of the accounting methods stated above and of the information provided in the notes to the financial statements
and conclude that they have been properly applied.
The opinion thus expressed falls within the framework of our approach to auditing the consolidated financial statements, overall,
and has therefore contributed in the formation of the opinion without reserve, expressed in the first part of this report.
3 Specific verification
Moreover, we have also verified the information provided in the report on the management of the group.
We have no comment or reservation regarding their accuracy and consistency with the consolidated financial statements.
Lyon and Villeurbanne, May 10, 2006
The Auditors
Grant Thornton
French Member of Grant Thornton International
François PONS
Associate
Jean-Marie VILMINT
Associate
Mazars
Christine DUBUS
Associate
89
Parent Company Financial Statements - Balance Sheet - Assets
Gross
12/31/05
Amortization
Provisions
Net at
12/31/05
Net at
12/31/04
Net at
12/31/03
67,691
23,858
20,957
19,884
1,559
FIXED ASSETS
Intangible Fixed Assets
91,549
Fixed assets in progress
1,794
7
1,788
1,098
Concessions, patents
1,742
1,115
627
14
25,590
22,754
Business including goodwill
25,590
23,669
Tangible Fixed Assets
Buildings
152
129
23
39
55
Tech. facilities, equip. and industrial tools
4,132
3,069
1,063
665
856
Other tangible fixed assets
7,906
4,648
3,257
3,501
3,893
99,459
309
99,150
107,195
50,619
923
18
18
698
1,060
1,115
Long term investments
Interests and receivables from interests
Loans
Other long-term investments
TOTAL FIXED ASSETS
923
1,238
540
613
38
575
255
273
235,098
77,546
157,552
157,555
101,941
2,332
724
1,608
1,826
2,041
34
3
4
1,119
182
937
1,076
1,527
41,987
3,305
38,682
29,682
30,760
CURRENT ASSETS
Inventories
Raw materials, supplies
Unfinished goods and services
Trade goods
34
Receivables
Receivables from suppliers
238
238
148
307
Personnel
167
167
179
155
1,138
1,138
3,724
1,289
29,969
41,560
995
43,643
1,028
1,028
Income-tax receivables
Sales tax receivables
Other receivables
30,958
988
Miscellaneous
Transferable investment securities
Cash and near-cash
TOTAL CURRENT ASSETS
43,643
1,308
1,308
997
2,359
117,723
80,223
40,465
1,544
1,544
2,597
1,888
722
722
4,098
938
2,266
2,266
6,695
2,826
277,541
244,473
145,232
122,924
5,200
SUSPENSE ACCOUNTS
Prepaid expenses
Expenses carried forward to future financial periods
TOTAL SUSPENSE ACCOUNTS
TOTAL ASSETS
90
360,287
82,746
Parent Company Financial Statements - Balance Sheet - Liabilities
Shareholders’ equity
Paid-in surplus, call and merger premium
Legal reserve
Regulated reserves
Net at
12/31/05
Net at
12/31/04
Net at
12/31/03
8,158
8,025
5,653
88,255
86,294
32,273
810
598
598
18
2,136
2,136
7,084
5,542
5,542
(3,006)
1,831
2,653
2,526
4,666
4,333
103,844
109,092
53,188
Provisions for risks
1,145
4,239
3,585
2,018
1,768
1,470
TOTAL PROVISIONS FOR RISKS AND CHARGES
3,164
6,007
5,055
Convertible Bond «OCEANE»
37,340
30,688
30,691
OBSAR bond loan
44,172
44,158
Other reserves
Retained earnings
Annual profit or loss
TOTAL SHAREHOLDERS’ EQUITY
Bond Loans
Borrowings and debt with credit institutions
Loans
Overdrafts, bank borrowings
36,000
4,016
523
989
843
86
86
8
8,268
12,693
8,837
18,585
18,940
18,280
Personnel
8,401
7,243
7,383
Social security and similar payables
7,198
6,419
5,895
Sundry borrowings
Miscellaneous
Group
Trade payables and equivalent
Tax and employee-related liabilities
Corporate income tax payables
Sales tax payables
488
1,697
1,974
1,280
1,405
Other tax and employee related liabilities
399
354
488
Investment debt
741
480
1,237
2,630
2,509
2,439
166,804
125,839
83,219
Unearned revenue
3,730
3,535
3,770
TOTAL SUSPENSE ACCOUNTS
3,730
3,535
3,770
277,541
244,473
145,232
Other liabilities
TOTAL PAYABLES
TOTAL LIABILITIES
91
Parent Company Financial Statements - Income Statement
2005
2004
2003
Sales of goods
30,420
27,130
33,356
Sold production
101,489
92,686
86,100
Income
Inventories
5
(2)
(7)
12,244
12,585
13,210
3,478
4,429
5,669
Charges transfer
605
447
398
Other income
504
128
183
148,744
137,403
138,921
24,093
22,935
25,199
Stock variation (goods)
131
267
1,063
Purchase of raw materials and other supplies
717
798
791
Stock variations (raw materials)
408
400
521
Other purchases and external charges
38,743
29,150
26,264
SUBTOTAL
64,091
53,550
53,838
2,823
2,696
2,285
Salaries and wages
40,819
38,961
38,205
Social security charges
19,441
18,549
17,975
Allowances for depreciation and reserves
13,958
18,211
19,352
1,364
890
670
Operating grants
Reinstatements of amortization and reserves
TOTAL INCOME
12
Supplies
Purchases of goods
Operating expenses
Taxes and similar payments
Other expenses
SUBTOTAL
78,405
79,306
78,487
142,496
132,856
132,325
6,249
4,547
6,596
Financial income
Financial expenses
7,273
10,525
2,579
3,363
1,691
2,053
NET FINANCIAL EXPENSE
(3,253)
(784)
(362)
2,996
3,763
6,234
Extraordinary income
534
1,352
2,913
Extraordinary charges
485
1,366
1,630
49
(14)
1,283
Employee profit sharing
Corporate income tax
519
(917)
533
2,651
Profit for the period
2,526
4,666
4,333
TOTAL EXPENSES
OPERATING PROFIT OR LOSS
PRE TAX INCOME BEFORE EXTRAORDINARY ITEMS
EXTRAORDINARY PROFIT OR LOSS
92
Parent Company Financial Statements - Balance Sheet - Assets
NET INCOME
2005
2004
2003
2,526
4,666
4,333
12,055
16,119
15,353
198
(318)
(1,316)
14,779
20,467
18,370
Restatement of deferred expense
Change in working capital requirements
(1,976)
(4,383)
(2,464)
(1,048)
16,047
CHANGE IN CASH FLOW RESULTING FROM OPERATING ACTIVITIES
12,802
13,620
33,369
(13,803)
(12,610)
(15,506)
Acquisitions of tangible assets
(1,554)
(1,010)
(4,078)
Acquisitions of financial assets
Amortissements et provisions nets
Capital gain/loss
CASH FLOWS FROM OPERATING ACTIVITIES
(2,402)
(57,394)
(20,873)
Transfers of tangible and intangible fixed assets
534
1,349
2,878
Transfers of financial assets
823
3
809
Change in cash flow resulting from dissolved companies
vis asset merger
(20)
(16,422)
(69,662)
(36,770)
2,116
56,393
339
(3,421)
CHANGE IN CASH FLOW RESULTING FROM INVESTMENT
Changes in shareholders’equity
Dividends paid to shareholders
(6,861)
(4,760)
Borrowings
36,000
44,100
(3)
(2,124)
7,490
(41,197)
4,016
CHANGE IN CASH FLOW RESULTING FROM FINANCING ACTIVITIES
38,745
54,533
(1,190)
NET CHANGE IN CASH FLOW
35,125
(1,509)
(4,591)
OPENING CASH BALANCE
1,035
2,544
7,135
CLOSING CASH BALANCE
36,161
1,035
2,544
Reimbursement of bonds
Other changes in borrowing
The closing cash balance includes drawing on the confirmed middle-term credit lines for €36,000 thousand. Cash from this utilization was
used to redeem the Convertible bond «OCEANE» on January 2, 2006 for an amount of €37,413 thousand.
Starting with fiscal year 2005, cash includes the group’s credit current accounts for €8,268 thousand, payable at any time.
93
Parent Company Financial Statements - Notes
The financial statements for the period ended December 31,
2005 were approved by the Board of Directors of March
23, 2006.
1 Significant events
1.1 Cegid-Ccmx Merger: Fiducial disputes the
taking over of Ccmx Holding
The take-over of Ccmx Holding by Cegid SA which was
authorized by a decision of the Minister of the Economy,
Finance and Industry on October 19, 2004, was disputed
with the Council of Sate by Fiducial Expertise and Fiducial
Informatique.
In its decree handed down On July 20, 2005, the Council
of State decided, before making a final decision, to seize
the Competition Board in order in order to examine the
concentration transaction.
The decision of the Competition Board was sent to the
Council of State on December 14, 2005 and concluded that
the concentration resulting from the acquisition of Ccmx by
Cegid is not of a nature to breech competition in the market
concerned.
The Council of State finally confirmed this take-over on
February 13, 2006.
These legal proceedings delayed the integration process
of Ccmx into the Cegid group and penalized the company’s
operating profit.
On January 1, 2005, Cegid SA transferred to Data Services
Informatiques a part of the business that it had received
during the merger of Data Bretagne in December 2003.
This business, operating in Lorient, consists in publishing and
distributing of business software for, in particular, maritime
companies. Actual possession as well as full control took
place on January 7, 2005.
The impact of this transfer on sales and income is not
significant.
1.6 Lease management of the CGO Informatique
business
Cegid SA took over the business of CGO Informatique via a
lease-management agreement starting on January 1, 2005. The
lease-management is granted subject to fixed annual royalties
of €40 thousand exc. tax.
1.7 Changes in control
The main increases in control for 2005 are as follows:
Cegid SA’s share in HCS’s capital changed from 40.90% at
December 31, 2004 to 43.66% at December 31, 2005,
An additional acquisition price of €10 thousand was paid
in December 2005 pertaining to ALP Sarl.
2 Accounting rules and methods
2.1 General rules
In accordance with accounting procedures stipulated in
recommendation 2004-01 of March 25, 2004, the technical
loss produced within the framework of this transaction was
booked in an intangible fixed assets account.
The 2005 year-end financial statements were prepared in
accordance with the standards defined by the 1982 French
General Accounting Plan, the Law of April 30, 1983 and the
Decree of November 29, 1983, and in accordance with the
measures of CRC regulations 99-03. The general accounting
conventions were applied according to the following basic
assumptions:
Continuity of operations,
Consistency of the accounting methods used from one year
to the next, except for the change in method described in
paragraph 2.11,
Independence of the years.
This technical loss was allocated, off the books, to the goodwill
of the various companies that were merged.
The historical cost method was used to determine the value
of the items in the accounting records.
1.3 Acquisition of businesses and business
software
The application on January 1, 2005 of CRC regulation
2002-10 pertaining to the amortization and depreciation
of fixed assets did not have any incidence on the financial
statements.
1.2 Universal Transfer of Assets
Logam Informatique SAS, Apalatys SARL and Synaptique SA,
were dissolved following the merger of their assets into those
of Cegid SA on December 30, 2005.
In July 2005, Cegid reinforced its technological potential
by integrating a new development team specializing in the
world of « .net » whose work mostly pertained to components
of the control and calculation engine type for tax and
financial statements, workflow, statistics and analyses.
This transaction was carried out through the acquisition of
a business and a software package.
Also in July, Cegid acquired a software package specialized
in managing organizations.
1.4 Sale of the building located in Toulouse
The building located in Toulouse, property of SCI Tersud, was sold
on December 21, 2005 for a transfer price of €1,180 thousand
exc. tax (net book value of €457 thousand).
94
1.5 Sale of the Data Mer business
However, application of CRC regulation 2004-06 relating to
the definition, accounting and evaluation of assets resulted
in the cancellation of a part of these charges over several
years (see § 2.11).
2.2.Intangible fixed assets
a) Software acquired
Software is depreciated over 1 to 5 years.
b) Research and development expenses
Research expense is booked as expense and development
expense is capitalized when the company can demonstrate
that:
Its intention and technical and financial capacity to see the
development project to term,
When it is likely that the future economic benefits that can
be attributed to the development expense will go to the
company,
When the cost of the intangible asset created for this
purpose can be evaluated reliably.
Development expense committed by the company pertaining
to its publishing activity (creation of marketable business
software) concerns primarily the development of applications
and these are monitored individually.
Their value is determined on the basis of direct salary
expenses plus social security expenses, on the one hand,
and operating expenses calculated using a coefficient based
on operating expenses of the departments involved.
Changes in estimates were taken into account, starting on
October 1, 2004, concerning the duration of amortization
of development expense. The methods that are now retained
are as follows:
The expenses related to the new PGI range, for which
agreements were recently signed with Microsoft (2003)
and IBM (September 2004), constitute new valuation
items that extend the range’s life expectancy. These
events resulted in the depreciation term being changed
to five-year straight-line as of October 1, 2004. Taking
into consideration of the life cycle of expense, this method
results in that the total life span for a range is about 5
years. This duration is economically justified due to the
constant change in products including new functionality
that increase the life span,
Non-PGI projects continue to be amortized on a straight-line
basis over three years. This amortization period concerns
both initial expenses and later development expenses
(product upgrade maintenance),
Configuration expenses related to annualized products such
as Etafi and Profin are amortized on a straight-line basis over
1 year starting on January 1, 2005.
For fiscal year 2005, the impact of this change in estimate
on current operating income is approximately €3.6 million.
Expense pertaining to projects that have not been finalized
is booked under current intangible assets and is not
depreciated. These projects are nevertheless monitored
and can be depreciated if applicable.
c) Goodwill
The “business including goodwill” item is not amortized;
however, a provision is set up, if applicable, when its balance
sheet value is less than the year-end valuation.
The retained method is in conformity with CRC regulation
2002-10: the value in use for these assets corresponds to
the value of the future expected economic advantages for
their use and retirement.
This valuation is carried out across the board if the
business(es) in question cannot be separated from the
company’s activity.
2.3. Tangible fixed assets
Tangible fixed assets are recorded at their acquisition cost
(purchase price, incidental expenses and other). They were
not reevaluated.
Depreciation was calculated using the straight-line method
according to the expected period of use by the company:
Buildings ...................................................... 25 years
Fixtures and facilities of the
buildings . .................................... 3 years and 9 years
Computer equipment ..................... 3 years and 4 years
Office equipment . ........................................... 5 years
Office furniture ............................................... 8 years
Hardware and equipment.................................. 5 years
Transport equipment..................... 3 years and 4 years
Residual values are generally considered to be zero.
2.4. Long-term investments
Equity interests are valued at their historical acquisition cost.
A provision is set up for equity interests if their inventory
value, determined according to the following criteria, is less
than the balance sheet value:
Value in use determined based on the adjusted net assets
of the subsidiary company and its earnings outlook,
Value determined based on recent transactions involving
companies of the same sector. A provision, however, is set
up only once the company is operating at a normal rate, if
newly-created, or once it has been fully consolidated into
the Cegid Group, in the case of an acquisition.
If applicable, a provision is set up for treasury shares based
on the average share price during the last month of the
year.
Starting on January 1, 2005, items in the liquidity agreement
are recorded as long-term investments:
Treasury shares for €905 thousand,
Other capitalized receivables for €464 thousand.
2.5 Loans, deposits and guarantees
These items are valued at their face value and if applicable,
a provision is made for depreciation.
2.6 Inventories
The acquisition cost for stocks includes the purchase price,
transportation, handling and other costs directly attributable
to the acquisition of finished products, net of any sales
rebates, trade discounts and financial discounts.
The value of inventories of raw materials (assemblies and
subassemblies) used to perform standard replacements as
well as those of spare parts used for hardware maintenance
is determined according to the following methods:
The gross value of the assemblies and subassemblies
includes the purchase price and incidental expenses,
A provision is set up based on the net realizable value (NRV) of
the item. Where applicable, an additional provision is booked
in order to take the value in use into account, referring in
particular to the current contract portfolio.
For IT stocks, the NRV corresponds to the estimated sales
price of these products, less any cost necessary to make
the sale.
Spare parts are valued based on the MACM method. A provision
for depreciation of spare parts stocks is made according to part
rotation and in reference to the current contract portfolio.
95
2.7 Receivables
Receivables are valued at their face value.
A provision is set up when the inventory value is less than
the book value.
Income from hardware and licenses is recorded when invoices
are issued. This is booked when they are delivered.
A provision for risk was booked for the duration of the loan
to cover the estimate of the expense, including taxes, for
the redemption premium. The principle retained was that
of a straight-line provision in proportion to time, taking into
account the number of bonds remaining in circulation.
Income from software support and hardware maintenance
contracts is recorded on a pro rated basis.
The provision for the redemption premium of €4,436,322
was fully reversed on December 31, 2005.
2.9 Accruals
b) OBSAR loan
Cegid issued a redeemable stock warrant bond loan in March
2004.
2.8 Operating income
When invoices related to support and hardware maintenance
contracts, in particular, refer to the current year and future
years, unearned revenue is recorded based on the principle
of matching the revenue to the year in question.
2.10 Cash
This includes liquidities and bank current accounts.
Short-term investment securities are recorded at their
acquisition cost. Their valuation at year end for mutual funds
(SICAV and Fonds Commun de Placement) is based on the last
known redemption price.
The value of listed securities is determined based on the average
share price during the last month of the year.
If the value resulting from the above valuation methods is less
than the historical acquisition cost, a provision is set up. This
provision, however, is not created if the associated unrealized
capital loss can be offset by unrealized capital gains on securities
of the same kind.
In case of a transfer involving securities of the same kind that confer
the same rights, the entry price of the securities transferred
was estimated using the «first in/first out» method.
2.11 Expenses carried forward
Expenses carried forward are, starting on January 1, 2005,
comprised solely of expense related to bond offerings. This
expense is amortized using the straight-line method over
the length of the loan.
In accordance with CRC regulation 2004-06 applicable to
fiscal periods opened starting on January 1, 2005, expenses
carried forward that do not meet the new definition of an
asset were cancelled and offset against the « retained
earnings » item.
2.12 Bond issues
a) Convertible bond «OCEANE»
In November 1999, CEGID SA issued an OCEANE bond that
could be converted and exchanged for new shares with
a redemption premium in the amount of €35.397 million
(172,500 bonds each with a par value of €205.20) bearing
interest at a rate of 2.5% for a maximum term of 6 years
and 57 days.
As of December 31, 2005, there are 145,904 bonds in
circulation.
The OCEANE bond issue was fully redeemed on January
2, 2006 for an amount, including redemption premium,
of €36,592,723.20. A premium of €45.60 per bond was
paid, which is a face value of €250.80, resulting in a yield
to maturity of 5.62%.
96
This redemption was financed by using at the end of
December 2005 middle-term bank lines of credit for
€36,000 thousand.
The OBSAR issue involved the sum of €44,100 K representing
2,004,546 bonds with a par value of €22, earning interest
annually at EURIBOR 3 months less 0.20%. Since each bond
is linked to a BSAR, 2,004,546 BSAR were therefore issued.
Each BSAR grants subscription rights to a Cegid SA share
at a price of €28.44 from March 3, 2004 until March 3,
2009. The bonds (ISIN code FR0010061846) and the BSAR
(ISIN code FR0010061853) have been quoted separately
on the Premier Marché of the Paris Stock Exchange since
March 3, 2004.
As of December 31, 2005, there are 2,004,546 bonds and
2,004,470 BSAR in circulation.
The characteristics of this bond and warrants are described
in the General Information section of this document.
2.13 Provisions for risks and charges
a) Provisions
These provisions are set up according to case by case
valuations of the corresponding risks and charges.
A provision is made when the company’s administrative
boards are aware of an implicit or legal obligation that results
from a past event that could lead to likely expenditures of
resources without expected compensation of at least an
equivalent amount
b) Retirement commitments
Post-employment personnel benefits (end of career
indemnities) are recorded as a provision for contingencies
and losses in the consolidated financial statements.
Starting with fiscal year 2004, the company has applied CNC
recommendation 03-R-01 of April 1, 2003.
In addition, FY 2004 was impacted by the signature of an
additional clause to the Syntec collective agreement, which
lifts the ceiling on rights and modifies costs related to past
services. The Cegid Group opted to spread these costs over
the average residual life of the services to render.
The company has booked a provision corresponding to the
amount of the company’s commitments pertaining to the
members if its personnel as well as its executive officers,
concerning all of the commitments for retirement, pension,
supplementary retirement, indemnities and allocations for
retirement.
The amount of these commitments is calculated on the basis
of current salaries by putting a figure on the indemnities that
will be paid to employees when they take retirement leave on
their own accord, weighted by the following coefficients:
Expected salary revalorizations,
Change in the number of employees, for which the estimate
is based on the possibility for survival table issued by the
INSEE and on a turnover rate stemming from statistical
observations,
The discount rate, which is 3.75% on December 31, 2005
(4% on December 31, 2004).
This provision for retirement indemnities is not subject to
social contributions.
2.14 Extraordinary profit or loss
Income and expenses relating to consolidated extraordinary
profit or loss include extraordinary items and items which,
by accounting standards, are considered extraordinary by
their nature (transfers of assets) and gains on transferring
own shares).
97
3 Notes on assets
3.1 Fixed assets
Balance at
12/31/04
Increases
Decreases
Other
movements (1)
Balance at
12/31/05
- research and development expense
97,289
11,554
- goodwill
22,747
800
17,964
670
91,549
470
2,505
25,583
2,099
1,448
21
17
3,543
12,160
1,554
1,613
89
12,190
107,461
1,895
243,652
869
1,534
17,760
8
675
20,751
(8,846)
3
(5,563)
99,476
2,757
235,098
Intangible fixed assets
77,313
8,803
17,735
431
68,812
Tangible fixed assets
7,956
1,268
1,462
84
7,846
249
68
8
10,139
19,205
Gross value
Intangible fixed assets
- other intangible fixed assets
Tangible fixed assets
Long term investments:
- securities(2)
- receivables
TOTAL
Allowances and provisions
Long term investments:
- securities(2)
- receivables
309
579
TOTAL
86,097
579
515
77,546
The other transactions concern contributions of companies Logam Informatique SAS, Apalatys SARL and Synaptique SA, subsidiaries that
were dissolved when their assets were merged with those of Cegid SA.
(2)
Impact of restating the liquidity agreement in accordance with current legislation.
(1)
3.2 Expenses carried forward to future financial years
Balance at
12/31/04
Expenses carried forward to future financial periods(1)
Increases
4,098
Decreases
3,376
Balance at
12/31/05
722
The decrease in expense carried forward corresponds to:
- the allocation of expense linked with acquiring Ccmx and with advertising expense as retained earnings at the opening of fiscal year 2005
for €3,029 thousand,
- amortization of expense liked to issuing the OBSAR bonds for €227 thousand and to issuing the Convertible bond «OCEANE» for €120 thousand.
Only expense carried forward corresponding to issue costs for the OBSAR remain on the balance sheet at December 31, 2005.
(1)
3.3 Maturity of receivables
Balance at
12/31/05
Fixed assets
1,852
98
Current assets & prepaid expense
124,468
124,468
TOTAL
126,320
124,566
(1)
(1)
98
Up to 1 year
1 to 5 years
More than 5
years
168
1,586
168
1,586
Including Ccmx current account for €29,903 thousand.
3.4 Unearned revenue included in balance sheet items
Trade receivables and similar accounts: €3,644 thousand
Other receivables: €348 thousand
3.5 Prepaid expense
Prepaid expense stands at €1,544 thousand at December 31, 2005. This item contains only ordinary expenses related to
normal operation of the company.
3.6 Provisions for depreciation
Balance at
12/31/04
Long term investments
Increases
826
Decreases
68
8
Inventories
1,087
907
1,087
Receivables
3,621
1,564
1,984
Current accounts
TOTAL
Including reinstatements and provisions:
- operating
- financial
- extraordinary
75
920
7
5,609
3,459
3,086
2,471
988
3,071
15
Other
movements(1)
Balance at
12/3105
886
907
104
3,305
104
6,086
988
The other transactions concern contributions from Logam Informatique SAS, Apalatys SARL and Synaptique SA, subsidiaries merged into
of Cegid SA through asset mergers
(1)
3.7 Asset items related to affiliated companies
Long term investments (gross)
Equity interests and similar receivables
Other long term investments
Deposits and loans
Provisions on long term investments
Long term investments (net)
Trade receivables (gross)
Provisions on trade receivables
Trade receivables (net)
Accruals
Balance at
12/31/05
Including affiliated
companies
102,233
99,459
923
1,851
(886)
101,347
74,487
(4,294)
70,193
2,266
100,904
99,459
905
540
(849)
100,055
34,468
(988)
33,480
69
3.8 Short-tem investments and misc. securities
Gross value
Market value at
12/31/05
Mutual fund Shares («SICAV and FCP»)
43,643
43,643
GROSS TOTAL
43,643
43,643
43,643
43,643
Provision
NET TOTAL
99
4 Notes on liabilities
4.1 Share capital
During fiscal year 2005, options were exercised by employees concerning 139,757 securities as well as the exercise of 12 BSAR,
resulting in the creation of 139,769 new shares with a par value of €0.95 linked to a bond premium of €1,960,584.68.
At December 31, 2005, the capital of Cegid SA was made up of 8,587,355 shares with a par value of €0.95 or
€8,157,987.25.
4.2 Changes in shareholders’ equity
Capital
Premiums
Reserves
BALANCE AT 12/31/2004
8,025
86,294
8,276
1,831
4,666
109,092
(364)
(1,831)
(4,666)
(6,861)
Allocation of 2004 earnings(1)
Capital increase
133
(2)
Retained Profit/Loss
earnings
1,960
2,093
Allocation of pre-paid expense to retained earnings
(3,029)
(3)
(3,029)
Profit/Loss
Other changes
2,526
2,526
2,526
103,844
23
(4)
BALANCE AT 12/31/2005
8,158
88,254
Total
7,912
23
(3,006)
In accordance with the allocation of earnings and distribution of dividends approved by the General Shareholders’ Meeting on June 8,
2005.
(2)
Changes due to the exercise of options and the exercise of BSAR.
(3)
Changes due to the putting into conformity of the expense carried forward to future financial years with CRC regulation 2004-06 suppressing
the possibility to book as assets expenses to be carried forward except for capital charges and loan issue expense.
(4)
Dividends on own shares.
(1)
4.3 Provisions for risks and charges
Balance at Provisions Reinstatements Reinstatements
12/31/04
(utilized)
(non-utilized)
Employee related lawsuits
368
250
52
1
Customer lawsuits
253
206
46
80
Provisions for retirement indemnities
989
367
3,617
818
780
344
6,007
1,985
OCEANE redemption premium(2)
Other
TOTAL
Other(1)
Balance at
12/31/05
565
333
13
1,369
4,435
0
227
4,533
308
308
897
13
3,164
Including reinstatements and provisions:
- operzting
1,070
98
- financial
818
4,435
- extraordinary
97
The other transactions concern contributions from Logam Informatique SAS, Apalatys SARL and Synaptique SA, subsidiaries dissolved
following the merger of their assets into those of Cegid SA through asset mergers
(2 )
See «Accounting rules and methods» Convertible bond «OCEANE» (§ 2.12.a)
(1)
100
4.4 Accrued expenses included in balance sheet
items
Balance at
12/31/05
Interest/loan
820
Accrued interest
38
Trade payables
3,149
9,351
Other liabilities (directors’ fees)
113
TOTAL
Balance at
12/31/05
Including
affiliated
companies
Financial debts
126,389
8,267
Operating debts
37,044
9,722
Misc. debts
3,371
10
Accruals
3,730
35
170,534
18,034
TOTAL
4.6 Maturity of debts
(in thousands of
euros)
Miscellaneous financial debts
89,867
45,767 44,100
Trade payables
19,326
19,326
18,458
18,459
Other debts
2,630
2,630
Unearned revenue
3,730
3,730
TOTAL
5.3 Financial expense and income
2005
170,534
90,435 80,100
5.1 Sales breakdown
Breakdown of sales by the different activities is as follows:
IT Management Solution
Maintenance and Installation
2005
Including
affiliated
companies
Financial income
Dividends and income/equity interests
Capital gains from transfers of securities
Interest from current accounts
Reversal of provisions
1,832
1,832
18
914
914
4,451
(1)
Discounts obtained
36
Other income
21
TOTAL
7,272
2,746
Financial expenses
Interest/bond loans
1,638
OCEANE redemption premium
6,653
Provision for financial expenses(2)
1,806
981
334
334
Interest on current accounts
Discounts given
79
Other expenses
14
TOTAL
10,524
FINANCIAL PROFIT OR LOSS
(3,252)
1,315
The Convertible bond «OCEANE» redemption premium was booked
before taxes as financial expense, while the related reversal for the
provision that was previously booked is an after-tax amount.
(2)
Including allowances for the following provisions:
- OCEANE redemption premium (€818 thousand),
- depreciation in securities (€68 thousand) and current account
(€461 thousand) of Cegid Corporation,
- depreciation in the current account of Cegid Espagne (452
thousand).
(1)
5 Notes on the income statement
2004
101,999
96,743
13,876
15,099
IT environment(1)
322
Distribution of hardware
6,857
2,479
Misc.
9,177
5,173
131,908
119,816
(2)
(2)
This concerns primarily:
Income in kinds .................................... €278 thousand
Training expense ................................. €208 thousand
Social Security system
per diem allowance ................................ €75 thousand
(1)
Balance at Up to 1 1 to 5 more
12/31/05 year
years than 5
years
36,523
523 36,000
Credit institution
TOTAL
Transfers of operating expenses in €605 thousand at
December 31, 2005.
13,471
4.5 Liability items related to affiliated companies
(1)
5.2 Expense transfers
Transfer of this activity of February 1, 2004
Direct hardware sales not integrated into an IT solution
Most of Cegid SA’s activity is carried out in France.
101
5.4 Extraordinary expenses and income
2005
5.7 Tax consolidation
Including
affiliated
companies
Extraordinary income
From management operations
344
Income from transfer of assets
189
23
TOTAL
534
23
Extraordinary expenses
Allowances to extraordinary provisions
97
Net book value of assets transferred
387
TOTAL
485
EXTRAORDINARY PROFIT OR LOSS
49
23
5.5 Increases and reductions of future tax
liabilities
Reductions:
Provisions not deductible temporarily
Payable charges not deductible
temporarily
Increases:
Deducted income or expense not yet
booked
Amount
Tax
2,243
748
1,905
635
338
113
722
241
Recurrent income
Extraordinary profit or loss
Pre-tax
income
Tax and
profit
sharing
Income
after tax
2,996
(503)
2,493
49
(16)
33
3,045
(519)
2,526
Employee profit sharing
Accounting income
In 2005, the tax consolidation scope was extended to the
following companies:
CGO Informatique SAS, Siren 323 872 721
Logam Informatique SAS, Siren 419 598 016
Magestel SARL, Siren 339 067 092
CCMX SA, Siren 410 218 010
FCRS, Siren 412 552 317
ASPX, Siren 430 048 462
Due to the dissolution of Apalatys and Logam, on December
30, 2005 following the merger of their assets into those of
Cegid SA, these companies left the tax consolidation scope
on January 1, 2005.
Cegid SA is the group’s head company. The tax includes
Corporate Income Tax, additional and social security taxes
and the annual fixed rate tax (IFA).
The terms of the tax consolidation agreements signed by
this group are as follows:
The parent company holds a claim on the dependent company
in an amount equal to the tax that the dependent company
would have been required to pay if it were not consolidated.
The tax savings realized by the group are recognized by the
parent company and reported as nontaxable income.
Recommendation 2005-B of March 2, 2005 of the
Emergency Committee pertaining to the conditions for
setting up a provision in the parent company benefiting
from the tax consolidation scheme does not impact Cegid
SA’s financial statements.
6 Miscellaneous notes
6.1 Average number of employees
5.6 Allocation of corporate income tax
(in thousands of
euros)
On January 1, 2000, CEGID SA opted for the tax consolidation
scheme. The companies included in this scope of consolidation
are:
Apalatys SARL, Siren 397 512 146
Servant Soft SA, Siren 318 762 192
2005
2004
Management
546
517
Non Management
611
689
1,157
1,206
TOTAL
6.2 Commitments
6.2.1 Commitments received
Commitments received in connection with asset and liability
guarantees related to acquisitions of companies.
Commitments subject to limitations
2006
2007
5,713
1,213
Debt write-off
Financial debt write-off granted by CEGID SA in 1999 to its
Servant Soft subsidiary which included a 10-year “better
fortunes” clause: €6,860 K.
Financial debt write-off granted by CEGID SA in 2004 to its
CGO Informatique subsidiary which included a 10-year “better
fortunes” clause: €190 K.
102
6.3 Lawsuits
6.2.2. Commitments given
Bank lines of credit at December 31, 2005
2005 2006 2007 2008 2009
Commitments subject
to limitations
57,154 47,515 35,067 22,620 1,433
Including drawdown utilized 36,000
Credit arrangements, generally made for a period of five
years, provide for annual straight line depreciation and
include various standard provisions relative to covenants
(consolidated net financial debt/consolidated equity,
consolidated net financial debt/consolidated EBIDA, etc.)
and standard clauses relative to acceleration of maturity.
At December 31, 2005, the Group is respecting these
measures.
Bank guarantees
Up to 1
year
Guarantees
97
1 to 5
years
299
More
Total at
than 5 12/31/05
years
749
1,144
Rent commitments
Rent payable(1)
(1)
Up to 1
year
1 to 5
years
More
Total at
than 5 12/31/05
years
5,400
17,734
8,281
31,415
2006
2007
2008
331
0
0
Not discounted
Other commitments
Price addition(1)
(1)
Concerns the acquisition of intangible fixed assets
Acquisition with return clause
On November 3, 1993, CEGID SA acquired 4,100 CEGID
SERVICE shares from HOLDING CEGID SERVICES. This
acquisition was carried out subject to a reversion clause,
at the first request of HCS, in exchange for a cost of carry
equivalent to the average money market rate plus 1%. This
operation was approved by the Boards of Directors in 1993
under the terms of Article 101 of the Law of 1966 that
has become L.225-38.
Other commitments given
The retirement departure indemnities scheme at Cegid
SA (Syntec collective bargaining agreement) was modified
(ceiling removed from indemnities) during the course of
fiscal year 2004. In accordance with the recommendation
of the CNC, the commitment corresponding to this change
in regime, i.e. €247 K on January 1, 2004, was depreciated
according to the straight line method over the average
period remaining until the corresponding rights are
acquired by the employees (11.5 years). The amount of
this commitment at closing is €219 thousand.
Decision in favor of Cegid within the framework of the
Cegid/Ccmx merger (February 13, 2006)
The Council of State, in its decree handed down on February
13, 2006 confirmed the legality of the takeover of Ccmx. The
authorization that resulted from a decision of the Ministry
of the Economy, Finance and Industry dated October 19,
2004, was appealed in front of the Council of State.
Before making a final decision, the Council of State decided
to seize the Competition Board in order to examine the
concentration transaction.
The Council of State followed the recommendation of the
Competition Board thus rejected definitively the cancellation request filed by Fiducial Informatique and Fiducial
Expertise.
Other lawsuits
The other lawsuits involve mainly labor and commercial
disputes. Certain lawsuits for which summonses have been
served have resulted in the creation of several provisions to
cover the estimated risk, after internal analysis and review
by the group’s attorneys. To the company’s knowledge,
there are currently no other exceptional items or lawsuits
that could significantly affect the Group’s business, assets,
financial position or earnings.
6.4 Other information: Compensation
For fiscal year 2005, net compensation allocated to members
of the administrative boards was €80 K (directors’ fees) and
to members of the Management boards, belonging to the
Group Management committee (see list of members in the
note on Corporate Governance) was €2,108 thousand.
We also remind you that since 1999, Mr. Jean-Michel AULAS
and Mr. Patrick BERTRAND have been salaried employees
of ICMI. They receive most of their compensation in this way
from ICMI which then in particular invoices Cegid SA for the
services of assisting General Management.
6.5 Identity of the parent company consolidating
the company’s financial statements
ICMI SAS, 52 quai Paul Sédallian 69009 LYON.
6.6 Events subsequent to the year-end closing
Favorable decision of the council of State (February 13,
2006) see point 6.3, lawsuits.
Acquisition of GTI Industrie and PMI Soft (March 13,
2006)
Acquisition of 100% of the shares of GTI Industrie and 80%
of the shares of PMI Soft, publishers and distributors of
103
6.7 Information concerning subsidiaries, equity interest and securities
Companies in the
Group
Capital Shareholders’ Percentage Book value Book value Outstanding Sales ex tax Income or
Net
equity before of capital of shares of shares loans & for the past loss (-) for dividends
appropriation
held
owned
owned
advances fiscal year the period received
(gross)
(net)
granted by
ended
by the
company
company
during the
fiscal year
1. Subsidiaries (at least 50% of the capital held by the company)
ALP SARL
253 av. Général Leclerc
94700 MAISONS ALFORT
Ccmx SA
52 Quai Paul Sédallian
69279 LYON
8,000
220,309
100 %
91,567,359 48,142,299
100%
263,000
263,000
96,703
55,974,436 55,974 436 29,690,800 61,169,499 (1) 2,136,414 (1)
Cegid Corporation
130 West 57th Street
10 019 New York, USA
52,557
(454,952)
100 %
68,281
Cegid España
46 Calle Rivera del Loira
28 042 Madrid, España
300,000
(963,313)
75 %
225,000
7,099,403 17,792,980
59%
9,196,205
9,196,205
Cegid Services SAS
69279 LYON
273,905
250
459,005
274,566
(295,067)
1,055,000
198,069
(229,701)
0
178,343
28,923
(4,285)
CGO Informatique SAS
69279 LYON
232,580
(30,948)
100 %
292,400
292,400
Dirfi EURL
69279 LYON
8,000
5,411
100 %
8,000
8,000
0
(415)
Magestel SARL
69279 LYON
304,898
106,678
100 %
997,007
997,007
88,000
92,753
8,000
5,430
100 %
8,000
8,000
0
(414)
1,500,000
3,905,315
100%
18,440,000 18,440,000
15,605,583
Tersud SCI
69279 LYON
152,449
874,828
100 %
Servant Soft SA
69279 LYON
6,849,150
4,029,651
100%
Mon expert comptable EURL
69279 LYON
Quadratus SA
Quartier Rampelin
13080 LUYNES
120,679
7,100
233,489
2,211,618 1,560,000
120,679
127,583
793,050
11,235,846 11,235,846
1,203,284
2,329,882
0
3,584
2. Affiliates (between 10 and 50% of the capital held by the company)
Holding Cegid Services SAS
69279 LYON
1,824,000
3,117,313
44 %
2,087,873
2,087,873
541,898
526,110
1,369,049
1,369,049
3. Information relating to other interests not included in 2.
Miscellaneous interests
4. Information relating to other short-term securities
Liquidity agreement
(1)
104
Period from 04/01/2005 to 12/31/2005.
Auditors’ Report on the Financial Statements
In accordance with the terms of our appointment at your Annual Shareholders’ Meeting, we hereby present our report for the
year ended December 31, 2005 on:
Our examination of the financial statements of CEGID SA, as attached to this report,
Justification of our opinions,
The specific verifications and information required by law.
The Board of Directors is responsible for these financial statements. Our responsibility is to express an opinion on them based
on our audit.
1 Opinion on the financial statements
We conducted our audit in accordance with professional standards applicable in France. Those standards require that we
plan and perform an audit to obtain reasonable assurance that the consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management
to prepare the financial statements, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed below.
We certify that the financial statements are prepared in conformity with accounting standards generally accepted in France
present fairly, in all material respects of the transactions for the period under review as well as the financial situation and
property of the company at the end of this period.
Without questioning the opinion expressive hereinabove, we would like to draw your attention to paragraph 2.1 of the notes
that covers the changes in the booking method relative to the application of the new CRC regulations 2002-10 and 2004-06
pertaining to the amortization, definition and evaluation of assets.
2 Justification of opinion
In accordance with the measures of Article L.823-9 of the French Commercial Code pertaining to the justification of our opinions,
we call your attention to the following items:
Within the framework of our appreciation of the accounting rules and principles followed by your company, we have audited
the appropriateness of the change in accounting methods stated above and of the presentation of the latter.
Cegid SA’s capital assets are primarily composed of:
- goodwill valued in accordance with CRC regulation 2002-10 as outlined in paragraph 2.2 of the notes,
- securities valued in accordance with the methods outlined in paragraph 2.4 of the notes.
Based on items available at this time, we have examined the approach and the calculations performed by the company and
have reviewed the resulting evaluations.
The opinion thus expressed falls within the framework of our approach to auditing the consolidated financial statements, overall,
and has therefore contributed in the formation of the opinion without reserve, expressed in the first part of this report.
3 Specific verifications and information
We also performed the specific verifications required by law, in accordance with professional standards applicable in France.
We have no comments to make on the fairness of the information given in the Board of Directors’ management report and
the documents sent to shareholders on the financial position and financial statements or their consistency with those financial
statements.
As required by law, we have also verified that details of controlling and other interests acquired and the identity of shareholders
are disclosed in the management report.
The Auditors
Grant Thornton
French member of Grant Thornton International
François PONS
Associate
Jean-Marie VILMINT
Associate
Mazars
Christine DUBUS
Associate
105
Auditors’ Special Report on Regulated Agreements
In our capacity as your company’s auditors, we hereby submit our report on regulated agreements.
1 Agreements signed during the year
Pursuant to article L.225-40 of the French Commercial Code, we have been informed of agreements subject to the prior
authorization of your Board of Directors.
Our assignment does not require us to investigate the existence of any undisclosed agreements but to report to you, based
on the information provided to us, the nature and basic terms and conditions of the agreements brought to our attention,
without expressing an opinion as to their relevance or substance. Pursuant to article 92 of the March 23, 1967 decree, it is
the responsibility of shareholders to determine whether the agreements are appropriate and should be approved.
We performed our work in accordance with professional standards applicable in France. Those standards require that we
perform procedures to verify that the information provided to us conforms to the basic documents they come from.
These agreements, authorized during the fiscal year, are presented in the table of agreements other than advances and loans
(table 2) of this report.
The parties concerned by these agreements (directors, general manager, delegated general managers, permanent representative
of a director who is a legal entity, shareholder holding more than 10% of the voting rights or a company controlling a company
holding more than 10% of the voting rights) are shown in table 3 in this report
2 Agreements concluded in prior years that remained in force during the year
In addition, pursuant to the March 23, 1967 decree we were informed of the following agreements concluded in prior years
that remained in force during the year.
These agreements are shown in table 1 and 2 of this report:
Table 1 shows the advances and loans,
Table 2 shows the other agreements.
The parties concerned by these agreements (directors, chief executive officer, delegated chief executive officers, permanent
representative of a director who is a legal entity, shareholder holding more than 10% of the voting rights or a company controlling
a company holding more than 10% of the voting rights) are shown in table 3 in this report.
The Auditors
Grant Thornton
François PONS
Associate
106
Jean-Marie VILMINT
Associate
Mazars
Christine DUBUS
Associate
Table 1: Advances and loans
Guaranteed by
Received by
Balance at
12/31/2005
in €K
Conditions
Income and
(expense)
recorded in €K
New Agreements
None
Agreements approved in prior periods
Advance paying interest on the basis
of EURIBOR 3 months + 0.35%.
5
1,055
Advance (inc. €540 K pertaining
to a profit-sharing loan) paying interest
on the basis of EURIBOR 3 months + 0.35%.
21
Cegid SA
3,796
(83)
ALP SARL
Cegid SA
215
(6)
Magestel SARL
Cegid SA
113
(1)
Servant Soft SA
Cegid SA
3,121
(46)
Cegid Services SAS
Cegid SA
(38)
Cegid SA
Ccmx SA
29,691
878
Cegid SA
7
1
Cegid SA
Fcrs SA
155
2
SCI Tersud
Cegid SA
961
7
Cegid SA
Synaptique SA (1)
(5)
Cegid SA
Apalatys SARL (1)
(123)
Cegid SA
Cegid Corporation
Cegid SA
Cegid España
Quadratus SA
459
Cegid SA
Logam Informatique SAS (1)
of EURIBOR 3 months + 0.50%..
(15)
Cegid SA
Cegid Business Intelligence (1)
(17)
(1)
Dissolution via asset merger, effective December 30, 2005.
107
Table 2: Agreements other than loans and advances
Companies concerned
Nature, purpose, terms and conditions
Income and
(expense) recorded
in K€
New agreements
Ccmx SA
Payment of a fee by Ccmx for the use of the brand image and structures of Cegid SA.
The amount of this fee is based on total sales excluding Sales tax and re-invoicing expense.
This fee is broken down as follows:
- group charge: 3% (implemented starting January 1, 2005),
- brand image: 1% (implemented starting July 1, 2005).
ICMI SAS
Modification in the agreement for ICMI SAS to provide assistance and general management services
to Cegid SA. The amount of the fixed fee changes to €160 thousand per month starting on January
1, 2005. The amount booked for fiscal year 2005 is broken down as follows:
- fixed monthly fee of €160 thousand, i.e. €1,920 thousand for the year 2005,
- variable charge of 4% on the gross consolidated profit, i.e. €577 thousand for the year 2005.
Servant Soft SA
Modification in the lease management fee.
The latter changes to €1,229,000 per year excluding tax starting on January 1, 2006.
2,905
(2,497)
Prior agreements
ALP SARL
Payment of a fee by ALP for the use of the brand image and structures of Cegid SA.
The amount of this fee is based on total sales excluding Sales tax and re-invoicing expense.
This fee is broken down as follows:
- group charge: 3%,
- brand image: 1%.
Quadratus SA
Payment of a fee by Quadratus SA for the use of the brand image and structures of Cegid SA.
The amount of this fee is based on total sales excluding Sales tax and re-invoicing expenses.
The fee is broken down as follows:
- group charges: 3%,
- brand image: 1%.
624
Magestel SARL
Lease management of Magestel by your company.
The amount of the annual fee is set at €88,000 excluding taxes.
(88)
CBI SA (1)
Payment of a fee to Cegid SA for the use of the brand image and structures of Cegid SA.
The amount of this fee is based on total sales excluding Sales tax and re-invoicing expenses.
The fee is broken down as follows:
group charges: 3%,
brand image: 1%.
126
Synaptique SA (1)
Payment of a royalty fee of 1% of sales for use of CEGID SA’s brand image. The royalty
amount is calculated based on total sales outside the group and excluding Sales tax and reinvoicing expenses.
Lease management of CGO Informatique by your company effective January 1, 2005 in
exchange for payment of an annual fee.
Payment of a fee by Cegid SA for use of the brand image of CGO Informatique starting on
January 1, 2005.
Cancellation of a financial claim granted by Cegid SA for fiscal year 2004 for €190 thousand.
This cancellation is accompanied by a better fortunes clause for 10 years.
The better fortunes clause did not impact the period.
(1)
108
11
5
(40)
(10)
Table 2: Agreements other than loans and advances (cont.)
Companies concerned
Ccmx SA
Logam Informatique SAS (1)
Cegid España
Nature, purpose, terms and conditions
Distribution agreement:
- Cegid benefits from a discount granted by Ccmx of 50% off the list price on business
software published by Ccmx and sold by Cegid SA.
- Ccmx benefits from a discount granted by Cegid of 50% off the list price on business
software published by Cegid and sold by Ccmx SA.
Management of Logam Informatique by your company in the form of a lease management
agreement.
Payment of a fee by Cegid SA for the use of the brand image of Logam Informatique.
Sales of licenses:
Sale price equal to 50% of the Spanish price and continuation in 2005 of the exceptional 25%
discount excluding tax granted in 2003.
30% discount on charges for services provided by CEGID France technical personnel to CEGID
España, subject to a maximum 100 days/year.
Apalatys SARL (1)
Compensation for exclusive rights to use and exploit the business software library and brands
of Apalatys by Cegid SA.
Servant Soft SA
Cancellation of a financial claim accorded in 1999 by CEGID SA accompanied by a better fortunes
clause for 10 years (total cancellation of debt initially accorded was for €6,860 thousand).
The better fortunes clause did not impact the period.
Cegid SA manages the business of Servant Soft via a lease management agreement.
This lease management agreement is granted for three years subject to tacit renewal in exchange for
a fixed annual fee of 1,143,367 euros excluding tax (amendment April 1, 2001).
Exploitation of trademarks by Cegid SA for activities outside the lease management, subject to a fixed
annual fee of 76,225 euros excluding taxes.
ICMI SAS
Agreement for CEGID to provide general management services and dividend payment management
to ICMI SAS in exchange for a fee.
Acquisition by CEGID of CEGID SERVICES shares from HOLDING CEGID SERVICES authorized
by the Board of Directors on September 22, 1993 accompanied by a better fortunes clause. If
this clause is revoked, CEGID shall pay the equivalent of the average money market rate plus
1%.
(1)
Income and
(expense) recorded
in K€
(25)
69
(140)
(15)
9
4
(1,530)
(1,143)
(76)
98
Dissolution via asset merger effective December 30, 2005.
109
Table 3: Parties concerned by agreements subject to Article L.225-38
Companies
Jean-Michel AULAS
Patrick BERTRAND
Cegid SA
Chairman of the Board of Directors
General Manager
Director
Permanent representative of ICMI SAS
ICMI SAS
Chairman
Servant Soft SA
Director
Apalatys SARL
Gérant (1)
Cegid Business Intelligence SA
Permanent representative
of Servant Soft (1)
Synaptique SA
Chairman
of the Board of Directors (1)
Director (1)
Cegid Services SAS
Chairman
Cegid España
Logam Informatique SAS
Chairman
of the Board of Directors
Director
Director
Partner holding more than
10% of the voting rights
(1)
ALP SARL
Quadratus SA
Director
Magestel SARL
Chairman
Ccmx (ex Ccmx Holding)
Ccmx SA
Fcrs
SCI Tersud
Cegid SA
Chairman and CEO
Assistant
General Managing Director (3)
Chairman
of the Board of Directors (2)
General Managing Director (2)
Manager
Chairman
Up until March 25, 2005, when Ccmx SA was absorbed by par Ccmx Holding and name change.
(3)
Since May 9, 2005.
(1)
(2)
110
Corporate governance
Chairman’s report in application of article L. 225-37
of the Commercial Code
Report of the Chairman of the Board of directors
pertaining to the conditions for preparing and
organizing the Board’s work, the possible limitations
applied to the power of the General Manager and
the internal control procedures set up by the Cegid
group.
In application of the measures provided in Article L. 225-37
paragraph 6 and L.225-68 paragraph 7 of the Commercial
Code amended by Law 2005-842 of July 26, 2005, hereafter
are exposed the conditions for preparing and organizing
the work of the Board of Directors, the operation General
Management, as well as the internal control procedures set
up by the company and its operational subsidiaries.
1Conditions for preparing and organizing the
work of the Board
Note that the Board of Directors of your company is made
up of eleven directors, including eight individual directors
and three companies. Among these eleven directors, seven
can be considered as independent, within the meaning of the
VIENOT and BOUTON reports, since they do not hold any
management positions in the company or Group to which
they belong and they do not maintain any significant relations
with the company, its Group or its management, that could
compromise the exercise of their freedom of judgment.
The Board of Directors is made up of the following
members:
Mr. Jean-Michel AULAS, Chairman of the Board of
Directors,
ICMI, represented by Mr. Patrick BERTRAND, Director and
General Manager,
APAX PARTNERS, represented by Mr. Edgard MISRAHI,
Eurazeo, represented by Mr. Gilbert SAADA,
Mr. Jean-Luc LENART, Director,
Mr. Lucien DEVEAUX, Director,
Mr. Michel REYBIER, Director,
Mr. Jacques MATAGRIN, Director
Mr. Franklin DEVAUX, Director,
Mr. Yves DEFOIN, Director,
Mr. Robert VERNET, Director (1),
Mr. Robert VERNET resigned from his function as director at the
Board of Directors meeting held on March 23, 2006.
(1)
The Board of Directors, at its meeting held on September
23, 2004, approved a set of rules of procedure of which
the purpose is to state the rules for participation and
functioning of the Board of Directors and to complete the
statutory measures on these points without modifying them.
These rules of procedure in particular provide for the use of
videoconferencing under the conditions set forth by law. The
Board of Directors meets five to ten times a year, according
to events in the company. It met five times in 2005. The
auditors attend all meetings of the Board of Directors. The
meeting is called by the Chairman of the Board via post and
by fax. The average time period for convening the Board is
about fifteen days, with an annual schedule established at the
beginning of the year. Meetings are held at the head office
and make it possible to account for the actual presence of
the majority of the directors.
Main work of the Board during the 2005 period pertained
to:
The operational implementation and definition of a merger
plan between Cegid and Ccmx.
Following the various appeals filed by Fiducial Expertise
and Fiducial Informatique against the decision rendered
October 19, 2004 by the Minister of the Economy, Finance
and Industry authorizing the concentration transaction
between Cegid and Ccmx,
Examination and study of external growth projects and
particularly the project to acquire a company based in Spain
that was not able to be completed due to the uncertainty
created by the appeals filed by the Fiducial group,
Renegotiating of occupation conditions for the building
located in Ampuis,
Half-year and annual results for the fiscal year.
Finally, note that the Board of Directors, at its meeting held
on March 23, 2005, appointed a Strategic Board within the
Board of Directors, composed of Mr. Jean-Michel AULAS,
Mr. Patrick BERTRAND, APAX PARTNERS, EURAZEO and
Mr. Franklin DEVAUX. The purpose of this Strategic Board
is to reflect on the major orientations of the Group, on its
development strategy and implementation by the Board
of Directors. Within this framework, it acknowledges the
development plan, management reports and forecasts
elaborated by the company’s management. It is also
responsible for major operational projects.
2Delegations of the General Manager
Since the meeting that took place on December 20, 2002,
and in accordance with the measures of Article 16 II of
the bylaws, harmonized with the law pertaining to the new
economic regulation dated May 15, 2001, the Board of
Directors decided for a separate exercising of the functions
of Chairman and CEO.
Mr. Patrick BERTRAND performs the functions of General
Manager. The Board of Directors has limited the powers of
the General Manager and in particular has provided that,
generally speaking, decisions that do not involve day to day
management and for which in particular are mentioned in
the list hereafter, must be submitted to prior authorization
of the Board of Directors:
Constitution of guarantees, mortgage loans, collateral
except for bank guarantee requests for the purpose of
guaranteeing payment of rent for commercial premises
as well as any request for guarantee involving the
signature of commercial contracts pertaining to day-today management,
Alienation of buildings,
The partial or entire transfer of businesses,
Significant acquisitions and external growth.
During Board meetings and, if applicable before the holding
of these meetings, confidential dossiers are given to the
directors in order to acquaint them with the projects on
which they will need to vote.
111
3Internal control system
3.1 Internal control
3.1.1 Definition of internal control and the company’s
goals
Internal control is defined within the Cegid group as a set
of procedures implemented by the Management in order to
reach the following goals:
Make sure that acts of management and the realization
on operations as well as employee efforts fall within the
framework of the guidelines provided by the Board of
Directors and are implemented by the various committees
in accordance with regulatory texts, principles, standards
and methods that apply to the company,
Foresee and control the identified risks that result from the
company’s activity, and in particular in the areas of finance
and accounting,
Ensure reliability of management and financial
information,
Secure protection of assets,
Optimize operational activities.
3.1.2 Organization of internal control
The Executive Board, which was replaced by the Group
Management Board since the merger with Ccmx in November
2004, and the General Managers of the operational
subsidiaries, are responsible for implementing strategy
decided by the Board of Directors of Cegid and its subsidiaries,
for identifying any risks that are inherent to the activities
carried out by the companies or group and for making sure
that internal control procedures are properly applied.
The Group Management Board meets at least once a month.
It can also meet at the time of major decisions: acquisitions,
financing, social bargaining.
Likewise, the Top Management Committee, created at
the beginning of the period and made up of the Group’s
major operational managers, which met twice during the
year, also works on the operational implementation of the
group’s strategy. The branch Strategic Boards, under
the responsibility of the respective member of the Group
Management Board, is a unit for information and for
implementation of all the operational issues pertaining to
the field of activity of the said Board. An extremely detailed
dossier is provided at each meeting to all of the attendees,
whether or not they are in actual attendance.
Internal control relies in particular on a repository of
procedures drafted by the Managers, who are in charge of
enforcing them and making them available to management
units concerning General Management and operational
subsidiaries. These procedures, covering the Purchasing,
Investment, Sales, Human Resources, Research and
Development cycles, are available on the company’s intranet
or directly brought to the attention of the managers.
In parallel, departmental memos or internal messages,
sent regularly to the various operational managers, allow
complementary information to be distributed on the
implementation of these procedures. The convergence
in the internal control procedures in effect within Cegid
since the acquisition of Ccmx in November 2004 took place
progressively during the fiscal year, but were not entirely
finalized due to delays pertaining to the legal proceedings
mentioned above.
In parallel, in line with the work carried out pertaining to
communications between the Information Systems of each of
the group’s entities as early as December 2004, fiscal year
112
2005 was dedicated to research and work prior to migrating
the sales and customer base information systems until then
used by Ccmx to the applications used by Cegid.
Follow up on investments pertaining to Research and
Development and follow up on Ccmx’s billable activities
were subject to regular reporting, submitted to the various
corresponding boards.
Finally, an internal audit structure was created and will be
reinforced during fiscal year 2006.
For 2006, goals allowing internal control procedures to
be improved and operational implementation will cover the
processes in the sales area for all of the steps from drafting
estimates up to collecting customer invoices, on the follow
up of the recurring revenue portfolio, and more generally
on the harmonization of the procedures in effect within the
group, especially those pertaining to Human Resources
Management, research and development, follow up on
marketing and communications efforts as well as procedures
implemented for the control of the group’s commitments.
Finally, a process will be developed that will facilitate the
integration of new activities within the framework of external
growth strategy.
3.2 Overall organization of internal control
procedures at the Group level
The actors or structures that engage in internal control
efforts are General Management, members of management
units and in particular the Group Executive Board, division
strategic boards, as well as Financial Management, and
primarily the Internal Audit department and the accounting,
finance and legal departments and finally, the «purchasing»
committee.
Furthermore, within the framework of their procedures
carried out in accordance with professional standards, the
auditors externally control the effectiveness and usefulness
of the procedures.
3.2.1 Organization of the management and accounting
system
The organization of the management and accounting system,
managed by the Finance Manager, Manager of the Finance
and Accounting department and the person in charge of
management control results in particular in:
A budget procedure and a procedure for analytical overall
monthly budget control,
A daily reporting pertaining to the activity of the company to
the Group Executive Board and operational management,
Monthly reports submitted for examination to the Group
Executive Board and branch Management Boards. This
reporting contains on one hand, items of information
pertaining to the activity of the ended period compared
to that of preceding years and of the budget, and to the
company’s financial situation and, on the other hand,
indicators pertaining to the activities performed by the
company,
Daily reports on items of operational and financial
management,
Rules for signature delegation and investment and budget
allocations are implemented with respect to the separation
of powers.
3.2.2 Organization of the human resources control
and management system
The control and management system pertaining to human
resources is a major item regarding the activities performed
by the company, and relies in particular on the following
areas:
Recruitment of employees that takes place through validation
by Human Resources Management, by the Director involved
and by General Management,
Compensation management, and in particular the
variable portion which is validated monthly by the various
departmental managers pertaining to how far the goals that
have been set for each employee have been reached,
Skills management,
Conformity with regulations in matters of health and safety
and work conditions under the responsibility of those in
charge of establishments that have delegations.
3.2.3 Organization of operational internal control
The various activities give rise in general to procedures
making it possible to ensure the monitoring of the identified
risks and pertaining to the activities that are carried out,
and the formalization and elaboration of activity follow up
indicators, and in particular:
For the making of decisions and monitoring of research
and development investments under the impetus and
responsibility of the Division Manager involved and of the
Technical Manager,
For the release of products in view of marketing them, and in
accordance with the procedures elaborated by the Technical
Management under control of the «ad hoc» committees,
For the safeguard procedures in relation with the
Management bodies involved and in particular for assets
pertaining to research and development which are subject
to registrations of trademarks and product sources with
authorized organizations,
For activities pertaining to customer services, through the
creation of follow up indicators for the activities that are
carried out (activities pertaining to training and deployment,
customer support hot line, maintenance, etc.),
For IT risks and in particular concerning procedures for
backups, control of computer applications used, access
to Internet and more generally for premises dedicated to
IT resources.
3.2.4 Organization of the elaboration of finance and
accounting information
The management and accounting system relies on an
integrated computer system making it possible to facilitate
the monitoring of completeness assertion, proper evaluation
of transactions and the elaboration of finance and accounting
information in accordance with the accounting rules and
methods in effect and applied by the company, for the parent
company financial statements as well as for the consolidated
financial statements, established using a dedicated piece of
business software.
General Management ensures that the financial and
accounting information that is produced and checked by
Financial Management reflects reality. This information
is checked by the auditors who carry out verifications in
accordance with the standards in effect.
Accounting and financial information is distributed regularly
in several media formats (press releases, the company’s
internet site, the Euronext site, legal publications, financial
analyst meetings) with regard to the listing of shares of
the company in compartment B of the Eurolist by Euronext
(formerly Premier Marché of Euronext Paris).
Jean-Michel AULAS
113
Auditors’ report on the Report of the Chairman of the Board of Directors
Auditors’ Report, established in accordance with Article L.225-235 of the French Commercial Code, on the
report of the Chairman of the Board of Directors of Cegid SA, pertaining to the internal control procedures
concerning the elaboration and processing of finance and accounting information
In our capacity as Auditors of Cegid SA and in accordance with the terms of the last paragraph of Article L.225-235 of the
French Commercial Code, we provide you with our report on the report established by the Chairman of the Board of Directors
of your company in accordance with Article L.225-37 of the French Commercial Code pertaining to the period ended December
31, 2005.
It is the Chairman’s responsibility to relate, in his report, in particular the conditions for preparing and organizing the work of
the Board of Directors and the internal control procedures set up within the company.
It is our responsibility to provide you with the observations on our part concerning the descriptions contained in the Chairman’s
report on internal control procedures pertaining to the elaboration and processing of finance and accounting information.
We performed our work in accordance with the professional standards applicable in France. Those standards require that we
perform procedures designed to evaluate the truthfulness of the description contained in the Chairman’s report on internal
control procedures pertaining to the elaboration and processing of finance and accounting information. These procedures
consist in particular:
in acknowledging the purposes and the general organization of internal control, as well as internal control procedures pertaining
to the elaboration and processing of finance and accounting information, presented in the Chairman’s report;
in acknowledging the work constituting the foundations of the description as presented.
Based on our work, we have no comments concerning the description of the company’s internal control procedures pertaining
to the elaboration and processing of finance and accounting information, contained in the Chairman of the Board’s report,
established in accordance with the last paragraph of Article L.225-37 of the French Commercial Code.
The Auditors
Grant Thornton
François PONS
Associate
114
Jean-Marie VILMINT
Associate
Mazars
Christine DUBUS
Associate
Directors and Of ficers
Administrative Directors
General Directors
At March 31, 2006, Cegid’s Board of Directors is composed
of ten directors:
Mr. Jean-Michel AULAS, Chairman,
ICMI, represented by Mr. Patrick BERTRAND, CEO,
Mr. Lucien DEVEAUX,
Mr. Jacques MATAGRIN,
Mr. Michel REYBIER,
Mr. Franklin DEVAUX,
Mr. Yves DEFOIN,
APAX PARTNERS, represented by Mr. Edgard MISRAHI,
Eurazeo, represented by Mr. Gilbert SAADA,
Mr. Jean-Luc LENART.
There is a Group Management Board which includes the
managers of the company’s functional and operational
divisions.
Note that Mr. Robert VERNET resigned from his functions
as director for personal reasons at the Board of Directors
meeting held on March 23, 2006.
Among these ten directors, seven can be considered as
independent, within the meaning of the VIENOT & BOUTON
reports, since they do not hold any management positions
in the company or group to which they belong and they do
not maintain any significant relations with the company,
its Group or its management, that could compromise the
exercise of their freedom of judgment and do not hold any
major interest in the share capital.
The Board of Directors does not include any director elected
by employees.
No advisor was appointed.
The Board of Directors, at its meeting held on September
23, 2004, approved a set of rules of procedure of which the
purpose is to state the rules for participation and functioning
of the Board of Directors and to complete the statutory
measures on these points without modifying them.
Number of Board Meetings: 6 in 2005. Meetings were held at
the head office and made it possible to account for the actual
presence of the majority of the directors. The attendance
rate for Board Members is 75%.
The Board of Directors, at its meeting held on March
23, 2005, appointed a Strategy Board composed of Mr.
Jean-Michel AULAS and Mr. Patrick BERTRAND, APAX
PARTNERS, Eurazeo and Mr. Franklin DEVAUX. The purpose
of this Strategic Board is to reflect on the major orientations
of the Group, on its development strategy and implementation
by the Board of Directors. Within this framework, it
acknowledges the development plan, management reports
and forecasts elaborated by the company’s management.
It is also responsible for major operational projects. The
Strategy Board met six times in 2005, with an attendance
rate for members of the Strategy Board.
It is composed of the following members:
Mr. Jean-Michel AULAS,
Mr. Patrick BERTRAND,
Mr. Christophe RAYMOND, Executive Vice President,
Technical Director,
Mr. Bertrand BOULET, Executive Vice President, Director
of Operations
Mr. Didier SERRAT, Executive Vice President, Administration Human resources - Finance - Business Development
Mr. Antoine WATTINNE, Business Unit Director,
Mrs. Nathalie ECHINARD, Business Unit Director,
Mr. Laurent DUBERNAIS, Business Unit Director,
Mr. Pierre DIANTEILL, Marketing Director, Group,
Mr. Christian LOYRION, Director of Logistics and Hardware
Deployment,
Mr. Thierry LUTHI, Finance Director,
Mr. Pascal GUILLEMIN, Director of Human Resources,
Group,
Mr. Sylvain MOUSSE, Director of Internal IS - Outsourcing
and Special Services
Mr. Jean-François MARCEL, Sales Director, Company
Branch
This Group Management Board is responsible for implementing
strategy decided by the Board of Directors. It meets at least
ten times a year, and at the time of major decisions such as
acquisitions, financing and employee related negotiations.
Furthermore, a «Top Management» committee which includes
the major managers in the Group (approximately fifty people)
meets at least twice a year.
Management holdings in the issuer’s capital
To the company’s knowledge, as of March 31, 2006, members
of the Board of Directors hold 2,619,447 shares or 30.48%
of the capital, representing 41.43% of the voting rights.
Compensation and benefits in kind granted for
the period ended
a) Compensation to directors
The Ordinary Shareholders’ Meeting voted to allocate
Directors’ fees to members of the Board of Directors for
the 2005 fiscal year, totaling €100,000.
The Board of Directors determines the distribution of directors’
fees among the directors according to their actual presence
at meetings and by taking a weighting into account for the two
managers. In 2005, the gross amounts paid for fiscal year
2004 were as follows:
Mr. Jean-Michel AULAS ................................. €15,000
Mr Patrick BERTRAND ................................... €15,000
Mr Robert VERNET ........................................ €10,000
Mr Jacques MATAGRIN ................................... €8,000
Mr Franklin DEVAUX . ..................................... €10,000
Mr Yves DEFOIN ............................................. €8,000
Mr Lucien DEVEAUX ....................................... €8,000
APAX Partners (1) ............................................ €2,000
EURAZEO (1) . .................................................. €2,000
Mr Jean-Luc LENART (1) ................................... €2,000
Director appointed at the Shareholders’ Meeting held on November 16,
2004.
(1)
115
Directors and Of ficers
b) Compensation to executive officers in the period ended
December 31, 2005
Compensation paid by Cegid SA and its subsidiaries for the
2005 fiscal year to salaried members of the Group Management
board totaled 2,230 thousand euros. Note that Mr. Jean-Michel
AULAS and Mr. Patrick BERTRAND receive the main share of
their compensation from ICMI, the management holding company
of the Cegid group (see p. 55 of the Management Report of this
Reference Document).
Agreements concluded with directors or officers benefits and/or loans granted
Total number of stock options granted on the
issuer’s shares to directors and officers
Employee profit sharing plans
Meeting date
Since the closing of the 2005 fiscal year, no new agreements,
benefits or loans have been granted to directors or
officers.
Most of the companies in the Group have a profit sharing
plan, a company savings plan and a statutory profit sharing
agreement. Concerning the company savings plan, the
company contributions totaled €483 K.
History of stock options
Plan n°1
The agreements related to the application of Articles L.22538 and following of the French Commercial Code are reported
on pages 108 to 112 of this document.
Plan n°2
For fiscal year 2005, the total amount of contribution paid
was €342 K with a profit sharing amount of €354 K.
06/14/2000 06/14/2000
Date of the Board of Directors
01/24/2001 12/20/2002
Total number of shares that can 179,660 (1)
85,200 (1)
be subscribed
Including the number that can be
subscribed by:
18,004 (1)
28,000 (1)
- Executive officers
(1)
(1)
32,200
44,000
- First ten employees
Options exercisable as of
01/24/2002 12/20/2003
Expiry date
Subscription price
01/24/2007 12/20/2006
€17.35 (2)
€9.81 (2)
NA
NA
104,977
42,800
- Including shares subscribed by
executive officers
18,004
28,000
- Including shares subscribed by the
first ten employees
26,800
16,000
None
None
45,136 (3)
34,000 (3)
Method of exercise (when the plan
includes several parts)
Number of shares subscribed as
of March 31, 2006
Including shares subscribed by the
first ten employees
Outstanding stock options
This number takes into account the 4 for 1 stock split for the
Cegid share decided during the Special Shareholders’ Meeting of
December 9, 2003.
(2)
This price takes into account the 4 for 1 stock split for the
Cegid share decided during the Special Shareholders’ Meeting of
December 9, 2003.
(3)
The number of outstanding options takes into account the loss
of the quality as a salaried employee in the Cegid company and
Group companies of certain beneficiaries.
(1)
Since the Board Meeting of March 23, 2005 when the Board
of Directors acknowledged the previous exercise of options
from the plan granted by the Board of Directors on January
24, and until the Board Meeting held on March 13, 2006,
63,821 shares were exercised. During the same period, no
exercise for the plan pertaining to the decision of the Board
of Directors of December 20, 2002, took place.
Finally, note that in fiscal year 2005 no new Cegid SA
subscription option and/or stock purchase plan was
granted.
116
Directors and of ficers
Information on directors
First and Last name
or Company name of
member
Date of first End of term
appointment
Main
function
exercised
in the
company
Main
function
exercised
outside the
company
Other mandates
and functions exercised
in any company
2005 - 2006
Other mandates and functions
exercised during the last four
periods
approving the 2009
Chairman
ICMI
represented by
1983
approving the 2009
GM
Mr. Yves DEFOIN
approving the 2007
Director
None
Mr. Franklin DEVAUX
June 9, 1987
Shareholders’ Meeting
approving the 2009
Director
Director Cegid SA, Director Aéro Club de France, Director Fondation Director and Chairman Ascendance SAS, Director Proteus
Nicolas Hulot, Director Securigate
Hélicoptères, Director Cegid, Director Fondation Nicolas Hulot,
Director Aéroclub de France
November 4, 1997 Shareholders’ Meeting
approving the 2008
Director
GM of FRD Holding SAS, GM of RFD Participations SAS, GM of
Grange Tambour Participations SAS, Board Member Deveaux
SA, GM of Armand Thiery SAS, PCS of ECCE SA, Chairman
DEVLOCATION, Chairman Tissage De Montagny, Chairman SCI
PHILIP II, Chairman SCI Philip I, Chairman SCI DU FOIE, Director
Lyonnaise de Banque
Mr. Lucien DEVEAUX
Chairman
Chairman Cegid, Chairman HCS, Chairman Ccmx SA (1), Director andChairman-CEO Cegid, Chairman Cegid, Director and Chairman
CEO Olympique Chairman ICMI, Director and Chairman Cegid Services, Chairman ICMI, Director and Chairman Cegid Services, Director and
Lyonnais Groupe Apalatys (3), Chairman-CEO Olympique Lyonnais Groupe, Chairman- Chairman Apalatys, Chairman Holding Cegid Services,
CEO SASP Olympique Lyonnais, Chairman-CEO Ccmx Holding (2), Chairman-CEO Olympique Lyonnais Groupe, Chairman-CEO
Director OL Voyages, REP P Servant Soft to the Board of CBI (3),
SASP Olympique Lyonnais, Director OL Voyages, Director Holding
Director Quadratus, Chairman SCI Tersud,
Cegid Services, Director Servant Soft, Director Cegid Business
Intelligence, Director Quadratus, Chairman SCI Arenas, Chairman
SCI Tersud
Executive
Vice President
Administration
Finance
Mr. Jean-Luc LENART
November 16,
2004
approving the 2009
Director
Senior Advisor
Bryan Garnier
& Co
Mr. Jacques MATAGRIN
approving the 2007
Director
Chairman
Noirclerc
Fenetrier
Informatique
APAX PARTNERS
represented by
Mr. Edgard MISRAHI
November 16,
2004
AGO approbation
approving the 2009
Mr. Michel REYBIER
May 21, 1997
EURAZEO
represented by
Mr. Gilbert SAADA
November 16,
2004
GM Cegid SA, REP P ICMI to the Board Cegid SA, GM Ccmx SA (4), GM Cegid, GM Holding Cegid Services, Chairman Cegid Business
Asst GM Ccmx (5), Director Ccmx Holding, Director HCS, Chairman Intelligence, Chairman Quadratus, Chairman Technilog, Chairman
CBI, Chairman Quadratus, Chairman ASPX, Chairman FCRS, DirectorData Bretagne, Director Servant Soft, Director Servant Soft InterSynaptique (3), Director Servant Soft, Director Expert & Finance,
national, Director Synaptique, Director Holding Cegid Services,
Director and Vice-Pdt Figesco, MCS Alta Profits
Director Expert & Finance, Director Figesco, MCS Alta Profits
Director Cegid SA, Chairman of Magestel
Chairman-CEO Deveaux, Director Textiles Holding, Director and
Chairman Holding de Distribution, Director and Chairman Ecce
SAS, GM Armand Thiery SAS, GM Simm SAS, Director Ercea,
Director Gestabene SA, Director Michaux Gestion SA, Director
and Chairman Uniclothing SAS, MCS Siparex Croissance, Chairman Devlocation, Chairman Eurl Deveaux, Chairman Tissage de
Montagny, Chairman Finabene Holding, Chairman SCI Philip I,
Chairman SCI Philip II, Chairman SCI du Foie
Director and MCS of Imagination SA, Director and MCS of Appia SA, Director and MCS Imagination SA, Director and MCS of Appia SA,
Chairman Aclam SARL, Chairman Les Sources SC
Chairman Aclam SARL, Chairman Les Sources SC, ChairmanCEO Ccmx Holding, Chairman-CEO Ccmx SA, Director Econocom
Director Le Tout Lyon and Le Moniteur Judiciaire SA, Director
Olympique Lyonnais Groupe, Director Eurazis, Director and
Chairman Association Olympique Lyonnais, Chairman-CEO OL
Voyages, Chairman ATF, Chairman Noirclerc Fenetrier Informatique
- NFI, Chairman JM Investissement, Chairman SCI Duvalent, REP P
Association Olympique
Lyonnais to the Board of Société Olympique Lyonnais Director
and Chairman MNC Michèle Neyret Communication, Director and
Chairman Noirclerc Fenetrier Informatique SAS, Chairman-CEO
OL Voyages, Director Olympique Lyonnais Groupe, Director
Tout Lyon, Chairman Société Nouvelle Patriote Beaujolais,
Chairman ATF
Director
Edgard MISRAHI GM Société Européenne Kleber SA, Chairman
Webraska Mobile Technologies, MCS Hubwoo,com, Director Antalis
TV, REP P of Apax Partners SA to the Board of Arkadin, REP P of
Apax Partners SA to the Board of Cegid SA, Director and Chairman
and Member of Executive Committee Fintel SAS, MCS Amboise
Investissement SCA
Edgard MISRAHI GM Société EuropéenneKleber SA, Chairman
Webraska Mobile Technologies, MCS Hubwoo,com, Director
Antalis TV, REP P of Apax Partners SA to the Board of Arkadin,
REP P of Apax Partners SA to the Board of Cegid SA, Director
and Chairman and Member of Executive Committee Fintel SAS,
MCS Amboise Investissement SCA, Vice-Pdt of CS Hubwoo,com,
REP P of Apax Partners SA to the Board of Antalis TV, Director
Aims Software, Director Haht Commerce, REP P of Apax Partners
SA to the Board Virtual Computer, REP P of Apax Partners SA
to the Board of Valoris, REP P Apax Partners SA to the Board of
Ccmx Holding, REP P Apax Partners SA to the Board of Ccmx
SA, Director Travelprice.com, MCS Valoris, Director Imédiation,
Director Lexiquest, REP P of Apax Partners to the Board of
Avisium (which became Hubwoo), REP P of Apax Partners to the
Board of Webraska Mobile Technologies
approving the 2008
Director
Chairman Domaines Reybier, Chairman MJ France, Director GIE
HELIPART, Director Pebercan, REP P société Company Morasto
Jalop BV to the Board of Aéroport du Golfe de Saint-Tropez,
Chairman SCI LAM, REP P Company Morasto Jalop to the Board
Reybier & Partners Investment SAS, REP P MJ France president
of SAS GOULEE
Chairman Domaines Reybier, Chairman MJ France, Director
GIE Helipart
approving the 2009
Director
Board Member of Member of the Board Eurazeo Gilbert SAADA Member of
Gilbert SAADA REP P of Eurazeo to the Board of Ccmx, REP
Eurazeo
the Board Eurazeo SA, REP P of Eurazeo to the Board of LT
P of Eurazeo to the Board of Ccmx Holding, Director and
Participations SA, REP P of Eurazeo to the Board of Cegid SA, Chairman of Satbirds (formerly Eutelsat Communications),
Director Eutelsat SA, Director Eutelsat Communications SA,
Director of IRR Capital, Chairman of Clay Tiles Sponsors, REP
Director BlueBirds Participations SA (Luxembourg), Director and P of Azeo Ventures to the Board of Audienta, REP P of Azeo
Chairman RedBirds Participations SA (Luxembourg), Chairman Ventures to the Board of Hi-Media, REP P of Azeo Ventures
Clay Tiles Participations SARL (Luxembourg)
to the Board of Polyplan, REP P of Azeo Ventures to the
Board of Netbooster, REP P of Azeo Ventures to the Board of
Cytale, REP P of Azeo Ventures to the Board of Realviz
Up until March 25, 2005, date on which Ccmx SA was absorbed by Ccmx Holding.
Became Ccmx starting on March 25, 2005 following the absorption of Ccmx SA by Ccmx Holding and following the change in name.
Up until November 28, 2005, date of dissolution via asset merger.
(4)
From November 16, 2004 to March 25, 2005, date on which Ccmx SA was absorbed by Ccmx Holding which became Ccmx.
(5)
Since May 9, 2005.
(1)
(2)
(3)
117
Documents regarding general shareholders’ meetings of June 2, 2006
Board of Director’s Report to the Combined General Shareholders’ Meeting of June 2, 2006
We have called this shareholders’ meeting to address the
following items of business:
1 Powers of the Ordinary Shareholders’
Meeting
Authorization granted to the Board of Directors to purchase
shares within the framework of the measures of Articles
L.225- 209 to L.225-212 of the French Commercial Code
(Resolution eight of the Ordinary Shareholders’ Meeting)
You are asked to grant the Board of Directors, in accordance
with the measures of Articles L.225-209 and seq. of the
French Commercial Code amended by law # 2005- 842
of July 26, 2005, and with the measures of regulation
2273/2003 of the European Commission of December 22,
2003, and market practices put forth by the Autorité des
Marchés Financiers, for a period of eighteen months starting
on the day of your meeting, authorization with faculty to
delegate under legal conditions, to purchase or sell shares
of the Company within the framework of implementing a
program to repurchase its own shares up to 10% of the
share capital, on the day of the Shareholders’ Meeting.
This authorization would have the purpose of allowing the
Company to continue with the following objectives subject
to applicable regulatory and legal measures:
Market drives through a liquidity contract in accordance
with the AFEI charter,
The purchase of shares with the intent to retain them and
to remit them at a later date for exchange or as payment
within the framework of external growth transactions,
pertaining to market practices put forth by the Autorité
des Marchés Financiers, and within the limits provided for
by law
The allocation of shares under the conditions and according
to the methods provided by law, in particular within the
framework of profit sharing pertaining to the company,
for the use in stock purchase options, as a company
savings plan, or for the allocation free of charge of shares
to employees and executives within the framework of the
measures of Articles L.225-197-1 and seq. of the French
Commercial Code,
Covering of bonds attached to marketable securities that
confer access to the capital,
Capital reduction by canceling all or part of the shares,
with the condition that the Special Shareholders’ Meeting
of June 2, 2006 adopts resolution one.
The maximum purchase price may not exceed €65 per share
(not including acquisition costs) and the minimum sale price
shall not be less than €10 (not including disposition costs)
subject to adjustments related to any corporate actions
and/or the nominal value of the share. The minimum sale
price of €10 shall not apply to the allotment of shares to
employees and/or management within the framework of
stock option plans. In this latter case, the price shall be
determined according to the provisions of the law, and
cannot be less than (i) 80% of the average price listed
over the twenty trading days preceding the transfer of
the shares, and (ii) than 80% of the average purchase
price of the shares held by Cegid for the employee profit
sharing scheme and for the present program of share
repurchase. This minimum price shall also not apply to the
free allocations of shares to employees and/or executives.
The maximum theoretical amount is therefore 54,911,383
euros (excluding negotiating fees), taking into account the
14,601 shares in treasury stock as of March 31, 2006.
118
The acquisition, transfer or exchange of shares may be
carried out and paid by any means, and in any manner, on
the market or over the counter, including through the use of
derivative instruments, in particular via optional transactions
as long as these latter means do not contribute significantly in
increasing the volatility of the share price, and in accordance
with applicable regulations.
These transactions may be carried out at any time including
while takeover bids are in effect pertaining to shares or
securities issued or initiated by the company, subject however
to the abstention periods provided for by law and the general
regulations of the Autorité des Marchés Financiers.
You will be asked to grant the broadest powers to the
Board of Directors with the faculty to delegate under the
conditions provided for by law, to sign all deeds, conclude
all agreements, perform any declarations, complete all
formalities and in general do all that is necessary, as well
as to adjust the unit price and maximum number of shares
to be acquired in proportion to the change in the numbers of
shares or the nominal value resulting from eventual financial
action undertaken by the company.
In virtue of applicable legal measures, shareholders are
to be informed within the framework of the next annual
shareholders’ meeting of the exact allocation of the shares
acquired to the various objectives pursued for all of the
buy-backs that have been carried out, and where applicable,
for any reallocations for purposes other than those initially
provided for.
This authorization cancels and replaces the authorization
granted in resolution seven of the general shareholders’
meeting of June 8, 2005.
2 Powers of the Special Shareholders’
Meeting
2.1 Financial authorizations
Your Board wants to have the means, if required, to use
the authorizations that it has been granted in terms of
resolutions two, three, four, five, six and seven of the Special
Shareholders’ Meeting of June 8, 2005 on one hand and
the delegations granted in terms of the resolutions of the
Shareholders’ Meeting of June 2, 2006 on the other hand
at the time of a takeover bid, if the regulatory and legal
conditions making the use of these authorizations possible
during a takeover bid exist.
In addition, you will be asked, in accordance with the measures
of law 2006-387 of March 31, 2006, within the framework
of resolution three of the Special Shareholders’ Meeting to
grant a delegation of power to the Board of Directors in order
to issue stock warrants to be allocated free of charge to
shareholders of the company while takeover bids are in effect
pertaining to shares of the company, within the framework of
the measures of Articles L.225-129 to L.225-129-6, L.23332 and L.233-33 of the French Commercial Code.
Within the framework of resolution two of the Special
Shareholders’ Meeting, you will also be asked to delegate
necessary powers to your Board of Directors to increase
the share capital through the incorporation of reserves or
premiums benefiting the holders of newly-issued free shares,
in order to allow the latter to benefit from the maximum
flexibility that the law offers during the implementation of
resolution nine of the Special Shareholders’ Meeting of June
8, 2005.
Finally, within the framework of resolution five of the Special
Shareholders’ Meeting of June 2, 2006, you will be asked
to authorize your Board of Directors to use the shares
acquired within the framework of the share buy-back program
authorized in virtue of resolution eight of the Ordinary
Shareholders’ Meeting so as to consequently issue securities
giving access to the company’s capital, or consequently to
allocate stock purchase options or free shares.
A) Powers delegated to the Board of Directors to increase the
share capital by incorporating reserves or premiums benefiting
shareholders of newly-issued free shares (resolution two of
the Special Shareholders’ Meeting)
You will be asked to grant the Board of Directors with
the powers necessary to increase the share capital by
incorporating reserves or premiums benefiting shareholders
of newly-issued free shares.
This power will be granted taking into account the preceding
authorization granted to the Board of Directors to allocate
company shares free of charge to personnel or executive
officers of the company or affiliated companies in the sense
of Article L.225-197-II of the French Commercial Code
pertaining to resolution nine of the Special Shareholders’
Meeting of June 8, 2005, with the stipulation that the free
shares may be newly-created shares.
The power will be granted for a period of twenty-six
months starting from the day it is approved by the Special
Shareholders’ Meeting. The nominal amount of the capital
increase or increases that is likely to be decided by the
Board of Directors and carried out in virtue of this power
shall not exceed 10% of the company’s capital on the day
of the decision to allocate free shares made in application
of resolution nine of the Special Shareholders’ Meeting of
June 8, 2005. This maximum amount of capital increase will
be subject to the amount of the total ceiling of €80 million
set in resolutions two and four of the Special Shareholders’
Meeting of June 8, 2005.
B) Powers delegated to the Board of Directors to decide to
issue share warrants to be allocated free of charge to the
company’s shareholders (resolution three of the Special
Shareholders’ Meeting)
You will be asked to grant your Board of Directors, with the
faculty to delegate, the powers necessary to decide to issue
shares to be allocated free of charge to the shareholders
of the company, in accordance with the regulatory and
legal measures governing commercial companies and in
particular those of Articles L.225-129 to L.225-129-6,
L.233-32 and L.233-33 of the French Commercial Code.
The issuings involved can be implemented only during a
takeover bid pertaining to the company’s shares and only
those shareholders of the company that benefit from this
quality before the expiration of the takeover bid shall benefit
from this allocation of shares free of charge. Note that the
maximum nominal amount of the capital increase that would
likely be carried out in virtue of this power shall not exceed
€50 million, with this ceiling being independent to the ceiling
of the total ceilings provided for in resolutions two and four
of the Special Shareholders’ Meeting of June 8, 2005.
Also note that the number of warrants that are likely to
be issued pertaining to this resolution shall not exceed a
number of warrants equal to the number of shares that
constitute the company’s capital on the day the decision to
issue is made.
This authorization is granted for a period of eighteen months
starting from its approval by the Special Shareholders’
Meeting.
C) Authorization for the Board of Directors to use the
authorization to issue and reduce the capital during a takeover
bid (resolution four of the Special Shareholders’ Meeting)
You shall be requested to decide that all of the authorizations
to increase the capital of the company through issuing shares
and other securities that the Board of Directors would have in
virtue of the resolutions adopted at the Special Shareholders’
Meeting of June 8, 2005, as well as the authorizations that
the Board of Directors would have in virtue of the General
Shareholders’ Meeting called for June 2, 2006, can be used
even in the period of a takeover bid or tender offer on the
securities of the company, insomuch as the regulatory and
legal conditions allowing them to be used are satisfied.
It cancels and replaces the authorization granted in resolution
ten of the Special Shareholders’ Meeting of June 8, 2005.
D) Authorization for the Board of Directors to use the shares
acquired within the framework of the share buy-back program
(resolution six of the Special Shareholders’ Meeting)
You will be asked to authorize your Board of Directors, subject
to approval of resolution eight of the Ordinary Shareholders’
Meeting called for June 2, 2006, to use the shares acquired
within the framework of the share buy-back program:
Within the framework of the authorization granted pertaining
to resolutions two, four, six and seven of the Special
Shareholders’ Meeting of June 8, 2005, and resolutions
three and five of the Special Shareholders’ Meeting called for
June 2, 2006, so as to allocate them consequently to the
issue of marketable securities to which would be attached
securities giving access to the company’s capital;
Within the framework of resolution eight and nine of the
Special Shareholders’ Meeting of June 8, 2005, in order
to consequently allocate stock purchase options or free
shares.
2.2 Complementary report in case the
authorizations are used
If the Board of Directors uses the authorizations that would
be granted by the Special Shareholders’ Meeting of June 8,
2005 as well as by your meeting, it shall prepare, if
necessary, in accordance with the law and when it makes
its decision, a complementary report that describes the final
conditions of the proposed issue and indicates its impact
on the holders of share capital and securities granting
access to capital, in particular regarding their share of the
company’s share capital, and the theoretical impact on the
market value of the share resulting from the average of the
twenty trading sessions preceding the transaction. This
report and the auditors’ report would be made immediately
available to shareholders, then brought before them at the
next shareholders’ meeting
2.3 Authorization to the Board of Directors to
reduce the share capital by the retirement of
treasury stock
We request that you authorize the Board of Directors, with
the faculty to delegate under legal and regulatory conditions,
for a period of eighteen months, subject to adoption of
resolution eight of the General Shareholder’s Meeting, to
retire at its sole decision in one or more transactions up
to 10% of the share capital on the date of this meeting in
119
periods of twenty-four months, the shares acquired as part
of resolution seven of the shareholders’ meeting on June 8,
2005 and resolution eight of the shareholders’ meeting and
to reduce a corresponding amount of the share capital by
retiring shares.
If you decide to authorize this project, you must also grant
the broadest powers to the Board of Directors to proceed
with this or these transactions of canceling and reducing
capital, and in particular to set the final amount of the
reduction in capital, set the methods for this, observe the
realization of this, proceed with the correlative modifications
to the articles of incorporation, complete all formalities and
declarations with all organizations, and especially with the
Autorité des Marchés Financiers, and in general, do all that
is necessary.
2.4 Authorization to the Board of Directors to
increase the share capital by issuing shares
reserved for members of an employee stock
ownership plan within the provisions of Article
443.5 of the French Labor Law
In accordance with the law on employee savings schemes
and the authorizations that you are asked to grant to the
Board of Directors to increase the share capital, we submit
to you a resolution concerning a power to grant to the
Board of Directors, with the faculty to delegate under legal
and regulatory conditions, concerning the issue of shares
reserved for members of the personnel, salaried employees
of the company and of French or foreign companies or groups
of companies as provided for in Article L.233-16 of the French
Commercial Code that are members of a company stock
ownership plan. This resolution would allow the increase of
the share capital by 3% for a period of twenty six months
in one or several transactions, and on the sole deliberations
of the Board of Directors.
This resolution would not allow the issue of preferred
shares.
The subscription price may not exceed the average of the
prices quoted over the last 20 trading days preceding the
day of the decision of the Board of Directors that sets the
opening date of the subscriptions, or be less than more than
20% of this average or 30% when the period of unavailability
provided for by the plan in application of Article L.443-6 is
greater than or equal to ten years.
The Board of Directors may also, in application of the eleventh
resolution of the Special Shareholders’ Meeting, grant free of
charge to salaried employees shares or securities granting
access to the company’s capital under the conditions
mentioned in Article L.443-5 of the French Labor Law, or
any security that would come to be authorized by the law or
regulations in effect.
Consequently, you will be asked to modify:
Article 26 in the articles of incorporation “Ordinary
Shareholders’ Meeting”
The wording of the second paragraph would be modified as
follows:
Article 26: Ordinary Shareholders’ Meeting
2nd paragraph
It can validly deliberate only if the shareholders that are
present or represented have at least, upon the first call,
one fifth of the shares with voting rights.
Article 27 in the articles of incorporation “Special Shareholders’
Meeting”
Article 27: Special Shareholders’ Meeting
2nd paragraph
The Special Shareholders’ Meeting can validly deliberate only
if the shareholders that are present or represented have at
least, upon the first call, a quarter of the shares with voting
rights and on the second call, a fifth of the shares with voting
rights. If the latter quorum is not met, the second Meeting
can be postponed to a date no later than two months after
that on which it had been called. For this extended Meeting,
a fifth is again required.
Article 28 of the articles of incorporation “Special
Meetings”
Article 28: Special Meetings
2nd paragraph
Special Meetings are called and deliberate under the same
conditions as the Special Shareholders’ Meeting, noting that
these Meetings can validly deliberate only if the shareholders
that are present or represented have at least, upon the first
call, a third, and on the second call, a fifth of the shares with
voting rights for which the rights to be modified are being
considered. If the latter quorum is not met, the second
Meeting can be extended to a date no later than two months
after that on which it had been called.
Your auditors will read their report on the waiver of preemptive subscription rights resulting from decisions to issue
securities that would be made by the Board of Directors,
pertaining to the above-mentioned resolutions.
We propose to proceed with the vote on the resolutions.
The Board of Directors
The Shareholders’ Meeting confers full powers to the Board
of Directors to implement this authorization.
However, since such a transaction is highly incompatible
with the company’s current best interests, the Board of
Directors does not recommend this resolution be passed
and suggests that you reject it.
2.5 Modifications to the articles of incorporation
Finally, you will be requested, within the framework of
resolutions seven, eight and nine to modify the articles
of incorporation in order to adapt them to the new legal
measures resulting from order # 2005-842 of July 26,
2005.
120
Assessment of the share buy-back program of May 20, 2005 (AMF approval 05-408)
Special Report to the Shareholders’ Meeting of June 2, 2006 (Articles L.225-209 paragraph 2)
Dear Shareholders,
We remind you that the company has a program to repurchase its own shares (AMF approval 05-408 from May 20, 2005) and
authorization granted to the Board of Directors by the Ordinary Shareholders’ Meeting of June 8, 2005, to purchase securities
within the framework of the measures of Articles L.225-209 to L.225-212 of the French Commercial Code.
Note that during fiscal year 2005 Cegid did not directly purchase or sell Cegid shares. Cegid share purchases and transfers
were performed by CM-CIC SECURITIES within the framework of the liquidity agreement in accordance with the AFEI charter
concluded with the said company.
We remind you that resolution seven of the general shareholders’ meeting of June 8, 2005 stipulates that purchases of Cegid
shares may be carried out in accordance with the indications in the information note mentioned above with the following results
in order of decreasing importance:
Market drives through a liquidity contract in accordance with the AFEI charter,
The purchase of shares with the intent to retain them and to remit them at a later date for exchange or as payment within
the framework of external growth transactions,
The allocation of shares under the conditions and according to the methods provided by law, in particular within the framework
of profit sharing pertaining to the company, for the use in stock purchase options, as a company savings plan, or for the
allocation free of charge of shares to employees and executives within the framework of the measures of Articles L.225-197-1
and seq. of the French Commercial Code,
Covering of bonds attached to marketable securities that confer access to the capital,
Capital reduction by canceling all or part of the shares, with the condition that the Special Shareholders’ Meeting of June 8,
2005 adopts resolution one.
Pertaining to each of the results provided for in resolution seven, Cegid SA shares were acquired for the number and prices
indicated below:
Results
Number
Price
437,203,58
32.04
The purchase of shares with the intent to retain them and to remit them at a later date
for exchange or as payment within the framework of external growth transactions.
none
none
The allocation of shares under the conditions and according to the methods provided
by law, in particular within the framework of profit sharing pertaining to the company,
for the use in stock purchase options, as a company savings plan, or for the allocation
free of charge of shares to employees and executives within the framework of the
measures of Articles L.225-197-1 and seq. of the French Commercial Code.
none
none
Covering of bonds attached to marketable securities that confer access to the capital.
none
none
Capital reduction by canceling all or part of the shares, with the condition that the
Special Shareholders’ Meeting of June 8, 2005 adopts resolution one.
none
none
Market drives through a liquidity contract in accordance with the AFEI charter.
Shares acquired in this way were not allocated to results other than those mentioned above.
Other information pertaining to the share buy-back program that was subject to the information note (AMF approval 05-408
from May 20, 2005) are indicated in the management report (page 53 of this document).
121
Assessment of the share buy-back program of May 20, 2005 (AMF approval 05-408)
Declaration Table - Summary
Declaration by the issuer of the transactions performed on its own shares from 05/01/2005 to 03/31/2006 (1)
The period involved begins on the day following the date on which the assessment of the previous program was established and ends on
the day the program’s description is published.
(1)
Percentage of treasury shares held directly or indirectly: 0.17% (1)
Number of shares cancelled during the last 24 months: 0 (2)
Number of shares held in a portfolio: 14,601 (1)
Book value of portfolio: €568,141.94 (1)
Market value of portfolio: €571,629.15 (1)
(1)
(2)
At March 31, 2006.
This is for the last 24 months preceding the date of publication of the program’s description.
Cumulative gross changes (1) *
Purchases
Number of shares
Sales/ Transfers
437,203.58
456,733.28
32.04
31.79
14,009,364.83
14,518,118.80
Open positions on the day of publication of the program’s
description **
Positions open
for purchase
Positions open
for sale
Purchase options Future purchases Purchase options
purchased
sold
Future sales
Average
maximum term (2)
Average price of the
transaction (3)
Average exercise
price (4)
Amount
The period involved begins on the day following the date on which the assessment of the previous program was established and ends on
the day the program’s description is published. States if this is block trading or transactions carried out within the framework of a liquidity
agreement (in this case, add the issuer’s share).
(2)
Period outstanding on the date of publication of the program description.
(3)
Concerns cash transactions.
(4)
For cumulative gross changes, indicates the average exercise price of exercised options and transactions that have matured.
* Cumulative gross changes include cash purchases and sales transactions as well as optional transactions that have matured and have been
exercised or are outstanding.
** Open positions include term purchases or sales that have not matured as well as purchase options that have not been exercised.
(1)
122
Share buy-back program description 2006
Description of the program for buying back
its own shares to be authorized by the
Ordinary Shareholders’ Meeting of June 2,
2006
In accordance with the measures of Articles 241-1 to 2416 of the General Regulations of the Autorité des Marchés
Financiers as well as regulation # 2273/2003 of the European
Commission dated December 22, 2003 effective October
13, 2004, the purpose of this description is to describe the
purposes and methods pertaining to the company’s program
of buying back its own shares, subject to authorization by the
Ordinary Shareholders’ Meeting of June 2, 2006.
This description is made available to the shareholders on
the company’s Internet site (www.cegid.com) as well as on
the website of the Autorité des Marchés Financiers (www.
amffrance.org). A copy can also be obtained free of charge
through the mail at the following address: Cegid SA, 52 quai
Paul Sédallian, 69009 Lyon.
Capital share and distribution by objective of
shares held by the company at March 31, 2006
At March 31, 2006, the company holds, due to the mandate
entrusted to CM –CIC Securities pertaining to its program
of buying back shares for itself and due to the liquidity
agreement managed by CM-CIC Securities, 14,601 of its
own shares, i.e. 0.17% of the capital, allocated fully to the
following objective:
with the AFEI charter.
Objectives of the buy-back program
The purposes of the program are the following, in order of
decreasing importance:
within the framework of external growth transactions
pertaining to market practices put forth by the Autorité
des marchés financiers, and within the limits provided for
by law,
to the methods provided by law, in particular within the
framework of profit sharing pertaining to the company,
for the use in stock purchase options, as a company
savings plan, or for the allocation free of charge of shares
to employees and executives within the framework of the
Commercial Code,
The remittance of company shares when rights attached to
securities that give access in any way to the allocation of
shares of the Company are exercised, in accordance with
current regulations,
of June 2, 2006 adopts resolution one,
The implementation of any market practices that would
be put forth by the Autorité des Marchés Financiers, and
more generally, to carry out any transaction in accordance
with current regulations.
Methods
Maximum share of capital and maximum number of
shares that the company is considering to purchase
The scope of this program, as previously, covers a variable
number of shares, as long as the company does not hold,
taking its treasury shares into account, more than 10%
of the existing share capital on the day of the Ordinary
Shareholders’ Meeting called for June 2, 2006.
Maximum purchase price and maximum amount of
funds authorized that can be committed
The maximum purchase price is set at sixty-five euros
(€65).
The maximum amount of funds authorized that can be
committed in the share buy-back program is set to
€54,911,383.
These amounts do not include acquisition costs. The abovementioned prices shall be adjusted by the Board of Directors
in the event of ex-dividend of an allocation or subscription
right or in the case of capital transactions that affect the
value of the share.
carried out and paid by any means, and in any manner,
on the market or over the counter, including through the
use of derivative instruments, in particular via optional
transactions as long as these latter means do not contribute
significantly in increasing the volatility of the share price, and
in accordance with applicable regulations. These transactions
may be carried out at any time including while takeover bids
are in effect pertaining to shares or securities issued or
initiated by the company, subject however to the abstention
periods provided for by law and the general regulations of
the Autorité des Marchés Financiers.
Characteristics of the shares concerned by the buyback program
The Cegid share is listed for trading in Compartment B of
Eurolist of Euronext Paris.
ISIN code: FR0000124703
Duration of the buy-back program
The program lasts for a period of eighteen months, starting
from the date of the Meeting, i.e. until December 1, 2007.
123
Auditors’ Report on the reduction of capital by the
retirement of treasury stock
Auditors’ Special Report on the free allocation of
future shares to salaried members of personnel
and/or executive officers
In our capacity as Auditors of Cegid SA, and in accordance
with the terms of our assignment and as provided for in
Article L.225-209, paragraph 7 of the French Commercial
Code, for capital reductions by the retirement of treasury
stock, we have prepared the present report to inform you of
our assessment of the causes and conditions of the planned
reduction of capital.
Article L.225-197-1 of the French Commercial Code, we
have prepared the present report on the project of allocating
free future shares to salaried members of personnel and/
or executive officers of Cegid SA and companies that are
affiliated with it in the sense of Article L.225-97-2 of the
French Commercial Code.
We performed our work in accordance with professional
standards applicable in France. Those standards require
that we perform procedures to verify that the causes and
conditions of the planned reduction of capital are regular.
This transaction falls within the scope of your company’s
repurchase of its own shares, limited to 10% of its capital,
under the conditions provided for in article L.225-209,
paragraphs 4 and 6 of the French Commercial Code. This
share buyback authorization is being submitted for approval
by your shareholders’ meeting for a period of 18 months.
Your Board requests that you grant it full authority for
18 months, as part of implementing the share buyback
authorization, subject to a maximum of 10% of the company’s
capital per 24-month period, to retire the shares so
repurchased.
In the absence of professional standards that would apply
to this transaction, resulting from a legislative measure on
December 30, 2004, we have implemented the procedures
that we have deemed as necessary.
These procedures in particular consisted in verifying that the
methods being considered and provided in the Report of the
Board of Directors are in accordance with the framework of
measures provided for by law.
We have no comments concerning the causes and conditions
of the proposed capital reduction, it being noted that this
transaction may only be carried out if your shareholders’
meeting has previously approved your company’s share
repurchase.
We have no comments on the information provided in the
Report of the Board of Directors pertaining to the transaction
being considered of allocating shares free of charge.
The Auditors
The Auditors
Grant Thornton
Grant Thornton
François PONS
Associate
Mazars
Christine DUBUS
Associate
124
The Board of Directors requests that you authorize it to
allocate future shares free of charge. It is the Board’s
responsibility to establish a report on this transaction that
it wishes to perform. It is our responsibility to provide you,
where applicable, with our observations on the information
provided to you for the transaction under consideration.
Jean-Marie VILMINT
Associate
François PONS
Associate
Mazars
Christine DUBUS
Associate
Auditors’ Report on the issue of stock warrants
In our capacity as Auditors of Cegid SA and in accordance
with the terms of our assignment as provided for in Article
L.228-92 of the French Commercial Code, we hereby submit
our report on the authorization requested by your Board of
Directors to decide to issue stock warrants allocated free
of charge to shareholders and which provide access to the
share capital during a takeover bid pertaining to the company’s
securities, for a maximum nominal amount of capital increase
of €50 million, transaction for which you are called to make
a decision.
Your Board of Directors proposes, based on its report, that
you grant it for a period of 18 months the power to decide one
or more issues of stock warrants allocated free of charge to
shareholders of the company during a takeover bid. Where
applicable, it would be its duty to set the final conditions of
issue pertaining to this transaction.
Your Board of Directors must establish a report in accordance
with Articles 154 and 155 of the order of March 23, 1967. It
is our duty to express an opinion on some of the information
contained in this report.
that we perform procedures to verify the contents of the
report of the competent body pertaining to this transaction
and the methods for determining the issue price of the future
securities.
Subject to later review of the conditions of issue for stock
warrants that would be decided, we have no comments
concerning the procedures for determining the issue of future
stock warrants provided in the Board of Directors’ Report.
We have no opinion concerning the final conditions under which
the increase in capital would be carried out.
In accordance with article 155-2 of the decree of March 23,
1967, we will prepare a subsequent report when your Board
of Directors uses this authorization.
The Auditors
Grant Thornton
François PONS
Associate
Jean-Marie VILMINT
Associate
Mazars
Christine DUBUS
Associate
125
Auditor’s Special Report on the authorizations to
increase or reduce the capital during a takeover
bid for cash or by way of an exchange of securities
pertaining to securities of the company
In our capacity as Auditors of Cegid SA and in accordance
with the terms of our assignment as provided for in Articles
L.225-135 and seq., L.228-92, and L.228-93 of the French
Commercial Code, we hereby submit our report on the
authorization requested by your Board of Directors allowing
it, for a period of fourteen months starting from the date
of this Meeting, to use, during a takeover bid pertaining to
the company’s securities, the following authorizations and
powers:
In accordance with article 155-2 of the decree of March 23,
1967, we will prepare a subsequent report when your Board
of Directors carries out the transactions.
1. Authorizations granted to the Board of Directors by the
Combined General Shareholders’ Meeting of June 8, 2005
to increase, in any legal manner, the share capital within
the conditions and limits provided for by the resolutions
mentioned hereinafter:
resolution two: power granted to the Board of Directors to
increase the capital, with pre-emptive subscription rights,
by issuing common stock or securities that give access to
common stock;
resolution four: power granted to the Board of Directors
to increase the capital, without pre-emptive subscription
rights, by issuing common stock or securities that give
access to common stock;
resolution five: authorization granted to the Board of
Directors to increase the amount of issue in the event of
excess demand;
resolution six: authorization to issue shares or miscellaneous
securities by setting the issue price freely;
resolution seven: authorization to increase the capital up
to 10% of the capital in order to compensate contributions
in kind;
resolution eight: authorization to grant options or purchase
options in favor of members of personnel and/or executive
officers of the companies in the Group;
resolution nine: authorization granted to the Board of
Directors to allocate free of charge existing or future
shares;
resolution eleven: authorization granted to the Board of
Directors to increase the capital by issuing shares reserved
for salaried personnel that are members of a company
savings plan;
The Auditors
Grant Thornton
François PONS
Associate
Jean-Marie VILMINT
Associate
Mazars
Christine DUBUS
Associate
2. Provided for in the resolutions submitted for the approval of
the Combined General Shareholders’ Meeting of June 2, 2006
with the purpose of increasing or decreasing the capital.
Article L. 233-32, III of the law pertaining to takeover bids,
published on April 1, 2006, makes it possible for your Board
of Directors to use the authorization that is requested.
standards applicable in France, which require that we
perform procedures to verify the contents of the Report of
the Board of Directors.
We have no comments concerning the information provided in
the Board of Directors’ Report pertaining to the authorizations
and powers requested.
126
Auditors’ Report on the increase in capital with
waiver of pre-emptive subscription rights reserved
for salaried personnel that are members of a
company savings plan
Articles L.225-135 and seq. of the French Commercial Code,
we hereby submit our report on the proposal to delegate
powers to the Board of Directors to decide to increase the
capital by issuing shares reserved for salaried personnel
of the company and companies or groups as per Article
L.233-16 that are members of a company savings plan that
have minimum seniority of three months with waiver of the
pre-emptive subscription rights reserved for members of
a company savings plan, for a maximum amount of 3% of
the share capital, transaction for which you are called to
decide upon.
This capital increase is submitted for your approval in
accordance with the measures of Articles L.225-129-6
of the French Commercial Code and L.443-5 of the Labor
Code.
In accordance with Article 155-2 of the decree of March
23, 1967, we will prepare a subsequent report when your
Board of Directors uses this authorization.
The Auditors
Grant Thornton
François PONS
Associate
Jean-Marie VILMINT
Associate
Mazars
Christine DUBUS
Associate
Your Board of Directors proposes, based on its report, that
you grant it for a period of 26 months the power to decide
one or more capital increases and to waive your pre-emptive
subscription rights to the future capital shares. Where
applicable, it will be its duty to set the final conditions of
issue pertaining to this transaction.
Your Board of Directors must establish a report in accordance
with Articles 154 and 155 of the order of March 23, 1967. It
is our duty to express an opinion on some of the information
contained in this report and on the proposal to waive the
pre-emptive subscription rights.
that we perform procedures to verify the contents of the
report of the competent body pertaining to this transaction
and the methods for determining the issue price of the
future securities.
Subject to later review of the conditions of increasing
the capital that would be decided, we have no comments
concerning the procedures for determining the issue price of
future shares provided in the Board of Director’s Report.
Since the issue price for the capital shares to be issued has
not been established, we have no opinion concerning the final
conditions under which these increases in capital shall be
carried out and, consequently, on the proposal made to you
to waiver the pre-emptive subscription rights.
127
Text of resolutions
1 Resolutions falling within the scope of the
Ordinary Shareholders’ Meeting
Resolution One
(Approval of the annual financial statements; discharge to
grant to the directors)
The shareholders, having reviewed the reports of the Board
of Directors and the Auditors, approve the annual financial
statements for the period ended December 31, 2005
including the income statement, balance sheet and notes
as presented, which result in a profit of €2,525,691.67,
along with the operations reflected in these statements or
summarized in these reports.
In consequence, they grant full and unconditional discharge
to the directors for the performance of their duties.
Resolution Two
(Approval of the consolidated financial statements)
The shareholders, having reviewed the reports of the Board
of Directors and the Auditors, approve the consolidated
financial statements for the period ended December 31,
2005 including the income statement, balance sheet and
notes as presented, resulting in net income (group share)
of €9,827,000, along with the operations reflected in these
statements or summarized in these reports.
Resolution Three
(Approval of the agreements mentioned in Articles L.225-38
and seq. of the French Commercial Code)
The shareholders, having reviewed the special report of
the Auditors, approve the transactions carried out in the
period under review as presented in the special reports of
the Auditors on regulated agreements covered by Articles
L.225-38 and seq. of the French Commercial Code, and the
terms of this report.
Resolution Four
(Allocation of earnings for the period ended December 31,
2005)
The shareholders, as proposed by the Board of Directors and
after noting that the financial statements for the period ended
December 31, 2005 result in a profit of €2,525,691.67
decide to allocate it to Retained Earnings, the debit balance
changing from -€3,006,162.81 to -€480,471.14.
128
In application of legal measures, the Shareholders’ Meeting
states that distribution of dividends paid for the three
preceding fiscal periods was as follows:
Fiscal year
2004 (€)
2003 (€)
2002 (€)
Number of shares
8,576,090
Net dividend per share
0.80
5,950,596
0.80
1,487,649 (1)
2.3
0.40
1.15
50% tax credit per
share
Dividend eligible for
50% abatement
0.40
Total per share
Total net dividend
(1)
1.20
1.20
3.45
6,860,872
4 760,476
3,421,593
Before 4 for 1 stock split.
Resolution Five
(Allowance for the legal reserve by reduction of the “Other
reserves” item)
The Shareholders’ Meeting decides to allocate €5,626.00 to
the legal reserves, by reducing the “Other reserves” item.
Resolution Six
(Approval of a reserve distribution)
The Shareholders’ Meeting decides to distribute a dividend
of €0.85 per share, deducted from the “Other reserves” and
“Issue, merger premiums”, items as follows:
reduction of ........................................ €7,078,322.30
on the “Other reserves” item (1)
reduction of ........................................... €224,873.45
on the “Issue, merger premiums” item (1)
i.e. for 8,591,995 shares (2) ........ €7,303,195.75
In addition, in accordance with the measures of Article 2.8.1 of the
bond with redeemable share warrant (BSAR) contract, shares issued
following the exercise of BSARs shall bear entitlement as of the first
day of the financial year during which the BSARs were exercised
and the subscription price paid. As such, shares issued after the
exercise of BSARs that took place after December 31, 2005 shall
not confer rights to dividends paid for fiscal year 2005.
Dividends will be paid on June 7, 2006. The Shareholders’ Meeting
acknowledges that the amount distributed as dividends between
shareholders who are natural persons is fully eligible for the 40%
abatement provided for in Article 158 of the General Tax Code
amended by law of finances for 2006 of December 30, 2005.
(1)
The Shareholders’ Meeting grants the broadest powers, as
needed, to the Board of Directors to adjust the conversion ratio
and where applicable the subscription price of the options granted
by the Board of Directors on January 24, 2001 and December
20, 2002.
(1)
The Shareholders’ Meeting grants the broadest powers, as
needed, to the Board of Directors, until the date of early redemption
of BSARs, to adjust the parity for exercising the BSARs, according
to the procedures provided for in the transaction note relative to
the issue of redeemable stock warrants mentioned at February
23, 2004 by the Autorité des Marchés Financiers under number
04-120.
(1)
Text of resolutions
Subject to the exercise of warrants into Cegid shares, currently in
effect, which could be exercised up until the date of the Shareholders’
Meeting. The shareholders resolve that if the company holds treasury
stock when the dividend is distributed, income corresponding to
dividends not paid out in consequence will be allocated to “retained
earnings”.
(2)
Resolution Seven
(Setting the amount of directors’ fees to allocate to directors
for the current fiscal year)
The shareholders, after having examined the report of the
Board of Directors, allocate director’s fees to the Board of
Directors of 100,000 euros for the period in progress.
Resolution Eight
(Authorization to the Board of Directors to acquire shares
within the framework of the measures of Articles L 225-209
to L 225-212 of the French Commercial Code)
The shareholders, having reviewed the report of the Board
of Directors and the information contained in the Reference
Document, authorize the Board of Directors with faculty
to delegate under legal conditions, in accordance with the
measures of Articles L.225-209 to L.225-212 of the French
Commercial Code, amended by law # 2005-842 of July 26,
2005, of regulation #2273/2003 of the European Commission
dated December 22, 2003, and market practices put forth
by the Autorité des Marchés Financiers, to repurchase in
one or several transactions at its own discretion and within
the limits stipulated hereafter, share of the company within
the limit of 10% of the share capital as determined on the
date of the meeting.
On the date of this meeting the treasury stock held by the
Company shall be deducted from this limit. The purchase
of shares may be carried out with the following results in
order of decreasing importance:
within the framework of external growth transactions
subject to the market practices put forth by the Autorité
des marchés financiers, and within the limits stipulated
by law,
to the methods provided for by law, in particular within the
framework of profit sharing pertaining to the company, for
the use in stock purchase options, as a company savings
plan, or for the allocation free of charge of shares to
employees and executives within the framework of the
Commercial Code,
The granting of company shares when the rights attached
to the securities that give rights in any form to the
allocation of Company shares are exercised subject to
current regulations,
of June 2, 2006 adopt resolution one,
carried out and paid by any means, and in any manner, on
the market or over the counter, including through the use of
derivative instruments, in particular via optional transactions
as long as these latter means do not contribute significantly in
increasing the volatility of the share price, and in accordance
with applicable regulations. These transactions ay be carried
out at any time including while takeover bids are in effect
pertaining to shares or securities issued or initiated by the
company, subject however to the abstention periods provided
for by law and the general regulations of the Autorité des
Marchés Financiers.
The maximum amount of capital purchased or transferred
through block trades may reach the total amount of the
program.
The maximum purchase price may not exceed €65 per share
(not including acquisition costs) and the minimum sale price
shall not be less than €10 (not including disposition costs)
subject to adjustments related to any corporate actions
and/or the nominal value of the share. The minimum sale
price of €10 shall not apply to the allotment of shares to
employees and/or management within the framework of stock
option plans. In this latter case, the price shall be determined
according to the provisions of the law, and cannot be less
than (i) 80% of the average price listed over the twenty
trading days preceding the transfer of the shares, and (ii)
than 80% of the average purchase price of the shares held
by Cegid for the employee profit sharing scheme and for
the present program of share repurchase. This minimum
price shall also not apply to the free allocations of shares
to employees and/or executives.
The maximum theoretical amount is therefore €54,911,383
(excluding negotiating fees), taking into account the 14,601
shares in treasury stock as of March 31, 2006.
The shareholders grant full powers to the Board of Directors
with the faculty to delegate under the conditions provided
for by law, to sign all deeds or of sale or transfer, conclude
all agreements, perform any declarations, complete all
formalities and in general do all that is necessary.
The shareholders grant the Board of Directors the broadest
powers to adjust the unit price and maximum number of
shares to be acquired in proportion to the change in the
number of shares or the nominal value resulting from any
financial actions undertaken by the company.
This authorization is granted for eighteen months from the
date of this meeting.
It cancels and replaces the authorization granted in resolution
seven of the Shareholders’ Meeting of June 8, 2005.
The shareholders acknowledge that in the hypothesis where
the Board of Directors were to use this authorization, the
Board of Directors will report on this in a special report
presented to the annual shareholders’ meeting in accordance
with Article L.225-209 paragraph 2 of the French Commercial
Code, of the performance of stock purchasing transactions
that it has authorized, with the mention, for each of the
results, of the number and price of the shares that were
acquired in this way, of the volume of shares used for these
results as well as any reallocations to other results other
than those initially provided for.
The implementation of any market practice that would be
put forth by the Autorité des Marchés Financiers, and more
generally, to perform any transaction that is in accordance
with current regulations.
129
Text of resolutions
Resolution Nine
The shareholders grant the broadest powers to the bearer of
an original, copy or extract of the minutes of the Meeting to
carry out all legal filing, publication and other formalities.
2 Resolutions concerning the powers of the
Special Shareholders’ Meeting
Resolution One
(Authorization granted to the Board of Directors to reduce
the share capital by the retirement of treasury stock)
The shareholders, voting according to the conditions of quorum
and majority required for special shareholders’ meetings,
having reviewed the report of the Board of Directors and the
special report of the Auditors and subject to the adoption
of resolution eight of the General Shareholders’ Meeting,
authorizes the Board of Directors with faculty to delegate
under legal and regulatory conditions in accordance with
Article L.225-209 of the French Commercial Code, to retire,
at its own discretion, in one or several transactions, within
the limit of 10% of the share capital, by twenty four month
periods, at the date of this meeting, shares repurchased
under the authorization granted by resolution seven of
the ordinary shareholders’ meeting of June 8, 2005 and
resolution eight of this meeting and to reduce the share
capital of the company in due proportion by the cancellation
of shares.
The shareholders grant this authorization for eighteen months
from the date of this meeting, duration of this authorization,
vesting all powers to the Board of Directors, with faculty to
delegate under legal and regulatory conditions in accordance
with Article L.225-209 of the French Commercial Code,
to determine the final amount of the capital reduction
within the limits provided by law and this resolution, to
determine the procedures, record its completion, allocate
the difference between the purchase price of the shares
and their nominal value to the reserve accounts of their
choosing or to premium, carry out all actions, formalities or
representations to finalize the reductions of capital carried
out by virtue of this authorization and to consequently amend
the articles of incorporation.
This authorization cancels and replaces resolution one
adopted by the special shareholders’ meeting of June 8,
2005.
Resolution Two
(Powers given to the Board of Directors to increase the share
capital by incorporating reserves or premiums reserved for
those benefiting from newly-issued free shares)
The shareholders, voting according to the conditions of
quorum and majority required for special shareholders’
meetings, having reviewed the report of the Board of
Directors and the special report of the Auditors,
taking into account the authorization granted to the Board
of Directors to allocate company shares free of charge
to personnel of executive officers of the company or of
affiliated companies in the sense of Article L.225-197-II of
the French Commercial Code pertaining to resolution nine
of the Special Shareholders’ Meeting of June 8, 2005,
decides that the free shares can be shares that are newlycreated by the Company,
130
in consequence and in accordance with the measures of
Articles L.225-129, L.225-129-2 and L.225-130 of the
French Commercial Code, delegate for a period of twenty-six
months starting from the adoption of this resolution, with
faculty to delegate under legal and regulatory conditions, its
power to, under the conditions set forth by law, to increase
the share capital in one or several times, in the proportions
and at periods that it shall determine, by incorporating
reserves or premiums reserved for those benefiting from
future shares within the framework of a free allocation in
accordance with resolution nine of the Special Shareholders’
Meeting of June 8, 2005.
The shares shall be issued at their nominal value, with
shareholders acknowledging the absence of pre-emptive
subscription rights to these shares.
The nominal amount of the capital increase or increases that
are likely to be decided by the Board of Directors and carried
out, immediately or in the future, in virtue of this power shall
not exceed an amount representing 10% of Cegid’s capital
on the day the decision to allocate free shares is made in
accordance with resolution nine of the Special Shareholders’
Meeting of June 8, 2005, notwithstanding that the nominal
amount of all the capital increases carried out in accordance
with this power shall be subject to the total ceilings of €80
million set in the terms of resolutions two and four of the
Special Shareholders’ Meeting of June 8, 2005.
This ceiling is set subject to, where applicable, consequences
on the capital of applicable adjustments in accordance with
the law.
In the event of capital increases that confer allocation of
new shares, the Board of Directors may decide that the
infringed rights are not negotiable and that the corresponding
securities will be sold in accordance with Article L.225-130
of the French Commercial Code.
The shareholders acknowledge that in the hypothesis where
the Board of Directors were to use this authorization, the
Board of Directors will report on this in a special report
presented to the annual shareholders’ meeting in accordance
with Article L.225-100 of the French Commercial Code of
the use that has been made of the authorizations granted
in virtue of this resolution.
The Board of Directors will have full faculty to take all
measures in view of modifying the articles of incorporation
of the company in consequence.
Resolution Three
(Powers granted to the Board of Directors to decide to issue
stock warrants allocated free of charge to the company’s
shareholders)
quorum and majority required for ordinary shareholders’
Directors and the special report of the Auditors, and in
accordance with the legal and regulatory measures governing
commercial companies and in particular those of Articles
L.225-129 to L.225-129-6, L.233-32 and L.233-33 of
the French Commercial Code, delegate to the Board of
Directors, with faculty to delegate under legal and regulatory
conditions, the power to decide to issue, in France or abroad,
stock warrants allocated free of charge to the company’s
shareholders.
The shareholders decide that the issuings mentioned in
this resolution can be implemented only during a takeover
bid pertaining to the company’s securities, and only those
Text of resolutions
shareholders of the company that have this quality before
the expiration of the period of the takeover bid shall benefit
from this free allocation of stock warrants.
The shareholders decide that:
The maximum nominal amount of the capital increase
that is likely to be carried out in the future in virtue of
this resolution cannot exceed €50 million or its equivalent
value in foreign currency or in composite monetary units,
with this limit being increased by the number of securities
pertaining to the adjustments that are likely to be made in
accordance with applicable legal and regulatory measures
to preserve the rights of holders of securities that confer
access to the Company’s capital. Note that the ceiling of
€50 million mentioned above is independent of the ceiling
for all of the ceilings provided for pertaining to resolutions
two and four of the Special Shareholders’ Meeting of June
8, 2005.
The maximum number of warrants that can be issued
cannot exceed a number of warrants equal to the number
of shares that comprise the company’s capital on the day
the decision to issue is made.
The shareholders acknowledge that, as needed, this power
carries full rights, fully entails in favor of holders of warrants
that are likely to be issued relating to this resolution, waiver
of shareholders’ pre-emptive subscription rights to the new
shares to which these securities confer rights.
The shareholders decide that the Board of Directors shall
have the broadest powers, with faculty to delegate under
conditions provided for by law, to implement this power, in
particular to determine the identity of the beneficiaries,
the number, characteristics and conditions for exercising
these warrants, the dates and procedures for issue, set the
entitlement date even retroactively for the future securities
and where applicable the conditions for their repurchase,
suspend where applicable the rights attached to future
securities during a period that shall not exceed three months,
set the procedures according to which, where applicable, the
preservation of the rights of holders of securities that confer
future access to Company shares and this in accordance
with legal, regulatory and contractual measures, reduce
where applicable on the issue premium or premiums and in
particular that for fees generated by carrying out the issue
and withdraw from this amount the amounts needed to bring
the legal reserve to one-tenth of the new capital after each
increase, take in general all useful measures and conclude
any agreement in order to properly conclude the issuings
considered, observe the capital increase or increases
resulting from any issue carried out by the use of this power
and correlatively modify the articles of incorporation.
The power thus granted to the Board of Directors is valid for
a period of eighteen months starting from this meeting.
Resolution Four
(Authorization granted to the Board of Directors to use the
authorization to increase or decrease the share capital during
a takeover bid pertaining to the company’s securities)
The shareholders, voting according to the conditions of quorum
and majority required for special shareholders’ meetings,
having reviewed the report of the Board of Directors and
the special report of the Auditors, and in accordance with
the measures of Articles L.233-32 and L.233-33 of the
French Commercial Code, decides that all the authorizations
to increase the capital of the company by issuing shares and
other securities as well as the authorizations for reducing the
capital, that the Board of Directors has available by virtue
of the resolutions adopted by the Shareholders’ Meeting
of the Company on June 8, 2005 of by this Shareholders’
Meeting, can be used even during a period of a takeover bid
or tender offer on the company’s securities, as long as legal
and regulatory conditions are complied with.
This authorization cancels and replaces resolution ten
adopted by the special shareholders’ meeting of June 8,
2005.
Resolution Five
(Powers granted to the Board of Directors to decide the issue
of shares and/or securities that give immediate and/or future
access to the capital of the Company reserved for members of
a company savings plan within the framework of the measures
of the French Commercial Code and of Articles L.443-1 and
seq. of the Labor Code)
The Shareholders’ Meeting, after having reviewed the
Report of the Board of Directors and the Auditors’ Special
Report, ruling under the conditions of majority for Special
Shareholders’ Meetings, authorizes the Board of Directors,
within the framework of Articles L.225-129-6 and L.225138-1 of the French Commercial Code, to proceed in one
or several transactions, at its own discretion, under the
conditions provided for in Article L.443-5 of the French
Labor Law, to increase the capital reserved for members
of the personnel, salaried employees of the company and
French, foreign or group companies provided for in Article
L.233-16 of the French Commercial Code that are members
of a company savings plan and that have minimum seniority
of three months in one or the other of said entities.
This authorization is granted for a period of twenty-six (26)
months starting from this day.
The total number of shares that shall therefore be subscribed
shall not exceed 3% of the capital stock on the day of the
decision to issue in terms of this resolution, with the
understanding that this ceiling is independent to the ceiling
of preceding authorizations to increase the capital, on the
day of the decision of the Board of Directors.
The subscription price shall not be greater than the average
quoted price over the twenty trading days preceding the day
of the decision of the Board of Directors setting the opening
date for the subscriptions, nor less than more than 20%
of this average or 30% when the period of unavailability
provided for in the plan in accordance with Article L.443-6
is greater than or equal to ten years.
The conditions for subscription and paying up the shares
can take place either in cash, or via compensation in the
conditions decided by the Board of Directors.
The Shareholders’ Meeting decides that the Board of Directors
may also, in application of this authorization, allocate free
of charge to employees shares or other securities granting
access to the capital of the company under the conditions
provided for in Article L.443-5 of the French Labor Law, or
any security that would come to be authorized by the law or
regulations in effect.
The Shareholders’ Meeting grants all powers to the Board
of Directors in order to implement this authorization and
in particular:
set the number of new shares to be issued and their date
of entitlement,
set the subscription price, as well as the timeframe granted
to the employees to exercise their rights,
131
Text of resolutions
set the periods and procedures for paying up
subscriptions,
record the completion of the capital increase(s) and make
the changes to the articles of incorporation that result
from it
in general, decide and carry out itself, or via a proxy, all
transactions and formalities, and do what is necessary
pertaining to the carrying out of the capital increase(s).
This authorization includes, benefiting the employees, explicit
waiver of the shareholders’ pre emptive subscription rights
to the shares that will be issued.
Resolution Six
(Authorization granted to the Board of Directors to use the
shares acquired within the framework of the share buy-back
program)
quorum and majority required for ordinary shareholders’
Directors and subject to the adoption of resolution eight
by the Ordinary Shareholders’ Meeting, decide to grant the
broadest powers to the Board of Directors, with faculty to
delegate under legal and regulatory conditions, to use the
shares acquired within the framework of the share buy-back
program:
Within the framework of the powers granted pertaining
to resolutions two, four, five, six, seven of the Special
Shareholders’ Meeting of June 8, 2005, and resolutions
three and five of this Special Shareholders’ Meeting, so as
to allocate them consequently for the issue of marketable
securities to which would be attached securities conferring
access to the Company’s capital;
Within the framework of resolutions eight and nine of the
Special Shareholders’ Meeting of June 8, 2005, so as
to allocate them consequently for the allocation of stock
purchase options or free shares.
Resolution Seven
in order to take into account the new measures resulting
from law 2005-842 of July 26, 2005.
The wording is modified as follows:
Article 27: Special Shareholders’ Meeting
Second paragraph
The Special Shareholders’ Meeting can validly deliberate only
if the shareholders that are present or represented have at
least, upon the first call, a quarter of the shares with voting
rights and on the second call, a fifth of the shares with voting
rights. If the latter quorum is not met, the second Meeting
can be postponed to a date no later than two months after
that on which it had been called. For this extended Meeting,
a fifth is again required.
Resolution Nine
(Modifications to Article 28 of the articles of incorporation of
the company relative to quorum rules for special shareholders’
meetings)
of Directors, decides to modify Article 28 of the articles of
incorporation “Special Meetings” 2nd paragraph, in order
to take into account the new measures resulting from law
2005-842 of July 26, 2005.
Article 28: Special Meetings
Second paragraph
Special Meetings are called and deliberate under the same
conditions as the Special Shareholders’ Meeting, noting that
these Meetings can validly deliberate only if the shareholders
that are present or represented have at least, upon the first
call, a third, and on the second call, a fifth of the shares with
voting rights for which the rights to be modified are being
considered. If the latter quorum is not met, the second
Meeting can be extended to a date no later than two months
after that on which it had been called.
Resolution Ten
(Powers for legal formalities)
(Modifications to Article 26 of the articles of incorporation
of the company relating to rules for quorum for ordinary
shareholders’ meetings)
The shareholders grant full powers to the bearer of an
original, copy or extract of the minutes of this Meeting to
carry out all legal filing, publication and other formalities.
of Directors, decides to modify Article 26 of the articles
of incorporation “Ordinary Shareholders’ Meetings” 2nd
paragraph so as to take into account the new measures
resulting from law 2005-842 of July 26, 2005.
Article 26: Ordinary Shareholders’ Meeting
Second paragraph
It can validly deliberate only if the shareholders that are
present or represented have at least, upon the first call,
one fifth of the shares with voting rights.
Resolution Eight
(Modifications to Article 27 of the articles of incorporation
of the company relating to rules for quorum for special
shareholders’ meetings)
of Directors, decides to modify Article 27 of the articles of
incorporation “Special Shareholders’ Meeting” 2nd paragraph
132
Persons responsible
for the Reference Document and auditing of the financial statements
Names and functions of the persons
responsible for the Reference Document
Names addresses and qualifications of the
statutory auditors of the financial statements
Principle Statutory Auditors
General Manager
Certifications of the persons responsible
We certify, after having taken all reasonable measures for
this purpose, that the information concerned in this reference
document is, to our knowledge, true and does not contain
any omissions that could affect its scope.
We have obtained a letter of the end of work from the
statutory auditors, in which they state that they have verified
the information pertaining to the financial situation and the
financial statements provided in this prospectus as well as
the reading of the entire prospectus.
General Manager
Lyon, May 22, 2006
Information policy
General Manager - Tel. 04 26 29 50 20
MAZARS
131 boulevard Stalingrad
69624 VILLEURBANNE Cedex
Date of first appointment: Combined Shareholders’ Meeting
of June 18, 1992.
Expiration date of appointment: Annual Shareholders’ Meeting
called to approve the financial statements for the period
ending December 31, 2009.
GRANT THORNTON
42 avenue Georges Pompidou
69442 Lyon Cedex 03
of May 22, 1996.
Alternate Statutory Auditors
Mr. Pierre SARDET
Electing domicile at Mazars,
131 boulevard Stalingrad
69624 VILLEURBANNE Cedex
Date of first appointment: Annual Shareholders’ Meeting
of June 4, 2004.
Mr. Jean-Charles PALIES
Residing at 985 chemin du Mas de Rochet
34170 CASTELNAU‑LE‑LEZ
of May 22, 1996.
133
134
Table of concordance
To make the reference document easier to read, the following table arranged by topic shows the principal information required
by the Autorité des Marchés Financiers in accordance with its regulations and instructions for implementation.
Certifications of the persons responsible
Certification of the persons responsible for the Reference Document ........................................................................ 133
Information policy .............................................................................................................................................. 25, 41
General information
General information concerning the company ......................................................................................................... 31
Capital
Distinctive features (limitation on exercise of voting rights) ........................................................................................ 32
Unissued authorized capital . .................................................................................................................................... 33
Potential capital ...................................................................................................................................................... 35
Change in capital since creation of the company ........................................................................................................ 36
Stock Market
Change in share price and volumes ........................................................................................................................... 39
Change in OCEAN bond price and volumes . ............................................................................................................... 39
Change in OBSAR and BSAR price and volumes ......................................................................................................... 40
Dividends . .............................................................................................................................................................. 41
Capital and voting rights
Current breakdown of capital and voting rights .......................................................................................................... 37
Change is share structure .................................................................................................................................. 37-38
Shareholders’ agreement ......................................................................................................................................... 38
Information regarding the Group’s activity
Presentation of the company and the Group ...................................................................................... 2 to 25 - 42 to 63
Personnel .................................................................................................................................................. 48, 49, 83
Investment policy .................................................................................................................................................... 57
Risk factors, litigation, extraordinary events, insurance and risk coverage .......................................................... 50 to 52
Assets, financial position and earnings
Consolidated Financial Statements ................................................................................................................. 64 to 88
Statutory Auditors’ Report on the consolidated financial statements ........................................................................... 89
Fees paid to the statutory auditors and members of their networks ........................................................................... 84
Individual financial statements . ..................................................................................................................... 90 to 104
Statutory Auditors’ Report on the individual financial statements .............................................................................. 105
Corporate Governance
Composition and operation of the administrative and management bodies ................................................................. 115
Senior company managers (salaries and benefits, options granted and exercised) ............................................ 115 to 117
Chairman’s Report in accordance with Article L.225-37 of the French Commercial Code .................................. 111 to 113
Statutory Auditors’ Report on the Chairman’s Report . ............................................................................................. 114
Statutory Auditors’ Report on Collective Agreements ................................................................................... 106 to 110
Recent developments .............................................................................................................................................. 62
Outlook . ................................................................................................................................................................. 63
135
136
137
138
Cegid 0506 - Crédit photo : JL Mège
Head Office : 52, quai Paul Sédallian, 69279 Lyon CEDEX 09
Tél. +33 (0) 4 26 29 50 00 - Fax. +33 (0) 4 26 29 50 50
e-mail : [email protected]
Site web : www.cegid.com

Reference Document

Transcription

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