20 - Groupe LDLC...serving over 4,500 customers by providing cutting-edge software solutions in SAAS...
Transcript of 20 - Groupe LDLC...serving over 4,500 customers by providing cutting-edge software solutions in SAAS...
T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
A N N U A L R E P O R T
2015 16
TWENTY YEARS IS A LONG TIME… BUT SO SHORT AS WELL!
,,
We have passed many milestones, but many projects still lie ahead of us.
Since 1996, the year of our foundation, we have constantly aimed at becoming
the best player in our market.
Thanks to our determination, we are now recognised as the unchallenged leader
of the online high-tech market. It is with the utmost pride that we celebrated our
20th anniversary this year, and we will take up the challenges the future has in
store for us with the same degree of energy.
,,TWENTY YEARS IS A LONG TIME… BUT SO SHORT AS WELL!
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T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
Laurent de la Clergerie Chairman of the Management Board and founder of the LDLC Group
10 websites
€467.8m PRO FORMA(1) 4700
INCLUDING
6 COMMERCIAL
REVENUES
(1) Consolidated revenues (FY ended 31/03/2016 for LDLC and 31/12/2015 for Domisys)
COUNTRIES
COVERED:
FRANCE
BELGIUM
LUXEMBOURG
SWITZERLAND
EMPLOYEES
KEY FIGURES AT 30 JUNE 2016
OVER THE PAST SIX YEARS WE HAVE ACHIEVED AN ANNUAL AVERAGE GROWTH RATE OF 14%.
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1,70039,000 sqm 50,000
LISTED
PRODUCTS
HIGH-TECH
PARTNER
BRANDS
LYON, PARIS,
VILLEFRANCHE-SUR-SAÔNE,
BOURGOIN-JALLIEU, ROUEN,
GRENOBLE, SAINT-ÉTIENNE,
DIJON, AVIGNON, VALENCE,
ANGOULÊME, LIMOGES,
TOULOUSE, MONTPELLIER,
NANTES, LE MANS,
CLERMONT-FERRAND
DEDICATED
LOGISTICS
PLATFORM
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17 LDLC.COM
stores
T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
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LDLC.COM STANDParis Games Week 2015.
Event attended by over
300,000 people
THE GROUP’S VALUES 05
BOLDNESS1•
PASSION2•
PROXIMITY3•
SOLIDARITY4•
PLEASURE5•
T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
,,"The acquisition of Materiel.net is a new milestone in the
development of the LDLC Group.
We have reached our declared target of €500 million
in revenues two years ahead of plan and we are now
one of the TOP 5 e-commerce companies in France*.
We have a lot in common with Materiel.net - we share
the same DNA and apply the same rigorous customer
service standards.
Our new ambition together is to step up our develop-
ment stemming from an expert, innovative and profitable
Group, with the aim of reaching the billion-euro revenue
mark by 2021. This target is well within reach, as the
growth drivers required to achieve it are already in place
and all we have to do now is roll out the roadmap."
Laurent de la ClergerieExecutive Chairman and founder of the LDLC Group
DIRECTORS’ MESSAGE
* Excluding tour operators and food industry
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LDLC AND MATERIEL.NET SHARE THE SAME DNA
,,
• Olivier de la Clergerie Chief Executive Officer
“The 2015/2016 financial year demonstrated our skill in ma-
naging our business model and our ability to roll out a global
strategy. In this way, LDLC Group is strengthening its leadership
of the online high-tech market year after year. Organic growth
is strong (12%), driven by all Group businesses, whether BtoC
or BtoB, with significant increases in LDLC.pro, LDLC.com and
cross-channel sales. This growth has been matched by our
financial performance, with gross margin up 18% to €55.8
million and EBITDA up 40% to €15.0 million. These improvements
are all the more impressive in view of the additional expenses we
incurred last year in connection with the LDLC School launch
and the acquisition of Domisys (Materiel.net). Integrating
Domisys is one of our main priorities. The initial benefits of
the implementation of Group-wide synergies should be felt
during the year, with the full impact expected within 2 years. For
2016/2017, we are aiming at double-digit revenue growth plus
an improvement in the EBITDA value.”
• Philippe Sauze Deputy Chief Executive Officer
“All our brand awareness and performance indicators are
flashing green. We have an extremely strong presence in the
social media, including over a million fans on Facebook, which
positions us as a major player in terms of brand relationship.
These fans have a very high engagement rate of between 25%
and 30%, with 250,000 to 300,000 people interacting on our
Facebook page every month.
A number of features, including the LDLC School, our
partnership with Asvel, repeated announcements of new store
openings and the acquisition of Materiel.net, help to increase
our visibility and enhance our brand reputation.
In the cross-channel sector, the aim is to have around 100 stores
up and running by 2021, which means opening an average of
one store a month between now and then, with franchising
taking precedence.
Our current stores are developing fast, which proves the merits
of our concept and strategy with regard to catchment areas.”
Olivier de la Clergerie, Laurent de la Clergerie & Philippe Sauze
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T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
ACQUISITION
MATERIEL.NET JOINS THE LDLC GROUPThe acquisition of Materiel.net marked the beginning of a new growth phase in LDLC’s development, strengthening the Group’s position among the leading e-commerce companies in France.
With the acquisition of Materiel.net, the LDLC Group has substantially achieved its €500 million revenues target originally slated for 2018, i.e. two years ahead of plan. This structural acquisition provides clear opportunities for sales and logistics synergies which will drive profitable growth.
CREATION OF A GROUP WITH NEARLY €500 MILLION IN REVENUES
ACQUISITION PROCEDURE
As at 31 March 2016, the LDLC Group acquired the entire share capital and voting rights of Domisys and the remaining portion of the share capital of Domimo 2 and Domimo 3, the real estate companies of the Materiel.net group, not held by Domisys, for a total price of €39.2 million.
The acquisition was financed partly by cash (€22.7 million), while the balance was paid in the form of 117,079 existing treasury shares and 574,732 new LDLC.com shares issued at a price of €23.86 per share.
Acquired on 31 March 2016, Domisys will be consolidated from 1 April 2016 (the start of the LDLC Group’s financial year).
MATERIEL.NET, A CHALLENGER WITH STRONG QUALITIES AND FUNDAMENTALS
Founded in 1999 by Jean-Philippe Fleury
2015revenues €147.1 m
200 employees
14,000 listed products
2 million unique visitors/month
175,000 Facebook fans
10 concept stores
18,000 sqm dedicated logistics platform (44 – Loire Atlantique)
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Jean-Philippe Fleury, founder of Domisys and CEO of Materiel.net:
“This project with LDLC testifies to the success of Materiel.net since its foundation. Our two companies have shared values and cultures and are strongly complementary in nature. Joining LDLC is an unprecedented strategic opportunity to pursue our expansion for the benefit of our customers.”
LDLC GROUP JOINS TOP 5 E-COMMERCE COMPANIES (excluding food industry and tour operators - source Fevad - January 2016)
A LOGICAL COMBINATION THAT CREATES PERFORMANCE DRIVERS
The acquisition of Materiel.net is in line with the LDLC Group’s strategic priorities and the trend towards consolidation of the e-commerce market.
• Two strongly identifiable brands with a recognised customer service culture.
• Two unchallenged online high-tech specialists.
• Two dedicated, geographically complementary logistics platforms situated near Lyon and Nantes.
The LDLC Group is expanding and can rely on strong fundamentals in order to step up the process.
Ranking of e-commerce companies by number of unique visitors/month (in millions)
5th ranking e-commerce companies
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CLEARLY IDENTIFIED POTENTIAL FOR GROWTH AND MARGIN IMPROVEMENT
Laurent de la Clergerie, founding Chairman of the LDLC Group:
“This acquisition enables us to confirm our medium-term goals while strengthening our visibility and position as an online high-tech specialist. But above all, we are demonstrating that LDLC is an active contributor to the transformation of the e-commerce sector and of commerce in general.”
17.5
10.7
10.7
7.9
7.6
7.5
6.9
6.8
6.0
5.6
5.4
5.05.04.9
4.7
4.4
Materiel.net head office
Materiel.net store
T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
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LDLC.com store in Limoges Opened on 18 November 2015
100 STORES BY 2021 OPENING AN AVERAGE OF ONE STORE PER MONTH
TARGET
NETWORK OF STORES AND LOGISTICS CENTRES
Since 2014, the LDLC Group has been expanding its network of branch stores and franchises all over France.
This strategy has paid off, with 17 stores opened at 30 June 2016 posting 2015/2016 sales up 32.7%.
Already leader of the online market, LDLC.com is in the process of becoming the top high-tech brand in the offline market as well.
In summer 2016, following the launch of four new stores, the LDLC Group store chain will cover 20 towns and cities. The cities presently
covered are Lyon, Paris, Villefranche-sur-Saône, Bourgoin-Jallieu, Rouen, Grenoble, Saint-Étienne, Dijon, Avignon, Valence, Angoulême,
Limoges, Toulouse, Montpellier, Nantes, Le Mans and Clermont-Ferrand.
Driven by its online and cross-channel strategy targeted at both consumers and professionals, the Group has established a position on
all segments of the specialised high-tech retail market.
Philippe Sauze, Deputy Chief Executive Officer:
“Our retail outlets form part of a multichannel business model and cater for new patterns in consumer behaviour, combining online and offline purchasing.”
SUCCESSFUL OMNICHANNEL STRATEGY
6 STORES LAUNCHED DURING THE YEAR
7 FRENCH REGIONS COVERED
AT 30/06/2016 17 LDLC.COM STORES & 10 MATERIEL.NET CONCEPT STORES
CONCEPT STORES
LOGISTICS CENTRES
LDLC.COM STORES
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T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
DEDICATED LOGISTICS PLATFORMS
Logistics is a core component of the distance selling business. The acquisition of Materiel.net has given the LDLC
Group a second logistics centre, located near Nantes, in addition to its own platform on the outskirts of Lyon. The
new centre expands the Group’s nationwide coverage and will improve quality of service for customers by shortening
delivery times. Furthermore, the increased storage space will enable the Group to cope with increasing sales volumes.
LOGISTICS, THE LYNCHPIN OF OUR GROWTH MODEL
approx.
7,000 PARCELS SHIPPED PER DAY
21,000 sqm DEDICATED WAREHOUSING AT SAINT-QUENTIN- FALLAVIER 38 - ISÈRE
18,000 sqm DEDICATED WAREHOUSING AT NANTES 44 - LOIRE ATLANTIQUE
39,000 sqmDEDICATED LOGISTICS SPACE
Laurent de la Clergerie, founding Chairman of the LDLC Group: “Our command of logistics means that we can sell anything. Maginea.com and L’Armoire de Bébé are prime examples of this, but other parts of our offering could follow suit.”
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SUBSIDIARY
Founded in 2003 by Nicolas Perroud, Anikop is the recognised leading French specialist in the development
and commissioning of high valued-added software solutions designed for professionals in the area of
processing prepaid vouchers, including gift, holiday and restaurant vouchers. The principle is as follows: each
voucher displays different information in different places and in different formats. Anikop has developed a pro-
prietary image recognition engine which is embedded in the scanners.
Backed by its considerable know-how and technological resources,
Anikop has succeeded in obtaining image recognition rates of over 99%
(customer source). The company’s 21 employees are committed to
serving over 4,500 customers by providing cutting-edge software
solutions in SAAS or licence mode, online or on-site training and swift,
efficient customer service and maintenance.
Anikop has built up a high degree of customer loyalty thanks to
its in-house developed CRM software, guaranteeing a responsive,
flexible, hands-on approach.
Anikop key figures
“Our customer portfolio is currently made up of large brands and
groups, but also includes a large number of retailers who gain va-
luable time by using our solutions. Our technological expertise allows us to maintain our competitive
edge and identify new requirements. Accordingly, we have launched a new set of interactive display solu-
tions for informational and advertising applications. This offering caters for a wide range of applications,
including displays for shops, restaurants, town halls, etc. This fast-growing market estimated at over €500 million
is a golden opportunity for development in view of the relationships we already have with this kind of customer,"
Nicolas Perroud explained.
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Revenues €2.0m
94%customer recommendation rate in 2016 (Anikop survey)
TARGET double revenues and headcount by 2020
ANIKOP, THE PREPAID VOUCHER SPECIALIST, IS FOCUSING ON CRM AND INTERACTIVE DISPLAYS
T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
LDLC SCHOOL
The cross-disciplinary training provided by the LDLC School is based on a philosophy that is unique in the digital industry. During the 3-year course, students acquire know-how and social skills related to digital transition in a simulated corporate environment: their schedule includes 40 hours of courses per week, project management exercises, HR workshops, real-life experience, meetings with professionals, seminars, internships and more.The school aims to reveal talented future managers and to breed a new generation of connected, practical, open-minded web intrapreneurs and entrepreneurs destined to work in start-ups and SMEs, digital companies or companies undergoing digital transition.
Fostering enterprise, stimulating thought and encouraging creativity
30 lecturers and professionals provide tuition geared towards the current state of affairs and the latest trends in the corporate world. The LDLC School syllabus is based on 4 general themes: Technologies & Practices, Communication Players & Vectors, the Corporate Environment, Prospects & Realities.
Immersion in the economic environment in order to promote our ecosystem
During a first year rich in discoveries, the 25 students admitted last year gained an insight into topics such as “The profitability of digital marketing”, “The stock market: risks and rewards for a pure player” and “Innovation via connected devices” via confe-rences given by company founders, researchers and experts, as well as taking part in career workshops designed to prepare students to enter the job market (composing a CV, filmed inter-views, etc.).This collaborative learning exercise provided a host of opportuni-ties for meeting, sharing and practice.
Laurent de la Clergerie, founding Chairman of the LDLC Group: “My goal is for the LDLC School to train young people for jobs in digital project management and to facilitate the development of such professions in the future.”
2016 I SECOND YEAR OF ADMISSIONS SET TO KICK OFF
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ENTREPRENEURSHIP
AGILE
POLYVALENT
DIGITAL
CREATIVE
ACTION
KNOW-HOW
WEB
PRACTICAL
25 admissions to the LDLC School’s first academic year
T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
Key points to note
• Like-for-like growth of 12.2% (14.2% excluding the impact of the termination of the partnership with MisterGoodDeal).
• Gross margin rate of 17.4%, up from 16.5% last year.
• EBITDA equal to 4.7% of revenues, up from 3.7% last year despite costs of launching LDLC School.
• EBIT up 34.7%, including non-recurring expenses arising from the Domisys acquisition.
Key balance sheet headings (31 March)
Key points to note
• The Group generated €5.8m in cash during the year.
• Net debt includes the financing of the Domisys acquisition and an €11 million mortgage related to the two Materiel.net
real estate companies.
ANALYSIS
RESULTS OF THE FINANCIAL YEAR
€m
Revenues
Gross margin
EBITDA
Underlying EBIT
EBIT
Earnings before tax
Net income
€m
Shareholders' equity
Net debt
Gearing*
2015/2016
320.7
55.8
15.0
13.8
13.2
13.1
7.9
2015/2016
49.0
43.0
0.88
2014/2015
285.6
47.1
10.7
10.0
9.8
9.7
5.8
2014/2015
24.6
13.1
0.53
*Net debt/equity
Change
+12.2%
+18.5%
+40.2%
+38.0%
+34.7%
+35.1%
+35.8%
Simplified income statement (1 April – 31 March)
Construction has started on the new Group head office, due for completion in 2017.The 7,500 sqm complex will house all the entities in its ecosystem, including the LDLC School.The €22 million investment will be financed under a lease purchase agreement.
2015 > 2016 NUMBER OF NEW LDLC.COM CUSTOMER ACCOUNTS 337,000
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Full-year revenue growth (1 April - 31 March) (€m)
Gross margin growth (1 April - 31 March) (€m)
320.7285.6255.0
2013 > 2014 2014 > 2015 2015 > 2016
+12.2%
55.847.141.4
2013 > 2014 2014 > 2015 2015 > 2016
+18.5%
2015 > 2016 LDLC.COM AVERAGE BASKET VALUE €319 excl. VAT
34.52621.4
2013 > 2014 2014 > 2015 2015 > 2016
+32.7%
Retail outlet revenue growth (€m)
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T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
COMPANY FACTSHEET
INVESTOR NOTEBOOK
Stock market EURONEXT Paris Compartment C
ISIN code FR0000075442 LDL
Number of shares 6,322,106
Index CAC All Shares
Market capitalisation at 30 June 2016 €218.11m
2015/2016 dividend €0.50/share (versus €0.45 in 2014/2015)
Analysts tracking the share Gilbert Dupont - Ning Godement, ODDO Securities - Antoine Augier de Lajallet
Investor reporting timetable30 September 2016 Annual General Meeting
20 October 2016 H1 2016-2017 revenues
24 November 2016 H1 2016-2017 results
26 January 2017 Q3 2016-2017 revenues
20 April 2017 FY 2016-2017 revenues
8 June 2017 FY 2016-2017 results
Publication after market close
Shareholder breakdown (at 30 June 2016)
18
40
35
30
25
20
15
10
5April 2012 June 2012 December 2012 June 2013 December 2013 June 2014 December 2014 June 2015 December 2015 June 2016
Share price movements (€) Historical data 01/04/2012 > 30/06/2016 - ISIN FR0000075442
up118%YOY
Share price
BRANDS
SPECIALISED WEBSITES, HIGH-POTENTIAL SOURCES OF GROWTH
Hardware.fr is the No. 1 French information medium dedicated to computer hardware. Specialising in spare parts, Hardware.fr offers articles, benchmarking, advice and a forum to help readers to choose the right equipment. Hardware.fr records over 36.5 million page views per month.
LDLC.pro, the Group's website for professionals, provides global solutions to meet the needs of public and private-sector companies. With its unrivalled catalogue of 25,000 products backed by a full range of services, LDLC.pro helps its corporate customers to find the best solution at the best price.
An exclusive importer-wholesaler of high-tech products, Textorm is a major supplier of high-quality innovative products to hardware retailers.
Anikop is the leading French provider of solutions for processing prepaid gift, holiday and restaurant vouchers. An LDLC Group subsidiary, Anikop has maintained a substantial lead over its competitors thanks to its custom-developed image recognition technology.
DLP Connect provides an additional service to professionals by offering solutions in the field of electrical equipment and installations, including electrical systems, computer networks, CCTV and home automation.
Materiel.net is a widely reputed specialist in the online retail of computer equipment. The brand has a chain of 10 concept stores and a dedicated 18,000 sqm logistics platform in western France (Nantes, Loire Atlantique) acting in synergy with LDLC.com’s own logistics centre.
L’Armoire de Bébé is an online boutique created in 2015 and specialising in the latest trends in baby clothing and accessories. This new online store covers the entire range of baby products and lists over 7,000 products by 130 carefully selected brands.
Maginea.com specialises in household goods, garden equipment and furniture, catering for all members of the family. The website offers 25,000 products by over 600 different brands, including lounge and garden furniture, household linen, lighting and decoration.
LDLC.com, the online high-tech market leader, offers a catalogue of over 30,000 products spanning over 1,700 brands, including LDLC's own brand. The wide product offering includes computer, audio, telephone and video equipment. The brand has now expanded its operations to the cross-channel market by setting up a chain of brand stores and franchises. LDLC.com has been awarded NF Service certification by the French AFNOR standardisation association.
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T h e u l t i m a t e h i g h - t e c h _ e x p e r i e n c e
LDLC GROUP ROADMAP
OUTLOOK
OUR TARGETS FOR 2021
€1 BILLION IN REVENUES
5.5% to 6% EBITDA
100STORES
ACTION PLAN
2016/2017 TARGET
Successful integration of Materiel.net by promoting synergies
Open at least one store per month
Step up growth of LDLC.pro
Increase market share across all e-commerce websites
Stay in tune with the European market
Increase in EBITDA value
Double-digit revenue growth
€
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A N N U A L F I N A N C I A L R E P O R T 2 0 1 5 I 1 6
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Annual f inancia l report 2015_2016
GENERAL COMMENTS � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 24
PERSONS RESPONSIBLE � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 25
MANAGEMENT REPORT � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 26
APPENDICES TO THE MANAGEMENT REPORT� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 90
REPORT PREPARED BY THE CHAIRWOMAN OF THE SUPERVISORY BOARD � � � � � � � � � � � � � � � � � � � � � � � � � � � 95
STATUTORY AUDITORS’ REPORT � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 102
REPORT OF THE INDEPENDENT THIRD PARTY � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 103
LDLC.COM COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016 � � � � � � � � � � � � � � � � � � 106
NOTES TO THE 2015/16 COMPANY FINANCIAL STATEMENTS � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 110
STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 126
STATUTORY AUDITORS’ SPECIAL REPORT ON RELATED-PARTY AGREEMENTS AND COMMITMENTS � � � � � 128
LDLC.COM CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016 � � � � � � � � � � � � � 130
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016� � � � � � � � 135
STATUTORY AUDITORS’ REPORT ON THE IFRS CONSOLIDATED FINANCIAL STATEMENTS � � � � � � � � � � � � � � 161
CERTIFICATES � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 163
Statutory Auditors’ statement on the information provided in accordance with Article L�225-115-4 of the French Commercial Code with respect to the total compensation paid to the highest paid persons for the year ended 31 March 2016
Statement in accordance with Article L�225-115-5 of the French Commercial Code
Statement of compensation in accordance with Article L�225-115-4 of the French Commercial Code
Statutory Auditors’ statement on the information provided in accordance with Article L�225-115-4 of the French commercial code with respect to the total amount of payments made pursuant to paragraphs 1 and 4 of Article 238 B of the French Tax Code
STATUTORY AUDITORS’ REPORT ON THE ISSUE OF SHARES AND SECURITIES WITH AND/OR WITHOUT PRE EMPTIVE SUBSCRIPTION RIGHTS � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 167
STATUTORY AUDITORS’ REPORT ON THE ISSUE OF ORDINARY SHARES AND/OR SECURITIES TO MEMBERS OF AN EMPLOYEE SHARE OWNERSHIP PLAN � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 169
STATUTORY AUDITORS’ REPORT ON THE SHARE CAPITAL REDUCTION � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 170
CONTENTS
24 GENERAL COMMENTS
GENERAL COMMENTS
Definitions
Throughout this annual financial report, unless stated otherwise:
The terms “Company” and “LDLC.com” refer to LDLC�com S�A�, a French limited company with a Management Board and a Supervisory Board, with share capital of €1,137,979�08, whose registered office is located at 18 Chemin des Cuers, CS40207, 69574 Dardilly Cedex, France, registered in the Lyon Trade and Companies Register under number 403 554 181�
The term “Group” refers to the Company and all the companies included within its consolidation scope�
Forward-looking information
This annual financial report includes information on Group objectives and development priorities� This information may be presented via the use of the future tense, conditional mood and forward-looking expressions such as “estimate”, “consider”, “aim to”, “expect”, “intend”, “should”, “wish”, “may” or any other variant or similar term� Please note that these objectives and development priorities do not represent historical data and must not be taken as a guarantee that the events and figures presented will transpire, that assumptions will be confirmed or that targets will be met� This concerns objectives which, by nature, may not be achieved� Furthermore, the information presented in this report may prove incorrect, in which case the Group will be under no obligation whatsoever to update the report, unless so required by applicable regulations, such as the General Regulation of the French Financial Markets Authority (“AMF”)�
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Annual f inancia l report 2015_2016
PERSONS RESPONSIBLE
Person responsible for the annual financial report
Pursuant to Article L�451-1-2 of the French Monetary and Financial Code, we hereby inform you that the person responsible for the annual financial report is Olivier Villemonte de la Clergerie, CEO of LDLC�com�
Statement by the person responsible for the report
Dardilly, 30 June 2016
“I hereby certify that, to the best of my knowledge, the financial statements have been drawn up in accordance with applicable accounting standards and provide an accurate presentation of the assets and liabilities, financial position and earnings of the issuer and all of the companies within its consolidation scope, and that the management report provides a fair presentation of the business performance, earnings and financial position of the issuer and all of the companies included in its consolidation scope as well as a description of the principal risks and uncertainties facing them.”
Olivier Villemonte de la Clergerie
Chief Executive Officer
26 MANAGEMENT REPORT
MANAGEMENT REPORT INCLUDING THE REPORT ON GROUP MANAGEMENT PURSUANT TO ARTICLE L.233-26 OF THE FRENCH COMMERCIAL CODE
PART 1. ECONOMIC AND FINANCIAL INFORMATION� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 30
1 I The Company’s financial position and business performance during the year ended �������������������������������������������������������������������������30
2 I Progress made and difficulties encountered �������������������������������������������������������������������������������������������������������������������������������������������������������������������������31
3 I Presentation of Company financial statements and accounting methods – Company earnings �����������������������������������������������31
4 I Objective and comprehensive analysis of the business performance, earnings and financial position of the Company, including its level of debt, with regard to business volumes and complexity�����������������������������������������������������32
5 I Analysis of financial and non-financial key performance indicators relating to the Company’s specific business activities, including information on human resources and the environment �������������������������������������������������������������������������������������������������32
6 I Description of the main risks and uncertainties facing the Company - Company’s exposure to price, credit, liquidity and cash risks - Information on market risks ���������������������������������������������������������32
7 I Information on the use of financial instruments and the Company’s financial risk management policy and objectives ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������35
8 I Forecast and outlook ��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������35
9 I Post balance sheet events �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������35
10 I Research and development at LDLC ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������35
11 I Breakdown of the Company’s trade receivables and payables by due date ��������������������������������������������������������������������������������������������36
12 I Proposed appropriation of earnings for the year ended 31 March 2016 ������������������������������������������������������������������������������������������������������36
13 I Corporate governance��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������37
PART 2. INFORMATION CONCERNING THE EXECUTIVE DIRECTORS � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 37
1 I List of positions and offices held �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������37
2 I Compensation of executive directors ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������38
3 I Provisions and other amounts recorded by the Company or its subsidiaries for the payment of corporate officer pensions, retirement or other benefits ���������������������������������������������������������������������������������������������������������������������������������������44
4 I Summary statement of Company share transactions carried out during the year ended by directors and persons listed under Article L.621-18-2 of the French Monetary and Financial Code ��������������������������������������������������������������45
5 I Summary and findings of Supervisory Board’s annual review on regulated agreements that are still effective ���������������45
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Annual f inancia l report 2015_2016
PART 3. INFORMATION ON SUBSIDIARIES AND EQUITY INTERESTS � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 46
1 I Revenues and earnings of subsidiaries and controlled companies ���������������������������������������������������������������������������������������������������������������������46
2 I Significant equity investments and takeovers �����������������������������������������������������������������������������������������������������������������������������������������������������������������������47
3 I Disposal of shares to settle interlocking investments �����������������������������������������������������������������������������������������������������������������������������������������������������49
4 I Treasury shares held indirectly ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������49
5 I List of existing branches ������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������49
6 I Information on treasury share transactions carried out by the Company �������������������������������������������������������������������������������������������������������49
7 I Agreements provided for under Article L.225-102-1, final paragraph, of the French Commercial Code �����������������������������50
PART 4. SHAREHOLDER STRUCTURE � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 51
1 I Changes in the Company’s shareholder structure during the financial year ������������������������������������������������������������������������������������������������51
2 I Shareholders with significant interests ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������51
3 I Employee share ownership �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������52
4 I Stock options and bonus shares ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������52
5 I Stock market information ����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������52
PART 5. TAX INFORMATION � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 53
1 I Expenditure on luxuries and non-tax deductible expenses ���������������������������������������������������������������������������������������������������������������������������������������53
2 I Dividends distributed by the Company over the last three financial years �����������������������������������������������������������������������������������������������������53
PART 6. INFORMATION REQUIRED BY ARTICLE L.225-100-3 OF THE FRENCH COMMERCIAL CODE � � � � � � � � 54
1 I Capital structure �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������54
2 I Restrictions on exercising voting rights and transferring shares imposed by the articles of associations, or contractual provisions made known to the Company pursuant to Article L.233-11 of the French Commercial Code �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������54
3 I Direct and indirect interests in the Company’s share capital of which it is aware, pursuant to Articles L.233-7 and L.233-12 of the French Commercial Code ���������������������������������������������������������������������������������������������������������������������54
4 I List of all shareholders holding shares granting special controlling rights and description thereof ��������������������������������������������55
5 I Control mechanisms applicable to a potential employee share ownership system where controlling rights are not exercised by the employees ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������55
6 I Shareholder agreements known to the Company which may give rise to restrictions on share transfers and the exercise of voting rights �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������55
7 I Rules applicable to the appointment and replacement of members of the Management Board and amendments to the articles of association �������������������������������������������������������������������������������������������������������������������������������������������������������������������55
8 I Management Board powers, specifically regarding share issues and buy-back ��������������������������������������������������������������������������������������55
9 I Agreements entered into by the Company which are automatically modified or terminated in the event of a change of control �����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������55
10 I Agreements providing for compensation to be paid to members of the Management Board or to employees, if they resign or are dismissed without genuine and substantive grounds, or if their employment contracts are terminated due to a public tender offer ���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������55
28 MANAGEMENT REPORT
PART 7. SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 56
1 I Social information � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 56
1�1� Headcount � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 56
1�1�1 � Total headcount and breakdown of employees by gender, age and region� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 56
1�1�2 � Hires and dismissals� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 59
1�1�3 � Compensation and changes thereto� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 60
1�2� Work organisation � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 61
1�2�1 � Organisation of working hours � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 61
1�2�2 � Absenteeism�� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 61
1�3� Industrial relations� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 62
1�3�1 � Organisation of industrial relations, including staff information, consultation and negotiation procedures� � � � � � � � � � � � � � � � � � � � � � � � � � 62
1�3�2 � Overview of collective agreements�� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 62
1�4� Health and safety � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 62
1�4�1 � Occupational health and safety conditions� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 62
1�4�2 � Overview of occupational health and safety agreements signed with trade unions or staff representatives� � � � � � � � � � � � � � � � � � � � � � � � � 63
1�4�3 � Industrial accidents, including frequency and severity thereof, and occupational sickness�� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 63
1�5� Training � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 64
1�5�1 � Safety training� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 64
1�5�2 � Training policies� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 64
1�5�3 � Total training hours� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 64
1�6� Equal treatment � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 65
1�6�1 � Measures to promote professional equality between men and women� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 65
1�6�2 � Measures to promote the employment and integration of disabled persons �� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 65
1�6�3 � Non-discrimination policy� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 65
1�6�4 � Promotion of and compliance with provisions of the ILO fundamental conventions on freedom of association and the right to collective bargaining, the elimination of discrimination in respect of employment and occupation, the elimination of forced and compulsory labour, and the effective abolition of child labour� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 65
2 I Environmental information� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 66
2�1� Overall environmental policy� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 66
2�1�1 � Organisational measures within the Company and its subsidiaries for dealing with environmental issues and assessment/certification initiatives� � 66
2�1�2 � Staff training and awareness schemes related to environmental protection� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 66
2�1�3 � Resources assigned to the prevention of environmental risks and pollution� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 66
2�1�4 � Provisions and guarantees for environmental risks� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 66
2�2� Pollution and waste management � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 66
2�2�1 � Measures to prevent, reduce and remedy atmospheric, water and soil pollution presenting a significant danger to the environment� � � � � � � � � 66
2�2�2 � Measures for preventing, recycling and eliminating waste� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 67
2�3� Sustainable use of resources � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 67
2�3�1 � Water consumption and supply geared towards local restrictions� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 67
2�3�2 � Raw material consumption and measures to improve efficiency of use� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 67
2�3�3 � Energy consumption, measures to improve energy efficiency and use of renewable energies� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 68
2�4� Climate change � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 68
2�4�1 � Greenhouse gas emissions� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 68
29
Annual f inancia l report 2015_2016
3 I Societal information� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 68
3�1� Local economic and social impact of the Company’s operations in terms of employment, regional development and impact on local communities � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 68
3�2� Relations with the Company’s stakeholders, including professional integration organisations, educational institutions, environmental protection organisations, consumer associations and local communities � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 69
3�2�1 � Conditions of stakeholder dialogue� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 69
3�2�2 � Partnership and sponsorship� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 69
3�3� Subcontracting and suppliers� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 69
3�3�1 � Inclusion of social and environmental considerations in the Company’s procurement policy� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 69
3�3�2 � The importance of subcontracting and inclusion of social and environmental responsibility issues in the relationship with suppliers and subcontractors�� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 69
3�3�3 � Fair practices� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 69
3�3�4 � Consumer health and safety� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 70
3�3�5 � Other initiatives relevant to this section regarding the promotion of human rights� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 70
PART 8. REPORT ON GROUP MANAGEMENT � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 72
1 I Presentation of consolidated financial statements and valuation methods � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 72
2 I Group financial position and business performance during the year ended � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 73
3 I Objective and comprehensive analysis of the business performance, earnings and financial position of the companies included in the consolidation scope, including their level of debt, with regard to business volumes and complexity � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 73
4 I Description of the main risks and uncertainties facing the companies included in the consolidation scope � � � � � � � 74
5 I Notes on the Company’s use of financial instruments where relevant to the valuation of its assets, liabilities, financial position and profits or losses � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 74
6 I Group forecast and outlook � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 74
7 I Post balance sheet events � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 74
8 I Group research and development activities � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 74
PART 9. PRESENTATION OF DRAFT RESOLUTIONS TO BE SUBMITTED TO THE ANNUAL GENERAL MEETING � � � � 75
APPENDICES TO THE MANAGEMENT REPORT � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 90
1 I Table of cross-references with the French Grenelle II Act � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 90
2 I Table of results of the last five (5) years � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � 92
3 I Table summarising currently valid delegations of authority and authorisations in respect of capital increases � � � � � 93
30 MANAGEMENT REPORT Part 1. Economic and Financial Information
PART 1. ECONOMIC AND FINANCIAL INFORMATION
• 1 I THE COMPANY’S FINANCIAL POSITION AND BUSINESS PERFORMANCE DURING THE YEAR ENDED
The Company posted solid gross margin growth thanks to tight control of purchases, helped by the Company’s significant size in its main sector, the specialised retail of high-tech products�
Thanks to its business model based on a predominantly fixed-cost structure, LDLC ensures that it is able to achieve high levels of profitability� This business model is made possible by extensive inhousing of services (logistics, customer service, IT systems, etc�), enabling the Group to monitor costs and minor cost fluctuations as closely as possible� Therefore, once profitability is achieved, economic leverage is the natural result, with the gross margin comprising a larger proportion of net income�
In view of the Domisys acquisition, the Company expects its production capacity to enable it to meet its future growth targets�
The specialised high-tech market is complex and demanding, and has seen most of its historical players switch to a generalist market and/or marketplace (Pixmania, RueduCommerce, GrosBill, etc�)� Other players have simply disappeared� As a result, thanks to its size and positioning, LDLC is today widely recognised on the French market as the leading online high-tech retailer� LDLC is also present on the BtoB market, which accounts for around one third of its business� This gives LDLC a further lead over its competitors, who are geared towards the individual consumer market� From 4 May 2015 to 10 July 2015, Viseo Conseil(1), organiser of the Customer Service of the Year award, tested the quality and responsiveness of LDLC�com’s customer service department� On the basis of 225 points of contact via email, phone, internet and social networks, for
which we obtained an average rating of 18�52/20, we came first in the “Technical product distance selling” category� Accordingly, the Group’s drive towards improving customer relations were once again rewarded, in the form of the ”2016 Customer Service of the Year” award�
During the year, the Company opened six franchise stores across France (Avignon, Valence, Angoulême, Limoges, Toulouse and Montpellier)�
The 2015/2016 financial year was also marked by the acquisition of Materiel�net� Specialising in online retail of high-tech products, Materiel�net is a brand with a sterling reputation; it is recognised for the quality of its customer service and has a network of ten concept stores, which will supplement the LDLC�com network, and a 18,000 m2 dedicated logistics platform in western France (Nantes)� Today, Materiel�net has just over 200 employees� Further information on this acquisition may be found in part 3, section 2 of this management report�
It should be noted that, as a result of the acquisition, the Company’s debt has increased (due to a new 7-year €23 million bank loan)�
Finally, preparations for the Company’s future registered office are currently under way� The office is due for completion in the second half of the 2017 calendar year�
(1) Mystery shopper survey carried out from May to July 2015 by Inference Operations and Viseo Conseil, via 225 points of contact including phone calls, emails, web browsing and social networking websites.
31
Annual f inancia l report 2015_2016
• 2 I PROGRESS MADE AND DIFFICULTIES ENCOUNTERED
In addition to the Material�net acquisition, the Company invested:
• €192,000 in intangible assets including €170,000 in leasehold right;
• €1,174,000 in property, plant and equipment during the 2015/2016 financial year, including €606,000 on refurbishment at the Paris store�
Furthermore, the Company created new wholly-owned subsidiaries during the 2015/2016 financial year, namely LDLC1, LDLC2, LDLC3 and CAMPUS 2017�
The Company also acquired a 10% equity interest in the share capital of NLCL�
See part 3, section 2 for more information on equity interests acquired during the financial year ended�
• 3 I PRESENTATION OF COMPANY FINANCIAL STATEMENTS AND ACCOUNTING METHODS – COMPANY EARNINGS
The presentation rules and accounting methods applied comply with regulations in force�
The annual financial statements were prepared in a manner consistent with prior years and in accordance with the French chart of accounts (“plan comptable général”)�
All additional explanations may be found in the notes to the financial statements�
During the year ended 31 March 2016, the Company posted net revenues of €316,984,835 compared to €283,013,423 in the previous year�
Operating expenses for the period amounted to €304,959,094, compared to €274,430,476 in the previous year�
Operating income totalled €318,351,453, with net operating income amounting to €13,392,359, compared to €10,335,687 for the year ended 31 March 2015�
Financial expenses for the year ended 31 March 2016 amounted to €487,059 (compared to €826,890 in the previous year), while financial income totalled €998,640 (compared to
€907,231 in the previous year)� Net financial income therefore amounted to €511,581, compared to €80,341 in the previous year�
Earnings before tax and non-recurring items amounted to €13,903,940, compared to €10,416,028 in the previous year�
Total non-recurring income amounted to €2,017,922, while non-recurring expenses amounted to €700,894, giving net non-recurring income of €1,317,028 compared to a net non-recurring expense of (€122,781) in the previous year�
Given these results, after a corporate income tax charge of €5,346,506, the Company posted a profit of €8,538,044 for the year ended 31 March 2016, compared to €5,882,646 in the previous year�
In accordance with Article R�225-102 of the French Commercial Code, a table presenting the Company’s results for each of the last five years has been included in the appendices to this report�
32 MANAGEMENT REPORT Part 1. Economic and Financial Information
• 4 I OBJECTIVE AND COMPREHENSIVE ANALYSIS OF THE BUSINESS PERFORMANCE, EARNINGS AND FINANCIAL POSITION OF THE COMPANY, INCLUDING ITS LEVEL OF DEBT, WITH REGARD TO BUSINESS VOLUMES AND COMPLEXITY
The Company posted excellent results for the year with strong growth in both revenues and profits, thereby strengthening its competitive position in the specialised high-tech retail market�
It is able to clearly monitor its level of debt, whether in terms of debt-to-equity ratio or EBITDA�
The e-commerce market remains extremely buoyant in general, and the foothold acquired in the bricks-and-mortar retail market has strengthened the Company’s standing�
The BtoB market is also doing extremely well, showing that digital products and processes are taking their place within businesses�
• 5 I ANALYSIS OF FINANCIAL AND NON-FINANCIAL KEY PERFORMANCE INDICATORS RELATING TO THE COMPANY’S SPECIFIC BUSINESS ACTIVITIES, INCLUDING INFORMATION ON HUMAN RESOURCES AND THE ENVIRONMENT
Given the specific nature of our business, please note that in the LDLC�com financial statements for the year ended 31/03/2016 the following environmental contributions were invoiced by suppliers:
• contribution for the collection and recycling of batteries and accumulators: €6,551�54 excl� VAT (SCRELEC),
• contribution for the disposal of packaging: €104,737�96 excl� VAT (ADELPHE),
• contribution for the recycling of furniture: €1,625�77 excl� VAT (ECO-MOBILIER),
• contribution for the recycling of paper: €484�27 excl� VAT (ECO-FOLIO)�
Furthermore, a contribution for waste electrical and electronic equipment (WEEE) is paid to certain suppliers and the cost is passed on to customers� In total, €203,580�06 excl� VAT was invoiced by suppliers for the year ended 31/03/2016, while €243,123�46 are charged to our customers�
• 6 I DESCRIPTION OF THE MAIN RISKS AND UNCERTAINTIES FACING THE COMPANY - COMPANY’S EXPOSURE TO PRICE, CREDIT, LIQUIDITY AND CASH RISKS - INFORMATION ON MARKET RISKS
In accordance with Article L�225-100 of the French Commercial Code, below you will find a description of the main risks and uncertainties facing the Company is confronted�
Inventory risks
Besides taking out fully comprehensive business insurance policies, the Company has adopted a proactive risk prevention
policy with regard to inventories by implementing appropriate systems and measures:
• CCTV systems, alarms, detectors and extinguishers to protect against the significant risk of fire and risks of theft and breakage;
• Development of specific, high-performance software to optimise inventory management and minimise the risk of stock-outs�
33
Annual f inancia l report 2015_2016
The net realisable value of the Company’s inventory at 31/03/2016 amounted to €51,044,000�
Technology risks
The Group’s websites are administered by the Company at specialised data centres responsible for maintenance and security� Measures implemented include systems of protection against cyber-attacks (anti-virus programmes, firewall), data back-up systems, duplicate IT systems in case of equipment failure and a secure payment system set up in partnership with banks�
Legal risks
The following checks are carried out:
• Checking compliance and monitoring in respect of the Group’s intellectual property rights and the assets required for its operations� All software owned by the Company is a key asset for the Group� The Group’s ability to deal with periodic increases in volume is determined by this software’s capacity for development and suitability to the Group’s operations�
• Checking the required disclosures, including disclosures to the French Data Protection Authority (CNIL), and compliance with distance selling regulations,
Arrangement of insurance to cover legal risks identified across the Group in relation to transportation, premises and business customer credit�
Customer risks
A customer follow-up department has been set up in order to minimise the risk of default, although this risk is already low due to the nature of the Company’s client base, given that around 65% of its revenues come from individual customers, who tend to pay at the time of order shipment�
The Group uses a credit insurance firm in order to minimise credit risk from business customers (around one third of revenues)�
Goods warranty risk
A €107,000 provision has been recorded to cover:
• probable customer service costs arising from sales of goods completed before 31 March 2016 to be borne by the Company following expiry of the supplier warranty;
• the contractual warranty awarded to customers on sales of goods, which was extended to 2 years from March 2008 or 5 years from the end of 2009, depending on the option selected by the customer�
The amount of the provision for customer warranties recognised at 31 March 2016 is derived from a new statistical method applied to the volume of customer returns� On the basis of this analysis, the rate of returns relating to this provision for customer warranties was reduced as of 31 March 2013�
Liquidity risks
The Company performed a detailed review of its exposure to liquidity risk and believes it is able to comply with its maturity schedules�
Risks relating to changes in the economic environment and consumer behaviour
Fluctuations in the US dollar are a significant factor in the high-tech sector, given that all products (including those purchased in euros) are impacted at one point or another by movements in this currency� The Company manages this sales risk via its ability to quickly adjust its selling prices to current market conditions, as well as by adjusting inventory levels wherever necessary, thus spreading the impact of currency fluctuations over time�
Competitive risks
LDLC’s niche positioning as a specialised retailer enables it to significantly minimise competitive risks with regard to generalist retailers, who do not offer the same degree of expertise or range of products�
Franchising risks
Franchise operations are monitored by a dedicated team that ensures the proper performance of contractual relations, as well as compliance with all obligations incumbent on franchises, specifically with regard to brand image�
34 MANAGEMENT REPORT Part 1. Economic and Financial Information
LDLC Group key person risks
Regarding the LDLC Group’s structure, no risks relating to key people have been identified�
Risks relating to ongoing disputes and legal proceedings
A tax audit was carried out on LDLC�com’s accounts by the tax authority, covering financial years 2009/2010 to 2012/2013� This audit led to initial proposed tax reassessments, with the Company receiving a response from the tax authorities to its observations� The proposed tax reassessments concern the French corporate real estate contribution (cotisation foncière des entreprises or CFE) and property tax (taxe foncière)� The Company is contesting these tax reassessment proposals but has already been required to pay the sum of €1,015,000�
Given the present stage of discussions with the tax authority regarding the Company’s standpoint on the proposed reassessments and the arguments it holds in its defence, no provision has been recognised and the amounts already paid to the tax authority have been recognised as assets on the Company balance sheet, under “Other receivables”�
The Company has assessed the risks that could have a material adverse effect on its business activities, financial position or earnings (or ability to achieve its objectives) and considers that there are no other material risks other than those presented�
Furthermore, in accordance with AMF recommendation 2014-14, the following section presents the risks incurred by the Company in the event of a fluctuation in interest rates, exchange rates or stock market prices, as well as the reasons for which the Company operates in a given market, the procedures for setting and periodically reviewing market risk exposure limits that the Company has set itself, and the sensitivity indicators regarding these risks that have been selected�
Interest rate risk
Despite the debt contracted for the Domisys acquisition, exposure to this risk remains low thanks to the use of hedging instruments�
For more information, see Note 4�3 to the consolidated financial statements�
Price fluctuation risks
The Company is exposed to price fluctuation risks affecting goods in the high-tech sector� Tools for analysing inventory turnover enable the Group to anticipate price deflation in this business by adapting the volumes it purchases�
Currency risk
The Company carries out part of its operations internationally and specifically sources supplies abroad� It is therefore exposed to foreign currency risk primarily arising from the US dollar� Currency risk relates to future sales transactions, and assets and liabilities recorded in foreign currencies on the balance sheet�
In order to manage currency risk related to futures transactions and to assets and liabilities recorded in foreign currencies on the balance sheet, Group entities use foreign exchange futures contracts entered into with financial institutions�
The ratio of goods paid for in USD is around 16%, and foreign exchange hedges were used during the year to settle around 44% of these purchases�
The instruments only hedge purchases, in accordance with IAS 39�
Risks incurred by the Company in the event of a fluctuation in interest rates, exchange rates or stock market prices, and the reasons for which the Company operates in a given market, the procedures for setting and periodically reviewing market risk exposure limits that the Company has set itself, and the sensitivity indicators regarding these risks that have been selected
In July 2003, LDLC�com signed a master agreement with Crédit Agricole regarding transactions in financial futures, enabling it to cover currency risk where necessary�
In January 2015, LDLC�com entered into a master agreement with Caisse d’Épargne regarding transactions in financial futures�
35
Annual f inancia l report 2015_2016
• 7 I INFORMATION ON THE USE OF FINANCIAL INSTRUMENTS AND THE COMPANY’S FINANCIAL RISK MANAGEMENT POLICY AND OBJECTIVES
Given the nature of the Company’s business, it has a low exposure to financial risk and therefore has not set up financial hedging instruments� The Company does however make use of foreign exchange futures to hedge goods purchased in US dollars�
The Company mostly uses short-term borrowings�
Please refer to section 6 above�
• 8 I FORECAST AND OUTLOOK
The Company expects to see double-digit growth in revenues over the next financial year, as well as increased EBITDA� It also aims to open an average of one store per month�
Synergies created via the Domisys acquisition (Materiel�net) are expected to begin to take effect, with the full impact expected within 2 years�
The Company is not facing any difficulties regarding future financing, given that its capital expenditure requirements are lower than those of conventional business activities�
• 9 I POST BALANCE SHEET EVENTS
In accordance with Article L�232-1 II of the French Commercial Code, it is specified that, to the best of our knowledge, no significant events liable to have a material impact on the assessment of the Company’s financial position have taken place since the balance sheet date�
Since year-end, the Company acquired a 70% equity interest
in LDLC Event, a French simplified joint-stock company with share capital of €30,000 whose registered office is located at 18 Chemin des Cuers, 69574 Dardilly Cedex, registered in the Lyon Trade and Companies Register since 12 May 2016 under number 820 527 103, whose business activities include event organisation and management, specifically in the e-sport sector�
• 10 I RESEARCH AND DEVELOPMENT AT LDLC
During the 2015/2016 financial year, the Company set up a research and development programme with an annual budget
of €162,000 (including staff costs)� One person is responsible for this programme at 31 March 2016�
36 MANAGEMENT REPORT Part 1. Economic and Financial Information
• 11 I BREAKDOWN OF THE COMPANY’S TRADE RECEIVABLES AND PAYABLES BY DUE DATE
In accordance with Article L�441-6-1, paragraph 1 of the French Commercial Code, below you will find a breakdown,
for the years ended 31 March 2015 and 2016, of outstanding trade receivables and payables by due date�
Due date - trade payables
Trade payables outstanding
31/03/2016 31/03/2015
Amount % Amount %
Payables not yet due:
• Payables due in less than 30 days 17,694 72% 18,159 73%
• Payables due in 31 to 60 days 3,541 14% 2,927 12%
• Payables due in more than 60 days
Payables past due 3,527 14% 3,763 15%
TOTAL 24,762 100% 24,851 100%
Due date - trade receivables
Trade receivables outstanding
31/03/2016 31/03/2015
Amount % Amount %
Receivables not yet due:
• Receivables due in less than 30 days 9,549 62% 7,120 64%
• Receivables due in 31 to 60 days 2,446 16% 2,112 19%
• Receivables due in more than 60 days 0.002 0%
Receivables past due 3,449 22% 1,934 17%
TOTAL 15,444 100% 11,167 100%
• 12 I PROPOSED APPROPRIATION OF EARNINGS FOR THE YEAR ENDED 31 MARCH 2016
It is proposed that earnings of €8,538,044�23 for the year ended 31 March 2016 be appropriated in the following manner:
• that €10,344�57 be allocated to the “Legal reserve”, which will accordingly increase from €103,453�34 to €113,797�91, the statutory maximum amount;
• that €3,161,053 be allocated to dividends, entailing a dividend of €0�50 per share, provided that, as treasury shares held by the Company do not carry entitlement to dividends, the unpaid dividend amounts pertaining to these shares will be allocated to “Retained earnings”;
• and that the balance of €5,366,646�66 be allocated to “Other reserves”, which will accordingly increase from €16,567,459�05 to €21,934,105�71�
Individuals residing in France will be entitled to the 40% tax allowance on the total amount of their dividends�
The General Meeting will also be asked to grant full powers to the Management Board to carry out a dividend payment of €3,161,053, effective as of the date of the General Meeting and within the statutory timeframes�
37
Annual f inancia l report 2015_2016
• 13 I CORPORATE GOVERNANCE
We hereby inform you that the Company’s Management Board has decided to refer to the MiddleNext corporate governance code as the Company’s reference code, considering that this code is suited to the Company’s size and shareholder structure�
The MiddleNext code may be consulted on the MiddleNext website: www�MiddleNext�com�
See the report prepared by the chairwoman of the Supervisory Board on internal control and corporate governance included in this annual financial report�
PART 2. INFORMATION CONCERNING THE EXECUTIVE DIRECTORS
• 1 I LIST OF POSITIONS AND OFFICES HELD
In accordance with Article L�225-102-1, paragraph 4 of the French Commercial Code, a list is provided below of all known offices and positions held in any company by all corporate officers during the year ended:
• No member of the Supervisory Board has carried out any management, governance, administrative or supervisory activities at another company�
• No member of the Management Board has carried out any management, governance, administrative or supervisory activities at another company, with the exception of:
– Laurent Villemonte de la Clergerie, who held the position of non-shareholding director at Textorm S�A�R�L, a French private limited company with share capital of €8,000, whose registered office is located at 18 Chemin des Cuers, Dardilly (69574), registered in the Lyon Trade and Companies Register under number 437 597 826�
– Olivier Villemonte de la Clergerie, who held the following positions:
− non-shareholding director at ANIKOP, a French private limited company with share capital of €30,000, whose registered office is located at 18 Chemin des Cuers, Dardilly (69574), registered in the Lyon Trade and Companies Register under number 493 220 479;
− non-shareholding director at DLP-Connect, a French private limited company with share capital of €30,000, whose registered office is located at 18 Chemin des Cuers, Dardilly (69574), registered in the Lyon Trade and Companies Register under number 451 663 637;
− managing director of Domimo 2, a French real estate company (French SCI) with share capital of €50,000, whose registered office is located at ZAC Erette, Rue Olivier de Serres, Grandchamps-des-Fontaines (44119), registered in the Nantes Trade and Companies Register under number 501 599 104 since 31 March 2016;
− managing director of Domimo 3, a French real estate company (French SCI) with share capital of €10,000, whose registered office is located at ZAC Erette, Rue Olivier de Serres, Grandchamps-des-Fontaines (44119), registered in the Nantes Trade and Companies Register under number 502 904 485 since 31 March 2016;
− board member at Thermador Groupe, a French public limited company (société anonyme) with share capital of €35,522,480, whose registered office is located at 80 rue du Ruisseau BP 719, Saint-Quentin (38070), registered under number 339 159 402 since 4 April 2016;
− member of the Supervisory Board at La Vie Claire, a French public limited company with share capital of €4,601,190, whose registered office is located at 1982 Route départementale 386, Montagny (69700), registered in the Lyon Trade and Companies Register under number 632 000 014�
– Marc Prieur, who held the position of non-shareholding director at Hardware�fr, a French private limited company with share capital of €20,100, whose registered office is located at 18 Chemin des Cuers, Dardilly (69574), registered in the Lyon Trade and Companies Register under number 428 912 281�
38 MANAGEMENT REPORT Part 2. Information concerning the Executive Directors
– Philippe Sauze, who held the following positions:
− member of the Board of Directors at Asvel Basket, a public limited professional sports company (French SASP) with share capital of €771,086, whose registered office is located at 451 Cours Emile Zola, Villeurbanne (69625), registered in the Lyon Trade and Companies Register under number 388 883 860;
− chairman of Trio Partners, a single-person simplified joint-stock company (French SASU) with share capital of €1,000, whose registered office is located at 28 avenue de la République, Saint-Didier-au-Mont d’Or (69370), registered in the Lyon Trade and Companies Register under number 814 274 494�
• 2 I COMPENSATION OF EXECUTIVE DIRECTORS
In order to comply with Article L�225-102-1, paragraph 1 of the French Commercial Code, below you will find, based on the information in our possession, the compensation and benefits of any kind paid during the year to each corporate officer by the Company, or by controlled companies within the meaning of Article L�233-16 of the French Commercial Code� The criteria for determining the amount of variable compensation payable to corporate officers are precisely defined in advance but are not disclosed in this report for the sake of confidentiality�
Tables presented in the AMF recommendation relating to disclosures on compensation paid to corporate officers, which appear in position-recommendation no� 2009-16 applicable by reference in recommendation no� 2013-20, are presented below�
Table 1: Summary of compensation, options and shares granted to each executive director
Laurent Villemonte de la Clergerie Chairman of the Management Board FY ended 31 March 2015 FY ended 31 March 2016
Compensation due for the year (breakdown in Table 2) €213,263.13 €278,564.81
Multi-year variable compensation awarded during the year None
Options granted during the year (breakdown in Table 4) None
Bonus shares granted (breakdown in Table 6) None
TOTAL €213,263.13 €278,564.81
Olivier Villemonte de la Clergerie CEO FY ended 31 March 2015 FY ended 31 March 2016
Compensation due for the year (breakdown in Table 2) €201,279.08 €285,351.48
Multi-year variable compensation awarded during the year None
Options granted during the year (breakdown in Table 4) None
Bonus shares granted (breakdown in Table 6) None
TOTAL €201,279.08 €285,351.48
39
Annual f inancia l report 2015_2016
Caroline Villemonte de la Clergerie Member of the Management Board FY ended 31 March 2015 FY ended 31 March 2016
Compensation due for the year (breakdown in Table 2) €26,051.19 €28,231.49
Multi-year variable compensation awarded during the year None
Options granted during the year (breakdown in Table 4) None
Bonus shares granted (breakdown in Table 6) None
TOTAL €26,051.19 €28,231.49
Marc Prieur Member of the Management Board FY ended 31 March 2015 FY ended 31 March 2016
Compensation due for the year (breakdown in Table 2) €93,341.22 €135,652.68
Multi-year variable compensation awarded during the year None
Options granted during the year (breakdown in Table 4) None
Bonus shares granted (breakdown in Table 6) None
TOTAL €93,341.22 €135,652.68
Philippe Sauze Member of the Management Board FY ended 31 March 2015 FY ended 31 March 2016
Compensation due for the year (breakdown in Table 2) €287,328.33 €319,811.33
Multi-year variable compensation awarded during the year None
Options granted during the year (breakdown in Table 4) None
Bonus shares granted (breakdown in Table 6) €577,994.97 €733,912.14
TOTAL €865,323.30 €1,053,723.47
40 MANAGEMENT REPORT Part 2. Information concerning the Executive Directors
Table 2: Summary of compensation paid to each executive directorThe tables presented below list compensation due to executive directors for the years ended 31 March 2015 and 2016 and compensation actually received by them during the same years�
In accordance with position-recommendation no� 2009-16 applicable by reference in recommendation no� 2013-20, with regard to the terms used in the tables below:
• “Amounts due” means compensation owed to the executive director for the financial year and which is not liable to fluctuate, regardless of the payment date, and
• “Amounts paid” means the total compensation paid during the year to the executive director�
Laurent Villemonte de la Clergerie Chairman of the Management Board
FY ended 31 March 2015 FY ended 31 March 2016
Amounts due Amounts paid Amounts due Amounts paid
Fixed compensation for corporate office (1) 0 €198,000.00 0 €180,000.00
Annual variable compensation €79,638.99 0 €159,782.37 €79,638.99
Multi-year variable compensation None None
Bonuses (2) 0 €11,277.34 0 €15,053.57
Attendance fees None None
Benefits in kind (3) €3,985.79 €3,872.25
TOTAL €79,638.99 €213,263.13 €159,782.37 €278,564.81
(1) Gross amount. (2) Yearly bonus provided for by collective bargaining agreement on distance selling of specialised products.(3) Company vehicle.
Olivier Villemonte de la Clergerie CEO
FY ended 31 March 2015 FY ended 31 March 2016
Amounts due Amounts paid Amounts due Amounts paid
Fixed compensation for corporate office (1) 0 €185,400.00 0 €185,400.00
Annual variable compensation €79,638.99 0 €159,782.37 €79,638.99
Multi-year variable compensation None None
Bonuses (2) 0 €10,643.60 0 €15,089.85
Attendance fees None None
Benefits in kind (3) 0 €5,235.48 0 €5,222.64
TOTAL €79,638.99 €201,279.08 €159,782.37 €285,351.48
(1) Gross amount. (2) Yearly bonus provided for by collective bargaining agreement on distance selling of specialised products.(3) Company vehicle.
41
Annual f inancia l report 2015_2016
Caroline Villemonte de la Clergerie, Member of the Management Board
FY ended 31 March 2015 FY ended 31 March 2016
Amounts due Amounts paid Amounts due Amounts paid
Fixed compensation for corporate office (1) 0 €21,600.00 0 €21,600.00
Fixed compensation as employee (1) None 0 €3,908.05
Annual variable compensation None None
Multi-year variable compensation None None
Bonuses (2) 0 €1,303.92 0 €1,289.71
Attendance fees None None
Profit-sharing 0 €1,455.07 None
Benefits in kind (3) 0 €1,692.20 0 €1,433.73
TOTAL 0 €26,051.19 0 €28,231.49
(1) Gross amount. (2) Yearly bonus provided for by collective bargaining agreement on distance selling of specialised products.(3) Company vehicle.
Marc Prieur Member of the Management Board
FY ended 31 March 2015 FY ended 31 March 2016
Amounts due Amounts paid Amounts due Amounts paid
Fixed compensation for corporate office (1) 0 €4,800.00 0 €4,800.00
Fixed compensation as employee of Hardware.fr (1) 0 €79,847.38 0 €79,851.07
Annual variable compensation €39,819.49 €79,891.18 €39,819.49
Multi-year variable compensation None None
Bonus relating to corporate office 0 €268.00 0 €2,491.25 (2)
Bonus in relation to work as employee of Hardware.fr (4) 0 €6,625.84 0 €6,890.87
Attendance fees None None
Employee benefits in kind (3) 0 €1,800.00 (6) 0 €217.24 (5)
€1,582.76 (6)
TOTAL €39,819.49 €93,341.22 €79,891.18 €135,652.68
(1) Gross amount. (2) Yearly bonus provided for by collective bargaining agreement on distance selling of specialised products.(3) Company vehicle.(4) 13th month bonus(5) Benefits in kind relating to corporate office.(6) Benefits in kind for work as employee of Hardware.fr.
42 MANAGEMENT REPORT Part 2. Information concerning the Executive Directors
Philippe Sauze Member of the Management Board
FY ended 31 March 2015 FY ended 31 March 2016
Amounts due Amounts paid Amounts due Amounts paid
Fixed compensation for corporate office (1) 0 €6,000.00 0 €6,000.00
Fixed compensation as employee (1) 0 €208,431.26 0 €216,022.90
Annual variable compensation None None
Multi-year variable compensation None None
Bonus relating to corporate office 0 €335.00 (2) 0 €335.00 (2)
Bonus for work as employee €25,000.00 €14,514.67€50,000.00
0 €14,947.50 (2)
€75,000.00 (4)
Profit-sharing 0 €3,224.60 0 €2,896.01
Attendance fees None None
Benefits in kind for work as employee (3) 0 €4,822.80 0 €4,609.92
TOTAL €25,000.00 €287,328.33 0 €319,811.33
(1) Gross amount.(2) Yearly bonus provided for by collective bargaining agreement on distance selling of specialised products.(3) Company vehicle.(4) Miscellaneous bonuses (long-service, one-off, targets, baby bonus, etc.) .
Table 3: Attendance fees and other compensation received by non-executive directors
Suzanne Villemonte de la Clergerie Chairwoman of the Supervisory Board FY ended 31 March 2015 FY ended 31 March 2016
Attendance fees None None
Fixed compensation for corporate office €21,600.00 €21,600.00
TOTAL €21,600.00 €21,600.00
Marc Villemonte de la Clergerie Vice-Chairman of the Supervisory Board FY ended 31 March 2015 FY ended 31 March 2016
Attendance fees None None
Fixed compensation for corporate office €16,800.00 €16,800.00
TOTAL €16,800.00 €16,800.00
Table 4: Stock options granted during the year to each executive director by the issuer and by any Group company
None�
Table 5: Stock options exercised during the year by each executive director
None�
43
Annual f inancia l report 2015_2016
Table 6: Bonus shares granted to each corporate officer during the year ended
None�
Table 7: Bonus shares available for sale by each corporate officer during the year ended
None�
Table 8: History of stock options granted
None�
Table 9: Stock options granted to the first ten non-director employees and options exercised by them
None�
Table 10: History of bonus shares granted
Information on bonus shares (1)
Date of General Meeting 28 September 2012 28 September 2012
Date of Management Board meeting 24 June 2013 9 July 2014
Total number of bonus shares granted (to): 11,494 161,746
Philippe Sauze (2) 11,494 160,924
Vesting date 23 June 2015 (3)
End of lock-in period 23 June 2017 (3)
Number of shares subscribed at 31 March 2016 None None
Total number of shares cancelled or expired None None
Bonus shares outstanding at year-end 0 160,924
(1) In accordance with Article L.225-197-4 of the French Commercial Code, in a special report we have summarised the Management Board’s exercise, during the year, of the authorisation granted by the Ordinary and Extraordinary General Meeting of 28 September 2012 to grant Company bonus shares pursuant to Article L.225-197-1 et seq. of said code.(2) For his work as a Company employee responsible for aspects of sales, internet and marketing.(3) Please see section 1 of the special report on the Management Board’s exercise, during the year, of the authorisation granted by the Ordinary and Extraordinary General Meeting of 28 September 2012 to grant Company bonus shares pursuant to Article L.225-197-1 et seq. of said code.
44 MANAGEMENT REPORT Part 2. Information concerning the Executive Directors
Table 11:
The following table provides specific information on conditions regarding compensation and other benefits granted to executive directors:
Executive directors
Employment contract
Supplementary pension scheme
Compensation or benefits due or likely to become due following termination
or a change of office, including retirement commitments and other
annuities
Compensation arising from a non-compete
clause
Yes No Yes No Yes No Yes No
Laurent Villemonte de la Clergerie X X X X
Date of appointment: 19/07/2005
Expiry of appointment: At the end of the Annual General Meeting called to approve the financial statements for the year ended on 31/03/2021
Olivier Villemonte de la Clergerie X X X X
Date of appointment: 19/07/2005
Expiry of appointment: At the end of the Annual General Meeting called to approve the financial statements for the year ended on 31/03/2021
Caroline Villemonte de la Clergerie X (1) X X X
Date of appointment: 19/07/2005
Expiry of appointment: At the end of the Annual General Meeting called to approve the financial statements for the year ended on 31/03/2021
Philippe Sauze X X X X (2)
Date of appointment: 27/09/2013
Expiry of appointment: At the end of the Annual General Meeting called to approve the financial statements for the year ended on 31/03/2021
Marc Prieur X (3) X X X
Date of appointment: 14/04/2005
Expiry of appointment: At the end of the Annual General Meeting called to approve the financial statements for the year ended 31/03/2021
(1) As at the date of this report, Caroline Villemonte de la Clergerie’s employment contract had been terminated.(2) A non-compete clause is included in Philippe Sauze’s employment contract.(3) Marc Prieur is an employee of Harware.fr, a subsidiary of the Company.
• 3 I PROVISIONS AND OTHER AMOUNTS RECORDED BY THE COMPANY OR ITS SUBSIDIARIES FOR THE PAYMENT OF CORPORATE OFFICER PENSIONS, RETIREMENT OR OTHER BENEFITS
Besides the provisions for statutory retirement bonuses described under note 3�13 to the consolidated financial statements appended to this financial report, the Company has not recorded any provisions for the payment of pensions, retirement and other benefits to members of the Management or Supervisory Boards�
The Company did not pay any golden hellos or golden parachutes to the aforementioned directors or to any other corporate officers�
45
Annual f inancia l report 2015_2016
• 4 I SUMMARY STATEMENT OF COMPANY SHARE TRANSACTIONS CARRIED OUT DURING THE YEAR ENDED BY DIRECTORS AND PERSONS LISTED UNDER ARTICLE L.621-18-2 OF THE FRENCH MONETARY AND FINANCIAL CODE
Pursuant to Article L�621-18-2 of the French Monetary and Financial Code and Article 223-26 of the AMF General Regulation, the Company has been forwarded information on the following acquisitions, disposals, subscriptions and
exchanges of Company shares, carried out by directors or by persons with close personal ties with them, during the financial year ended:
Persons concernedType of
transactionNumber of
tradesMonth of
transaction Volume
Average price in
eurosTransaction amount
in euros
Laurent Villemonte de la Clergerie Chairman of the Management Board
Disposal 10 April 2015 8,342 18.22 151,991.24
Disposal 3 May 2015 2,811 16.71 46,971.81
Disposal 3 June 2015 1,000 16.9 16,900
Disposal 2 July 2015 1,904 18.85 35,890.4
Disposal 2 August 2015 1,096 19.30 21,152.8
Disposal 1 September 2015 1,000 18.67 18,670
• 5 I SUMMARY AND FINDINGS OF SUPERVISORY BOARD’S ANNUAL REVIEW ON REGULATED AGREEMENTS THAT ARE STILL EFFECTIVE
In accordance with proposal no� 27 of AMF recommendation 2012-05, we hereby inform you of the findings of the Supervisory Board meeting of 1 July 2016 following its annual review of agreements described under Article L�225-86 of the French Commercial Code, carried out in accordance with Article L�225-88-1 of the French Commercial Code�
At its meeting on 1 July 2016, the Supervisory Board performed a follow-up review of these agreements� Considering these agreements to be in compliance with the criteria that led to their initial approval, the Supervisory Board unanimously upheld its authorisation�
46 MANAGEMENT REPORT Part 3. Information on subsidiaries and equity interests
PART 3. INFORMATION ON SUBSIDIARIES AND EQUITY INTERESTS
• 1 I REVENUES AND EARNINGS OF SUBSIDIARIES AND CONTROLLED COMPANIES
In accordance with Articles L�233-6 para� 2 and R�225-102 of the French Commercial Code, below you will find the revenues and earnings of the Company’s subsidiaries and companies that it controls, by business line:
SARL Textorm (hardware wholesaler) for the period from 01/04/2015 to 31/03/2016 Revenues: €2,370,000Earnings before tax and non-recurring items: €13,000Net income: €13,000New investments in PP&E: NoneAverage headcount at 31/03/16: 1 (LDLC�com employee)
SARL Hardware.fr (hardware tests website) for the period from 01/04/2015 to 31/03/2016Revenues: €369,000Earnings before tax and non-recurring items: €158,000Net income: €103,000New investments in PP&E: NoneAverage headcount at 31/03/16: 2
SARL DLP-Connect (installation of cable networks, access control systems and CCTV) for the period from 01/04/2015 to 31/03/2016 Revenues: €1,142,000Earnings before tax and non-recurring items: €8,000Net income: €7,000New investments in PP&E: NoneAverage headcount at 31/03/16: 10
SASU LDLC Distribution (design and development of a retail network for the sale of all hardware and software, trading, training, granting of franchising rights or licenses) for the period from 01/04/2015 to 31/03/2016 Revenues: €1,606,000Earnings before tax and non-recurring items: (€29,000)Net income/(loss): (€29,000)New investments in PP&E: €6,000Average headcount at 31/03/16: 6
SARL Anikop (design, creation and sale of software and provision of IT services, plus customer service, maintenance and training) for the period from 01/04/2015 to 31/03/2016Revenues: €2,000,000Earnings before tax and non-recurring items: €303,000Net income: €303,000New investments in PP&E: €123,000Average headcount at 31/03/16: 16
SASU L’École LDLC (higher education) for the period from 01/04/2015 to 31/03/2016 Revenues: €233,000Earnings before tax and non-recurring items: (€383,000)Net income: €114,000New investments in PP&E: €137,000Average headcount at 31/03/16: 7
SAS LDLC Villefranche (retailer selling computers, external devices and software in specialised stores) for the period from 01/04/2015 to 31/03/2016 Revenues: €1,912,000Earnings before tax and non-recurring items: (€154,000)Net income/(loss): (€154,000)New investments in PP&E: €523,000Average headcount at 31/03/16: 3
SASU Campus 2017 (legal support for real estate projects) for the period from 29/09/2015 to 31/03/2016Revenues: €0Earnings before tax and non-recurring items: (€61,000)Net income/(loss): (€61,000)New investments in PP&E: €0Average headcount at 31/03/16: 0
47
Annual f inancia l report 2015_2016
SASU LDLC 1 (retailer selling computers, external devices and software in specialised stores) for the period from 15/03/2016 to 31/03/2016 Revenues: €0Earnings before tax and non-recurring items: (€3,000)Net income/(loss): (€3,000)New investments in PP&E: €7,000Average headcount at 31/03/16: 0
SASU LDLC 2 (retailer selling computers, external devices and software in specialised stores) for the period from 15/03/2016 to 31/03/2016 Revenues: €0Earnings before tax and non-recurring items: (€2,000)Net income/(loss): (€2,000)New investments in PP&E: €4,000Average headcount at 31/03/16: 0
SASU LDLC 3 (retailer selling computers, external devices and software in specialised stores) for the period from 15/03/2016 to 31/03/2016 Revenues: €0Earnings before tax and non-recurring items: (€2,000)Net income/(loss): (€2,000)New investments in PP&E: €0Average headcount at 31/03/16: 0
The figures for Domisys, Domimo 2 and Domimo 3 cover the period from 01/01/2015 to 31/12/2015, as these three companies have a different balance sheet date to the other Group companies�
SCI Domimo 2 (acquisition, use and development of land) for the period from 01/01/2015 to 31/12/2015 Revenues: €1,221,000Earnings before tax and non-recurring items: €318,000Net income: €217,000New investments in PP&E: 0Average headcount as at 31/12/15: 0
SCI Domimo 3 (acquisition, use and development of land for the construction and leasing of a building) for the period from 01/01/2015 to 31/12/2015 Revenues: €78,000Earnings before tax and non-recurring items: €39,000Net income: €33,000New investments in PP&E: €0Average headcount at 31/12/15: 0
SASU Domisys (retail seller of IT, office, hi-fi and multimedia equipment and accessories) for the period from 01/01/2015 to 31/12/2015 Revenues: €147,081,000Earnings before tax and non-recurring items: €3,285,000Net income: €5,749,000New investments in PP&E: €89,000Average headcount at 31/12/15: 206
• 2 I SIGNIFICANT EQUITY INVESTMENTS AND TAKEOVERS
In accordance with Articles L�233-6 paragraph 1 and L�247-1, I-1 of the French Commercial Code, below you will find a description of the equity interests acquired by the Company during the year ended in companies having their registered offices in France, representing more than one twentieth, one tenth, one fifth, one third, half or two-thirds of the share capital or voting rights at General Meetings of said companies or the takeover of such a company:
• LDLC�com acquired a 10% interest in the share capital of NLCL, a French private limited company with share capital of €166,667 whose registered office is located at 30 avenue Général de Gaulle – 69410 Champagne-au-Mont-d’Or, registered in the Villefranche-Tarare Trade and Companies Register under number 531 901 031 and whose main business activity is the online retail sale of pet products;
• LDLC�com acquired:
– 100% of the shares and voting rights in Domisys (Materiel�net), a French simplified joint-stock company with share capital of €272,605, whose registered office is located at 3 Rue Olivier de Serres, ZAC Erette, 44119, Grandchamps-des-Fontaines, registered in the Nantes Trade and Companies Register under number 415 378 249 and whose main business activity is the retail sale of IT, office, hi-fi and multimedia equipment and accessories,
– 3,500 shares and 900 shares respectively in Domimo 2, a French real estate investment company (SCI) with share capital of €50,000, whose registered office is located at 3 rue Olivier de Serres, ZAC Erette, 44119 Grandchamps-des-Fontaines, registered in the Nantes Trade and Companies Register under number 501 599 104, and Domimo 3, an SCI with share capital of €10,000, whose
48 MANAGEMENT REPORT Part 3. Information on subsidiaries and equity interests
registered office is located at 3 rue Olivier de Serres, 44119 Grandchamps-des-Fontaines, registered in the Nantes Trade and Companies Register under number 502 904 485�
The acquisition is in line with LDLC Group’s strategic priorities and the trend towards consolidation of the e-commerce market�
The Domisys acquisition was carried out as follows:
• sale of 151,792 Domisys shares for cash at a price of €20,739,000,
• exchange of 20,446 Domisys shares for 117,079 LDLC�com treasury shares,
• in-kind contribution of 100,367 Domisys shares in consideration for 574,732 new LDLC shares with a par value of €0�18 each, at a price of €23�86 per share including a share premium of €23�68�
Domimo 2 and Domimo 3 were acquired by means of cash payments amounting to €1,760,000 and €210,000 respectively�
LDLC�com took out a €23 million loan to partly finance the aforementioned acquisitions�
LDLC�com’s Management Board, which met on 31 March 2016, exercised the authority granted to it by the Ordinary and Extraordinary General Meeting of 25 September 2015 under its thirteenth resolution and declared its intention to carry out a capital increase of €103,451�76 via the issue of 574,732 new shares with a par value of €0�18 each, at a price of €23�86 including a share premium of €23�68�
The specific terms of the acquisition were presented in an information circular drawn up in accordance with Article 212-5-1 of the AMF General Regulation and Article 12 of AMF Instruction 2005-11 dated 13 December 2005 as amended, which may be consulted on the Company’s website at: http://www�groupe-ldlc�com/�
In accordance with Articles L�225-129-5 and R�225-116 para� 1 and 3 of the French Commercial Code, an additional report describing the final terms and conditions of the transactions carried out in accordance with the authorisation granted by the General Meeting, was approved by the Management Board at the time the authorisation was exercised�
The Company’s Statutory Auditors verified the compliance of this capital increase with regard to the authority granted by the Ordinary and Extraordinary General Meeting of 25 September 2015 and which they certified in their additional report prepared in accordance with the provisions of Article R�225-116 of the French Commercial Code�
In accordance with applicable statutory and regulatory provisions, these two reports were made available to shareholders at the Company’s registered office and shall be presented directly to the shareholders at the Ordinary and Extraordinary Meeting to be held on 30 September 2016�
The Company created four new wholly-owned subsidiaries:
• Campus 2017, a French simplified joint-stock company with share capital of €1,500 whose registered office is located at 18 Chemin des Cuers, 69574 Dardilly Cedex, registered in the Lyon Trade and Companies Register under number 813 818 127,
• LDLC1, a French simplified joint-stock company with share capital of €30,000 whose registered office is located at 18 Chemin des Cuers, 69574 Dardilly Cedex, registered in the Lyon Trade and Companies Register under number 819 179 284,
• LDLC2, a French simplified joint-stock company with share capital of €30,000 whose registered office is located at 18 Chemin des Cuers, 69574 Dardilly Cedex, registered in the Lyon Trade and Companies Register under number 819 179 300,
• LDLC3, a French simplified joint-stock company with share capital of €1,500 whose registered office is located at 18 Chemin des Cuers, 69574 Dardilly Cedex, registered in the Lyon Trade and Companies Register under number 819 179 318�
Other than the information presented above, no changes have been made with regard to equity interests held by the Company since the previous financial year�
Furthermore, the Company has not disposed of any of its equity interests�
49
Annual f inancia l report 2015_2016
• 3 I DISPOSAL OF SHARES TO SETTLE INTERLOCKING INVESTMENTS
In accordance with Article R�233-19, paragraph 2 of the French Commercial Code, we hereby inform you that the Company has not been required to dispose of any shares in order to
bring an end to any interlocking investments prohibited by Articles L�233-29 and L�233-30 of the French Commercial Code�
• 4 I TREASURY SHARES HELD INDIRECTLY
In accordance with Article L�233-13 of the French Commercial Code, we hereby inform you that no company directly or indirectly controlled by the Company holds any treasury shares�
• 5 I LIST OF EXISTING BRANCHES
In accordance with Article L�232-1 II of the French Commercial Code, a list of currently existing branches is presented below:
Address Town/city
22 rue de la Gare Lyon 9 (69)
24 rue de la Gare Lyon 9 (69)
20 rue du Ruisseau Saint-Quentin-Fallavier (38)
Boulevard de Satolas Saint-Quentin-Fallavier (38)
12 rue de l’Eglise Paris 15 (75)
• 6 I INFORMATION ON TREASURY SHARE TRANSACTIONS CARRIED OUT BY THE COMPANY
The Company’s Ordinary and Extraordinary General Meeting held on 25 September 2015 authorised the Management Board to implement, for a period of eighteen (18) months
from the date of the Meeting, a Company share buy-back plan pursuant to Article L�225-209 of the French Commercial Code and in accordance with the AMF General Regulation�
Pursuant to Article L�225-211, paragraph 2 of the French Commercial Code, we inform you that the Company performed the following treasury share transactions during the year ended 31 March 2016:
Number of shares purchased during the year ended 163,918
Average share purchase price during the year ended €20.64
Trading fees None
Number of shares sold during the year 245,033
Average share sale price during the year ended €15.12
Number of shares cancelled during the year ended 0
Number of treasury shares registered in the Company’s name at 31 March 2016 28,537
50 MANAGEMENT REPORT Part 3. Information on subsidiaries and equity interests
Treasury shares held at 31 March 2016 (% of share capital) 0.45%
Net book value of treasury shares at 31 March 2016 €537,306.87
Par value of treasury shares at 31 March 2016 €5,136.66
Market value of treasury shares at 31 March 2016 (share price of €31.10 at this date) €887,500.70
The information on treasury shares registered in the Company’s name at 31 March 2016 (number, percentage of share capital, net book value, par value and market value) only
relates to shares held by the Company itself, i�e� less bonus shares, pursuant to Articles L�225-197-1 et seq� of the French Commercial Code�
The breakdown of treasury shares, by purpose, at 31 March 2016 is as follows:
Purpose of buy-back Number of shares
Liquidity contract entered into with an independent investment service provider, compliant with the new AMAFI code of ethics dated 8 March 2011 and recognised by the AMF on 21 March 2011
1,851
To cover employee share options or other share allocations in accordance with the terms and conditions set out under Articles L.3332-1 et seq. and R.3332-4 of the French Labour Code, or the allocation of Company shares to employees and/or corporate officers of the Company or companies referred to in Article L.225-197-2 of the French Commercial Code, or the allocation of shares as part of the employee profit-sharing scheme
161,746
(relates to allocations on 09/07/2014)(1)
Cancellation of all or some of the shares acquired via a share capital reduction 0
Holding of shares acquired and subsequent tender in exchange or as consideration in relation to financial transactions or acquisitions, in accordance with applicable regulations
26,686
TOTAL 190,283
(1) In accordance with Article L.225-197-4 of the French Commercial Code, a special report informs the Ordinary General Meeting each year of transactions carried out pursuant to Articles L.225-197-1 to L.225-197-3 of said code.
No reallocation of Company shares for any other purpose or objective has been carried out�
• 7 I AGREEMENTS PROVIDED FOR UNDER ARTICLE L.225-102-1, FINAL PARAGRAPH, OF THE FRENCH COMMERCIAL CODE
In accordance with the final paragraph of Article L�225-102-1, excluding agreements entered into at arms’ length in the ordinary course of business, we would remind you of the agreements concluded between (i) a member of the
Management or Supervisory Board, the CEO, a Deputy CEO or a shareholder holding over 10% of the voting rights in the Company, and (ii) another company in which the Company directly or indirectly holds over 50% of the share capital:
Members of the Management Board and/or Supervisory Board and/or the CEO and/or Deputy CEOs and/or a shareholder holding more than 10% of the Company’s share capital Purpose
Subsidiaries concerned
None
51
Annual f inancia l report 2015_2016
PART 4. SHAREHOLDER STRUCTURE
• 1 I CHANGES IN THE COMPANY’S SHAREHOLDER STRUCTURE DURING THE FINANCIAL YEAR
Following the Domisys acquisition on 31 March 2016, the Company increased the share capital by a nominal amount of €103,451�76 via the issue of 574,732 new shares with a par value of €0�18 each and a price of €23�86, including a share premium of €23�68�
The Company’s share capital thereby increased from €1,034,527�32 to €1,137,979�08 (6,322,106 shares with a par value of €0�18 each)�
See part 3, section 2 of this report�
• 2 I SHAREHOLDERS WITH SIGNIFICANT INTERESTS
Pursuant to Article L�233-13 of the French Commercial Code and in accordance with the information and notifications received pursuant to Articles L�233-7 and L�233-12 of said code, listed below are the identities of shareholders that
directly or indirectly hold more than 5%, 10%, 15%, 20%, 25%, 30%, 33%, 50%, 66%, 90% or 95% of the share capital or voting rights as at financial year-end, as well as any changes occurring during the year:
Thresholds Shareholder nameInterest
Share capital Voting rights5% to 10% Suzanne de la Clergerie 6.20%
Domicorp 9.52%
10% to 15% Domicorp 14.01%
Caroline Villemonte de la Clergerie 10.62% 12.93%
Olivier Villemonte de la Clergerie 10.12% 12.20%
15% to 20%
20% to 25% Laurent Villemonte de la Clergerie 20.91%
25% to 331/3% Laurent Villemonte de la Clergerie 26.95%
331/3% to 50%
50% to 662/3%
662/3% to 90%
90% to 95%
> 95%
On 6 April 2016, the French simplified joint-stock company Domicorp (Rue Olivier de Serres, ZAC Erette, 44119 Grandchamps-des-Fontaines) stated that, on 31 March 2016, it had exceeded the thresholds of 5% of the Company’s share capital and voting rights and 10% of the share capital, and that it held 885,546 LDLC�com shares, representing as many voting rights, i�e� 14�01% of the Company’s share capital and 9�52% of the voting rights�
As at 31 March 2016, Domisys no longer held any LDLC shares�
Please note that the articles of association provide for a double voting right in respect of shares held in registered form for more than two years, in accordance with Article L�225-123 of the French Commercial Code�
To the Company’s knowledge, there are no other shareholders that hold, directly or indirectly, alone or in concert, more than 5% of the share capital or voting rights�
52 MANAGEMENT REPORT Part 4. Shareholder structure
• 3 I EMPLOYEE SHARE OWNERSHIP
In accordance with Article L�225-102 of the French Commercial Code, we inform you that 11,631 shares, representing approximately 0�18% of the Company’s share capital, are held by employees of the Company and companies related to it within the meaning of Article L�225-180, under an employee share ownership plan as provided for by Articles L�443-1 to L�443-9 of the French Labour Code, and by current and former employees under employee mutual funds (FCPEs) governed by chapter III of French Act no� 88-1201 dated 23 December 1988 on UCITS and the establishment of debt mutual funds� Registered shares directly held by employees
are also taken into account in accordance with Articles L�225-187 and L�225-196 of the French Commercial Code, in their wording prior to the entry into force of Act no� 2001-152 dated 19 February 2001 on employee share ownership plans, Article L�225-197-1 of the same code, Article L�3324-10 of the French Labour Code, Article 31-2 of administrative order 2014-948 dated 20 August 2014 on governance and share capital transactions of state-owned companies and Article 11 of Act no� 86-912 dated 6 August 1986 on methods of privatisation, in its wording prior to the entry into force of the aforementioned order�
• 4 I STOCK OPTIONS AND BONUS SHARES
In accordance with Articles L�225-185 para� 4 and L�225-197-1, II para� 4 of the French Commercial Code, we hereby inform you that no stock options or bonus shares were granted to corporate officers during the financial year ended�
In accordance with Article L�225-197-4 of the French Commercial Code, a special report informs the Ordinary General Meeting each year of transactions carried out pursuant to Articles L�225-197-1 to L�225-197-3 of said code�
• 5 I STOCK MARKET INFORMATION
At 31 March 2016, the Company’s share capital comprised 6,322,106 shares� Market capitalisation, at 31 March 2016, amounted to €196,617,496�60�
Trading volumes during the financial year were as follows:
Month Volume Average price High Low Amounts in €m
Apr-15 165,081 18.80 19.85 16.85 3.1
May-15 95,265 17.00 17.65 15.5 1.6
June-15 140,370 17.45 19.2 16 2.5
July-15 69,539 19.12 19.85 18.51 1.3
Aug-15 51,675 19.41 20.02 17.62 1.0
Sept-15 64,090 18.51 19.68 17.5 1.2
Oct-15 148,540 17.99 18.3 17.5 2.7
Nov-15 139,382 20.51 23.1 17.85 2.9
Dec-15 405,560 26.96 29.64 22.9 9.9
Jan-16 147,507 27.98 29.9 25.4 4.1
Feb-16 82,476 28.40 29.85 26.5 2.3
Mar-16 70,815 28.74 31.49 26.68 2.1
During the financial year ended, the LDLC�com share reached a high of €31�49 and a low of €15�50�
53
Annual f inancia l report 2015_2016
PART 5. TAX INFORMATION
• 1 I EXPENDITURE ON LUXURIES AND NON-TAX DEDUCTIBLE EXPENSES
In accordance with Article 223 quater of the French Tax Code, we hereby inform you that the financial statements for the year ended include €80,336 in non-tax deductible expenses as provided for by Article 39-4 of the French Tax Code and that the corresponding tax charge amounted to €30,528 (rate of 38% including social security and non-recurring contributions)�
In accordance with Article 223 quinquies of the French Tax Code, we hereby inform you that there is no charge or expense not deductible from earnings subject to corporate income tax, under the meaning provided in Article 39-5 of said code�
• 2 I DIVIDENDS DISTRIBUTED BY THE COMPANY OVER THE LAST THREE FINANCIAL YEARS
In accordance with Article 243 B of the French Tax Code, below we have provided information on the dividends paid over the last three financial years and the amounts of income eligible and ineligible for the 40% tax allowance:
Dividends distributed
Distributed amount eligible for the allowance provided for by Article 158 3 2° of the French Tax Code
Distributed amount not eligible for the allowance provided for by Article
158 3 2° of the French Tax Code
FY ended 31 March 2015 €2,586,318.30 €2,586,318.30 None
FY ended 31 March 2014 €2,586,318.30 €2,586,318.30 None
FY ended 31 March 2013 €1,896,633.42 €1,896,633.42 None
54 MANAGEMENT REPORT PART 6. Information required by article l.225-100-3 of the French commercial code
PART 6. INFORMATION REQUIRED BY ARTICLE L.225-100-3 OF THE FRENCH COMMERCIAL CODE
• 1 I CAPITAL STRUCTURE
None�
• 2 I RESTRICTIONS ON EXERCISING VOTING RIGHTS AND TRANSFERRING SHARES IMPOSED BY THE ARTICLES OF ASSOCIATIONS, OR CONTRACTUAL PROVISIONS MADE KNOWN TO THE COMPANY PURSUANT TO ARTICLE L.233-11 OF THE FRENCH COMMERCIAL CODE
We would remind you that Article 12 of the Company’s articles of association on “Rights and obligations attached to shares” provides that:
“Any individual or legal entity, acting alone or in concert, that comes to possess, via any means whatsoever, a number of shares representing 2% of the share capital or voting rights at General Meetings, or any multiple of this amount, must inform the Company within 15 days of crossing this threshold, by registered letter with acknowledgement of receipt addressed to the registered office, of the total number of shares and attached voting rights that it holds as well as, where applicable, the number of shares granting future access to the share capital and the voting rights attached thereto.
This obligation shall apply under the same terms and conditions as those provided for above, whenever the fraction of the share capital or voting rights held falls below one of the determined thresholds.
In the event of non-compliance with any of the foregoing provisions, the shares exceeding the threshold that must be disclosed shall be stripped of voting rights with regard to all shareholders’ meetings that may take place, until the expiry of
a two-year period from when the required disclosure is made. Under the same conditions, the voting rights attached to said shares that were not duly disclosed may not be exercised or assigned by the non-compliant shareholder.
Unless one of the thresholds referred to under Article L.2337 of the French Commercial Code is crossed, this sanction shall only be applied upon request, recorded in the minutes of the General Meeting, of one or more shareholders holding, together or separately, at least 5% of the share capital and/or voting rights in the Company.
Compliance with said obligation to disclose the crossing of the 2% threshold of the share capital or voting rights at General Meetings, or any multiple of this percentage, does not under any circumstances whatsoever dispense the shareholders, whether individuals or legal entities, from complying with statutory provisions requiring that the Company be informed of any interests exceeding one twentieth, one tenth, three twentieths, one fifth, one quarter, three tenths, one third, half, two thirds, eighteen twentieths or nineteen twentieths of the share capital or voting rights of the Company, in accordance with Articles L.233-7 et seq. of the French Commercial Code.”
• 3 I DIRECT AND INDIRECT INTERESTS IN THE COMPANY’S SHARE CAPITAL OF WHICH IT IS AWARE, PURSUANT TO ARTICLES L.233-7 AND L.233-12 OF THE FRENCH COMMERCIAL CODE
See part 3, sections 3 and 4 of this report�
55
Annual f inancia l report 2015_2016
• 4 I LIST OF ALL SHAREHOLDERS HOLDING SHARES GRANTING SPECIAL CONTROLLING RIGHTS AND DESCRIPTION THEREOF
None�
• 5 I CONTROL MECHANISMS APPLICABLE TO A POTENTIAL EMPLOYEE SHARE OWNERSHIP SYSTEM WHERE CONTROLLING RIGHTS ARE NOT EXERCISED BY THE EMPLOYEES
None�
• 6 I SHAREHOLDER AGREEMENTS KNOWN TO THE COMPANY WHICH MAY GIVE RISE TO RESTRICTIONS ON SHARE TRANSFERS AND THE EXERCISE OF VOTING RIGHTS
None�
• 7 I RULES APPLICABLE TO THE APPOINTMENT AND REPLACEMENT OF MEMBERS OF THE MANAGEMENT BOARD AND AMENDMENTS TO THE ARTICLES OF ASSOCIATION
The applicable rules are those stated in the articles of association� They comply with French law�
• 8 I MANAGEMENT BOARD POWERS, SPECIFICALLY REGARDING SHARE ISSUE AND BUY-BACK
Powers granted to the Management Board by the Company’s General Meeting of shareholders in respect of share issue and buy-back are presented in Appendix 3 of this report�
• 9 I AGREEMENTS ENTERED INTO BY THE COMPANY WHICH ARE AUTOMATICALLY MODIFIED OR TERMINATED IN THE EVENT OF A CHANGE OF CONTROL
None�
• 10 I AGREEMENTS PROVIDING FOR COMPENSATION TO BE PAID TO MEMBERS OF THE MANAGEMENT BOARD OR TO EMPLOYEES, IF THEY RESIGN OR ARE DISMISSED WITHOUT GENUINE AND SUBSTANTIVE GROUNDS, OR IF THEIR EMPLOYMENT CONTRACTS ARE TERMINATED DUE TO A PUBLIC TENDER OFFER
None�
56 MANAGEMENT REPORT Part 7. Social, environmental and societal information
PART 7. SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
In accordance with Articles L�225-102-1 para� 7 and R�225-105-2 (II) of the French Commercial Code, social and environmental information presented in this report was verified, under statutory and regulatory conditions, by an independent third party, whose opinion is appended to this report�
In accordance with Article R�225-105 of the French Commercial Code, below we have presented the initiatives carried out and guidance adopted by the Company and its subsidiaries, in order to make allowance for the impact of its operations on staff and the environment, as well as to meet its social commitments to sustainable development�
• 1 I SOCIAL INFORMATION
Pursuant to Article R�225-105-1 of the French Commercial Code established by decree no� 2012-557 dated 24 April 2012, the Company has presented the following social information� As specified in the methodological note, the information relates to the LDLC�com Group�
1.1. Headcount
1.1.1 . Total headcount and breakdown of employees by gender, age and region
As at 31 March 2016, the Group employed 489 people (excluding Caroline, Suzanne, Laurent, Marc and Olivier Villemonte de la Clergerie) at LDLC�com and its subsidiaries LDLC Distribution, Anikop, Hardware�fr, DLP-Connect, l’École LDLC and LDLC Villefranche; 475 are permanent employees, 8 are on fixed-term contracts and 6 are trainees�
Breakdown of headcount by company (excluding executive directors):
CompaniesNumber of employees
at 31 March 2016Number of employees
at 31 March 2015
Total LDLC.com 440 446
LDLC.com Boutiques 43 41
LDLC.com Bureau 224 213
LDLC.com Logistique 173 192
Anikop 19 17
Hardware.fr 1 1
DLP-Connect 9 12
LDLC Distribution 9 3
L’École LDLC 6 5
LDLC Villefranche 5 (including 4 transfers)
TOTAL 489 484
57
Annual f inancia l report 2015_2016
Breakdown of LDLC.com employees by age (excluding executive directors):
Age bracket Number of employees Percentage
<26 73 17%
26-35 194 44%
36-45 127 29%
46-55 38 9%
56-66 7 2%
>66 1 0%
Breakdown of Anikop employees by age:
Age bracket Number of employees Percentage
<26 1 5%
26-35 8 42%
36-45 8 42%
46-55 2 11%
56-66 0 0%
Breakdown of DLP-Connect employees by age:
Age bracket Number of employees Percentage
<26 1 11%
26-35 4 44.5%
36-45 3 33.5%
46-55 1 11%
56-66 0 0%
Breakdown of Hardware.fr employees by age:
Age bracket Number of employees Percentage
<26 0 0%
26-35 0 0%
36-45 1 100%
46-55 0 0%
56-66 0 0%
Breakdown of LDLC Distribution employees by age:
Age bracket Number of employees Percentage
<26 1 11%
26-35 4 44.5%
36-45 4 44.5%
46-55 0 0%
56-66 0 0%
58 MANAGEMENT REPORT Part 7. Social, environmental and societal information
Breakdown of L’École LDLC employees by age:
Age bracket Number of employees Percentage
<26 0 0%
26-35 2 33%
36-45 4 67%
46-55 0 0%
56-66 0 0%
Breakdown of LDLC Villefranche employees by age:LDLC�com employees attached to the business line transferred to LDLC Villefranche were transferred on 26 September 2015 following the spin-off�
Age bracket Number of employees Percentage
<26 2 40%
26-35 1 20%
36-45 2 40%
46-55 0 0%
56-66 0 0%
Breakdown of LDLC.com employees by gender (excluding executive directors):
Gender Total Percentage
F 153 35%
M 287 65%
TOTAL 440 100%
Breakdown of Anikop employees by gender:
Gender Total Percentage
F 5 26%
M 14 74%
TOTAL 19 100%
Breakdown of DLP-Connect employees by gender:
Gender Total Percentage
F 0 0%
M 9 100%
TOTAL 9 100%
59
Annual f inancia l report 2015_2016
Breakdown of Hardware.fr employees by gender:
Gender Total Percentage
F 0 0%
M 1 100%
TOTAL 1 100%
Breakdown of LDLC Villefranche employees by gender:LDLC�com employees attached to the business line transferred to LDLC Villefranche were transferred on 26 September 2015 following the spin-off�
Gender Total Percentage
F 0 0%
M 5 100%
TOTAL 5 100%
Breakdown of LDLC Distribution employees by gender:
Gender Total Percentage
F 5 56%
M 4 44%
TOTAL 9 100%
Breakdown of L’École LDLC employees by gender:
Gender Total Percentage
F 3 50%
M 3 50%
TOTAL 6 100%
1.1.2 . Hires and dismissals
LDLC.Com:The Company’s staff turnover rate corresponds to its young and dynamic workforce, which entails an ongoing search for employees to replace those who have left or who are on maternity leave� Once again, this year the Company faced the difficult challenge of filling certain vacant positions, such as account managers, sales representatives and technical support technicians�
LDLC�com’s growth has resulted in an expansion of the workforce, in order to handle increased business and strengthen teams� Almost all support services have increased their permanent staff�
Hires from 01/04/2015 to 31/03/2016: 74Departures from 01/04/2015 to 31/03/2016: 78
• 12 expired fixed-term contracts
• 30 voluntary departures
• 8 terminations of trial period, including 1 instigated by the employee and 7 by the employer
• 12 terminations by mutual agreement
• 13 dismissals, including 2 employees deemed unfit for work, 9 for gross negligence and 2 on other grounds
• 1 early termination of a fixed-term contract, initiated by the employee
• 1 termination of an apprenticeship contract by mutual agreement
• 1 voluntary retirement�
60 MANAGEMENT REPORT Part 7. Social, environmental and societal information
Anikop:Hires from 01/04/2015 to 31/03/2016: 8Departures from 01/04/2015 to 31/03/2016: 6
• 2 terminations of trial period instigated by the employer
• 1 termination of trial period instigated by the employer
• 2 expired fixed-term contracts
• 1 dismissal for gross negligence
DLP-Connect:Hires from 01/04/2015 to 31/03/2016: 1Departures from 01/04/2015 to 31/03/2016: 4
• 3 expired fixed-term contracts
• 1 termination of an apprenticeship contracts
Hardware:Hires from 01/04/2015 to 31/03/2016: 1 freelance contributorDepartures from 01/04/2015 to 31/03/2016: 1 freelance contributor
LDLC Distribution:Hires from 01/04/2015 to 31/03/2016: 3Departures from 01/04/2015 to 31/03/2016: 0
L’École LDLC:Hires from 01/04/2015 to 31/03/2016: 2Departures from 01/04/2015 to 31/03/2016: 1 termination of trial period
LDLC Villefranche:Hires from 01/04/2015 to 31/03/2016: 1 Departures from 01/04/2015 to 31/03/2016: 0
1.1.3 . Compensation and changes thereto
a. LDLC.com compensationLDLC�com’s management has decided to reward the Company’s employees for the growth achieved this year� Effective as of 1 April 2016, Group Management took the following decisions:
Increases to compensation were agreed to in line with the mandatory annual negotiation agreement (French NAO) signed on 11 April 2016 and implemented on 1 April 2016�
In order to reward long-serving employees for their proven reliability and loyalty to the Company, Group Management agreed to review the thresholds for the granting of long-service bonuses�
The thresholds were modified as follows, effective 1 April 2016:
• 3 years and over: bonus of €30 gross
• 6 years and over: bonus of €70 gross
• 9 years and over: bonus of €120 gross
• 12 years and over: bonus of €150 gross
• 15 years and over: bonus of €180 gross
This year, Laurent Villemonte de la Clergerie decided to grant a long-service bonus to supervisors under the same terms as for employees� The criteria for obtaining this bonus are identical for both categories of employee�
At the recommendation of Laurent Villemonte de la Clergerie in his capacity as Chairman of the Management Board, the Supervisory Board, at its meetings held on 25 March 2016 and 1 July 2016, decided to decrease his annual fixed remuneration in said capacity from €180,000 gross to €12 net, effective 1 April 2016�
The release of the corresponding funds enabled the Company to increase the wage rises awarded under its wage policy, as of 1 April 2016�
b. Payroll• LDLC�com gross annual payroll charge for the period from
01/04/2015 to 31/03/2016: €13,002,224�
• Anikop gross annual payroll charge for the period from 01/04/2015 to 31/03/2016: €646,697�
• Hardware�fr gross annual payroll charge for the period from 01/04/2015 to 31/03/2016: €104,204�
• LDLC Distribution gross annual payroll charge for the period from 01/04/2015 to 31/03/2016: €280,409�
• L’École LDLC gross annual payroll charge for the period from 01/04/2015 to 31/03/2016: €267,245�
• DLP-Connect gross annual payroll charge for the period from 01/04/2015 to 31/03/2016: €305,897�
• LDLC Villefranche gross annual payroll charge for the period from 26/09/2015 to 31/03/2016: €71,129�
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Annual f inancia l report 2015_2016
c. Profit-sharingAn employee profit-sharing agreement was signed on 18 March 2004 and is still in force� A profit-sharing bonus will be paid this year, in July 2016� The gross amount of the LDLC profit-share for the year ended 31 March 2016 amounts to €1,336,418�19 (including the CSG-CRDS general social contribution/social debt repayment contribution)� The fixed social security contribution calculated on the basis of the profit-share amounted to €267,283�64�
There are no profit-sharing schemes in place in the subsidiaries�
1.2. Work organisation
1.2.1 . Organisation of working hours
Work at the Company is primarily based on a 35-hour (in cycles or not) or 37�5-hour working week, including the granting of rest days to offset overtime worked� Since the end of 2004, all new employees have been systematically hired on the basis of a 35-hour working week�
At the Saint-Quentin-Fallavier site, teams work in two 8-hour shifts or in normal daytime hours, with schedules adjusted to business requirements and employee preferences� At the Dardilly site, working hours are organised in terms of days, while managers work a fixed number of hours per period and customer service staff (technical support/order information) work in shifts; staff at the Lyon and Paris stores also follow this kind of schedule�
LDLC�com signed an agreement on night-time work in 2013� Voluntary employee teams were set up at the Saint-Quentin-Fallavier site in order to handle end-of-year volumes�
In 2015, two supplemental agreements were signed with the trade union representative, which changed the working period to 6�30 pm to 2�00 am, including an unpaid 30-minute break from 8�30 pm to 9�00 pm� The night shift also has two breaks from 11�00 pm to 11�10 pm and 12�30 am to 12�40 am, for which they are paid at the full night-time rate�
Compensation for work carried out between 9�00 pm and 6�00 am was increased by 20%� Night-time work also gave rise to time off in lieu�
20 people worked at night in 2015/2016, i�e� 4�5% of LDLC�com employees:
ManagersEngineers/
supervisors Employees Total
2015/2016 0 4 16 20
143 people work in shift teams as at 31 March 2016, i�e� 32�5% LDLC�com employees:
ManagersEngineers/
supervisors Employees Total
2015/2016 0 14 129 143
At LDLC�com Group subsidiaries, no employee works in a shift team or in alternating hours�
1.2.2 . Absenteeism
The average rate of absenteeism at all LDLC�com sites over the period was 7�10%, including:
• 4�04% sick leave,
• 1�59% industrial accidents,
• 0�00% travel accidents,
• 0�72% maternity leave,
• 0�75% other (unpaid leave and personal leave)�
The average rate of absenteeism at Anikop over the period was 1�68%, including:
• 1�31% sick leave,
• 0�21% parental leave,
• 0�16% other absences�
The average rate of absenteeism at DLP-Connect over the period was 5�24%, including:
• 0�23% sick leave,
• 0�27% parental leave,
• 4�75% other absences�
The total rate of absenteeism at LDLC Distribution over the period was 0�71%, including:
• 0�71% for parental leave�
The total rate of absenteeism at Hardware over the period was 3�46%, including:
• 3�46% for parental leave�
The average rate of absenteeism at LDLC Villefranche over the period was 0�05%, including:
• 0�05% other absences�
L’École LDLC recorded no absenteeism�
62 MANAGEMENT REPORT Part 7. Social, environmental and societal information
1.3. Industrial relations
1.3.1 . Organisation of industrial relations, including staff information, consultation and negotiation procedures
Meetings with staff representative bodies are held regularly and within applicable statutory timeframes� Representatives are informed and consulted on legal matters within statutory timeframes, and information is regularly shared with them outside meetings�
Regarding the Works Council, the collective bargaining agreement on distance selling applied by the Company provides for the payment of a total grant of 0�2%� In agreement with the Works Council, the decision was therefore taken to transfer the grant amount to cover welfare actions�
Subsidiaries do not have employee representatives, given the staff sharing arrangements applied� Anikop, however, elected employee representatives in June 2014�
1.3.2 . Overview of collective agreements
A supplemental agreement to the employee profit-sharing agreement and the regulations of the employee share ownership plan were signed on 29 November 2012� (In force)
An agreement relating to the implementation of a personal protection scheme was signed on 29 March 2007� (In force)
An agreement on dressing/undressing time for staff working in the warehousing area at Saint-Quentin-Fallavier was signed on 20 December 2007 and approved by a vote held on 16 January 2008� The agreement provides for time off in lieu for the period from 24 April 2006 to 31 December 2007, for all employees present during this period (in proportion to time present) and the establishment of a time recovery system for the future� A supplemental agreement to this agreement was signed on 30 May 2011 in order to adjust the conditions for taking these days off� Accordingly, from 1 January 2008, every employee receives 3 additional rest days per year (“dressing days”), prorated for incomplete years� (In force)
An agreement on gender equality was signed on 13 December 2011� A new agreement was signed on 1 April 2016�
A three-year company agreement on the hiring of seniors was signed on 10 December 2009�
The mechanism for the profit-sharing bonus was repealed, effective 1 January 2015 (Article 19 of the French Social Security Financing Act for 2015)�
An inter-generational agreement was signed on 4 July 2013, effective 1 September 2013 for a three-year term� A supplemental agreement to this agreement was signed on 25 November 2015�
A company agreement on night work was signed on 25 October 2013, effective 18 November 2013� Two supplemental agreements were signed on 17/11/2015 and 07/12/2015�
A Christmas bonus agreement was signed on 25 November 2015�
No other agreements were signed in 2015�
The Group does not plan to implement an incentive scheme�
1.4. Health and safety
1.4.1 . Occupational health and safety conditions
Group management intends to continue improving conditions at work and pursuing initiatives to reduce arduous tasks� Training sessions, specific initiatives and working groups have been set up in order to achieve this goal�
The Quality, Safety and Environment officer follows an action plan covering all Group sites and addressing the major safety challenges: workstation design, arduous work, safety training, hazard prevention, etc�
During the reporting period, several workstation assessments were carried out�
Under a specific integration programme for temporary workers and new recruits, our safety officer spends time at the Saint-Quentin site familiarising employees with occupational safety procedures and their new workstations�
These training hours are monitored by the Quality, Safety and Environment Officer, as they are deemed to provide information and encourage awareness of workstation risks, including training on the correct movements and postures to adopt in order to prevent accidents at work�
A study was carried out by an independent firm (SECAFI) to assess psychosocial risk factors within the Company�
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Annual f inancia l report 2015_2016
1.4.2 . Overview of occupational health and safety agreements signed with trade unions or staff representatives
Two health and safety committees based at Dardilly and Saint-Quentin-Fallavier meet every quarter, in the presence of their members, the chairman or chairman’s representative and the Company doctor�
No agreement on occupational health and safety was signed during the year�
Subsidiaries do not have employee representatives given their staff sharing arrangements� Only Anikop has employee representatives�
1.4.3 . Industrial accidents, including frequency and severity thereof, and occupational sickness
Industrial accidents are closely monitored by the QSE officer, who keeps a record of accidents, with or without lost time, at all sites�
Number of industrial accidents:
Site ActivityAccidents
with no lost time Lost time accidents Travel accidents
Saint-Quentin Logistics platform 3 40 1
Saint-Quentin 2 Logistics platform annex 0 1 0
Dardilly Registered office 2 0 0
Vaise Store 0 0 0
Paris Store 1 1 1
Anikop Subsidiary 0 0 0
DLP Subsidiary 0 0 0
LDLC Distribution Subsidiary 0 0 0
Hardware.fr Subsidiary 0 0 0
Villefranche Subsidiary 0 0 0
L’École LDLC Subsidiary 0 0 0
Frequency and severity rates:
LDLC.com Group
Logistic Office Stores Subsidiaries
Frequency rate (Fr) 136.8 0 13.6 0
Severity rate (Sr) 7.35 0 0.02 0
Occupational sickness: 0 occupational sicknesses declared�
64 MANAGEMENT REPORT Part 7. Social, environmental and societal information
1.5. Training
1.5.1 . Safety training
Every year, LDLC�com organises different safety training programmes for its employees at all of its sites� Training is provided by a specialised training firm�
The programme includes:
• Occupational first aid initial & refresher training,
• Forklift training (CACES 1 - 3 - 5),
• AWP training (PEMP 3),
• Fire evacuation procedure training,
• Electrical authorisation initial & refresher training,
• Stimcore training,
• Occupational health training,
• Fire safety training�
1.5.2 . Training policies
Ongoing professional training enables every employee, regardless of age, to participate in paid or unpaid training programmes so as to adapt to changes in their occupation or structure, or in order to pursue a career change�
Via budgeted annual initiatives, LDLC�com tries to reach this goal as effectively as possible, whilst seeking solutions to problems that may arise along the way�
In 2016, LDLC�com intends to continue the progress made in 2015 by addressing the following issues:
• Enhance the management skills of managers and team leaders, in order to avert employee-related problems and boost staff morale�
• Ensure the professional development of employees so that they can keep up with constantly changing techniques and legal or administrative constraints�
For a company, to achieve long-term success, it must constantly challenge its methods and pursue structural growth; this includes ensuring the development of its employees�
Despite recent vocational training reforms that have modified companies’ obligations as of 01/01/2015, LDLC�com intends to continue financing its employees’ training requirements,
thereby contributing towards the adaptation and development of employees and the preservation of their jobs�
As in 2015, departmental managers will not be responsible for reporting their department’s training requirements; Group management will draw up official training priorities in order to respond to changes in its structure and meet its new strategic goals�
This year, we will continue preparing an annual training plan tailored to employees’ needs, the Company’s development, changes in job functions and the preservation of jobs�
LDLC�com has always strived, depending on its staffing requirements, to facilitate the integration and training of young people in the Company� In this regard, LDLC�com has always made use of vocational training contracts (5 in the 2015/2016 financial year), and apprenticeships contracts (2 in the 2015/2016 financial year)�
1.5.3 . Total training hours
LDLC.com:Over the 2015 calendar year, 3,754 hours of training were dispensed under the LDLC�com training programme:
• Training programme (TP): 29 courses under the TP totalling 3,754 hours broken down as follows: 332 hours of IT training, 28 hours of legal training, 151 hours of human resources training, 1,792 hours of management training, 1,045 hours of safety training, and 406 hours of sales training�
Anikop:Over the 2015 calendar year, 14 hours of training were dispensed under the Anikop training program:
• Training programme (TP): 1 course under the TP including 14 hours of sales training, i�e� around 1 hour per person�
LDLC Distribution:Over the 2015 calendar year, 63 hours of training were dispensed under the LDLC Distribution training programme:
• Training programme (TP): 4 courses under the TP totalling 63 hours, including 21 hours of management training, 14 hours of sales, 7 hours of legal and 21 hours of trainer training, i�e around 10 hours per person�
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Annual f inancia l report 2015_2016
DLP-Connect:In 2015, 175 hours of training were dispensed under the DLP-Connect training programme, i�e� around 19 hours of training per employee:
• Training programme (TP): 6 courses under the TP totalling 175 hours, including 63 hours of management training, 80 hours of safety training, 21 hours of technical training and 11 hours of IT training�
L’École LDLC:In 2015, 77 hours of training were dispensed under the L’École LDLC: training programme, i�e� around 11 hours of training per employee:
• Training programme (TP): 2 courses under the TP totalling 77 hours, including 70 hours of management training and 7 hours of safety training�
Hardware.fr:None�
LDLC Villefranche:None�
Please note that the DIF no longer exists and has been replaced by the CPF personal training account�
1.6. Equal treatment
1.6.1 . Measures to promote professional equality between men and women
The Company signed an agreement on the matter on 13 December 2011, renewed in 2016, demonstrating its willingness to formalise a company policy regarding professional equality between men and women, throughout their professional careers from the moment they are hired�
In the 2015 calendar year, LDLC�com hired 80 people, including 42�5% women� This gender disparity results from the fact that, despite efforts to redress the balance, the IT field still has a predominantly male workforce� This explains why fewer women are hired than men� Furthermore, women accounted for only 29�77% of the employees who received training during the 2015 calendar year� The proportion of women at the Company during the same period was 35�28%�
Over the financial year, Anikop hired 8 employees, including 1 woman�
Over the financial year, DLP-Connect hired 1 male employee� A job advertisement for an electrician was posted� No female candidates applied�
L’École LDLC hired 2 employees during the financial year, both of whom were women�
LDLC Distribution hired 3 employees during the financial year, all of whom were women�
LDLC Villefranche hired 1 male employee during the financial year�
As for Hardware�fr, no job listings were posted and no unsolicited job applications were received during the financial year�
1.6.2 . Measures to promote the employment and integration of disabled persons
As at 31 March 2016, 19 disabled employees were working for LDLC�com�
LDLC�com maintains ties with a French employment agency, Cap Emploi, in order to promote the professional integration of disabled persons, as well as with the AGEPHIP network as part of the programme to help keep disabled workers in employment�
Furthermore, a disabled-friendly company (French EA or entreprise adaptée) provides us with disabled workers to replace maintenance staff at our sites in Saint-Quentin-Fallavier and Dardilly during their holidays�
These same measures apply within the subsidiaries�
1.6.3 . Non-discrimination policy
The Company applies a non-discrimination policy with regard to hiring, professional development and compensation�
The same principle applies within the subsidiaries�
1.6.4 . Promotion of and compliance with provisions of the ILO fundamental conventions on freedom of association and the right to collective bargaining, the elimination of discrimination in respect of employment and occupation, the elimination of forced and compulsory labour, and the effective abolition of child labour
The Group’s global policy complies with the general principles of international law (OECD, ILO, EU), as well as domestic legislation, which prohibit all types of discrimination, harassment, forced labour and child labour� In particular, the Group works to uphold the dignity of its employees, subcontractors, temporary workers and suppliers�
66 MANAGEMENT REPORT Part 7. Social, environmental and societal information
Furthermore, our Company respects freedom of association and the right to collective bargaining, and complies with statutory provisions relating to this matter�
These same principles apply across the board at all Group subsidiaries�
• 2 I ENVIRONMENTAL INFORMATION
2.1. Overall environmental policy
2.1.1 . Organisational measures within the Company and its subsidiaries for dealing with environmental issues and assessment/certification initiatives
A number of Group departments have responsibility for environmental matters� The main responsibility lies with the Quality, Safety and Environment (QSE) officer and General Services Coordinator, but the legal, transport, purchasing and logistics departments also play an important role� The QSE officer is attached to the Logistics Division and is based at the Company’s main warehouse site� Their role is to ensure compliance with environmental regulations, in particular for the Saint-Quentin-Fallavier facilities, which are specifically subject to French ICPE environmental regulations� Based at head office and reporting directly to senior management, the General Services department liaises between the QSE officer and head office, the stores and L’École LDLC� The department incorporates environmental factors into its daily work of managing and overseeing all buildings used by the Company and its subsidiaries�
Furthermore, in November 2015, the Group carried out an energy audit in accordance with European directive 2012/27/EU of 25 October 2012 on energy efficiency� The audit was carried out on the Group head office and the Paris store in order to comply with the requirement to cover 65% of its energy bills�
No environmental certification procedures are currently under way�
2.1.2 . Staff training and awareness schemes related to environmental protection
The Group is pursuing its policy of improving the sorting of waste from operations at source in order to promote the recycling of materials� The Group has introduced an indicator to measure the rate of waste recycling� Employees are made aware of the importance of waste sorting and are instructed in the use of the various sorting bins installed on
our sites� Notices are displayed to remind employees of these instructions�
2.1.3 . Resources assigned to the prevention of environmental risks and pollution
Given the non-industrial nature of the Company’s business and its use of logistics, environmental risks are considered to be low� For this reason, the Company has not introduced specific measures for the prevention of environmental and pollution risks�
The Group makes sure that it complies with the regulations applicable to its operations and with the conditions of its permits to operate the Saint-Quentin sites (French ICPE-listed sites subject to authorisation)�
Furthermore, in accordance with the principles of Extended Producer Responsibility (EPR), the Group is affiliated with a number of environmental organisations covering the areas that concern it (waste electrical and electronic equipment (WEEE), packaging, batteries, printed matter and furniture) and contributes funding for the end-of-life management of the products it sells�
2.1.4 . Provisions and guarantees for environmental risks
For the reasons explained above, the Group recognises no provisions or guarantees for environmental risks�
2.2. Pollution and waste management
2.2.1 . Measures to prevent, reduce and remedy atmospheric, water and soil pollution presenting a significant danger to the environment
During its normal course of business the Group does not generate atmospheric, water or soil pollution other than sanitary wastewater, which is channelled into the local sewage systems�
Moreover, as a preventive measure, the Company has installed oil interceptors in the car parks at its main storage location, as well as a fire water retention system�
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Annual f inancia l report 2015_2016
2.2.2 . Measures for preventing, recycling and eliminating waste
Group operations generated 358 tones of waste during the 2015/2016 financial year.
2014/2015: 365t2013/2014: 313t
Product end-of-lifeAs a manufacturer and “bringer to market” (own brand products, direct imports, packaging and printed matter), the Group has a duty to contribute financially and/or directly (management of waste recycling processes) towards the management of the relevant recycling chains� For this purpose, the Group has chosen to fulfil this duty via certified environmental organisations� The Group has identified four relevant areas of EPR: electrical and electronic equipment, packaging, batteries, graphic papers and furniture�
LDLC is affiliated with a specific organisation for each of these types of material (Ecologic, Adelphe, Screlec, Ecofolio and Ecomobilier)� Every year, the Group discloses the volume of items brought to market and pays the invoices issued by the organisation�
Furthermore, as an electrical and electronic equipment retailer, the Group is responsible for informing consumers of the right way to dispose of used products and is required to take back used products when customers replace them with an equivalent new product (“1 for 1” principle)� This information is provided to consumers by store assistants and via the “Environment” page of the Group website in the case of online purchases�
During the 2015/2016 financial year, the Group collected and transferred 17 tons of WEEE to the relevant recycling organisation, compared to 22 tons in the previous year� This waste is mainly derived from defective product returns or collected end-of-life products� This figure is included in the calculation of the waste recycling rate�
Other recyclable waste, including paper, cardboard, shrink wrap and pallets, is sorted at source on site and then collected and recycled by the relevant recycling firms�
Accordingly, in 2015/2016, the Group recycled 74% of its waste (paper, cardboard, shrink wrap, WEEE and pallets), compared to 76% in the previous year�
Type of wasteVolume
(tons)
Volume (tons)
2014/2015
Paper, cardboard and shrink wrap 211 211
Wooden pallets 38 46
Non-hazardous waste 91 86
Special waste = liquids generated from maintenance of logistics chains
0.5 1
Waste electrical and electronic equipment (WEEE)
17 22
Total 357.5 365
2.3. Sustainable use of resources
2.3.1 . Water consumption and supply geared towards local restrictions
For its operations, the Group only uses water from the municipal mains supply for purely sanitary purposes� Given the level of consumption and the fact that the Group’s sites are located in France, no restrictions on consumption or specific water consumption issues have been identified�
2.3.2 . Raw material consumption and measures to improve efficiency of use
Group raw material consumption is limited to the packaging required for wrapping and shipping products ordered (cardboard and bubble wrap)�
We aim to use the most suitable sizes of cardboard boxes in order to avoid excessive use of this material� We currently use four different cardboard box sizes� Two formats are used for preparing parcels, while a special format is used for hard drives� This year we introduced a fourth, small format in order to reduce our cardboard consumption and adapt our packaging in line with our increasingly compact catalogue items�
68 MANAGEMENT REPORT Part 7. Social, environmental and societal information
2.3.3 . Energy consumption, measures to improve energy efficiency and use of renewable energies
In terms of energy consumption, the main cost item and issue is consumption of electricity� The Group consumes electricity on all of its sites for lighting, air conditioning, computer equipment, order picking chains, forklifts and other uses� The Saint-Quentin warehouse is heated by gas, while the Lyon store uses domestic heating oil for this purpose�
Total energy consumption for the year was 3�8 MWh�
Energy consumptionQuantity
(kWh) Quantity (kWh)
Electricity 1,864,325 2014/2015: 3,494,014
2013/2014: 3,649,979Gas 1,865,706
Domestic heating oil 103,622
Total 3,814,308
LDLC currently has no official energy consumption policy or target� Nevertheless, the Group has made investments to promote the use of efficient equipment and low-energy technology in the most recent buildings and after major renovation work� It has also introduced a number of measures to reduce consumption, the most important of which are as follows:
• The Campus building (head office in Dardilly) was designed to meet the standards of the French Very High Energy Performance (THPE) label
• Lighting is provided by individual lamps that are automatically activated by presence and light sensors�
• Lighting is turned off on all sites outside working hours, including at night�
• The interior layout of the L’École LDLC was also designed in the same manner, with LED lighting and individual lamps activated automatically by presence and light sensors�
The Group continues to monitor its electricity consumption in order to analyse and improve the energy efficiency of its operations�
2.4. Climate change
2.4.1 . Greenhouse gas emissions
Group locations are not subject to the EU emissions trading system or to the requirement to produce a greenhouse gas emissions report pursuant to Article 75 of the French Grenelle II Act�
Group greenhouse gas emissions are as follows:• Electricity: 154,978 kg CO
2eq
• Gas: 436,575 kg CO2eq
• Domestic heating oil: 31,087 kg CO
2eq
2015/2016: 622,640 kg CO2eq2014/2015: 557,680 kg CO2eq2013/2014: 581,700 kg CO2eq
• 3 I SOCIETAL INFORMATION
3.1. Local economic and social impact of the Company’s operations in terms of employment, regional development and impact on local communities
Last year, the LDLC Group recorded an average headcount of 505 employees (including 19 temporary), working in France at head office (Dardilly, near Lyon), the logistics platform (Saint-Quentin-Fallavier, Isère), L’École LDLC and the stores (Paris, Villefranche and Lyon)� These jobs represent our direct contribution to the local employment market� We also contribute indirectly by creating jobs and providing business for our suppliers and service providers�
Nevertheless, in view of our size and the location of our sites in firmly established urban areas and logistics hubs, we consider that our impact in terms of employment and regional development is not significant for these areas and we have not identified any specific related issues�
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Annual f inancia l report 2015_2016
3.2. Relations with the Company’s stakeholders, including professional integration organisations, educational institutions, environmental protection organisations, consumer associations and local communities
3.2.1 . Conditions of stakeholder dialogue
Via our business of trading and selling products online, we are able to maintain a relationship with our customers, suppliers and employees, who comprise our three main categories of stakeholder�
LDLC�com seeks to provide its customers with premium-quality service� Responsiveness and compliance with order shipment deadlines are essential for our business and constitute two of our main selling points�
Between 4 May 2015 and 10 July 2015, Viseo Conseil (1), organiser of the Customer Service of the Year awards in France, tested the quality and responsiveness of LDLC�com’s customer service department� On the basis of 225 points of contact via email, phone, internet and social networks, for which we obtained an average rating of 18�52/20, we came first in the “Technical product distance selling” category� Accordingly, the Group’s drive towards improving customer relations were once again rewarded, in the form of the 2016 Customer Service of the Year award�
We also listen carefully to what customers have to say about our products, as their opinions can influence our decision whether to continue marketing a certain product�
Our relationship with our suppliers is explained in further detail in section 3�3 below, “Subcontracting and suppliers”�
3.2.2 . Partnership and sponsorship
LDLC is a major partner of ASVEL basketball club�
LDLC made donations totalling €136,000 during the 2015/2016 financial year�
3.3. Subcontracting and suppliers
3.3.1 . Inclusion of social and environmental considerations in the Company’s procurement policy
The Group has not specifically drawn up a responsible procurement policy including social and environmental criteria that would be applicable to its suppliers or to specific product ranges�
3.3.2 . The importance of subcontracting and inclusion of social and environmental responsibility issues in the relationship with suppliers and subcontractors
Purchases of goods account for a significant portion of our expenses� Most of these purchases are made in Europe� Direct imports account for around 12% of our goods purchases�
Breakdown of purchases per region:
Region Purchases (%)
European Union 88.16%
Non-EU (mainly Asia) 11.84%
Supplier and subcontractor social and environmental responsibility is not specifically factored into our relationships, as priority is given to product quality�
In practice, we rarely enter into direct contact with the manufacturers of the products we sell, and we lack the critical mass to impose social and environmental responsibility requirements on our suppliers�
Nevertheless, most of our purchases are made from European wholesalers� We also try to cultivate long-term relationships with our many suppliers, who are recognised players in the sector�
3.3.3 . Fair practices
Measures to prevent bribery and corruptionThe Group has not introduced a formal set of procedures or code of conduct for the prevention of bribery and corruption�
Nevertheless, the Company’s purchasing practices are aimed at minimising the related risks� For example, the purchasing department is centralised and all transactions are managed at the head office in Dardilly under the direct supervision of senior management� Buyers are allocated capped lines of credit and individual buyer margins are monitored daily so that any anomalies can be quickly identified�
(1) Mystery shopper survey carried out by Inference Operations and Viseo Conseil from May to July 2015 via 225 points of contact including phone calls, emails, web browsing and social networking websites.
70 MANAGEMENT REPORT Part 7. Social, environmental and societal information
Responsibility for purchases of products classified as strategic, whose prices may vary considerably from day to day for example, lies with Laurent Villemonte de la Clergerie, for non-EU purchasing, and the Chief Purchasing Officer for EU purchases�
3.3.4 . Consumer health and safety
The Group monitors the conformity of the products it sells via a system of random audits carried out on its suppliers based within and outside the EU� The purpose of these audits is to review documentation in order to ascertain whether the products comply with current regulations and, in particular, with the requirements of the European CE marking system and the New Approach directives�
In terms of data privacy (especially with regard to consumers), the Group is committed to ensuring strict compliance with the requirements of the French Data Protection Act (Loi informatique et libertés)� For this purpose, the Group appointed a Data Protection Officer (DPO) in 2009� This
position is currently vacant due to the departure of the previous incumbent on 31 July 2015� The appointment of a successor will depend on the new European legislation due to be enacted by 2018� In the meantime, an employee has been given the task of making all the relevant disclosures to the French Data Protection Authority (CNIL) on behalf of all LDLC Group companies�
3.3.5 . Other initiatives relevant to this section regarding the promotion of human rights
Given that the LDLC Group’s employees are based in France, the Company has not identified any specific risks of violation of human rights in respect of its employees� As stated in the section on subcontracting and suppliers, we rarely enter into direct contact with the manufacturers of the products we sell, and we lack the critical mass to impose requirements on our suppliers� Therefore, the Company has not introduced any specific human rights initiatives�
Methodological note concerning the environmental, social and societal information included in section 7 of this report
Reporting contextPursuant to Article L�225-102-1 of the French Commercial Code, the environmental, social and societal information presented in part 7 of this report covers the year ended 31 March 2016�
Reporting scope The consolidation scope comprises the Group subsidiaries that are fully consolidated for the purposes of the Group financial statements, i�e� the subsidiaries that are exclusively controlled by the Group, whether directly or indirectly (see Note 2�3 to the consolidated financial statements)�
Some subsidiaries that were financially consolidated within the Group as at 31 March 2016 have not been included in the CSR report, as they were acquired on the closing date� This applies in particular to Domisys, Domimo 2 and Domimo 3, which were acquired on 31 March 2016� Nevertheless, action plans are under preparation or in progress to ensure that reliable CSR information for these companies will be included in next year’s report�
The scope for this year includes L’École LDLC, which opened in September 2015�
Reporting period Unless otherwise stated, the figures disclosed relate to the financial year beginning on 1 April 2015 and ending on 31 March 2016�
Reasons for exclusion of specific informationThe Group’s business activity consists of the trading and retail of products� Its operations primarily include the reception, storage, packaging and shipping of manufactured goods, assembly of computer components and all services related to online selling� Therefore, the Group is not directly engaged in any industrial activity involving the processing or transformation of materials or production� Generally speaking, there are no night-time operations on Group sites and Group operations are conducted inside its buildings�
The premises occupied by the Group consist of office buildings, sales outlets and warehouses situated in urban areas or existing logistics hubs� All Group facilities are located in France�
For the reasons mentioned above, the Group has not identified any specific risks or requirements related to its operations or facilities with regard to the following issues, which are therefore not included in this report:
• Noise and all other forms of specific pollution;
• Land use;
• Adaptation to the consequences of climate change; and
• Preservation or promotion of biodiversity�
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Notes on specific indicatorsSocial informationHeadcountHeadcount is expressed in number of employees and includes all persons paid by and working for the Company as at the closing date (31 March 2016), excluding trainees and temporary workers�
AbsenteeismAbsence taken into consideration includes short and long-term sick leave, absence due to industrial and travel accidents, parental leave, unjustified absence and personal leave (referred to as “other absences”)�
The theoretical number of hours used to calculate the rate of absenteeism equals the theoretical number of hours worked per month (151�67) x times the number of FTE employees�
The rate of absenteeism equals the ratio between the number of hours of absence and the number of theoretical hours of presence�
Frequency rateThe industrial accident frequency rate equals the number of lost-time industrial accidents per million hours worked: no� of lost-time industrial accidents/no� of hours worked x 1,000,000�
Only lost-time industrial accidents occurring during the year are counted; travel accidents resulting in lost time are not included� Accidents incurred by trainees and temporary employees are also excluded� Hours of absence are deducted from the number of hours worked, while overtime hours are added to this number�
Severity rateThe industrial accident severity rate equals the number of working days lost due to industrial accidents per 1,000 hours worked: no� of days lost due to industrial accidents/no� of hours worked x 1,000�
Number of training hoursTraining may take place outside working hours, within the scope of the French CPF personal training allowance scheme, or during working time� Training provided under a training plan or professional qualification contract is included in the calculation� The Group does not provide training to temporary employees or to trainees on work-study placements�
Quantitative information regarding the training plan relates to the 2015 calendar year�
Environmental informationWasteFrench regulations are applied for the purposes of defining waste and determining whether it is hazardous� Reporting covers all Group facilities� Waste generation is calculated on the basis of volumes removed from Group facilities during the reporting period� The total volume of waste generated is determined on the basis of the quantities stated on invoices and waste monitoring documents, where available� Ordinary industrial waste generated by head office, the Paris store and L’École LDLC, as well as waste paper and cardboard generated by the school are excluded as these categories of waste are managed by the local waste collection services�
As paper and cardboard waste from the Paris store is collected in bulk, the figures have been estimated on the basis of the weighing of a representative sample of containers in order to determine an average weight, which was used for the calculation�
The quantities of WEEE collected include all items collected from Group sites and pooled together at Saint-Quentin-Fallavier� The total quantity of WEEE is based on the quantities stated on the invoices and waste monitoring documents issued by the company hired to collect and process this waste�
Our non-hazardous waste is fed into the relevant industrial recycling chains (e�g� waste paper and cardboard are recycled by paper mills)� On the other hand, WEEE is recycled by specialised recycling firms�
EnergyEnergy consumption equals the total amount of energy (electricity, gas and domestic heating oil) invoiced to the Group by its suppliers over the reporting period� Consumption at the Saint-Quentin-Fallavier site has been estimated on the basis of surface area and a survey of the building’s energy profile� With regard to this year, part of the Q4 gas consumption was estimated on the basis of the previous year, as it was not possible to obtain the relevant data�
For domestic heating oil, we have applied the conversion factor provided by the French “Base Carbone” database, Version 7�3, domestic fuel France�
Greenhouse gas emissions Greenhouse gas emissions have been calculated on the basis of energy consumption over the reporting period multiplied by the standard emission factor for each source of energy (electricity, gas and domestic heating oil) - source: decree of 8 February 2012 amending the decree of 15 September 2006 on energy performance surveys on existing buildings put up for sale in mainland France�
72 MANAGEMENT REPORT Part 8. Report on Group management
PART 8. REPORT ON GROUP MANAGEMENT
Pursuant to Articles L�233-16, L�233-16 and L�225-100-2 of the French Commercial Code, we hereby report on the management of the Group during the financial year ended 31 March 2016�
• 1 I PRESENTATION OF CONSOLIDATED FINANCIAL STATEMENTS AND VALUATION METHODS
The consolidated financial statements include the following subsidiaries:
• fully consolidated subsidiaries:
– Hardware�fr
– Textorm
– DLP-Connect
– Anikop
– Ldlc Distribution
– L’École LDLC
– LDLC Villefranche
– Campus 2017
– LDLC1
– LDLC2
– LDLC3
– Domisys
– Domimo 2
– Domimo 3�
Domisys, Domimo 2, Domimo 3, Campus 2017, LDLC1, LDLC2 and LDLC3 were consolidated for the first time during the year�
The results of Domisys, Domimo 2 and Domimo 3 will be included in the consolidated financial statements from 1 April 2016�
The consolidated financial statements were prepared in respect of the period from 1 April 2015 to 31 March 2016�
The consolidated financial statements for the year ended 31 March 2016 were prepared in accordance with international accounting standards and interpretations (IAS/IFRS) adopted by the European Union and applicable as at 31 March 2016� These standards and interpretations are consistently applied for the financial years presented�
All further explanations required may be found in the notes to the consolidated financial statements�
For the financial year ended 31 March 2016, the Group posted revenues of €320,719,000 excluding tax, compared to €285,615,000 for the previous financial year ended 31 March 2015�
EBIT amounted to €13,232,000, up from €9,786,000 the previous year�
After net cost of debt amounting to €(157,000) and net other financial income of €2,000, earnings before tax came to €13,078,000, up from €9,660,000 the previous year�
Net income from equity associates for the year ended 31 March 2016 was zero, compared to €4,000 in the previous year�
Comprehensive consolidated net income for the year ended 31 March 2016 amounted to €7,131,000, up from €5,957,000 the previous year� Net income attributable to owners of the Company (Group share) came to €7,941,000, up from €5,846,000 the previous year�
All further explanations required may be found in the notes to the consolidated financial statements�
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• 2 I GROUP FINANCIAL POSITION AND BUSINESS PERFORMANCE DURING THE YEAR ENDED
Full-year Group sales amounted to €320�7 million, up 12�2% over the previous year (1)� This performance is in line with the Group’s published target of double-digit organic growth� This dynamic business growth was driven by BtoC and BtoB online and cross-channel selling, which saw an all-round ramp-up in line with Group targets�
The BtoC business posted revenues of €201�0 million, up 7�5% from €187�0 million in the previous year�
Excluding MisterGoodDeal sales, like-for-like growth was even stronger at 10%� During the year, LDLC�com acquired over 337,000 new customers, including 88,000 during the fourth quarter, thereby further strengthening its leading position�
At 31 March 2016, the Group had 14 stores, compared to 8 on the same date in 2015� Full-year store sales increased 32�7% to €34�5 million� A new store has been opened in Nantes since the balance sheet date, with 4 or 5 more stores due to open by August� LDLC�pro maintained its high growth rate, posting an increase of 19�8% with revenues of €109�0 million�
The remaining businesses continued to make positive contributions to Group growth, with sales up 40�8% to €10�7 million� Maginea revenues rose 27�1% to €7�5 million�
Gross margin rose again to €55�8 million, up 18�4%� The gross margin rate came to 17�4%, up from 16�5% last year�
EBITDA surged 40% to €15�0 million, boosted by skilful management of our business model� EBITDA includes the costs related to the launch of L’École LDLC� The EBITDA margin amounted to 4�7% of revenues, up from 3�7% last year�
EBIT for the year came to €13�2 million, up 34�7%, including non-recurring expenses arising from the Domisys acquisition�
Net income Group share increased 35�8% to €7�9 million�
The Group generated €5�8 million in cash during the year� The financial structure remains sound, with net debt of €43�0 million, including the financing arrangements for the Domisys acquisition, and a debt-to-equity ratio (gearing) well under control at 0�96�
The Domisys acquisition brings the LDLC Group close to its €500 million revenue target two years ahead of plan� After aggregating the two sets of financial statements for the periods ended 31 December 2015 and 31 March 2016, consolidated revenues came to €467�8 million� Consolidated gross margin amounted to €76�1 million, with EBITDA of €19�6 million and underlying EBIT of €16�8 million�
• 3 I OBJECTIVE AND COMPREHENSIVE ANALYSIS OF THE BUSINESS PERFORMANCE, EARNINGS AND FINANCIAL POSITION OF THE COMPANIES INCLUDED IN THE CONSOLIDATION SCOPE, INCLUDING THEIR LEVEL OF DEBT, WITH REGARD TO BUSINESS VOLUMES AND COMPLEXITY
See part 1 section 4 of the management report�
The comments and analyses made for the Company financial statements also apply to the consolidated financial statements�
(1) Excluding the impact of the termination of the partnership with MisterGoodDeal on 2015/16 revenues, growth came in at 14.2%.
74 MANAGEMENT REPORT Part 8. Report on Group management
• 4 I DESCRIPTION OF THE MAIN RISKS AND UNCERTAINTIES FACING THE COMPANIES INCLUDED IN THE CONSOLIDATION SCOPE
See part 1 section 6 of the management report� The comments and analyses made for the Company financial statements also apply to the consolidated financial statements�
• 5 I NOTES ON THE COMPANY’S USE OF FINANCIAL INSTRUMENTS WHERE RELEVANT TO THE VALUATION OF ITS ASSETS, LIABILITIES, FINANCIAL POSITION AND PROFITS OR LOSSES
See part 1 section 7 of the management report� The comments and analyses made for the Company financial statements also apply to the consolidated financial statements�
• 6 I GROUP FORECAST AND OUTLOOK
As explained in our press release dated 9 June 2016 (which may be consulted on: http://www�groupe-ldlc�com/), one of the Group’s priorities for the current year will be the integration of Domisys including a gradual roll-out of synergies between the various Group entities� The initial benefits of this action plan should be felt during the year, with the full impact expected within 2 years�
Meanwhile, the Group will continue to implement its business plan based on three main areas of development: 1) expanding the store chain; 2) maintaining steady growth in the LDLC�pro business; 3) continuing to grow market share for
all BtoC online brands (LDLC�com, Materiel�net, Maginea and L’Armoire de Bébé)�
Accordingly, the Group is aiming at double-digit revenue growth in the 2016/17 financial year plus an improvement in the EBITDA value� The Group is also starting construction on its new head office, located just west of Lyon and due to be completed during the 2017/18 financial year�
The LDLC Group has set itself the goal of reaching the billion-euro revenue mark and an EBITDA margin of 5�5%-6% by 2021� By that time, the Group plans to have around 100 stores up and running�
• 7 I POST BALANCE SHEET EVENTS
To the best of our knowledge, no major event that could have a material impact on the assessment of the Group’s position has occurred since the balance sheet date�
• 8 I GROUP RESEARCH AND DEVELOPMENT ACTIVITIES
See part 1 section 10 of the management report�
The comments and analyses made for the Company financial statements also apply to the consolidated financial statements�
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PART 9. PRESENTATION OF DRAFT RESOLUTIONS TO BE SUBMITTED TO THE ANNUAL GENERAL MEETING
Dear Shareholders,
We have called you to this Combined Ordinary and Extraordinary General Meeting in order to submit for your approval resolutions requiring the General Meeting to vote in both an Ordinary and an Extraordinary capacity�
You are therefore called to vote on the matters included on the following agenda:
• Reading of the Management Board’s management report, including the report on the Group, reading of the Supervisory Board’s report, presentation of the Company and consolidated financial statements for the year ended 31 March 2016 by the Management Board,
• Reading of the Statutory Auditors’ reports,
Ordinary resolutions
• Approval of the Company financial statements for the year ended 31 March 2016,
• Approval of the consolidated financial statements for the year ended 31 March 2016,
• Discharge of the members of the Management Board in respect of the performance of their duties during the year ended,
• Appropriation of earnings for the year ended 31 March 2016,
• Review of agreements referred to in Articles L�225-86 et seq� of the French Commercial Code,
• Authorisation to be granted to the Management Board to buy-back the Company’s shares,
• Powers for formalities�
Extraordinary resolutions
• Change in the Company’s name - Corresponding amendment to Article 3 of the articles of association,
• Changes to the Company’s objects - Corresponding amendment to Article 2 of the articles of association,
• Authorisation to be granted to the Management Board to reduce the share capital via the cancellation of shares,
• Delegation of authority to the Management Board to increase the share capital via the issue of ordinary shares or any securities granting access to the share capital, with shareholder pre-emptive subscription rights,
• Delegation of authority to the Management Board to increase the share capital via the issue of ordinary shares or any securities granting access to the share capital, without shareholder pre-emptive subscription rights via a public offering,
• Delegation of authority to the Management Board to increase the share capital via the issue of ordinary shares or any securities granting access to the share capital, without shareholder pre-emptive subscription rights, in the form of an offering made to qualified investors or a limited group of investors as defined by Article L�411-2 (II) of the French Monetary and Financial Code,
• Authorisation of the Management Board to set the issue price at up to 10% of the share capital, subject to the caps imposed by the General Meeting, in the event of an issue of shares or any securities granting access to the share capital without shareholder pre-emptive subscription rights,
• Delegation of authority to the Management Board to increase the number of shares to be issued in the event of a capital increase with or without pre-emptive subscription rights,
• Delegation of authority to the Management Board to issue ordinary shares and securities granting access to the Company’s share capital in the event of a public tender offer initiated by the Company including an exchange component,
• Delegation of power to the Management Board to increase the share capital by up to 10% of the share capital in order to compensate contributions in kind of equity securities or securities granting access to the share capital of third-party companies outside the scope of a public exchange offer,
• Overall caps on the amounts of the issues completed pursuant to resolutions 10, 11, 12, 14, 15 and 16 above and resolution 20 below,
• Delegation of authority to the Management Board to increase the share capital by capitalisation of additional paid-in capital, reserves, retained earnings or other amounts,
• Authorisation of the Management Board to grant existing or future bonus shares,
• Delegation of authority to the Management Board to increase the share capital via the issue of shares and securities granting access to the Company’s share capital to members of a Group employee share ownership plan�
76 MANAGEMENT REPORT Part 9. Presentation of draft resolutions to be submitted to the Annual General Meeting
Resolutions 1 and 2. Approval of the Company and consolidated financial statements for the year ended
Under the first resolution, we submit for your approval the Company financial statements (balance sheet, income statement and notes) as presented to you, as well as the transactions underlying said financial statements�
Under the second resolution, we submit for your approval the consolidated financial statements (balance sheet, income statement and notes) as presented to you, as well as the transactions underlying said financial statements�
Resolution 3. Discharge of the members of the Management Board in respect of the performance of their duties during the year ended
Under the third resolution, we propose that, provided the first two resolutions are adopted, you discharge the members of the Management Board in respect of the performance of their duties during the year ended�
Resolution 4. Proposed appropriation of earnings for the year
Under the fourth resolution, we propose that the earnings for the year ended amounting to €8,538,044�23 be appropriated as follows:
• that €10,344�57 be allocated to the “Legal reserve”, which will accordingly increase from €103,453�34 to €113,797�91, the statutory maximum amount;
• that €3,161,053 be allocated to dividends, entailing a dividend of €0�50 per share, provided however that, as treasury shares held by the Company do not carry
entitlement to dividends, the unpaid dividend amounts pertaining to these shares will be allocated to “Retained earnings”;
• and that the balance of €5,366,646�66 be allocated to “Other reserves”, which will accordingly increase from €16,567,459�05 to €21,934,105�71�
Individuals residing in France will be entitled to the 40% tax allowance on the total amount of their dividends�
Pursuant to Article 243 B of the French Tax Code, we inform you herein below of the amount of dividends distributed in respect of the previous three years and the amount of income eligible for the 40% tax allowance, as well as the amount that is not eligible for this allowance:
Dividends distributed
Distributed amount eligible for the allowance provided for by Article 158 3 2° of the French Tax Code
Distributed amount not eligible for the allowance provided for by Article
158 3 2° of the French Tax Code
Financial year ended 31 March 2015 €2,586,318.30 €2,586,318.30 None
Financial year ended 31 March 2014 €2,586,318.30 €2,586,318.30 None
Financial year ended 31 March 2013 €1,896,633.42 €1,896,633.42 None
Resolution 5. Review of agreements referred to in Articles L.225-86 et seq. of the French Commercial Code
The special report drawn up by the Statutory Auditors mentions the regulated agreements which fall within the scope of application of Articles L�225-86 et seq� of the French Commercial Code, including agreements entered into during the year ended and agreements entered into in previous years which continued to be performed during the year ended�
Under the fifth resolution, pursuant to Article L�225-88 of the French Commercial Code, we ask you, after having read the report, to approve each of the agreements mentioned therein�
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Resolution 6. Authorisation of the Management Board to buy-back the Company’s shares
We propose that you authorise your Management Board, with the option of further delegation subject to the conditions provided for by law, to purchase the Company’s shares, subject to the conditions provided for by Articles L�225-209 et seq� of the French Commercial Code�
These shares may be purchased, sold or transferred by any means, on one or more occasions, including on the market or over the counter, by means of block trades, public tender offers, options or derivatives, subject to the conditions provided for by the market regulators and applicable regulations�
This authorisation may be used in order to:
• guarantee the liquidity of the Company share pursuant to a liquidity contract to be entered into with an investment services provider in compliance with a code of ethics approved by the French Financial Markets Authority (AMF);
• perform obligations related to stock option, bonus share and employee share ownership plans or any other allotments of shares to employees and directors of the Company or related companies;
• deliver shares upon the exercise of rights attached to securities granting access to the share capital;
• purchase shares for holding and subsequent tender in exchange or as consideration in relation to a merger or acquisition transaction; or
• cancel all or some of the repurchased shares, provided that the ninth resolution submitted for your approval is adopted and, in that event, subject to the terms defined therein�
We propose that the maximum purchase price per share (excluding fees and commissions) be set at €75, subject to an overall cap of €4,875,000, provided, however, that said purchase price shall be adjusted where applicable in accordance with any equity transactions (including capitalisation of reserves, bonus share issues, stock splits or reverse stock splits) completed during the term of this authorisation�
The maximum number of shares that may be purchased under the present resolution shall at no time exceed 10% of the total number of shares, as adjusted in accordance with any transactions affecting such number following the adoption of this resolution, less the amount of treasury shares held, provided, however, that (i) if the shares are acquired for the purpose of promoting the liquidity of the Company share, the number of shares used to calculate the aforementioned cap shall be equal to the number of shares purchased less the number of shares resold during the term of the authorisation, and (ii) if the shares are acquired for holding and subsequent tender in exchange or as consideration in relation to a merger, demerger or asset transfer, the number of shares acquired shall not exceed 5% of the total number of shares, as adjusted in accordance with transactions affecting such number following the adoption of this resolution�
We therefore request that you grant full powers to the Management Board, with the option of further delegation subject to the conditions provided for by law, to place all trading orders, sign all deeds of sale or transfer, enter into all agreements, liquidity contracts and option contracts, make all representations and complete all required formalities�
Resolution 7. Change in the Company’s name - Corresponding amendment to Article 3 of the articles of association
Under the seventh resolution, we propose that the Company’s name be changed from LDLC�com to Groupe LDLC as of the date of this General Meeting�
The purpose of this change would be to clarify the Company’s position with regard to all of its activities that have been developed over time� The name “Groupe LDLC” [in English, “LDLC Group”] would convey an overall vision of the
Company’s activity and harmonise the Company’s name with its public image�
If this seventh resolution is adopted, we propose that Article 3 of the Company’s articles of association be amended accordingly�
78 MANAGEMENT REPORT Part 9. Presentation of draft resolutions to be submitted to the Annual General Meeting
Resolution 8. Changes to the Company’s objects - Corresponding amendment to Article 2 of the articles of association
Under the eighth resolution, we propose that the Company’s objects be amended as follows:
“ARTICLE 2 - OBJECTS
The Company’s objects are:
• direct, online and mail order sale and sale via franchise networks of all computer hardware and software and all services that may be related thereto,
• as a secondary activity, direct, online and mail order sale of all products related to the home, garden, pets, childcare, leisure activities, education, culture, games and, more broadly, the environment and personal well-being.”
These changes to the Company’s objects are designed to reflect developments in the Company’s activities�
If this eighth resolution is adopted, we propose that Article 2 of the Company’s articles of association be amended accordingly�
******
We hereafter submit for your approval various resolutions intended to provide your Management Board with the appropriate financial authorisation in light of current legislation and financial market practice�
Among other things, these authorisations and delegations of authority would allow the Company to issue shares or securities in a manner that is most appropriate to the LDLC Group’s position and development, as well as to the market, by means of rights issues, private placements or public offerings�
Under the seventeenth resolution, we propose that you resolve that:
• the aggregate maximum nominal amount of capital increases that may be carried out pursuant to the authority delegated under resolutions 10, 11, 12, 14, 15, 16 and 20 be set at €1,000,000 plus the amount of additional shares issued in order to maintain the rights of holders of securities and other rights granting access to shares, pursuant to statutory and regulatory provisions and any applicable contractual provisions, and
• the aggregate maximum nominal amount of debt securities that may be issued pursuant to the authority thus delegated be set at €1,000,000 (or the foreign currency equivalent thereof as at the date of issue), provided, however, that any redemption premiums above par shall be added to said amount and that this cap shall not apply to issues of debt securities resolved upon or authorised by the Management Board pursuant to Article L�228-40 of the French Commercial Code�
These caps shall not apply to the delegation of authority which we propose that you grant to your Management Board in order to increase the share capital by capitalisation of additional paid-in capital, reserves, retained earnings or other amounts�
All of the aforementioned delegations of authority shall be granted for a term of twenty-six (26) months�
Your Statutory Auditors have drawn up all reports required by law in respect of these authorisations and delegations of authority�
The authorisations and delegations of authority so granted would cancel any prior authorisation granted for the same purpose�
We propose that you review each of these authorisations and delegations of authority, which are set out below�
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Resolution 9. Authorisation of the Management Board to reduce the share capital via the cancellation of shares within the scope of its authorisation to buy-back Company’s shares
Provided that the sixth resolution above is adopted, we request that you authorise your Management Board, pursuant to Article L�225-209 of the French Commercial Code, to cancel all or some of the shares purchased by the Company, in one or more instalments, up to a limit of 10% of the share capital per twenty-four month period, and to reduce the share capital accordingly� The aforementioned cap shall apply to the amount of share capital as adjusted in accordance with any transactions affecting it following the date of this General Meeting�
Any amounts whereby the purchase price of the shares exceeds their par value shall be deducted from the share,
merger or contribution premium accounts or from any distributable reserve, including the legal reserve, provided that this reserve does not fall below 10% of the Company’s share capital after the completion of the capital reduction�
We request that you grant full powers to Management Board, with the option of further delegation subject to the conditions provided for by law, to complete all acts, deeds and formalities and make all representations for the purpose of finalising the capital reductions that may be completed under the present authorisation and to amend the Company’s articles of association accordingly�
Resolution 10. Delegation of authority to the Management Board to increase the share capital via the issue of ordinary shares or any securities granting access to the share capital, with shareholder pre-emptive subscription rights
We propose that you delegate to the Management Board your authority to resolve upon the issue, on one or more occasions, in such proportions and at such times as it shall see fit, in France or abroad, in euros, foreign currencies or any monetary unit established with reference to a basket of currencies, free of charge or for valuable consideration, ordinary shares of the Company and any securities granting access by any means, immediately and/or in the future, to ordinary shares of the Company, said shares conferring the same rights as existing shares in accordance with their dividend date�
The securities issued hereunder could consist of debt securities, be associated with an issue of such securities or allow the issue thereof as intermediate securities�
Under the present delegation of authority, we request that you:
• resolve that the shareholders shall have a pre-emptive right to subscribe for the ordinary shares or securities issued under the present delegation of authority, in proportion to the amount of shares they hold,
• give the Management Board the power to grant shareholders the right to subscribe for a number of shares
or securities over and above their statutory entitlement, in proportion to the rights they hold and, in any event, up to the number of shares or securities they request,
• resolve that the aggregate nominal amount of capital increases that may thus be completed, immediately and/or in the future, shall not exceed €1,000,000 (or the equivalent thereof in the event of an issue denominated in another currency) plus the amount of any additional shares that must be issued in order to maintain the rights of holders of securities and other rights granting access to the share capital, pursuant to statutory and regulatory provisions and any applicable contractual provisions,
• resolve, in addition, that the nominal value of all capital increases thus completed shall be deducted from the overall cap provided for above,
• resolve that the total nominal value of all debt securities granting access to the share capital issued hereunder shall not exceed €1,000,000 (or the equivalent thereof in the event of an issue denominated in another currency), and that the amount of such issues shall be deducted from the overall cap provided for above,
80 MANAGEMENT REPORT Part 9. Presentation of draft resolutions to be submitted to the Annual General Meeting
• resolve that, if subscriptions do not cover the entire issue, the Management Board may adopt one or more of the following solutions, in such order as it shall see fit:
– cap the issue at the amount of subscriptions, provided that subscriptions amount to at least three-quarters of the initially decided issue,
– freely distribute any or all unsubscribed securities among persons of its choosing, and
– make a public offering, on the French market or on an international market, of any or all securities issued but not subscribed�
This delegation of authority automatically entails the shareholders’ express waiver, in favour of the holders of any securities issued under this delegation of authority, of their pre-emptive subscription rights to the shares to which such securities confer entitlement�
Furthermore, the Management Board shall have full powers, with the option of further delegation subject to the conditions provided for by law, to exercise the authority hereby delegated, subject to the conditions provided for by law and the articles of association, to perform the following tasks in particular:
• set the dates, terms and conditions of all issues and the form and features of the future shares or securities granting access to the share capital, with or without share premiums,
• set the amounts to be issued, the dividend/interest entitlement date of the future shares or securities granting access to the share capital, including on a retrospective basis, the manner in which they are to be paid up and,
where applicable, the terms and conditions applicable to the exercise of rights to exchange, conversion, redemption or the grant of any other type of equity securities or securities granting access to the share capital,
• make any adjustments required pursuant to statutory and regulatory provisions and any applicable contractual provisions, in order to maintain the rights of holders of securities and other rights granting access to the Company’s share capital, and
• suspend, where applicable, the exercise of the rights attached to these securities during a period of no more than three months�
In addition, the Management Board shall be entitled to:
• at its sole discretion and when it sees fit, deduct the costs, disbursements and fees incurred in connection with the capital increases carried out under the present delegation of authority from the amount of premiums associated with these transactions and deduct from such amount the amounts required to increase the legal reserve to one tenth of the new share capital amount after each transaction,
• take any decisions required with regard to the admission of the shares and securities issued hereunder for trading on the Euronext regulated market in Paris and, more broadly,
• implement any measures, make any undertakings and complete all formalities required for the due completion of the proposed issue and for the finalisation of the ensuing capital increase, and amend the articles of association accordingly�
Resolution 11. Delegation of authority to the Management Board to increase the share capital via the issue of ordinary shares or any securities granting access to the share capital, without shareholder pre-emptive subscription rights via a public offering
We request that you delegate to the Management Board your authority to resolve upon the issue via public offering, on one or more occasions, in such proportions and at such times as it shall see fit, in France or abroad, in euros, foreign currencies or any monetary unit established with reference to a basket of currencies, free of charge or for valuable consideration, of ordinary shares of the Company and any securities granting access by any means, immediately and/or in the future, to ordinary shares of the Company, said shares conferring the same rights as existing shares in accordance with their dividend date�
The securities issued hereunder could consist of debt securities, be associated with an issue of such securities or allow the issue thereof as intermediate securities�
Therefore we propose, under the present delegation of authority:
• that shareholders’ pre-emptive subscription rights to the ordinary shares or securities issued under this delegation of authority be cancelled, but that the Management Board shall have the option of establishing a priority right in respect of all or part of the issues entitling shareholders to subscribe for their statutory entitlement plus any additional securities during the period and subject to the terms defined by the
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Management Board pursuant to Article L� 225-135 of the French Commercial Code, where such priority shall not give rise to any tradable rights,
• that you note, for all intents and purposes, that this delegation of authority automatically entails the shareholders’ express waiver, in favour of the holders of any securities granting access to the share capital issued under this delegation of authority, of their pre-emptive subscription rights to the shares to which such securities confer entitlement,
• that you resolve that the aggregate nominal amount of capital increases that may be completed, immediately and/or in the future, under this delegation of authority shall not exceed €1,000,000 plus the amount of any additional shares that must be issued in order to maintain the rights of holders of securities and other rights granting access to the share capital, pursuant to statutory and regulatory provisions and any applicable contractual provisions,
• that you resolve, in addition, that the nominal value of all capital increases thus completed shall be deducted from the overall cap provided for above,
• that you resolve that the total nominal value of all debt securities granting access to the share capital issued hereunder shall not exceed €1,000,000 and that the amount of such issues shall be deducted from the overall cap provided for above,
• that you resolve that, if subscriptions do not cover the entire issue, the Management Board may adopt one or more of the following solutions, in such order as it shall see fit:
– cap the issue at the amount of subscriptions, provided that subscriptions amount to at least three-quarters of the initially decided issue,
– freely distribute any or all unsubscribed securities among persons of its choosing, and
– make a public offering, on the French market or on an international market, of any or all securities issued but not subscribed,
• that you resolve that the issue price of the shares and securities issued under the present delegation of authority shall be set by the Management Board and shall not be lower than the weighted average listed price over the three trading sessions preceding the date on which it is set, less the discount permitted by law where applicable (currently 5%) and adjusted for any differences in dividend/interest entitlement dates�
The Management Board shall have full powers, with the option of further delegation subject to the conditions provided for by law, to exercise the authority hereby delegated, subject to the conditions provided for by law and the articles of association, to perform the following tasks in particular:
• set the dates, terms and conditions of all issues and the form and features of the future shares or securities granting access to the share capital, with or without share premiums,
• set the amounts to be issued, the dividend/interest entitlement date of the future shares or securities granting access to the share capital, including on a retrospective basis, the manner in which they are to be paid up and, where applicable, the terms and conditions applicable to the exercise of rights to exchange, conversion, redemption or the grant of any other type of equity securities or securities granting access to the share capital,
• make any adjustments required pursuant to statutory and regulatory provisions and any applicable contractual provisions, in order to maintain the rights of holders of securities granting access to the Company’s share capital, and
• suspend, where applicable, the exercise of the rights attached to these securities during a period of no more than three months�
The Management Board shall be entitled to:
• at its sole discretion and when it sees fit, deduct the costs, disbursements and fees incurred in connection with the capital increases carried out under the present delegation of authority from the amount of premiums associated with these transactions and deduct from such amount the amounts required to increase the legal reserve to one tenth of the new share capital amount after each transaction,
• take any decisions required with regard to the admission of the shares and securities issued hereunder for trading on the Euronext Paris regulated market and, more broadly,
• implement any measures, make any undertakings and complete all formalities required for the due completion of the proposed issue and for the finalisation of the ensuing capital increase, and amend the articles of association accordingly�
82 MANAGEMENT REPORT Part 9. Presentation of draft resolutions to be submitted to the Annual General Meeting
Resolution 12. Delegation of authority to the Management Board to increase the share capital via the issue of ordinary shares or any securities granting access to the share capital, without shareholder pre-emptive subscription rights, in the form of an offering made to qualified investors or a limited group of investors as defined by Article L.411-2 (II) of the French Monetary and Financial Code
We request that you delegate to the Management Board your authority to resolve upon the issue, on one or more occasions, in such proportions and at such times as it shall see fit, in France or abroad, in euros, foreign currencies or any monetary unit established with reference to a basket of currencies, free of charge or for valuable consideration, of ordinary shares of the Company and any securities granting access by any means, immediately and/or in the future, to ordinary shares of the Company, in the form of an offering made to qualified investors or a limited group of investors as defined by Article L�411-2 (II) of the French Monetary and Financial Code, said shares conferring the same rights as existing shares in accordance with their dividend date�
The securities issued hereunder could consist of debt securities, be associated with an issue of such securities or allow the issue thereof as intermediate securities�
Therefore we propose, under the present delegation of authority:
• that shareholders’ pre-emptive subscription rights to the ordinary shares or securities issued under the present delegation of authority be cancelled,
• that you note, for all intents and purposes, that this delegation of authority automatically entails the shareholders’ express waiver, in favour of the holders of any securities issued hereunder, of their pre-emptive subscription rights to the shares to which such securities confer entitlement,
• that you resolve that the aggregate nominal amount of capital increases that may be completed, immediately and/or in the future, under this delegation of authority shall not exceed €1,000,000 and, in any event, shall not exceed the caps provided for by regulations applicable on the date of issue (for information, at the present date, the issue of equity securities via an offering as defined in Article L�411-2 (II) of the French Monetary and Financial Code is capped at 20% of the Company’s share capital, as valued on the date of the Management Board’s decision to exercise the authority hereby delegated, per 12-month period), plus the amount of any additional shares that must be issued in order to maintain the rights of holders of securities and other rights granting access to shares,
pursuant to statutory and regulatory provisions and any applicable contractual provisions,
• that you resolve, in addition, that the nominal value of all capital increases thus completed shall be deducted from the overall cap provided for above,
• that you resolve to set the maximum nominal amount of debt securities that may be issued pursuant to the authority hereby delegated at €1,000,000 (or the equivalent thereof in the event of an issue denominated in another currency), provided, however, that:
– any redemption premiums above par shall be added to said amount,
– this amount shall be deducted from the overall cap referred to in resolution 17 below,
– this cap shall not apply to issues of debt securities resolved upon or authorised by the Management Board pursuant to Article L�228-40 of the French Commercial Code,
• that you resolve that, if subscriptions do not cover the entire issue, the Management Board may adopt one or more of the following solutions, in such order as it shall see fit:
– cap the issue at the amount of subscriptions, provided that subscriptions amount to at least three-quarters of the initially decided issue,
– freely distribute any or all unsubscribed securities among persons of its choosing,
• that you resolve that the issue price of the shares shall not be lower than the weighted average listed price over the three trading sessions preceding the date on which it is set, less the discount permitted by law where applicable (currently 5%) and adjusted for any differences in dividend dates,
• that you resolve that the Management Board shall have full powers, with the option of further delegation subject to the conditions provided for by law, to exercise the authority hereby delegated, subject to the conditions provided for by law and the articles of association, to perform the following tasks in particular:
– set the dates, terms and conditions of all issues and the form and features of the future shares or securities
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granting access to the share capital, with or without share premiums,
– set the amounts to be issued, the dividend/interest entitlement date of the future shares or securities granting access to the share capital, including on a retrospective basis, the manner in which they are to be paid up and, where applicable, the terms and conditions applicable to the exercise of rights to exchange, conversion, redemption or the grant of any other type of equity securities or securities granting access to the share capital,
– make any adjustments required pursuant to statutory and regulatory provisions and any applicable contractual provisions, in order to maintain the rights of holders of securities and other rights granting access to the Company’s share capital, and
– suspend, where applicable, the exercise of the rights attached to these securities during a period of no more than three months,
• that you resolve that the Management Board shall be entitled to:
– at its sole discretion and when it sees fit, deduct the costs, disbursements and fees incurred in connection with the capital increases carried out under the present delegation of authority from the amount of premiums
associated with these transactions and deduct from such amount the amounts required to increase the legal reserve to one tenth of the new share capital amount after each transaction,
– take any decisions required with regard to the admission of the shares and securities issued hereunder for trading on the Euronext regulated market in Paris and, more broadly,
– implement any measures, make any undertakings and complete all formalities required for the due completion of the proposed issue and for the finalisation of the ensuing capital increase, and amend the articles of association accordingly,
• that you note that, given that this is not a general delegation of authority regarding capital increases without pre-emptive subscription rights, but rather a delegation of authority regarding capital increases without pre-emptive subscription rights via an offering as defined in Article L�411-2 (II) of the French Monetary and Financial Code, it does not have the same purpose as the delegation of authority provided for by resolution 11 above,
• that you note accordingly that this delegation of authority does not render resolution 11 ineffective and that the applicability and term of resolution 11 are not hereby affected�
Resolution 13. Authorisation of the Management Board to set the issue price at up to 10% of the share capital, subject to the caps imposed by the General Meeting, in the event of an issue of shares or any securities granting access to the share capital without shareholder pre-emptive subscription rights
Pursuant to Article L�225-136-1 of the French Commercial Code, we propose that you authorise your Management Board, with the option of further delegation subject to the conditions provided for by law, in respect of each of the issues resolved upon pursuant to resolutions 11 and 12 which it is authorised to carry out up to a limit of 10% of the Company’s share capital (as it stands on the date of the transaction) per 12-month period, to disregard the price setting conditions provided for under the delegations of authority referred to in said resolutions and to set the issue price of the issued ordinary shares and/or securities giving immediate or future access to the share capital in the following manner:
• the issue price of the ordinary shares shall not be lower than the weighted average listed price over the three trading sessions preceding the date on which it is set, less a maximum potential discount of 20%; in any event, the price shall not be lower than the par value of one Company share as at the date on which said shares are issued,
• in the event of an issue of securities granting access to the share capital, the issue price of shares issued via the conversion, exchange or exercise of these securities may be set, at the Management Board’s discretion, using a calculation formula defined by the Board and applicable after the issue of said securities (for example, at the time of their exercise, conversion or exchange), in which case the aforementioned maximum discount may be valued, if the Board sees fit, as at the application date of said formula, and
• the issue price of the securities granting access to the share capital shall be such that the amount received immediately by the Company, plus any amounts that it may subsequently receive, is not lower than the issue price defined in the previous paragraph for each share issued as a result of the issue of said securities�
84 MANAGEMENT REPORT Part 9. Presentation of draft resolutions to be submitted to the Annual General Meeting
Resolution 14. Delegation of authority to the Management Board to increase the number of shares to be issued in the event of a capital increase with or without pre-emptive subscription rights
Pursuant to Articles L�225-129, L�225-129-2, L�225-135 et seq�, L�228-91 and L�228-92 of the French Commercial Code, we request that you delegate to the Management Board your authority to increase the number of shares or securities to be issued in the event of oversubscription in relation to an increase in the Company’s share capital, without or without pre-emptive subscription rights, resolved upon pursuant to resolutions 10, 11 or 12 and submitted for your approval, subject to the conditions defined by Articles L�225-135-1 and R�225-118 of the French Commercial Code (i�e�, at the present date, within thirty days following the close of subscriptions, at the same price as that of the initial issue, the increase being capped at 15% of the initial issue), said shares conferring the same rights as existing shares in accordance with their dividend date�
The nominal value of all capital increases resolved upon pursuant to this delegation of authority shall be deducted from the overall cap provided for above�
Under this delegation of authority, the Management Board shall have full powers, with the option of further delegation subject to the conditions provided for by law, to exercise the authority hereby delegated, subject to the conditions provided for by law and the articles of association, to perform the following tasks in particular:
• set the dates, terms and conditions of all issues and the form and features of the future shares or securities granting access to the share capital, with or without share premiums,
• set the amounts to be issued, the dividend/interest entitlement date of the future shares or securities granting access to the share capital, including on a retrospective
basis, the manner in which they are to be paid up and, where applicable, the terms and conditions applicable to the exercise of rights to exchange, conversion, redemption or the grant of any other type of equity securities or securities granting access to the share capital,
• make any adjustments required pursuant to statutory and regulatory provisions and any applicable contractual provisions, in order to maintain the rights of holders of securities and other rights granting access to the Company’s share capital, and
• suspend, where applicable, the exercise of the rights attached to these securities during a period of no more than three months�
In addition, the Management Board shall be entitled to:
• at its sole discretion and when it sees fit, deduct the costs, disbursements and fees incurred in connection with the capital increases carried out under the present delegation of authority from the amount of premiums associated with these transactions and deduct from such amount the amounts required to increase the legal reserve to one tenth of the new share capital amount after each transaction,
• take any decisions required with regard to the admission of the shares and securities issued hereunder for trading on the Euronext regulated market in Paris and, more broadly,
• implement any measures, make any undertakings and complete all formalities required for the due completion of the proposed issue and for the finalisation of the ensuing capital increase, and amend the articles of association accordingly�
Resolution 15. Delegation of authority to the Management Board to issue ordinary shares and securities granting access to the Company’s share capital in the event of a public tender offer initiated by the Company including an exchange component
We request that you delegate to the Management Board your authority to resolve upon the issue, on one or more occasions, of ordinary shares of the Company and/or securities granting access by any means, immediately and/or in the future, to ordinary shares of the Company as consideration for securities contributed to a public tender offer including an exchange
component initiated by the Company, in France or abroad, in accordance with domestic regulations, on the securities of another company admitted for trading on one of the markets defined by the aforementioned Article L�225-148, said shares conferring the same rights as existing shares in accordance with their dividend date�
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The securities issued hereunder could consist of debt securities, be associated with an issue of such securities or allow the issue thereof as intermediate securities�
Accordingly, we request, for all intents and purposes, that you cancel shareholders’ pre-emptive subscription rights to these ordinary shares and securities to be issued in favour of the holders thereof and that you note that this delegation of authority automatically entails the shareholders’ express waiver, in favour of the holders of any securities issued hereunder, of their pre-emptive subscription rights to the shares to which such securities confer entitlement�
Under the present delegation of authority, we request that you resolve that:
• the aggregate nominal amount of capital increases that may be completed, immediately and/or in the future, under this delegation of authority shall not exceed €1,000,000 plus the amount of any additional shares that must be issued in order to maintain the rights of holders of securities and other rights granting access to the share capital, pursuant to statutory and regulatory provisions and any applicable contractual provisions,
• the nominal value of all capital increases thus completed shall be deducted from the overall cap provided for above in respect of all delegations of authority,
• the total nominal value of all debt securities granting access to the share capital issued hereunder shall not exceed €1,000,000 (or the equivalent thereof in the event of an issue denominated in another currency), and that the amount of such issues shall be deducted from the overall cap provided for above�
The Management Board shall have full powers, with the option of further delegation subject to the conditions provided for by law, to exercise the authority hereby delegated, to perform the following tasks in particular:
• approve the list of securities contributed to the exchange as well as the form and features of the future shares or securities granting access to the share capital, with or without share premiums,
• set the conditions for the issue, the exchange ratio and, where applicable, the amount of the balance to be settled in cash,
• set the practical terms of the issue, including in the case of a public exchange offer or a primary alternative tender or exchange offer combined with a secondary public exchange or tender offer,
• note the number of securities contributed to the exchange,
• set the dividend date of the future shares or securities granting access to the share capital, including on a retrospective basis, the manner in which they are to be paid up and, where applicable, the terms and conditions applicable to the exercise of rights to exchange, conversion, redemption or the grant of any other type of equity securities or securities granting access to the share capital,
• record the difference between the issue price of the new ordinary shares and their par value under balance sheet liabilities in the “Contribution premium” account, to which all shareholders shall be entitled,
• make any adjustments required pursuant to statutory and regulatory provisions and any applicable contractual provisions, in order to maintain the rights of holders of securities and other rights granting access to the Company’s share capital, and
• suspend, where applicable, the exercise of the rights attached to these securities during a period of no more than three months�
In addition, the Management Board shall be entitled to:
• at its sole discretion and when it sees fit, deduct the costs, disbursements and fees incurred in connection with the capital increases carried out under the present delegation of authority from the amount of premiums associated with these transactions and deduct from such amount the amounts required to increase the legal reserve to one tenth of the new share capital amount after each transaction,
• take any decisions required with regard to the admission of the shares and securities issued hereunder for trading on the Euronext Paris regulated market and, more broadly,
• implement any measures, make any undertakings and complete all formalities required for the due completion of the proposed issue and for the finalisation of the ensuing capital increase, and amend the articles of association accordingly�
86 MANAGEMENT REPORT Part 9. Presentation of draft resolutions to be submitted to the Annual General Meeting
Resolution 16. Delegation of power to the Management Board to increase the share capital by up to 10% of the share capital in order to compensate contributions in kind of equity securities or securities granting access to the share capital of third-party companies outside the scope of a public exchange offer
We request that you delegate to the Management Board the powers required to issue, on the basis of a report by one or more Statutory Auditors , on one or more occasions, in such proportions and at such times as it shall see fit, ordinary shares of the Company or securities granting access by any means, immediately and/or in the future, to ordinary shares of the Company, as consideration for contributions in kind made to the Company consisting of equity securities or securities granting access to the share capital where the provisions of Article L�225-148 of the French Commercial Code are not applicable, said shares conferring the same rights as existing shares in accordance with their dividend date�
Under the present delegation of authority, we request that you:
• resolve that the securities issued hereunder could consist of debt securities, be associated with an issue of such securities or allow the issue thereof as intermediate securities,
• cancel shareholders’ pre-emptive subscription rights to these ordinary shares and securities to be issued in favour of the contributors of said shares or securities,
• note that this delegation of authority automatically entails the shareholders’ express waiver, in favour of the holders of any securities issued hereunder, of their pre-emptive subscription rights to the shares to which such securities confer entitlement,
• resolve that the aggregate nominal amount of capital increases that may be completed, immediately and/or in the future, under this delegation of authority shall not exceed €1,000,000 and, in any event, shall not exceed a cap of 10% of the Company’s share capital (as it stands on the
date of the transaction), plus the amount of any additional shares that must be issued in order to maintain the rights of holders of securities and other rights granting access to the share capital, pursuant to statutory and regulatory provisions and any applicable contractual provisions,
• resolve, in addition, that the nominal value of all capital increases thus completed shall be deducted from the overall cap provided for above in respect of all delegations of authority thus granted,
• resolve that the total nominal value of all debt securities granting access to the share capital issued hereunder shall not exceed €1,000,000 (or the equivalent thereof in the event of an issue denominated in another currency), and that the amount of such issues shall be deducted from the overall cap provided for above�
The Management Board shall have full powers, with the option of further delegation subject to the conditions provided for by law, to approve the valuation of contributions, to resolve upon and record the completion of the capital increase carried out as consideration for the contribution transaction, to deduct all costs and disbursements associated with the capital increase from the contribution premium, where applicable, to transfer the amounts required to supplement the legal reserve from the contribution premium account, if it sees fit, to amend the articles of association accordingly, to take any decision regarding the admission of the shares and securities issued hereunder for trading on the Euronext regulated market in Paris and, more broadly, to do everything that is necessary�
Resolution 18. Delegation of authority to the Management Board to increase the share capital by capitalisation of additional paid-in capital, reserves, retained earnings or other amounts
We propose that you delegate to the Management Board, with the option of further delegation subject to the conditions provided for by law, your authority to resolve upon one or more capital increases by capitalisation of additional paid-in capital, reserves, retained earnings or other amounts that may be capitalised pursuant to statutory provisions and the articles of association, by granting newly issued bonus shares, raising the par value of existing shares or via a combination of these
two procedures, said shares conferring the same rights as existing shares in accordance with their dividend date�
We request that you resolve that the aggregate nominal amount of capital increases thus completed, immediately and/or in the future, shall not exceed €1,000,000 plus the amount of any additional shares that must be issued in order to maintain the rights of holders of securities granting access
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to shares, pursuant to statutory and regulatory provisions and any applicable contractual provisions, provided that said total nominal amount shall be separate and distinct from the cap defined above in respect of all delegations of authority�
Pursuant to Article L�225-130 of the French Commercial Code, if the Management Board exercises the authority delegated under this resolution, rights to fractional shares shall not be tradable and the corresponding securities shall be sold and the proceeds of such sale allocated to rightholders within the period stipulated by the regulations�
****
In view of the continuation of the Company’s employees and directors share ownership policy, your Management Board proposes that you grant it an authorisation allowing it to use the most suitable resources for this purpose�
Your Statutory Auditors have drawn up the reports required by law�
Accordingly, we request that you review the following proposal�
Resolution 19. Authorisation of the Management Board to grant existing or future bonus shares
Pursuant to Articles L�225-197-1 and L�225-197-2 of the French Commercial Code, we request that you:
• authorise the Management Board to grant existing or future bonus ordinary shares of the Company, on one or more occasions, to the following persons:
– salaried employees of the Company or of French or foreign companies or groups directly or indirectly related to the Company within the meaning of Article L�225-197-2 of the French Commercial Code,
– and/or corporate officers who meet the criteria laid down by Article L�225-197-1 of the French Commercial Code�
• resolve that the total number of bonus shares granted shall not represent more than 10% of the Company’s share capital at the date on which the Company’s Management Board decides to grant them;
• resolve that the shares will not be fully vested to beneficiaries until the end of a vesting period of no less than one year; the Management Board may provide for a vesting period that is longer than one year;
• resolve to provide for the full vesting of shares before the end of the vesting period if the beneficiary suffers second or third category disablement as defined by Article L�341-4 of the French Social Security Code�
• resolve that a lock-in period during which fully vested shares may not be sold or transferred may be defined by the Management Board, provided that:
– such lock-in period shall be mandatory if the Management Board has set a vesting period of less than two years� In this case, the combined duration of the vesting and lock-in periods may not be less than two years,
– the lock-in period will not be mandatory if the Management Board has set a vesting period of at least two years,
– the shares may be freely sold or transferred if the beneficiary suffers second or third category disablement as defined by Article L�341-4 of the French Social Security Code;
• resolve that existing shares that may be granted pursuant to this resolution shall be purchased by the Company within the scope of the share buy-back plan, authorisation of which is submitted for your approval pursuant to Article L�225-209 of the French Commercial Code, or of any share buy-back plan applicable prior to or following the adoption of the draft resolution;
• grant the Management Board full powers in order to:
– set the terms and conditions and any criteria for the allotment of the shares (including presence and, where applicable, performance criteria),
– determine the identity of the beneficiaries and the number of shares allotted to each one,
– with regard to any shares granted to executive directors as defined in the Article L�225-197-1 (II), paragraph 4 of the French Commercial Code, either resolve that these shares may not be sold or transferred prior to the termination of the beneficiary’s duties, or set the amount of shares they are required to hold in registered form until the termination of their duties; all shared granted to the Company’s corporate officers shall be subject to performance criteria,
88 MANAGEMENT REPORT Part 9. Presentation of draft resolutions to be submitted to the Annual General Meeting
– identify the manner in which transactions carried out during the vesting and lock-in periods that affect the share capital, or that could affect the value of the shares granted, will impact the rights of beneficiaries, and, where necessary, adjust the number of shares granted accordingly in order to maintain the beneficiaries’ rights,
– set the duration of the vesting period and, where applicable, the lock-in period in respect of the bonus shares granted, in accordance with the limits laid down by this resolution,
– note the existence of sufficient reserves and, in connection with each allotment, transfer the amounts required for paying up the new shares to be granted to an undistributable reserve account,
– at an appropriate time, resolve on the capital increase(s) by capitalisation of reserves, additional paid-in capital or retained earnings corresponding to the new bonus share issue,
– purchase the requisite shares within the scope of the buy-back plan and allocate them to the bonus share plan,
– take all necessary measures to ensure that beneficiaries comply with lock-in requirements,
– and, more broadly, do everything that is necessary in order to exercise this authorisation, in accordance with applicable statutory provisions�
This authorisation which we are requesting that you grant to the Management Board shall be granted for a period of thirty-eight months from the date of this General Meeting�
Resolution 20. Delegation of authority to the Management Board to increase the share capital via the issue of shares and securities granting access to the Company’s share capital to members of a Group employee share ownership plan
In accordance with statutory provisions, in particular those of Articles L�225-129 et seq� and L�225-138-1 of the French Commercial Code, and Articles L�3332-1 et seq� of the French Labour Code, we request that you delegate full powers to the Management Board to resolve upon the issue, on one or more occasions, in such proportions and at such times as it shall see fit, of ordinary shares or securities granting access by any means, immediately and/or in the future, to ordinary shares of the Company, to be reserved for members of an employee share ownership plan set up by the Company and, where applicable, by French or foreign companies related to the Company within the meaning of Article L�225-180 of the French Commercial Code and Article L�3344-1 of the French Labour Code (the “LDLC Group”)�
We therefore request that you:
• resolve that the aggregate nominal amount of capital increases that may be completed under this resolution shall not exceed €34,139�34 plus the amount of any additional shares that must be issued in order to maintain the rights of holders of securities granting access to shares, pursuant to statutory and regulatory provisions and any applicable contractual provisions,
• resolve, in addition, that the nominal value of all capital increases thus completed shall be deducted from the overall cap provided for in respect of all financial delegations of authority under resolution 17,
• resolve that the total nominal value of all debt securities granting access to the share capital issued hereunder shall not exceed €34,139�34 (or the equivalent thereof in the event of an issue denominated in another currency), and that the amount of such issues shall be deducted from the overall cap provided for in respect of all financial delegations of authority under resolution 17,
• set the term of the present delegation of authority at twenty-six months from the date of this General Meeting,
• resolve that the issue price of the new shares or securities granting access to the share capital shall be set by the Management Board in accordance with the provisions of Articles L�3332-18 to L�3332-23 of the French Labour Code,
• resolve to cancel shareholders’ pre-emptive subscription rights to the future shares or securities granting access by any means, immediately and/or in the future, to ordinary shares, in favour of members of an employee share ownership plan, and
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• resolve that the Management Board shall have full powers, with the option of further delegation subject to the conditions provided for by law and those set out above, to exercise the authority hereby delegated to perform the following tasks in particular:
– resolve that subscriptions may be made directly or via company mutual funds or other vehicles or entities permitted by applicable statutory or regulatory provisions,
– set the dates, conditions and practical terms of the issues carried out under this resolution and, in particular, set the opening and closing dates for subscription, the dividend dates and the procedure for paying up the shares and other securities granting access to the Company’s share capital, and stipulate deadlines for paying up the shares and any other securities granting access to the Company’s share capital,
– apply for the admission of the newly issued securities for trading, record the completion of capital increases at the amount of shares actually subscribed and amend the articles of association accordingly, complete all transactions and formalities related to the capital increases, either directly or through an agent, and deduct from the amount of related premiums the costs of the capital increases and the amounts required to increase the legal reserve to one tenth of the new share capital amount after each increase�
However, your Management Board considers that such proposal does not fall within the scope of your Company’s employee share ownership policy and therefore recommends that you do not adopt the resolution submitted to you for this purpose�
Under these conditions, we request that you vote on the draft resolutions proposed to you by your Management Board�
90 APPENDICES TO THE MANAGEMENT REPORT
APPENDICES TO THE MANAGEMENT REPORT• 1 I TABLE OF CROSS-REFERENCES WITH THE FRENCH GRENELLE II ACT
Grenelle article Description Report section
1. SOCIAL INFORMATION
1.a Employment 1.1
Total headcount and breakdown of employees by gender, age and region 1.1.1
Hires and dismissals 1.1.2
Compensation and changes thereto 1.1.3
1.b Work organisation 1.2
Organisation of working hours 1.2.1
Absenteeism 1.2.2
1.c Industrial relations 1.3
Organisation of industrial relations, including staff information, consultation and negotiation procedures 1.3.1
Overview of collective agreements 1.3.2
1.d Health and safety 1.4
Occupational health and safety conditions 1.4.1
Overview of occupational health and safety agreements signed with trade unions or staff representatives 1.4.2
Industrial accidents, including frequency and severity thereof, and occupational sickness 1.4.3
1.e Training 1.5
Safety training 1.5.1
Training policies 1.5.2
Total training hours 1.5.3
1.f Equal treatment 1.6
Measures to promote gender balance in employment 1.6.1
Measures to promote the employment and integration of disabled persons 1.6.2
Non-discrimination policy 1.6.3
1.g Promotion of and compliance with the ILO fundamental conventions on freedom of association and the right to collective bargaining, the elimination of discrimination in respect of employment and occupation, the abolition of forced or compulsory labour, and the effective abolition of child labour
1.6.4
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Grenelle article Description Report section
2 ENVIRONMENTAL INFORMATION 2
2.a Overall environmental policy 2.1
Organisational measures within the Company for dealing with environmental issues and assessment/certification initiatives
2.1.1
Staff training and awareness schemes related to environmental protection 2.1.2
Resources assigned to the prevention of environmental risks and pollution 2.1.3
Amount of provisions and guarantees in respect of environmental risks, provided that such information would not cause severe harm to the Company within the scope of current legal proceedings
2.1.4
2.b Pollution and waste management 2.2
Measures to prevent, reduce and remedy atmospheric, water and soil pollution constituting a significant danger to the environment
2.2.1
Measures for preventing, recycling and eliminating waste 2.2.2
Measures with regard to noise and all other forms of pollution inherent in a business activity N/A
2.c Sustainable use of resources 2.3
Water consumption and supply geared towards local restrictions 2.3.1
Raw material consumption and measures to improve efficiency of use 2.3.2
Energy consumption, measures to improve energy efficiency and use of renewable energies 2.3.3
Land use N/A
2.d Climate change 2.4
Greenhouse gas emissions 2.4.1
Adaptation to the consequences of climate change N/A
Preservation or promotion of biodiversity N/A
3 SOCIETAL INFORMATION 3
3.a Local economic and social impact of the Company’s operations in terms of employment, regional development and impact on local communities
3.1
3.b Relations with the Company’s stakeholders, including professional integration organisations, educational institutions, environmental protection organisations, consumer associations and local communities
3.2
Conditions of stakeholder dialogue 3.2.1
Partnership and sponsorship 3.2.2
3.c Subcontracting and suppliers 3.3
Inclusion of social and environmental considerations in the Company’s procurement policy 3.3.1
The importance of subcontracting and inclusion of social and environmental responsibility issues in the relationship with suppliers and subcontractors
3.3.2
Fair practices 3.3.3
Consumer health and safety 3.3.4
Other initiatives relevant to this section regarding the promotion of human rights 3.3.5
92 APPENDICES TO THE MANAGEMENT REPORT
• 2 I TABLE OF RESULTS OF THE LAST FIVE (5) YEARS
Closing date Length of reporting period (months)
31/03/2016 12
31/03/2015 12
31/03/2014 12
31/03/2013 12
31/03/2012 12
Share capital at year-end
Share capital 1,137,979 1,034,527 1,034,527 1,034,527 1,034,527
Number of ordinary shares 6,322,106 5,747,374 5,747,374 5,747,374 5,747,374
Max. no. of shares to be issued via ex. of subscription rights 0 0 0 0 0
Revenues and earnings
Revenues excl. VAT 316,984,835 283,013,423 252,418,222 205,121,789 173,594,395
Earnings before tax, profit-sharing, depr./amort. and provisions
16,489,421 11,102,082 10,694,319 7,683,834 5,929,556
Income tax 5,346,506 3,542,133 3,251,490 2,494,902 2,015,234
Employee profit-sharing 1,336,418 868,469 821,388 696,792 511,229
Depreciation, amortisation and provisions 1,268,453 808,834 1,352,512 203,097 (220,529)
Net income 8,538,044 5,882,646 5,268,929 4,289,043 3,623,622
Distributed earnings (1) (2) 3,161,053 2,586,318 2,586,318 1,896,633 1,264,422
Earnings per share
EPS after tax and profit-sharing, before depr./amort. and provisions
1.55 1.16 1.15 0.78 0.59
EPS after tax, profit-sharing, depr./amort. and provisions 1.35 1.02 0.92 0.75 0.63
Dividend allotted (2) 0.50 0.45 0.45 0.33 0.22
Human resources
Average headcount 443 422 367 310 300
Payroll expenses 13,410,429 12,453,584 10,590,291 9,637,434 8,360,839
Employment benefits paid (social security, welfare actions, etc.) 5,981,004 6,036,904 4,371,455 4,265,852 3,594,784
(1) including dividends attached to treasury shares held as at the payment date.(2) subject to the approval of the Annual General Meeting on 30 September 2016.
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• 3 I TABLE SUMMARISING CURRENTLY VALID DELEGATIONS OF AUTHORITY AND AUTHORISATIONS IN RESPECT OF CAPITAL INCREASES
Type of delegation of authority or powers to the Company’s Management Board pursuant to Articles L.225-129-1 and L.225-129-2 of the French Commercial Code EGM date
Term
Expiry dateAuthorised nominal amount of capital increase
Capital increase(s) completed during the year
Remaining amount at date of preparation of this table
Delegation of authority to the Management Board to increase the share capital via the issue of all securities giving immediate or future access to a portion of the share capital, with shareholders’ pre-emptive subscription rights
25/09/2015
Resolution 8
26 months
25/11/2017
€4,500,000 in respect of the capital increase via the issue of all securities giving immediate or future access to a portion of the share capital, to be subscribed in cash and paid up either in cash or by offsetting against liquid and due receivables from the Company, with the exception of preference shares or securities giving immediate or future entitlement to preference shares;
€6,000,000 in respect of the capital increase by capitalisation of reserves, retained earnings, share premiums or any other capitalisable items, via an increase in the par value of existing shares or the issue of new bonus shares of the same type as existing shares, provided that this cap shall be added to the overall cap defined in the preceding paragraph.
None €4,500,000 in respect of the capital increase via the issue of all securities giving immediate or future access to a portion of the share capital, to be subscribed in cash and paid up either in cash or by offsetting against liquid and due receivables from the Company, with the exception of preference shares or securities giving immediate or future entitlement to preference shares;
€6,000,000 in respect of the capital increase by capitalisation of reserves, retained earnings, share premiums or any other capitalisable items, via an increase in the par value of existing shares or the issue of new bonus shares of the same type as existing shares, provided that this cap shall be added to the overall cap defined in the preceding paragraph.
Delegation of authority to the Management Board to increase the share capital by means of a public offering, via the issue of all securities giving immediate or future access to a portion of the share capital, without shareholders’ pre-emptive subscription rights
25/09/2015
Resolution 9
26 months
25/11/2017
€4,500,000 in respect of the capital increase(s) that may result from the issue of these securities, without shareholder pre-emptive subscription rights;
€4,500,000 in respect of issues of debt securities granting access to the share capital;
The total being capped at the unused portion of the overall caps defined by resolution 8.
None €4,500,000 in respect of the capital increase(s) that may result from the issue of these securities, without shareholder pre-emptive subscription rights;
€4,500,000 in respect of issues of debt securities granting access to the share capital;
The total being capped at the unused portion of the overall caps defined by resolution 8.
94 APPENDICES TO THE MANAGEMENT REPORT
Type of delegation of authority or powers to the Company’s Management Board pursuant to Articles L.225-129-1 and L.225-129-2 of the French Commercial Code EGM date
Term
Expiry dateAuthorised nominal amount of capital increase
Capital increase(s) completed during the year
Remaining amount at date of preparation of this table
Delegation of authority to the Management Board to increase the share capital by means of a private placement within the meaning of Article L.411.2 (II) of the French Monetary and Financial Code, via the issue of all securities giving immediate or future access to the share capital, without shareholders’ pre-emptive subscription rights
25/09/2015
Resolution 10
26 months
25/11/2017
€4,500,000 in respect of the capital increase(s) that may result from the issue of these securities, without shareholder pre-emptive subscription rights;
€4,500,000 in respect of issues of debt securities granting access to the share capital;
The total being capped at the unused portion of the overall caps defined by resolution 8.
None €4,500,000 in respect of the capital increase(s) that may result from the issue of these securities, without shareholder pre-emptive subscription rights;
€4,500,000 in respect of issues of debt securities granting access to the share capital;
The total being capped at the unused portion of the overall caps defined by resolution 8.
Delegation of authority to the Management Board to increase the share capital in order to compensate contributions in kind of equity securities or securities granting access to the share capital made to the Company, up to a limit of 10% of the share capital, and in order to compensate securities contributed to the Company as part of a public exchange offer
25/09/2015
Resolution 13
26 months
25/11/2017
In accordance with Article L.225-147, paragraph 6 of the French Commercial Code and up to a limit of 10% of the share capital as adjusted in accordance with any transactions affecting it following the date of the General Meeting;
Pursuant to Article L.225-148 of the French Commercial Code, as consideration for the securities contributed to the Company as part of a public exchange offer initiated by the Company, in France or abroad, on the securities of a company whose shares are admitted for trading on a regulated market as defined by said article;
subject to a cap amounting to the unused portion of the overall caps defined in the second paragraph of resolutions 8, 9 and 10.
€103,451.76 by decision of the M a n a g e m e n t B o a r d o n 31 March 2016 as consideration for the contribution in kind of 100,367 Domisys shares as part of the acquis i t ion of Materiel.net
Following the exercise of the Management Board’s authorisation on 31 March 2016 in the amount of €103,451.76, the remaining available amount, barring changes in the share capital, is 0.0001% of the share capital;
Pursuant to Article L.225-148 of the French Commercial Code, as consideration for the securities contributed to the Company as part of a public exchange offer initiated by the Company, in France or abroad, on the securities of a company whose shares are admitted for trading on a regulated market as defined by said article;
subject to a cap amounting to the unused portion of the caps defined in the second paragraph of resolutions 8, 9 and 10.
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REPORT PREPARED BY THE CHAIRWOMAN OF THE SUPERVISORY BOARD PURSUANT TO ARTICLE L.225-68 OF THE FRENCH COMMERCIAL CODE
Pursuant to Article L�225-68 of the French Commercial Code, I hereby report to you on the following matters:
• The membership and conditions of preparation and organisation of the work of the Company’s Supervisory Board, as well as the application of the principle of gender balance on the Board,
• The restrictions imposed by the Supervisory Board on the powers of the Chairman and Chief Executive Officer,
• Applicable corporate governance rules,
• The principles and rules approved by the Supervisory Board to determine the compensation and benefits of all kinds awarded to corporate officers,
• specific procedures regarding shareholder participation in the General Meeting,
• Information published in the management report that could have an impact in the event of a public tender offer,
• Internal control and risk management procedures established by the Company�
This report was approved by the Company’s Supervisory Board at its meeting on 1 July 2016, in accordance with Article L�225-68, paragraph 11 of the French Commercial Code�
I. PREPARATION AND ORGANISATION OF THE WORK OF THE SUPERVISORY BOARD
a. Supervisory Board membership
In accordance with Article L�225-68 of the French Commercial Code, I hereby inform you that the proportion of men and women on the Supervisory Board is as follows:
• Men: 33�33%
• Women: 66�67%
Identity of directors and officersDuties performed at the Company
Duties performed outside the
CompanyDate of appointment to office within Company
Date of expiry of office within
Company
Suzanne Villemonte de la Clergerie Member of Supervisory Board and Chairwoman of Supervisory Board
None 28 September 2012 (reappointment)
28 September 2018
Marc Villemonte de la Clergerie Member of Supervisory Board and Vice-Chairman of Supervisory Board
None 28 September 2012(reappointment)
28 September 2018
Anne-Marie Valentin Bignier Member of Supervisory Board
None 28 September 2012(reappointment)
28 September 2018
96 REPORT PREPARED BY THE CHAIRWOMAN OF THE SUPERVISORY BOARD
b. Preparation and organisation of the work of the Supervisory Board
Number of meetings, attendance rate and main decisions taken:The Supervisory Board met four times during the year ended 31 March 2016, with an attendance rate of 67%�
Meeting dates Attendance rate
19 June 2015 67%
25 September 2015 67%
22 December 2015 67%
25 March 2016 67%
The main decisions taken at these meetings were as follows:
• Review of the quarterly reports on the conduct of the Company’s affairs during the first, second, third and fourth quarters of the financial year ended 31 March 2016,
• Review of the Company and consolidated financial statements and the report by the Management Board, including the Group management report, for the year ended 31 March 2016,
• Review of the report prepared by the chairwoman of the Supervisory Board on the conditions of preparation and organisation of the work of the Supervisory Board and on the Company’s internal control procedures,
• Review of management forecasts,
• Authorisation of sureties, endorsements and guarantees,
• In relation to the Company’s acquisition of Materiel�net, approval of (i) the terms of the financing to be granted to the Company, and (ii) the granting of security interests by the Company in accordance with Article L�225-68 of the French Commercial Code; authorisation to be granted to the Management Board to sign the loan agreement, security interests and any other documents related to the acquisition, for and on behalf of the Company,
• Annual discussion of the Company’s policy on professional equality and equal pay,
• Compensation of the Management Board members, Chairman and Chief Executive Officer,
• Changes in the compensation awarded to members of the Management Board in respect of their office,
• Determination of the variable compensation awarded to members of the Management Board,
• Review of the real estate project,
• Reappointment of Management Board members�
Procedures for preparing decisions:Procedures for convening meetingsMeetings are convened by any means, including orally� Meetings are held at the head office or any other location specified in the notice of meeting�
Procedures for taking decisionsAny member of the Supervisory Board may appoint another member as proxy to represent him/her at a Board meeting, via any written document, including any electronically signed document�
At least half of the members must be present for the Board’s proceedings to be valid�
Decisions are passed by a majority of the votes of members present or represented, where each member present or represented holds one vote and each member present may hold only one proxy�
In the event of a split vote, the person chairing the meeting has the casting vote�
Board members participating in the meeting by means of videoconference technology in accordance with the conditions stipulated by laws and regulations applicable at the time of the meeting are deemed to be present for the purposes of calculating quorum and majority� However, this provision does not apply when the Board votes on the appointment or removal of the Chairman or Vice-Chairman of the Supervisory Board or the appointment or removal of Management Board members�
Procedures for provision of documents and information required for decision-making purposesAt each meeting, the Supervisory Board members received all of the documents and information required in order to make informed decisions and duly perform their duties, including the Company and consolidated first-half and full-year financial statements and the management forecasts�
Furthermore, please note that the Company has no special committee or charter designed to supplement statutory and regulatory provisions, except for the audit committee set up on 20 December 2014 in application of Recommendation 12 of the MiddleNext corporate governance code�
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II. RESTRICTIONS ON THE POWERS OF THE CHAIRMAN OF THE MANAGEMENT BOARD AND THE CHIEF EXECUTIVE OFFICER
There are no restrictions other than statutory restrictions on the powers of the Chairman of the Management Board and the Chief Executive Officer�
Accordingly, pursuant to Article L�225-68 of the French Commercial Code and Article 15 of the articles of association,
the sale of property, the full or partial sale or transfer of equity investments and the granting of security interests, sureties, endorsements and guarantees require the prior authorisation of the Supervisory Board�
III. CORPORATE GOVERNANCE
I hereby inform you that the Company’s Management Board has decided to refer to the MiddleNext corporate governance code as the Company’s reference code, considering that this code is suited to the Company’s size and shareholder structure�
The MiddleNext code may be consulted on the MiddleNext website at: www�MiddleNext�com�
The reference code contains fifteen (15) recommendations specifically related to executive directors and the Supervisory Board�
The Management Board has launched an initiative aimed at gradually bringing the Company into line with the reference code recommendations, as follows:
MiddleNext code recommendation Adopted Not adoptedUnder
consideration
I. Executive power
R 1: Combining employment contract with corporate office X
R 2: Definition and transparency of executive directors’ compensation X
R 3: Severance pay X
R 4: Supplementary pension schemes X
R 5: Stock options and bonus shares X
II. Supervisory power
R 6: Establishment of Board internal regulations X
R 7: Code of conduct for Board members X
R 8: Board membership – Independent members X
R 9: Choice of Board members X
R 10: Board members’ term of office X
R 11: Provision of information to Board members X
R 12: Establishment of committees X
R 13: Board and committee meetings X
R 14: Compensation of Supervisory Board members X
R 15: Establishment of a system for assessing the work of the Board X
Let me also remind you that, pursuant to recommendation 12, the Supervisory Board assumed the role of an audit committee on 20 December 2014�
98 REPORT PREPARED BY THE CHAIRWOMAN OF THE SUPERVISORY BOARD
IV. THE PRINCIPLES AND RULES APPROVED BY THE SUPERVISORY BOARD TO DETERMINE THE COMPENSATION AND BENEFITS OF ALL KINDS AWARDED TO EXECUTIVE DIRECTORS
The amounts of compensation awarded for corporate office were approved by decisions of the Supervisory Board on 14 April 2005 and revised by decisions of the Supervisory Board on 24 April 2007, 16 January 2008, 21 April 2008, 7 April 2010, 15 April 2011, 30 March 2012, 2 April 2013, 28 March 2014, 19 June 2015 and 25 March 2016� The amounts of compensation are suited to the Group’s business activity, size, earnings and outlook�
The members of the Management Board, Chairman of the Management Board and Chief Executive Officer receive fixed compensation in respect of their corporate office� They also receive variable compensation determined in accordance with the LDLC Group’s underlying EBIT for the year and paid in July every year� The criteria for determining the amount of variable compensation payable to corporate officers are precisely defined in advance but are not disclosed in this report for the sake of confidentiality�
The Company does not grant corporate officers any specific benefits in terms of deferred compensation, severance pay or pension commitments, except for a personal protection scheme set up on 1 May 2010 for the Chairman of the Management Board and the Chief Executive Officer�
Moreover, as their main source of compensation, the members of the Management Board (excluding the Chairman and the CEO) receive a fixed salary under their employment contract as distinct from their corporate office�
Compensation paid under employment contracts complies with the Group’s wage policy�
The chairwoman and vice-chairman of the Supervisory Board receive fixed compensation in respect of these offices�
The aforementioned compensation paid to corporate officers during the year ended 31 March 2016 in respect of their corporate offices and employment contracts is set out in the Management Board’s management report to the General Meeting�
V. PROCEDURES REGARDING SHAREHOLDER PARTICIPATION IN THE GENERAL MEETING
In accordance with Article L�225-68, paragraph 9, of the French Commercial Code, I hereby invite you to consult the provisions of the articles of association that lay down the procedures regarding shareholder participation in the General Meeting, including in particular:
• Articles 20 to 23 of the articles of association, on the modus operandi and main powers of the General Meeting;
• Articles 12, 13 and 20-1 of the articles of association, on shareholder rights and the terms of exercise thereof�
VI. INFORMATION THAT COULD HAVE AN IMPACT IN THE EVENT OF A PUBLIC TENDER OFFER
In accordance with Article L�225-68, paragraph 10, of the French Commercial Code, I hereby inform you that the information listed in Article L�225-100-3 of the French Commercial Code has been disclosed in the management report drawn up by the Management Board�
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VII. INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES ESTABLISHED BY THE COMPANY
1. Company objectives with regard to internal control and risk management procedures
The purposes of the internal control procedures applicable within the Company are:
• to ensure that managerial acts, the execution of transactions and staff conduct comply with the guidelines imposed on the Company’s business activities by its corporate bodies, applicable laws and regulations and the Company’s values, standards and internal rules,
• to ensure that the accounting, financial and administrative information forwarded to the Company’s bodies gives a true and fair view of the operations and financial position of the Company and its subsidiaries�
One of the goals of internal control is to forestall and control the risks arising from the operations of the Company and its subsidiaries and the risks of error and fraud, particularly with regard to finance and accounting� Like any control system, however, it cannot provide complete assurance that such risks have been fully eliminated�
2. Overview of applicable procedures
a. Overall organisation of internal control and risk management procedures at Company level
(i) Internal control at Company level is organised centrally by department, under the responsibility of a director or departmental manager based at head office and reporting directly to the Management Board and specifically to the Chairman of the Management Board and/or the CEO�
Internal control procedures are in place at the Company and, where necessary, are amended by decision of senior management, with the coordination and assistance of each director or departmental manager concerned� There are no written procedures or internal procedure manuals or guides�
(ii) The Company has set up an informal management committee composed of the Chairman of the Management Board, the CEO and CFO, the Deputy CEO, the Sales Director, the Maginea COO, the SEO Director (“Search Engine Optimisation”), the Financial Control and Cash Management Director, the Chief Purchasing Officer, the Accounting Director, the Director of Marketing and Communication, the IT Systems Director and the Director of Logistics�
(iii) The main departments and individuals responsible for internal control are:
• the members of the Management Board, i�e� Caroline Villemonte de la Clergerie, Laurent and Olivier Villemonte de la Clergerie, Philippe Sauze and Marc Prieur;
• the operating or departmental managers of the Company and its subsidiaries, including the aforementioned Company directors responsible for the following departments:
Sales DepartmentWith a staff of around 49, the sales department is responsible for:
• upstream relations with specific manufacturers, including Intel, Microsoft and HP,
• BtoB sales�
One staff member is responsible for on-site installation and, if a contract is signed, on-site maintenance solely for business customers�
As part of the services it provides to businesses, the Company can also provide cable installation services via its subsidiary, DLP-Connect�
IT Systems and Webmaster Service DepartmentsThe 28 employees working in this division are responsible for the following IT projects:
• technical development of e-commerce websites (upgrading the browser experience, SEO, etc�)� Graphic features are the responsibility of the communication division;
• implementation of security mechanisms (websites, hardware, etc�);
• in-house development of software required for Company operations� During the course of a few years, over thirty software applications have been developed and upgraded, covering all back office operations (order analysis, order processing, inventory management, statistical operational analysis, analysis of incoming and outgoing phone calls, logistics platform administration)�
100 REPORT PREPARED BY THE CHAIRWOMAN OF THE SUPERVISORY BOARD
Customer Relations DepartmentThe customer relations department is responsible for the practical implementation of projects involving the relocation or extension of premises, in accordance with determined schedules, given that any delay in implementing specific strategic decisions could strongly impact the Group’s operations�
This department also houses the customer contact centre, which has a staff of around 61�
Marketing DepartmentThe Group has always applied a targeted communications policy in preference to the shock campaigns used by a large number of online traders�
31 employees perform the following tasks:
• organisation of online promotion campaigns, often linked to major calendar events (Company anniversary, St� Valentine’s Day, etc�);
• organisation of customer breakfast presentations, etc;
• participation in key trade fairs: Cebit, etc�
In terms of marketing, the department is responsible for defining the Group house style, the store concept (friendly atmosphere, etc�), reviewing newsletters prior to circulation, photo illustrations on all e-commerce websites, website content, etc�
Accounts DepartmentAround 12 employees are responsible for Group accounting operations, including the following tasks:
• accounting management;
• customer follow-up;
• monitoring cash and supplier payments;
• accounting management for subsidiaries under a service contract;
• receipts processing (cheques, card payments, stores);
• preparation of annual and half-year statements, etc�
Human Resources DepartmentThe department currently has a staff of 7 people responsible for hiring, schedules, payroll and employment contract management as well as managing the training budget�
Financial ControlOne member of the Management Board is responsible for financial control and cash management�
This person is also responsible for:
• preparing the annual budget,
• cash management for all subsidiaries�
Bank relations are managed directly by senior management�
Purchasing DepartmentWith a staff of 24, the purchasing department manages all procurement for the LDLC Group and prepares technical data sheets for the website�
Maginea DepartmentWith a staff of around 11, this department manages all procurement for Maginea�com�
b. Presentation of summary information on internal control and risk management procedures established by the Company
Following an analysis carried out by all individuals and departments involved in internal control, a certain number of risks inherent to the Company’s business activity have been identified�
The Company introduces systems or procedures designed to minimise the impact of each type of risk�
Inventory risksBesides taking out fully comprehensive business insurance policies, the Company has adopted a proactive risk prevention policy with regard to inventories by implementing appropriate systems and measures:
• CCTV systems, alarms, detectors and extinguishers to protect against the significant risk of fire and risks of theft and breakage;
• Development of specific, high-performance software to optimise inventory management and minimise the risk of stock-outs�
Technology risksThe Group’s websites are administered by the Company at specialised data centres responsible for maintenance and security� Measures implemented include cyber-attack protection systems (anti-virus programmes, firewall), data back-up systems, duplicate IT systems in case of equipment failure and a secure payment system set up in partnership with banks�
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Legal risksThe following checks are carried out:
• Checking compliance and monitoring in respect of the Group’s intellectual property rights and the assets required for its operations� All software owned by the Company is a key asset for the Group� The Group’s ability to deal with periodic increases in volume is determined by this software’s capacity for development and suitability to the Group’s operations�
• Checking the required disclosures, including disclosures to the French Data Protection Authority (CNIL), and compliance with distance selling regulations�
Arrangement of insurance to cover legal risks identified across the Group in relation to transportation, premises and business customer credit�
Customer risksA customer follow-up department has been set up in order to minimise the risk of default, although this risk is already low due to the nature of the Company’s client base, given that around 65% of its revenues come from individual customers, who tend to pay at the time of order shipment�
The Group uses a credit insurance firm in order to minimise credit risk from business customers (around 35% of revenues)�
Goods warranty riskA provision of €107,000 has been recognised to cover:
• probable customer service costs arising from sales of goods completed before 31 March 2016 to be borne by the Company following expiry of the supplier warranty;
• the contractual warranty awarded to customers on sales of goods, which was extended to 2 years from March 2008 or 5 years from the end of 2009, depending on the option selected by the customer�
The amount of the provision for customer warranties recognised at 31 March 2016 is derived from a new statistical method applied to the volume of customer returns� On the basis of this analysis, the rate of returns relating to this provision for customer warranties was reduced as of 31 March 2013�
c. Risks related to the preparation of financial and accounting information
The accounting and finance department operates under the responsibility of the Chief Executive Officer, who also performs the duties of Chief Financial Officer� The department includes:
• the accounts department,
• the financial control and cash management department�
All accounting operations are performed in-house by a team of 12 accountants, including the preparation of reports and brochures for the Company and its subsidiaries�
They also prepare the Company and consolidated financial statements, using standard approved and tested software�
Accounting management is carried out on CEGID software�
Senior management is directly responsible for financial reporting and investor relations�
In terms of financial control, the following reporting items are included in the scoreboard:
• daily revenues presented in weekly periods, including a comparison with the previous month’s figures;
• breakdown of revenues by sales segment (general public, businesses and stores);
• margin per product line, once a month�
Annual budgets are drawn up by the financial control department� The budget approach is reconciled with the secondary approach (globally and per sales channel) adopted by Senior Management� The outcome of this reconciliation is the final budget�
The financial and accounting information is then verified by each Group company’s Statutory Auditors � The consolidated financial statements are also verified by the Statutory Auditors �
Lastly, the financial and accounting information is approved by the Management Board on a half-yearly and yearly basis, under the supervision of the Supervisory Board�
All of the aforementioned processes for preparing and processing financial and accounting information contribute towards controlling and minimising the related risks�
Dardilly1 July 2016
The chairwoman of the Supervisory Board
102 STATUTORY AUDITORS’ REPORT
STATUTORY AUDITORS’ REPORT PREPARED IN ACCORDANCE WITH ARTICLE L.225-235 OF THE FRENCH COMMERCIAL CODE, ON THE REPORT PREPARED BY THE CHAIRWOMAN OF THE SUPERVISORY BOARD OF LDLC.COM(For the year ended 31 March 2016)
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
To the Shareholders,
In our capacity as Statutory Auditors of LDLC�com and in accordance with Article L�225-235 of the French Commercial Code (Code de commerce), we hereby report to you on the report prepared by the Chairwoman of the Supervisory Board of your Company in accordance with Article L�225-68 of the French Commercial Code for the year ended 31 March 2016�
It is the Chairwoman’s responsibility to prepare, and submit to the Supervisory Board for approval, a report describing the internal control and risk management procedures implemented by the Company and providing the other information required by Article L�225-68 of the French Commercial Code, in particular relating to corporate governance�
It is our responsibility:
• to report to you on the information set out in the Chairwoman’s report on the internal control procedures relating to the preparation and processing of the accounting and financial information, and;
• to attest that this report sets out the other information required by Article L�225-68 of the French Commercial Code, it being specified that it is not our responsibility to assess the fairness of this information�
We conducted our work in accordance with professional standards applicable in France�
Information concerning the internal control and risk management procedures relating to the preparation and processing of financial and accounting informationThe professional standards require that we perform procedures to assess the fairness of the information on internal control and risk management procedures relating to the preparation and processing of financial and accounting information set out in the Chairwoman’s report� These procedures mainly consist of:
• obtaining an understanding of the internal control and risk management procedures relating to the preparation and processing of financial and accounting information on which the information presented in the Chairwoman’s report is based, and of the existing documentation;
• obtaining an understanding of the work performed to support the information given in the report and of the existing documentation;
• determining if any material weaknesses in the internal control procedures relating to the preparation and processing of financial and accounting information that we may have identified in the course of our work are properly described in the Chairwoman’s report�
On the basis of our work, we have no matters to report on the information given on internal control and risk management procedures relating to the preparation and processing of financial and accounting information, set out in the Chairwoman of the Supervisory Board’s report, prepared in accordance with Article L�225-68 of the French Commercial Code�
Other informationWe attest that the Chairwoman of the Supervisory Board’s report sets out the other information required by Article L�225-68 of the French Commercial Code�
Lyon, 13 July 2016
The Statutory Auditors
Cap Office Diagnostic Revision ConseilChristophe Reymond Hubert de Rocquigny du Fayel
103
Annual f inancia l report 2015_2016
REPORT BY THE INDEPENDENT THIRD PARTY ON THE CONSOLIDATED ENVIRONMENTAL, HUMAN RESOURCES AND SOCIAL INFORMATION INCLUDED IN THE MANAGEMENT REPORT
(For the year ended 31 March 2016)
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional standards applicable in France.
To the Shareholders,
In our capacity as independent third party, certified by COFRAC under number 3-1060 (1) and member of the PwC network to which one of the Statutory Auditors of LDLC�com belongs, we hereby report to you on the consolidated environmental, human resources and social information for the year ended 31 March 2016, included in the management report (hereinafter the «CSR Information») pursuant to Article L�225-102-1 of the French Commercial Code (Code de commerce)�
Company’s responsibilityThe Management Board is responsible for preparing the Company’s management report including the CSR Information required by Article R�225-105-1 of the French Commercial Code in accordance with the guidelines used by the Company (hereinafter the «Guidelines»), summarised in the management report and available on request from the Company’s head office�
Independence and quality controlOur independence is defined by regulatory texts, the French code of ethics (Code de déontologie) of our profession and the requirements of Article L�822-11 of the French Commercial Code� In addition, we have implemented a system of quality control including documented policies and procedures regarding compliance with the ethical requirements, French professional standards and applicable legal and regulatory requirements�
Third party’s responsibilityOn the basis of our work, it is our responsibility to:
• attest that the required CSR Information is included in the management report or, in the event of non-disclosure of CSR Information, that an explanation is provided in accordance with the third paragraph of Article R�225-105 of the French Commercial Code (Statement regarding the completeness of CSR Information);
• express a limited assurance conclusion that the CSR Information taken as a whole, is, in all material respects, fairly presented in accordance with the Guidelines (Conclusion on the fairness of CSR Information)�
Our work was carried out by a team of five persons between February and June 2016 and lasted around four weeks�
We performed our work in accordance with the French professional standards and with the order dated 13 May 2013 defining the conditions under which the independent third party performs its engagement and with ISAE 3000 concerning our conclusion on the fairness of CSR Information�
1. Statement regarding the completeness of CSR Information
Nature and scope of our workOn the basis of interviews with the individuals in charge of the relevant departments, we obtained an understanding of the Company’s sustainability strategy regarding the human resources and environmental impacts of its activities and its social commitments and, where applicable, any actions or programmes arising from them�
We compared the CSR Information presented in the management report with the list provided in Article R�225-105-1 of the French Commercial Code�
For any consolidated information that is not disclosed, we verified that explanations were provided in accordance with Article R�225-105, paragraph 3 of the French Commercial Code�
We verified that the CSR Information covers the scope of consolidation, i�e�, the Company, its subsidiaries as defined by Article L�233-1 and the controlled entities as defined by Article L�233-3 of the French Commercial Code within the limitations set out in the methodological note, presented in the section of the management report entitled «Methodological note
(1) Whose scope is available at www.cofrac.fr(2) ISAE 3000 – Assurance engagements other than audits or reviews of historical financial information
104 REPORT BY THE INDEPENDENT THIRD PARTY
concerning the environmental, human resources and social information included in section 7 of this report»�
ConclusionBased on this work and given the limitations mentioned above, we attest that the required CSR Information has been disclosed in the management report�
2. Conclusion on the fairness of CSR Information
Nature and scope of our workWe conducted around ten interviews with the persons responsible for preparing the CSR Information in the departments responsible for collecting the information and, where appropriate, responsible for internal control and risk management procedures, in order to:
• assess the suitability of the Guidelines in the light of their relevance, completeness, reliability, neutrality and understandability, and taking into account industry best practices where appropriate;
• verify the implementation of data-collection, compilation, processing and control processes to ensure the completeness and consistency of the CSR Information and obtain an understanding of the internal control and risk management procedures used to prepare the CSR Information�
We determined the nature and scope of our tests and procedures based on the nature and importance of the CSR Information with respect to the characteristics of the Company, the human resources and environmental challenges of its activities, its sustainability strategy and industry best practices�
Regarding the CSR Information that we considered to be the most important (as specified in the appendix):
• at LDLC�com parent entity level, we referred to documentary sources and conducted interviews to corroborate the qualitative information (organisation, policies, actions),
performed analytical procedures on the quantitative information and verified, using sampling techniques, the calculations and the consolidation of the data� We also verified that the information was consistent and in agreement with the other information in the management report;
• at the level of a representative sample of sites selected by us (3) on the basis of their activity, their contribution to the consolidated indicators, their location and a risk analysis, we conducted interviews to verify that procedures are properly applied and we performed tests of details, using sampling techniques, in order to verify the calculations and reconcile the data with the supporting documents� The selected sample represents on average 91% of the headcount, and between 82% and 100% of the quantitative environmental data presented�
For the remaining consolidated CSR information, we assessed its consistency based on our understanding of the Company�
We also assessed the relevance of explanations provided for any information that was not disclosed, either in whole or in part taking into consideration, if any, industry best practices set out in the Global Reporting Initiatives guidelines�
We believe that the sampling methods and sample sizes used, based on our professional judgement, are sufficient to provide a basis for our limited assurance conclusion; a higher level of assurance would have required us to carry out more extensive procedures� Due to the use of sampling techniques and other limitations inherent to information and internal control systems, the risk of not detecting a material misstatement in the CSR information cannot be totally eliminated�
ConclusionBased on our work, nothing has come to our attention that causes us to believe that the CSR Information, taken as a whole, is not presented fairly, in all material respects, in accordance with the Guidelines�
Neuilly-sur-Seine and Lyon, 13 July 2016
The independent third partyPricewaterhouseCoopers Audit
Sylvain Lambert Hubert de Rocquigny du Fayel
Partner in charge of the Sustainable Development Department Partner
(3) Dardilly and Saint Quentin Fallavier sites for all of the quantitative human resources and environmental information, and the Vaise Store for the «fuel oil consumption» information.
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Annual f inancia l report 2015_2016
Appendix: List of Information that we considered to be the most importantHuman resources information:• total headcount and breakdown by gender, age and geographical region;
• new hires and dismissals;
• absenteeism;
• workplace health and safety conditions;
• work-related accidents, particularly the frequency rate and severity rate, as well as occupational illnesses;
• training policies;
• total number of training hours�
Environmental information:• efforts made by the Company to take account of environmental issues and, where applicable, any environmental assessment
and certification procedures;
• waste prevention, recycling and elimination measures;
• energy consumption, measures taken to improve energy efficiency and the use of renewable energy;
• greenhouse gas emissions�
Social information:• the importance of outsourcing and taking into consideration CSR issues in dealings with suppliers and their own subcontractors;
• measures taken to ensure consumer health and safety�
106 LDLC.Com Company finanCiaL statements for the year enDeD 31 marCh 2016
LDLC.COM COMPANY FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016
• 1 i BALANCE SHEET
Assets At 31 March
(€000 unless otherwise stated) Note 2016 2015
Net intangible assets (3.1) 192 82
Net property, plant and equipment (3.2) 3,199 3,197
Net financial assets (3.3) 46,496 7,799
Non-current assets 49,888 11,077
Inventories and WIP (3.4) 51,044 49,913
Trade receivables (3.5) 16,054 11,538
Other receivables (3.6) 9,788 5,147
Cash and cash equivalents (3.7) 2,417 1,955
Current assets 79,303 68,553
Accrued income and prepaid expenses (3.8) 3,018 3,213
Total assets 132,209 82,843
Equity and liabilities At 31 March
(€000 unless otherwise stated) Note 2016 2015
Share capital * 1,138 1,035
Additional paid-in capital * 21,053 7,458
Legal reserve * 103 103
Other reserves * 16,567 13,271
Retained earnings * 400 267
Net income for the year * 8,538 5,883
Regulated provisions 0 44
Total shareholders’ equity 47,800 28,061
Provisions for risks and contingencies (3.9) 1,594 1,125
Borrowings (3.10) 41,237 16,881
Trade payables (3.11) 25,886 25,910
Tax and social security liabilities (3.12) 9,598 6,611
Other payables (3.13) 3,178 2,106
Accrued expenses and deferred income (3.14) 2,916 2,149
Total equity and liabilities 132,209 82,843
* See Statement of changes in shareholders’ equity on p. 108.
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Annual f inancia l report 2015_2016
• 2 i INCOME STATEMENT
(€000 unless otherwise stated)
At 31 March
Note 2016 2015
Sales of goods (3.17) 299,716 266,439
Sales of services (3.17) 17,269 16,575
Purchase of goods (265,160) (237,976)
Gross margin 51,825 45,038
Other income 233 187
Other purchases and external costs (15,309) (12,930)
Miscellaneous taxes (1,600) (1,531)
Staff costs (3.18) (19,391) (18,490)
Net depreciation, amortisation and provisions (3.19) (1,354) (864)
Other expenses (1,012) (1,073)
EBIT 13,392 10,336
Financial income (3.20) 999 907
Financial expense (3.20) (487) (827)
Net financial income 512 80
Earnings before tax and non-recurring items 13,904 10,416
Non-recurring income/(expense) (3.21) 1,317 (123)
Employee profit-sharing (1,336) (868)
Income tax (3.22) (5,347) (3,542)
Net income 8,538 5,883
108 LDLC.Com Company finanCiaL statements for the year enDeD 31 marCh 2016
• 3 i STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(€000)Share
capital
Additional paid-in capital
Legal reserve
Undistri-butable reserve
Other reserves
Retained earnings
Regl. prov.
Net income for the
year
Total shareholders’
equity
Shareholders’ equity at 31 March 2014 1,035 7,458 103 0 10,589 140 103 5,269 24,697
Appropriation of previous year’s earnings 2,683 (2,683) 0
Dividends allotted/ FY ended 31/03/2014 127 (2,586) (2,459)
Accelerated depreciation/amortisation (59) 0 (59)
2014/15 net income 5,883 5,883
Shareholders’ equity at 31 March 2015 1,035 7,458 103 0 13,271 267 44 5,883 28,061
Appropriation of previous year’s earnings 3,296 (3,296) 0
Dividends allotted/ FY ended 31/03/2015 132 (2,586) (2,454)
Capital increase 103 13,595 13,698
Share purchases
Accelerated depreciation/amortisation (44) (44)
2015/16 net income 8,538 8,538
Shareholders’ equity at 31 March 2016 1,138 21,053 103 0 16,567 400 0 8,538 47,800
109
Annual f inancia l report 2015_2016
Shareholder breakdown at 31 March 2016
as at 31 march 2016, LDLC.com increased its share capital by a nominal value of €103,451.76, from €1,034,527.32 to €1,137,979.08, by issuing 574,732 new shares with a par value of €0.18 each, fully paid up at a price of €23.86 per share including a share premium of €23.68 per share.
at 31 march 2016, the share capital of LDLC.com consisted of 6,322,106 shares with a par value of €0.18 each.
as a reminder, the articles of association confer double voting rights on shares held in registered form for over two years, in accordance with article L.225-123 of the french Commercial Code.
Number of shares
Treasury shares
Number of bonus shares
Total at 31 March 2014 5,747,374 280,515 11,631
New shares 0
Treasury shares purchased/(sold) 2,514
Bonus shares granted 161,746
Total at 31 March 2015 5,747,374 283,029 173,377
New shares 574,732
Treasury shares purchased/(sold) (92,746)
Bonus shares granted (11,631)
Total at 31 March 2016 6,322,106 190,283 161,746
110 notes to the 2015/16 Company finanCiaL statements
NOTES TO THE 2015/16 COMPANY FINANCIAL STATEMENTS
(Amounts in €000 unless otherwise stated)
the following notes form an integral part of the Company financial statements for the period from 1 april 2015 to 31 march 2016, which have been approved by the Company’s management Board.
• 1 i HIGHLIGHTS OF THE YEAR
as at 31 march 2016, LDLC.com purchased the entire share capital of Domisys and the remaining portion of the share capital of Domimo 2 and Domimo 3, the real estate companies of the materiel.net group, not held by Domisys. the total value of the shares acquired amounts to €39,798,000 (see note 3.3). additional consideration of up to €497,000 may be payable on the Domimo 2 acquisition in accordance with a pending court ruling on a supplier dispute.
the Domisys acquisition was carried out as follows:
• sale of 151,792 Domisys shares for cash at a price of €20,739,000,
• exchange of 20,446 Domisys shares for 117,079 LDLC.com treasury shares,
• in-kind contribution of 100,367 Domisys shares in consideration for 574,732 new LDLC shares with a par value of €0.18, at a price of €23.86 per share including a share premium of €23.68 per share.
Domimo 2 and Domimo 3 were acquired by means of cash payments amounting to €1,760,000 and €210,000 respectively.
LDLC.com took out a €23 million loan to partly finance the price of the aforementioned acquisitions.
• LDLC.com carried out a spin-off by transferring net assets amounting to €300,000 to LDLC Villefranche.
• a tax audit was carried out on LDLC.com’s accounts for the 2009/2010 to 2012/2013 financial years, leading to initial tax reassessment proposals being made, with the Company receiving a response from the tax authorities to its observations. the proposed tax reassessments concern the french corporate real estate contribution (cotisation foncière des entreprises or Cfe) and property tax (taxe foncière). the Company is contesting these tax reassessment proposals but has already been required to pay the sum of €1,015,000.
Given the present stage of discussions with the tax authority regarding the Company’s standpoint on the proposed reassessments and the arguments it holds in its defence, no provision has been recognised and the amounts already paid to the tax authority have been recognised as assets on the company balance sheet, under “other receivables” (see note 3.6).
• 2 i ACCOUNTING POLICIES
the financial statements are prepared in accordance with french accounting standards board (Autorité des Normes Comptables or anC) regulation no. 201403 of 5 June 2014 as approved by the ministerial order of 8 september 2014.
Generally accepted accounting principles are applied in accordance with the principle of prudence, the basic assumptions of:
• Going concern,
• Consistency of presentation from one period to the next,
• accrual basis of accounting,
and generally accepted rules for preparing and presenting the annual financial statements.
the basic method used to measure the items recorded in the accounts is the historical cost method.
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Annual f inancia l report 2015_2016
the principal methods applied are as follows:
2.1. Intangible assets
intangible assets are stated at cost on the balance sheet. they mainly consist of software licences.
they are amortised on a straight line basis as of commissioning, except for software for which amortisation begins on the acquisition date.
LDLC.com has opted to amortise leasehold rights over the remaining term of the lease, i.e. just under 8 years.
the following amortisation periods are applied:
Software 1-3 years
Other intangible assets 5-8 years
2.2. Research and development costs
research and development costs are fully expensed during the year in which they are incurred.
2.3. Property, plant and equipment
property, plant and equipment are measured at purchase cost including purchasing fees and, where applicable, assembly costs if the hardware is purchased by the Company for its own use.
Depreciation is calculated on a straight line basis according to the estimated useful life once the asset is ready for commissioning.
Depreciation periods are as follows:
Fixtures and fittings 8-10 years
Equipment 5-8 years
Technical facilities 8-10 years
Office equipment and hardware 3 years
Furniture 5 years
2.4. Financial assets
financial assets are recorded at cost.
the Company has opted to include acquisition expenses such as transfer taxes, fees, commissions, registration fees and other costs, as specified in french national accountancy Council (CnC) emergency committee opinion no. 2006 of 7 June 2006, in the acquisition cost of financial assets. these expenses are amortised for accounting purposes over a period of 5 years.
equity investments are subject to an impairment charge when their value in use falls below their acquisition cost.
Value in use is calculated using various methods based on reported net assets, profit forecasts and compliance with long-term forecasts, as well as on discounted future cash flows as adjusted for net cash.
other financial assets include treasury shares purchased under a share buy-back plan or liquidity contract entered into with an investment services provider. the shares are written down in accordance with the average trading price during the last month of the financial year.
2.5. Inventories
Goods are valued using the ”first in, first out” (fifo) method.
the gross value of goods and supplies includes the purchase price and any ancillary expenses.
an impairment charge is recorded when:
• the estimated realisable value of the inventories is lower than cost,
• it may not be possible to run down inventory stocks under normal conditions.
the net realisable value is the estimated selling price in the ordinary course of business, less costs to sell.
2.6. Trade receivables
trade and related receivables are recorded at their nominal value.
they are written down on an individual basis in accordance with their age and expectation of recovery.
112 notes to the 2015/16 Company finanCiaL statements
2.7. Cash and cash equivalents
Cash and cash equivalents include immediately available cash and treasury shares purchased to cover bonus share plans.
Bank transactions in foreign currencies are valued as at the date of the transaction. at the end of the month, the accounts are revalued at the closing rate. the matching entry for this revaluation is a currency gain or loss account.
in accordance with the CnC opinion of 6 november 2008, treasury shares assigned to current plans are not written down in accordance with changes in the share price.
2.8. Provisions for risks and contingencies
provisions for risks and contingencies are recognised in accordance with the CrC 200-06 “regulations on liabilities”.
provisions are recorded in order to provide for a probable outflow of resources in favour of a third party without any corresponding consideration accruing to the Company. Depending on the type of provision concerned, they are estimated on the basis of the most likely assumptions or by using statistical methods.
in particular, a provision for risks is recognised to cover the risk of losses related to defective items returned by customers but not covered by a supplier warranty, in which case the Company must bear the cost of repairing or replacing the item.
a provision for contingencies is recorded for purchase vouchers issued during the year ended and not yet redeemed by the customer.
2.9. Transactions in foreign currencies
income and expenses in foreign currencies are recognised at their equivalent value in euros as at the date of the transaction.
foreign currency receivables and payables are carried on the balance sheet at their equivalent value in euros as calculated using the closing rate.
the differences arising from the remeasurement of foreign currency receivables and payables at the closing rate are recorded as translation differences on the balance sheet. a provision for risks is recorded to cover unrealised currency losses.
2.10. Revenues
in the income statement, revenues from the sale of products are presented under “sales of goods” and from the related services under “sales of services”.
sales of products are recognised under “sales of goods” when the following criteria have been satisfied:
• the significant risks and rewards of ownership have been transferred to the buyer,
• the amount of revenue and the costs related to the transaction can be measured reliably, and
• it is probable that the economic benefits associated with the transaction will flow to the Company.
the sales of goods to professionals and consumers presented in the income statement, excluding sales to stores and subsidiaries, are restated taking into account the effect of the last two days of sales, given that the Company considers that the risks and rewards of ownership have not yet been transferred to the buyer during this time in view of the average delivery periods recorded by carriers.
revenues from the sale of services are recognised once the services have been rendered. LDLC.com corrected an error in its financial statements for the year ended 31 march 2016 in order to comply with the requirement to spread revenues from “Pack Expert” sales over the duration of the service. these revenues were originally recognised at the same time as the sale of the goods. this correction, which affected the last two financial years, led to a €431,000 reduction in sales of services offset by a corresponding increase in deferred income.
2.11. Post balance sheet events
none.
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Annual f inancia l report 2015_2016
• 3 i ADDITIONAL BALANCE SHEET AND INCOME STATEMENT INFORMATION
3.1. Intangible assets
intangible assets break down as follows:
Gross values 31/03/15 Acquisitions ReclassificationDisposals/ retirement 31/03/16
Software and other intangible assets 480 192 139 533
Total 480 192 0 139 533
intangible assets mainly consist of software.
acquisitions mainly comprise leasehold rights amounting to €170,000.
Amortisation and provisions 31/03/15 Charges Write-backs 31/03/16
Software and other intangible assets 398 81 139 341
Total 398 81 139 341
3.2. Property, plant and equipment
property, plant and equipment break down as follows:
Gross values 31/03/15 Acquisitions ReclassificationDisposals/ retirement 31/03/16
Fixtures and fittings 6,432 581 (101) 772 6,140
Equipment 1,572 69 1 1,640
Office equipment and hardware 1,608 524 101 247 1,986
PP&E in progress 0 0
Total 9,612 1,174 0 1,020 9,766
the main changes in property, plant and equipment involved €606,000 of refurbishment costs for the paris store.
property, plant and equipment for a gross amount of €520,000 was transferred to LDLC Villefranche as part of the spin-off carried out by LDLC.com.
Depreciation and provisions 31/03/15 Charges Write-backs 31/03/16
Fixtures and fittings 3,911 489 523 3,877
Equipment 1,314 70 1 1,384
Office equipment and hardware 1,189 244 127 1,307
Total 6,415 803 651 6,567
Depreciation charges amounting to €249,000 were transferred to LDLC Villefranche in connection with the spin-off.
114 notes to the 2015/16 Company finanCiaL statements
3.3. Financial assets
financial assets break down as follows:
31/03/15 gross value Acquisitions Reclassification Disposals
31/03/16 gross value Impairment
31/03/16 net value
Hardware shares 3,033 3,033 3,033
Textorm shares 8 8 8
DLP-Connect shares 24 24 24
Anikop shares 24 24 24
Orichalk shares 0 0 0
LDLC Distribution shares 100 100 100
École LDLC shares 300 200 500 500
LDLC Villefranche shares 30 300 (27) 303 303
LDLC1 shares 30 30 30
LDLC2 shares 30 30 30
LDLC3 shares 2 2 2
LDLC Domisys shares 37,684 37,684 37,684
LDLC Domimo 2 shares 1,892 1,892 1,892
LDLC Domimo 3 shares 223 223 223
LDLC Campus shares 2 2 2
LDLC NLCL shares 1,500 1,500 1,500
Other shares 1 1 1
Treasury shares 852 3,383 (3,698) 537 537
Loans to affiliates - Textorm 88 (88) 0 0
Loans to affiliates - DLP 719 (719) 0 0
Loans to affiliates - Anikop 2,042 (2,042) 0 0
Deposits and guarantees 577 41 (1) (13) 604 604
Total gross 7,799 45,285 (2,850) (3,738) 46,496 0 46,496
Provisions 0 0 0
Total net 7,799 45,285 (2,850) (3,738) 46,496 0 46,496
By a decision dated 25 march 2016, École LDLC (LDLC school), a wholly-owned subsidiary of LDLC.com, increased its share capital by €200,000.
in consideration for the transfer of assets from LDLC.com to LDLC Villefranche as part of the spin-off, the latter company completed a €300,000 share issue corresponding to the value of the net assets transferred.
in march 2016, three wholly-owned subsidiaries of LDLC.com were created, named LDLC1, LDLC2 and LDLC3.
as at 31 march 2016, LDLC.com purchased the entire share capital of Domisys and the remaining portion of the share capital of Domimo 2 and Domimo 3, the real estate companies of the materiel.net group, not held by Domisys. the acquisitions were made at a price of €37,684,000 for Domisys, €1,892,000 for Domimo 2 and €223,000 for Domimo 3.
LDLC.com acquired a 10% interest in nLCL via a share issue carried out on 20 november 2015. LDLC.com paid a price of €1,500,000 for this transaction.
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Annual f inancia l report 2015_2016
as at 31 march 2016, LDLC.com held 28,537 treasury shares with a market value of €888,000.
Loans to affiliates amounting to €2,849,000 were reclassified to “other receivables”.
Deposits and guarantees amounting to €13,000 were transferred in connection with the spin-off between LDLC.com and LDLC Villefranche.
3.4. Inventories and work-in-progress
inventories and work-in-progress break down as follows:
From 01/04/15 to 31/03/16 From 01/04/14 to 31/03/15
Gross value Impairment Net value Gross value Impairment Net value
Goods inventories 50,037 271 49,766 48,702 211 48,491
Customer service inventories 1,721 443 1,278 1,629 207 1,422
Total 51,759 715 51,044 50,331 418 49,913
inventories are written down in accordance with the age of the products and the expected difficulty of selling them, and/or in
the case of products whose realisable value is lower than cost.
3.5. Trade receivables
trade receivables break down as follows:
From 01/04/15 to 31/03/16 From 01/04/14 to 31/03/15
Gross Impairment Net Gross Impairment Net
Trade receivables 16,239 185 16,054 11,800 262 11,538
Total 16,239 185 16,054 11,800 262 11,538
all trade receivables are due in less than one year.
3.6. Other receivables
other receivables break down as follows:
From 01/04/15 to 31/03/16
From 01/04/14 to 31/03/15
Gross Impairment Net Net
Advances and down payments 686 686 257
Supplier credits receivable 1,870 1,870 1,912
Government (income tax, VAT and other income receivable) 385 385 854
Government - income receivable 141 141 138
Income receivable 81 81 75
Eurofactor current account and retainer 5,609 5,609 817
Other 1,016 1,016 1,095
Total 9,788 0 9,788 5,147
116 notes to the 2015/16 Company finanCiaL statements
all other receivables are due in less than one year.
the “other” line item includes the sum of €1,015,000 paid by the Company in connection with a tax audit (see note 1).
on 2 february 2009, LDLC.com signed a factoring agreement with eurofactor.
3.7. Cash and cash equivalents
Cash and cash equivalents break down as follows:
From 01/04/15 to 31/03/16 From 01/04/14 to 31/03/15
Values Gross Prov. Net Gross Prov. Net
Cash 1,504 0 1,504 855 0 855
Short-term investments 913 0 913 1,100 0 1,100
Total 2,417 0 2,417 1,955 0 1,955
short-term investments solely consist of 161,746 treasury shares held by LDLC.com.
in July 2003, LDLC.com signed a master futures agreement with Crédit agricole for purchasing UsD. the Company must purchase the currency prior to the maturity date. as at 31 march 2016, two flexigain fixed-rate currency futures were outstanding:
Subscription date Maturity date Currency Exchange rateContract amount
in USD
Amount purchased
in USD
24/11/15 24/11/16 USD 1.067800 10,000,000 556,209
25/01/16 25/01/17 USD 1.087800 3,000,000 1,947,940
Total 13,000,000 2,504,149
in January 2015, LDLC.com signed a master agreement on transactions in financial futures with Caisse d’Épargne. there are no contracts outstanding as at 31 march 2016.
3.8. Accrued income and prepaid expenses
From 01/04/15 to 31/03/16
From 01/04/14 to 31/03/15
Invoices for goods delivered after the closing date 1,351 1,598
Prepaid expenses/property rent and rental charges 682 636
Sundry prepaid operating expenses charges 983 973
Sundry prepaid financial expenses charges 0 0
Subtotal accrued income and prepaid expenses charges 3,016 3,207
Unrealised foreign currency losses 2 7
Total 3,018 3,213
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Annual f inancia l report 2015_2016
3.9. Provisions for risks and contingencies
this item breaks down as follows:
From 01/04/15 to 31/03/16 From 01/04/14 to 31/03/15
Provisions
b/fwd
Provisions rec. during
year
Provisions used
during year
Provisions not used Total
Provisions b/fwd
Provisions rec. during
year
Provisions used
during year
Provisions not used Total
Customer warranties 115 107 (115) 0 107 133 115 (133) 0 115
Retirement benefits 753 252 0 (13) 992 591 162 0 0 753
Bonus share plans 234 282 (37) 0 479 14 220 0 0 234
Other provisions 22 15 (22) 15 37 22 (17) (19) 22
Total 1,125 656 (174) (13) 1,594 774 520 (150) (19) 1,125
as at 31 march 2016, the Company is not aware of any circumstances that could require the recording of provisions for risks and contingencies other than the following:
Customer warrantiesa provision of €107,000 was recognised to cover:
• probable customer service costs arising from sales of goods completed before 31 march 2016 to be borne by the Company following expiry of the supplier warranty;
• the contractual warranty awarded to customers on sales of goods, which was extended to 2 years from march 2008 or 5 years from the end of 2009 depending on the option selected by the customer.
the amount of the provision for customer warranties recognised at 31 march 2016 is derived from a new statistical method applied to the volume of customer returns. on the basis of this analysis, the rate of returns relating to this provision for customer warranties was reduced as of 31 march 2013.
Retirement benefitsLDLC.com applies anC recommendation no. 2013-02 of 7 november 2013 and applies the principles of ias 29 as revised in June 2011 to its statutory financial statements, except for the option of recognising actuarial gains and losses under shareholders’ equity.
the main assumptions used to calculate the provision for retirement benefits as at 31 march 2016 are as follows:
• Discount rate: 1.39% versus 2% as at 31 march 2015.
• Wage growth rate: 2% versus 2.5% for non-managerial staff, 3% for managers aged up to 50 and 2% for managers aged over 50 as at 31 march 2015.
• retirement age: between 60 and 67 depending on the employee’s age, versus 62 for non-managerial staff and 64-66 for managers as at 31 march 2015.
• staff turnover: rate decreasing with age and depending on the actual number of departures from the Company.
• applicable collective bargaining agreement: “Distance selling undertakings” - iDCC 2198.
a €13,000 write-back was recorded at 31 march 2016 in connection with the spin-off between LDLC.com and LDLC Villefranche.
Bonus share plansthere are a number of outstanding bonus share plans:
• 161,746 existing bonus shares in LDLC.com were allotted on 9 July 2014, to be vested after a vesting period of 2-5 years and thereafter subject to a two-year lock-in period.
the allotment of bonus shares is subject to a condition of presence in the Company but is not subject to any performance criteria.
as at 31 march 2016, the provision for contingencies in respect of bonus share plans stood at €479,000, including a €282,000 provision charge for the year ended 31 march 2016 and a €37,000 write-back following the vesting of 11,631 bonus shares. this provision is intended to cover the probable outflow of resources for each of the 2014 plans, in accordance with the likelihood that the presence condition will be met and in proportion to services rendered. the contra-entry to this provision is recorded under staff costs.
118 notes to the 2015/16 Company finanCiaL statements
3.10. Borrowings
Borrowings break down as follows:
From 01/04/15 to 31/03/16 From 01/04/14 to 31/03/15
Gross amount Due in ≤ 1 yrDue in > 1 yr
and ≤ 5 yrs Gross amount Due in ≤ 1 yrDue in > 1 yr
and ≤ 5 yrs
Loans 23,872 3,326 20,546 549 355 195
Bank overdrafts 11,576 11,576 0 11,033 11,033 0
Trade rec. assigned to Eurofactor
3,699 3,699 0 3,278 3,278 0
Guarantee deposits received 0 0 0 0 0 0
Hardware current a/c 1,971 1,971 0 1,834 0 1,834
LDLC Distribution current a/c 119 119 0 188 188 0
Total 41,237 20,691 20,546 16,881 14,853 2,028
Short-term loansnew loans bear interest for an indefinite term based on the following rates, depending on the bank issuing the loan:
• from euribor 3m + 0.80% to euribor 3m + 1.00%
• eonia + 1%
as at 31 march 2016, LDLC.com had authorised overdrafts of €23 million excluding factored receivables. By 8 april 2016, these overdrafts had been reduced to €9.5 million, plus an overdraft of Chf300,000.
on 31 march 2016, LDLC.com took out a €23 million loan to partly finance the acquisition of materiel.net, including relating costs and fees. this loan is repayable over a 7-year term and bears interest at euribor 3 months plus an acquisition
loan margin subject to annual revision. the loan is subject to compliance with a number of covenants (ratios, capex limits, etc.). failure to comply with these covenants may under specific conditions trigger early repayment.
in accordance with the loan agreement, these covenants will be based on the consolidated financial statements for the years ended 31 march 2017 and thereafter.
the agreement also provides for a €15 million revolving credit facility, subject to minimum drawdowns of €1 million each, intended to partly finance working capital for LDLC.com and its subsidiaries. this facility is subject to interest based on the euribor rate plus a 1.30% revolving credit facility margin. no drawdowns had been made under this facility as at 31 march 2016.
3.11. Trade payables
trade and related payables break down as follows:
From 01/04/15 to 31/03/16
From 01/04/14 to 31/03/15
Trade payables 21,230 20,610
Supplier L/C & prom. notes payable 3,532 4,241
Supplier invoices not received 1,123 1,059
Total 25,886 25,910
all trade and related payables are due in less than one year.
119
Annual f inancia l report 2015_2016
3.12. Tax and social security liabilities
tax and social security liabilities break down as follows:
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Payable to employees 4,358 3,527
Payable to social security organisations 1,700 1,708
Payable to the government (income tax, VAT, etc.) 3,541 1,376
Total 9,598 6,611
all tax and social security liabilities are due in less than one year.
3.13. Other payables
other payables break down as follows:
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Customer down payments received on orders 1,561 865
Other customer credit, discounts & rebates to be granted 1,616 1,240
Other 1 1
Total 3,178 2,106
all other payables are due in less than one year.
3.14. Accrued expenses and deferred income
this item mainly consists of deferred income amounting to €2,870,000, including €2,368,000 relating to the restatement of revenues for goods not delivered by the closing date.
3.15. Accrued expenses payable
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Bank loans and borrowings 1 0
Cash - accrued interest payable 133 116
Trade payables 1,123 1,059
Tax and social security liabilities 5,568 4,437
Other payables 177 95
Total 7,003 5,709
120 notes to the 2015/16 Company finanCiaL statements
3.16. Accrued income receivable
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Customer invoices to be issued 793 290
Other income receivable 81 75
Supplier receivables 1,795 1,767
State income receivable 141 138
Total 2,810 2,271
3.17. Breakdown of net revenues
From 01/04/15 to 31/03/16 From 01/04/14 to 31/03/15
France Export Total France Export Total
Sales of goods 253,216 46,500 299,716 222,419 44,020 266,439
Sales of services * 10,978 6,291 17,269 11,451 5,124 16,575
Total 264,194 52,791 316,985 233,870 49,144 283,013
* Sales of services mainly comprise shipping costs invoiced for goods sold.
3.18. Staff costs and average headcount
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Wages and salaries 13,410 12,454
Social security contributions 5,981 6,037
Total 19,391 18,490
Average headcount * 462 441
including 19 temporary employees for the years ended 31 march 2015 and 2016.
the french competitiveness and employment tax credit (CiCe) is based on salaries not exceeding 2.5 times the french minimum wage (smiC) paid during the year, at a rate of 6%.
the CiCe is recognised as a reduction in staff costs, as a €556,000 credit entry under account no. 649000.
the CiCe tax credit is used to increase the Company’s competitiveness, primarily via expenditure on modernisation, hiring and training, as well as on improving health and safety conditions in the workplace.
121
Annual f inancia l report 2015_2016
3.19. Net depreciation, amortisation and provisions
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Net depr./amort. of non-current assets (884) (902)
Net provisions for inventory impairment (304) 62
Net provisions for impairment of trade rec. 76 38
Net provisions for current accounts 0 64
Net provisions for warranties 8 18
Net provisions for retirement benefits (252) (162)
Other charges/write-backs 2 18
Total net depreciation, amortisation and provisions (1,354) (864)
3.20. Net financial income
net financial income breaks down as follows:
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Discounts received 375 438
Current account income 59 70
Currency gains 556 394
Financial provision write-backs 7 3
Other financial income 2 2
Subtotal financial income 999 907
Financial depr./amort. and provision charges 2 7
Interest on borrowings 14 15
Current account expenses 45 49
Interest paid to banks 109 78
Financing commissions 34 35
Currency losses 283 642
Other financial expenses 0 0
Subtotal financial expenses 487 827
Net financial income 512 80
122 notes to the 2015/16 Company finanCiaL statements
3.21. Non-recurring income/(expense)
this item breaks down as follows:
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Non-rec. income from fixed asset disposals 81 1
Non-rec. income from disposal of fin. assets 0 0
Gains on sale of treas. shares 1,855 37
Non-rec. w/backs of accel. depr./amort. 81 59
Other non-recurring income 1 93
Subtotal non-recurring income 2,018 190
Non-rec. expenses on fixed asset disposals 98 34
Non-rec. exp. on disposal of fin. assets 0 70
Losses on sale of treas. shares 86 54
Non-rec. depr./amort. & provision charges 0 0
Other non-recurring expenses 516 155
Subtotal non-recurring expenses 701 313
Net non-recurring income/(expense) 1,317 (123)
in connection with the Domisys acquisition, 117,079 treasury shares held by LDLC.com were transferred to Domicorp, giving rise to a €1,800,000 gain on sale of treasury shares for the year ended 31 march 2016.
non-recurring expenses include a €500,000 grant awarded to L’École LDLC, whose operations form part of LDLC.com’s Csr initiatives, particularly in its capacity as a listed company.
3.22. Income tax
income tax is calculated as follows:
From 01/04/15 to 31/03/16
Earnings before tax
Corporate income tax @ 33.33%
Soc. sec. charges @ 3.3% and non-
rec. charges @ 10.7%
Inc. tax on dividends
Impact of tax consolidation and
charity donation tax credit
Tax impact of
share premium
Earnings after tax
EBIT 13,392 (4,434) (595) (74) 140 (8) 8,422
Net financial income 512 (181) (25) 305
Non-recurring income/(expense) 1,317 (439) (61) 817
Employee profit-sharing (1,336) 289 41 (1,006)
Total 13,885 (4,764) (642) (74) 140 (8) 8,538
negative tax figures shown in brackets indicate tax expenses.
123
Annual f inancia l report 2015_2016
3.23. Future tax (increases) and reductions
the following figures indicate future reductions in the tax base.
From 01/04/15
to 31/03/16From 01/04/14
to 31/03/15
Tax loss carryforwards 0 0
Customer warranty provision 107 115
Purchase voucher provision 13 16
Organic 114 107
Retirement benefit provision 252 162
Total 487 399
3.24. Table - List of subsidiaries and equity interests
Shar
e ca
pita
l
Equi
ty o
ther
than
sha
re
capi
tal (
incl
udin
g FY
20
15/1
6 ne
t inc
ome)
Inte
rest
(%)
Gros
s va
lue
of s
hare
hold
ing
Net v
alue
of s
hare
hold
ing
Loan
s an
d ad
vanc
es
gran
ted/
(rec
eive
d) b
y th
e Co
mpa
ny a
nd n
ot y
et re
paid
Guar
ante
es &
end
orse
men
ts
give
n by
the
Com
pany
FY 2
015/
16 re
venu
es e
xcl.
VAT
FY 2
015/
16 n
et in
com
e/(lo
ss)
Divi
dend
s re
ceiv
ed b
y Co
mpa
ny d
urin
g th
e ye
ar
Subsidiaries held > 50%
Anikop 30 (1,666) 80% 24 24 1,879 2,000 303 0
Campus 2017 2 (61) 100% 2 2 1,798 0 (61) 0
DLP-Connect 30 (298) 80% 24 24 530 1,142 7 0
Domimo 2 * 50 264 70% 1,892 1,892 0 1,221 217 0
Domimo 3 * 10 103 90% 223 223 0 78 33 0
Domisys * 273 14,761 100% 37,684 37,684 0 147,081 5,749 0
Hardware.fr 20 2,040 100% 3,033 3,033 (1,971) 370 104 0
LDLC Distribution 100 6 100% 100 100 (119) 1,606 (29) 0
LDLC Villefranche 303 (154) 100% 303 303 53 1,912 (154) 0
LDLC1 30 (3) 100% 30 30 0 0 (3) 0
LDLC2 30 (2) 100% 30 30 0 0 (2) 0
LDLC3 2 (2) 100% 2 2 0 0 (2) 0
École LDLC 500 10 100% 500 500 280 233 114 0
Textorm 8 38 100% 8 8 100 2,370 13 0
Subsidiaries held < 50%
NLCL** 167 1,383 10% 1,500 1,500 0 1,008 (47) 0
* Domimo 2, Domimo 3 and Domisys were acquired on 31 March 2016. The figures for these three companies apply to their last financial year, i.e. the 12 months ended 31 December 2015.
** The figures for NLCL apply to its last financial year ended 31 December 2015.
124 notes to the 2015/16 Company finanCiaL statements
Transactions with related companiesBalance sheet items pertaining to related companies break down as follows:
From 01/04/15 to 31/03/16 From 01/04/14 to 31/03/15
Related companies
Equity interests Related companies
Equity interests
Gross Impair. Net Gross Impair. Net
Financial assets 43,854 1,501 0 1,501 6,368 1 0 1
Trade receivables 936 0 0 0 476 0 0 0
Other receivables 4,641 0 0 0 0 0 0 0
Accrued income and prepaid expenses 0 0 0 0 0 0 0 0
Total assets 49,430 1,501 0 1,501 6,844 1 0 1
Borrowings 2,090 0 0 0 2,021 0 0 0
Trade payables 192 0 0 0 348 0 0 0
Other payables 5 0 0 0 2 0 0 0
Accrued expenses and deferred income 2 0 0 0 2 0 0 0
Total equity and liabilities 2,289 0 0 0 2,373 0 0 0
Transactions with related companies and other related parties: financial income and expense
From 01/04/15 to 31/03/16 From 01/04/14 to 31/03/15
Related companies
Equity interests
Related companies
Equity interests
Current account income 59 0 69 1
Dividends received 0 0 0 0
Current account expenses 45 0 49 0
there are no material transactions with related parties that have not been concluded on arm’s length terms.
3.25. Tax consolidation agreement
LDLC.com, hardware.fr and textorm have formed a tax group since 1 april 2004 which was joined by LDLC Distribution as of 1 april 2013.
LDLC Villefranche and École LDLC were included in the tax group from 1 april 2015.
LDLC.com is the tax group parent company.
the tax consolidation agreement provides that each subsidiary shall pay an income tax charge equal to the charge they would have paid in the absence of such agreement.
tax consolidation arrangements led to a tax saving of €72,000 for the year ended 31 march 2016.
125
Annual f inancia l report 2015_2016
3.26. Compensation of corporate officers
From 01/04/15 to 31/03/16
From 01/04/14 to 31/03/15
Management Board members 642 450
Supervisory Board members 38 38
3.27. Off balance sheet commitments
Commitments given√ exchange rate hedging (see note 3.7).
√ pledge of shares in Domisys, Domimo 2 and Domimo 3 as security for the €23 million loan.
Under the real estate lease purchase agreement entered into between finamur, LDLC.com and Campus 2017 on 30 november 2015:
√ pledge of all Campus 2017 shares, i.e. 150 shares representing its entire share capital, and voting rights held by LDLC.com in favour of finamur in the amount of €22 million.
√ Undertaking by LDLC.com not to sell or transfer its shares in Campus 2017 without finamur’s prior written consent.
√ personal joint and several guarantee given by LDLC.com to finamur on behalf of Campus 2017 until the end of the 12th year following the effective date of the lease purchase agreement, for the amount of €3 million during the first 3 years and €2 million thereafter.
Commitments received√ Bnp paribas has granted sCi Blomet, represented by
mr Chancel, company director, a €400,000 guarantee on behalf of LDLC.com to cover the rental payments due on its paris store.
• 4 i OTHER INFORMATION
ConsolidationLDLC.com presents the consolidated financial statements for the Group of which it is the parent company.
126 statUtory aUDitors’ report on the finanCiaL statements
STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS(for the year ended 31 march 2016)
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers. The Statutory Auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information is presented below the opinion on the financial statements and includes an explanatory paragraph discussing the Auditors’ assessments of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the financial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the financial statements.
This report also includes information relating to the specific verification of information given in the management report and in the documents addressed to shareholders.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
to the shareholders,
in compliance with the assignment entrusted to us by your annual General meeting, we hereby report to you, for the year ended 31 march 2016, on:
• the audit of the accompanying financial statements of LDLC.com;
• the justification of our assessments;
• the specific verifications and information required by law.
these financial statements have been approved by the management Board. our role is to express an opinion on these financial statements based on our audit.
I. 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 the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. an audit involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts and disclosures in the financial statements. an audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
in our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company at 31 march 2016 and of the results of its operations for the year then ended in accordance with french accounting principles.
Without qualifying our opinion, we draw your attention to the matter set out in note 2.10 «revenue» to the financial statements, which describes the impact of the correction of the error relating to the past two financial years recorded to take account of the need to spread the revenue generated by «pack expert» sales, initially recognised at the same time as the sale of the equipment, over the duration of the service.
127
Annual f inancia l report 2015_2016
II. JUSTIFICATION OF OUR ASSESSMENTS
in accordance with the requirements of article L.823-9 of the french Commercial Code (Code de commerce) relating to the justification of our assessments, we bring to your attention the following matters:
• note 2.4 to the financial statements describes the accounting rules and methods applied to value equity securities. as part of our assessment of the accounting rules and methods applied by the Company, we verified that the above-mentioned accounting methods and the related information provided in the notes to the financial statements were appropriate, and ensured that these methods were properly applied.
• LDLC.com records provisions for retirement benefit obligations, as described in notes 2.8 and 3.9 to the financial statements. our work consisted of assessing the data and assumptions on which these estimates were based, reviewing, on a test basis, the calculations performed by the Group and examining management’s procedures for approving these estimates. We assessed the reasonableness of the estimates made.
these assessments were made as part of our audit of the financial statements, taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report.
III. SPECIFIC VERIFICATIONS AND INFORMATION
in accordance with professional standards applicable in france, we have also performed the specific verifications required by french law.
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management report of the management Board, and in the documents addressed to the shareholders with respect to the financial position and the financial statements.
Concerning the information given in accordance with the requirements of article L.225-102-1 of the french Commercial Code relating to compensation and benefits received by corporate officers and any other commitments made in their favour, we have verified its consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the information obtained by your Company from companies controlling it or controlled by it. Based on this work, we attest to the accuracy and fair presentation of this information.
in accordance with french law, we have verified that the required information concerning the purchase of investments and controlling interests and the identity of shareholders and holders of the voting rights has been properly disclosed in the management report.
Lyon, 13 July 2016
the statutory auditors
Cap office Diagnostic revision ConseilChristophe reymond hubert de rocquigny du fayel
128 statUtory aUDitors’ speCiaL report on reLateD-party aGreements anD Commitments
STATUTORY AUDITORS’ SPECIAL REPORT ON RELATED-PARTY AGREEMENTS AND COMMITMENTS(annual General meeting held to approve the financial statements for the year ended 31 march 2016)
This is a free translation into English of the Statutory Auditors’ special report on related-party agreements and commitments issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
to the shareholders,
in our capacity as statutory auditors of LDLC.com, we hereby report to you on related-party agreements and commitments.
it is our responsibility to report to shareholders, based on the information provided to us, on the main terms and conditions of the agreements and commitments that have been disclosed to us or that we may have identified as part of our engagement, as well as the reasons given as to why they are beneficial for the Company, without commenting on their relevance or substance or identifying any undisclosed agreements or commitments. Under the provisions of article r.225-58 of the french Commercial Code (Code de commerce), it is the responsibility of the shareholders to determine whether the agreements and commitments are appropriate and should be approved.
Where applicable, it is also our responsibility to provide shareholders with the information required by article r.225-58 of the french Commercial Code in relation to the implementation during the year of agreements and commitments already approved by the annual General meeting.
We performed the procedures that we deemed necessary in accordance with professional standards applicable in france to such engagements. these procedures consisted in verifying that the information given to us is consistent with the underlying documents.
Agreements and commitments to be submitted for the approval of the Annual General Meeting
Agreements and commitments authorised during the yearWe were not informed of any agreements or commitments entered into during the year to be submitted for approval at the annual General meeting pursuant to the provisions of article L.225-86 of the french Commercial Code.
Agreements and commitments not authorised in advancein accordance with articles L.225-90 and L.823-12 of the french Commercial Code, we inform you that the following agreement was not authorised in advance by the supervisory Board.
We are required to report to shareholders on the circumstances in which the authorisation procedure was not followed.
Agreement with Asvel Basket SASP
Person concerned: philippe sauze, Deputy Chief executive officer and member of the management Board.
Sponsorship, public relations and ticketing services agreement
on 13 april 2016, LDLC.com entered into a sponsorship, public relations and ticketing services agreement with asvel Basket sasp. this agreement had no material impact on the financial statements for the year ended 31 march 2016.
this agreement was not authorised in advance by the supervisory Board due to an error of omission.
129
Annual f inancia l report 2015_2016
Agreements and commitments already approved by the Annual General Meeting
Agreements and commitments approved in previous years in accordance with article r.225-57 of the french Commercial Code, we were informed that the following agreements and commitments, approved by the annual General meeting in previous years, remained in force during the year ended 31 march 2016.
Agreement with Caroline Villemonte de la Clergerie
Compensation payable to a member of the Management Board holding an employment contract with the Company (Supervisory Board meeting of 15 April 2011)
Nature, purpose and conditions: Caroline Villemonte de la Clergerie received gross compensation in an amount of €3,908.05 in respect of her employment contract with the Company during the year ended 31 march 2016. it is specified that Caroline Villemonte de la Clergerie’s employment contract was terminated on 13 July 2015.
Agreement with Philippe Sauze
Compensation payable to a member of the Management Board holding an employment contract with the Company (Supervisory Board meeting of 30 June 2014)
Nature and purpose: it was decided that an amendment should be signed to alter the terms and conditions for the granting of free shares to philippe sauze, in a maximum number of 160,924, under his employment contract entered into on 5 December 2011 as Deputy Chief executive officer and employee of the company responsible for sales, internet and marketing activities. it was therefore stipulated that the granting of the remaining free shares by the management Board would no longer be subject to the achievement of a performance condition, consisting in the management Board’s recognition of philippe sauze’s right, as an employee of the Company, to receive at least 50% of his maximum variable compensation as defined in his employment contract.
Condition: this agreement gives rise to the recognition of a non-cash expense of €276,010 (excluding payroll taxes) in LDLC.com’s financial statements for the year ended 31 march 2016.
Lyon, 13 July 2016
the statutory auditors
Cap office Diagnostic revision ConseilChristophe reymond hubert de rocquigny du fayel
130 LDLC.Com ConsoLiDateD finanCiaL statements for the year enDeD 31 marCh 2016
LDLC.COM CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2016All of the data presented below is stated in euro thousands, unless indicated otherwise.
• 1 i CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Assets Note
At 31 March
2016 2015*
Net goodwill (8.1) 27,143 0
Other net intangible assets (8.2) 249 92
Net property, plant and equipment (8.3) 16,331 3,424
Net financial assets (8.4) 4,423 581
Deferred tax (8.8) 2,318 1,888
Non-current assets 50,464 5,985
Inventories (8.5) 69,091 50,223
Trade receivables (8.6) 19,713 11,786
Other receivables (8.7) 11,402 8,362
Cash and cash equivalents (8.9) 8,107 1,739
Current assets 108,313 72,111
Total assets 158,777 78,095
Equity and liabilities Note
At 31 March
2016 2015*
Share capital ** 1,138 1,035
Additional paid-in capital ** 21,053 7,458
Consolidated reserves ** 19,675 12,028
Treasury shares ** (758) (1,804)
Net income for the year ** 7,941 5,846
Total shareholders’ equity, Group share 49,048 24,562
Total shareholders’ equity 49,048 24,562
Borrowings due in > 1 yr (8.13) 30,354 195
Deferred tax 481 20
Provisions for retirement benefits (8.12) 1,203 784
Non-current liabilities 32,038 999
Borrowings and other current financing (8.13) 20,756 14,668
Provisions for risks and contingencies (8.12) 377 131
Trade payables (8.14) 35,494 25,737
Other payables (8.15) 21,064 11,999
Current liabilities 77,691 52,535
Total equity and liabilities 158,777 78,095
* The financial statements for the year ended 31 March 2015 include the correction of an error, as described in note 2.6.** See Statement of changes in consolidated shareholders’ equity on p. 132.
131
Annual f inancia l report 2015_2016
• 2 i CONSOLIDATED INCOME STATEMENT
Note
FY ended 31 March
2016 2015*
Revenues (9.1) 320,719 285,615
Other income from operations 142 451
Cost of goods sold (265,106) (238,972)
Gross margin 55,755 47,094
Other purchases and external costs (14,899) (12,980)
Miscellaneous taxes (978) (1,096)
Staff costs (9.2) (24,047) (21,440)
Net depreciation, amortisation and provisions (9.3) (1,212) (705)
Other income and expenses (804) (910)
Underlying EBIT 13,815 9,963
Non-recurring operating expenses (9.4) (665) (270)
Non-recurring operating income (9.4) 82 93
EBIT 13,232 9,786
Net cost of debt (9.5) (157) (129)
Other financial income and expenses (9.5) 2 3
Earnings before tax 13,078 9,660
Income tax (9.6) (5,137) (3,818)
Net income from equity associates 0 4
Net income of consolidated companies 7,941 5,846
Net income after tax from discontinued operations 0 0
Net income for the year 7,941 5,846
Revaluation of employee benefits, net of income tax (69) (60)
Transactions on financial instruments (742) 171
Gains and losses posted to shareholders’ equity (811) 110
Total comprehensive income 7,131 5,957
Total net income attributable to:
- owners of the Company 7,941 5,846
- non-controlling interests 0 0
Earnings per share: income attributable to owners of the Company (in € per share)
- underlying EBIT per share
- diluted underlying EBIT per share
- earnings per share 1.43 1.07
- diluted earnings per share 1.43 1.07
* The financial statements for the year ended 31 March 2015 include the correction of an error, as described in note 2.6.
132 LDLC.Com ConsoLiDateD finanCiaL statements for the year enDeD 31 marCh 2016
• 3 i CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY
Share capital
Additional paid-in capital
Consolidated reserves
Treasury shares
Shareholders’ equity, Group
shareShareholders’
equity
Shareholders’ equity at 31 March 2014 1,035 7,458 14,179 (1,754) 20,917 20,917
Error correction * (244) (244) (244)
Shareholders’ equity at 31 March 2014 (corrected)
1,035 7,458 13,935 (1,754) 20,674 20,674
Net income for the year ended 31 March 2015 * 5,846 5,846 5,846
Gains and losses posted to shareholders’ equity 110 110 110
Changes in treasury shares (11) (50) (60) (60)
Bonus shares 451 451 451
Capital increase 0 0
Dividends paid ** (2,459) (2,459) (2,459)
Non-controlling interests 0 0 0 0
Shareholders’ equity at 31 March 2015 1,035 7,458 17,874 (1,804) 24,562 24,562
Net income for the year ended 31 March 2016 7,941 7,941 7,941
Gains and losses posted to shareholders’ equity (811) (811) (811)
Changes in treasury shares 1,121 350 1,471 1,471
Bonus shares 530 530 530
Capital increase and additional paid-in capital 103 13,595 3,414 695 17,807 17,807
Dividends paid ** (2,454) (2,454) (2,454)
Non-controlling interests 0 0
Shareholders’ equity at 31 March 2016 1,138 21,053 27,616 (758) 49,048 49,048
* The financial statements for the year ended 31 March 2015 include the correction of an error, as described in note 2.6.** i.e. a dividend per share of €0.45 in 2014 and 2015.
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• 4 i CONSOLIDATED CASH FLOW STATEMENT
FY ended 31 March
2016 2015*
Net income from continuing operations 7,941 5,846
Elimination of non-cash income and expenses 1,282 1,054
Tax expense (current and deferred) 5,137 3,818
Gains/losses on disposal of assets 0 32
Elimination of income from discontinued operations net of tax 0 (4)
Sub-total (gross operating cash flow before tax) 14,360 10,747
Tax expense and change in deferred tax (5,134) (4,176)
Change in working capital (301) (11,045)
Net cash flow from operating activities 8,925 (4,474)
Income from disposal of non-current assets, after tax 81 0
Acquisition & disposal of non-current assets (4,817) (1,400)
Change in consolidation scope (34,426) 0
Change in current accounts 0 0
Net cash flow from investing activities (39,162) (1,400)
Treasury share transactions and bonus shares 2,002 391
Other transactions 282 (304)
Transactions on financial instruments (a) (742) 171
Increase in non-controlling interests 0 0
Changes in borrowings and other debt 22,834 (361)
Change in financing from factoring of receivables 421 378
Capital increase (nominal) 103 0
Additional paid-in capital + undistributable reserves + retained earnings 13,595 0
Decrease in shareholders’ equity (dividends) (2,454) (2,459)
Net cash flow from financing activities 36,041 (2,183)
(Decrease)/increase in cash, cash equivalents and bank overdrafts
5,804 (8,058)
Opening cash, cash equivalents and bank overdrafts (9,295) (1,238)
Closing cash, cash equivalents and bank overdrafts (3,491) (9,295)
* The financial statements for the year ended 31 March 2015 include the correction of an error, as described in note 2.6.
(a) restatement of outstanding flexigain contracts at year-end at eCB rate.
134 LDLC.Com ConsoLiDateD finanCiaL statements for the year enDeD 31 marCh 2016
Calculation of EBITDA - detailed method
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Net income 7,941 5,846
Net depreciation, amortisation and provisions (1,212) (705)
Net non-recurring operating income/(expense) (583) (177)
Net cost of debt (157) (129)
Other financial income and expenses 2 3
Tax expense (5,137) (3,814)
EBITDA 15,027 10,667
Calculation of EBITDA - simplified method
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Underlying EBIT 13,815 9,963
Operating depreciation and amortisation (1,212) (705)
EBITDA 15,027 10,667
Given that eBitDa is not an aggregate defined by ifrs and its method of calculation may vary from company to company, please note that eBitDa corresponds to the sum of underlying eBit and net operating depreciation and amortisation.
• 5 i CHANGE IN WORKING CAPITAL
At 31 March
2016 2015
Inventories (1,181) (14,381)
Trade receivables (4,322) (1,492)
Other receivables (45) (762)
Trade payables 261 4,383
Other payables 4,986 1,207
Total (301) (11,045)
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Annual f inancia l report 2015_2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR END YEAR ENDED 31 MARCH 2016(Amounts in €000 unless otherwise stated)
LDLC.com is a french limited company (société anonyme) with a management Board and supervisory Board, having its registered office at 18 Chemin des Cuers Cs40207 69574, Dardilly Cedex, france. the Company is registered in the trade and Companies register under number 403 554 181 and is listed on euronext paris.
the consolidated financial statements for the year ended 31 march 2016 were prepared in accordance with international accounting standards and interpretations (ias/ifrs) adopted by the european Union and applicable as at 31 march 2016. these standards and interpretations are consistently applied for the financial years presented.
the management Board approved the financial statements on 30 June 2016. they will be submitted for approval to the next General meeting of shareholders.
• 1 i HIGHLIGHTS OF THE YEAR
• as at 31 march 2016, LDLC.com purchased the entire share capital of Domisys and the remaining portion of the share capital of Domimo 2 and Domimo 3, the real estate companies of the materiel.net group, not held by Domisys. the fair value of the price paid amounted to €43,325,000 (see note 2.7). additional consideration of up to €497,000 may be payable on the Domimo 2 acquisition in accordance with a pending court ruling on a supplier dispute.
Given that these 3 companies were acquired as at the Company’s balance sheet date, the decision was taken to consolidate them in the Group’s financial statements for the year ended 31 march 2016.
Where the notes refer to materiel.net, this relates to Domisys, Domimo 2 and Domimo 3.
the Group’s consolidation scope is provided under note 3.
proforma figures were prepared for the income statement, given the significant change in the consolidation scope. the aggregates presented are described under note 12.
the impact of changes in the consolidation scope on balance sheet items is identified and set out in detail in the notes.
the impact of changes in the consolidation scope is presented on a separate line in the cash flow statement.
• Creation of sas Campus 2017 in september 2015, as well as sas LDLC1, LDLC2 and LDLC3 in march 2016.
• a tax audit was carried out on LDLC.com’s accounts by the tax authority, covering financial years 2009/10 to 2012/13. initial proposals were made for tax reassessment and the Company received answers to its observations. the proposed tax reassessments concern the french corporate real estate contribution (cotisation foncière des entreprises or Cfe) and property tax (taxe foncière). the Company is contesting these tax reassessment proposals but has already been required to pay the sum of €1,015,000.
Given the present stage of discussions with the tax authority regarding, the Company’s standpoint on the proposed reassessments and the arguments it holds in its defence, no provision has been recognised and the amounts already paid to the tax authority have been recognised as assets on the company balance sheet, under “other receivables” (see note 8.7).
136 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
• 2 i ACCOUNTING POLICIES
2.1. Basis of preparation
pursuant to european regulation no. 1606/2002 of 19 July 2002, the LDLC.com Group’s consolidated financial statements for the year ended 31 march 2016 were prepared in accordance with the international accounting standards published and approved by the european Union as at the closing date of these financial statements and which were mandatory on said date.
the international standards include ifrs (international financial reporting standards), ias (international accounting standards) and ifriC interpretations (international financial reporting interpretations Committee).
the financial statements presented do not take into account draft standards and interpretations which, at the closing date, are still only at the exposure Draft stage at the iasB (international accounting standards Board) and ifriC.
all standards, amendments and interpretations adopted by the european Union may be consulted on the european Commission’s website at: http://ec.europa.eu/finance/company-reporting/index_en.htm
the Group applied mandatory standards and interpretations for the first time in its financial statements for the year ending 31 march 2016 including:
• ifriC 21 “Levies”: this interpretation states that levies must be recognised in accordance with their obligating event as defined by law, irrespective of their calculation base. the only significant tax concerned by the implementation of this interpretation is the french self-employed workers’ welfare contribution (french C3s). the application of this interpretation did not have a material effect on opening shareholders’ equity. accordingly, the Group did not retrospectively apply ifriC 21 to the financial statements for the year ended 31 march 2015, but has applied it to the period from 1 april 2015 to 31 march 2016. the impact on net income for the period amounts to income of €114,000;
• amendment to ifrs 11 “Joint arrangements” relating to acquisitions of interests in joint operations;
• amendment to ias 19 “employee benefits” which applies to employee or third-party contributions to defined benefit plans. Certain contributions may now be recognised as a deduction from the cost of services rendered for the period during which the service was performed;
• annual improvements to ifrs 2010-2012 cycle applicable at 1 february 2014, relating to ias 24, ifrs 2, ifrs 8, ifrs 13 and ifrs 3;
• annual improvements to ifrs 2011-2013 cycle applicable at 1 January 2015, relating to ifrs 1, ifrs 3, ifrs 13 and ias 40.
the application of these standards, amendments and improvements had no material impact on the Group’s financial statements.
furthermore, the Group opted not to apply the standards or interpretations for which the mandatory application date fell after 31 march 2016. the Group does not expect any material impact to arise due to the application of these new standards.
2.2. General rules of presentation
the balance sheet is presented in accordance with the current/non-current classification defined by revised ias 1. therefore, provisions recorded under liabilities, borrowings and financial assets are broken down between items due to be received or settled in more than one year, presented under non-current items, and those due to be received or settled in less than one year, presented under current items. the consolidated income statement is presented on a functional basis, in accordance with the model proposed by the french accounting standards board (Autorité des Normes Comptables or anC) in its recommendation no. 2013-03 of 7 november 2013. the Group applies the indirect method to present its cash flow, in accordance with the format recommended by the anC in its recommendation no. 2013-03 of 7 november 2013.
2.3. Estimates and judgements
in the preparation and presentation of the financial statements, Group management is frequently required to exercise its judgement in order to value or estimate certain items in the financial statements (such as provisions, deferred tax and the valuations used for impairment testing). the probability of future events occurring is also assessed. these valuations or estimates are reviewed at each year-end, and in accordance with the actual occurrence of events, in order to adjust the assumptions initially applied where necessary. During the financial year, LDLC.com did not observe any changes in the level of uncertainty relating to these estimates and assumptions, with the exception of the volatility of the discount rate used to calculate social security liabilities.
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2.4. Consolidation methods
LDLC.com has applied the new applicable consolidation standards as of 1 april 2014.
Companies under the exclusive control of LDLC.com are fully consolidated. exclusive control is assessed in accordance with criteria defined by ifrs 10 (direct or indirect control over the financial and operating policies of the relevant business activities, exposure to variable returns and the capacity to use its power to influence those returns). this control is generally presumed to exist in companies in which LDLC.com directly or indirectly holds over 50% of the voting rights of the controlled company. in order to assess this control, potential voting rights that may be immediately exercised are taken into account, including those held by another entity.
at year-end, there were no companies in which the Company exercised joint control or significant influence.
subsidiaries are fully consolidated as of the date on which control is transferred to the Group, with recognition of the rights of minority shareholders. subsidiaries are deconsolidated as of the date on which control ceases to be exercised.
the financial year-end for all Group companies is 31 march, except for materiel.net group comprising Domisys, Domimo 2 and Domimo 3, for which a balance was drawn up at 31 march 2016. Domisys’ financial position was the subject of a limited review at the Group’s balance sheet date.
the Group’s consolidation scope during the financial year ended 31 march 2016 is described under note 3.
intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated for assets sold, unless they are considered to be an indication of impairment. the accounting methods used by subsidiaries were made consistent with those used by the Group.
2.5. Translation of foreign currency transactions
2.5.1 . Functional and presentation currency of the financial statements
the consolidated financial statements are presented in euros, which is the Company’s functional and presentation currency.
2.5.2 . Transactions and balances
transactions denominated in currencies other than the functional currency of Group companies are translated into euros using the applicable exchange rates as at the transaction dates. exchange gains and losses arising from the settlement of these transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rate are recorded on the income statement.
2.5.3 . Group companies
the Group’s entities operate in france and the financial statements are presented in euros.
2.6. Correction of an error regarding IAS 8
LDLC.com corrected an error in its financial statements for the year ended 31 march 2016 in order to comply with the requirement to spread revenues from “Pack Expert” sales over the duration of the service. these revenues were originally recognised at the same time as the sale of the goods.
in accordance with ias 8, the adjustment was retrospectively recorded, without affecting net income for the period. the impact on the relevant balance sheet and income statement items is presented below:
Balance sheet - Assets 31 March 2015 reported Correction 31 March 2015 corrected
Deferred taxes 1,724 164 1,888
Balance sheet - Equity & liabilities
Consolidated reserves 12,271 (243) 12,028
Net income for the year 5,870 (24) 5,846
Other payables 11,569 430 11,999
138 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
Income statement 31 March 2015 reported Correction 31 March 2015 corrected
Revenues €285,653,000 (€38,000) €285,615,000
Tax (€3,832,000) €14,000 (€3,818,000)
the impact on earnings per share is immaterial after correction of the error.
2.7. Business combinations and related goodwill
the acquisition method is used for all business combinations carried out by the Group.
pursuant to revised ifrs 3, goodwill represents the difference between the cost of business combinations (excluding transaction costs) and the Group’s share of the acquisition-date fair value of the assets acquired, liabilities incurred or commitments assumed, and shares issued by the acquiring entity. the determination of fair values and goodwill is finalised within a period of one year as of the acquisition date. Changes made after this date are recorded on the income statement, including changes to deferred tax assets.
positive goodwill is identified on a separate line on the balance sheet, “net goodwill”, at the amount net of any impairment. negative goodwill (badwill) is directly recorded on the income statement for the year in which control was assumed.
Costs directly attributable to the business combination are recognised on the income statement for the financial year.
in accordance with ifrs 3 “Business combinations”, goodwill is not amortised. at the acquisition date, goodwill is allocated to a cash generating unit (CGU) and is subject to an impairment test at least once a year.
Calculation of goodwill
Fair value of the price paid in cash at 31 March 2016 for the Domisys acquisition 20,739
Fair value of the price paid via the issue of 574,732 LDLC.com shares at 31 March 2016 for the Domisys acquisition 17,127
Fair value of the price paid via transfer of 117,079 LDLC.com treasury shares at 31 March 2016 for the Domisys acquisition 3,489
Fair value of the price paid in cash at 31 March 2016 for the Domimo 2 acquisition 1,760
Fair value of the price paid in cash at 31 March 2016 for the Domimo 3 acquisition 210
Fair value of the price paid 43,325
Non-current assets 13,495
Inventories 17,687
Trade and other receivables 6,865
Cash and cash equivalents 4,810
Assets 42,857
Loans and borrowings 12,449
Provisions 357
Deferred taxes 294
Trade and other payables 13,575
Liabilities 26,675
Net assets acquired 16,182
Goodwill 27,143
this goodwill consists of clear sales, logistics and industrial synergies, as well as the contribution of the brand image of the materiel.net website.
the amount of goodwill is provisional. the determination of CGUs and the allocation of goodwill to CGUs is under way.
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2.8. Intangible assets
Costs relating to the purchase of software licences are recorded under assets on the basis of costs incurred to acquire and deploy the software concerned. these costs are amortised over the estimated useful life of the software applications (one to three years).
Costs associated with the development and maintenance of the software are expensed as incurred.
Costs directly associated with the production of identifiable software and websites that are unique in nature and controlled by the Group are recognised as expenses for the year. Costs directly associated with production include the payroll costs of software and website developers, as well as an appropriate share of general production expenses.
the Group has opted to amortise leasehold rights over the remaining term of the lease, i.e. just under 8 years.
the principal amortisation periods used are as follows:
Type of asset Amortisation period
Software 1-3 years
Other intangible assets 5-8 years
2.9. Property, plant and equipment
property, plant and equipment are recognised at cost less any accumulated depreciation and impairment. Cost includes all costs directly attributable to the acquisition of the assets concerned and their transfer to their place of operation.
interest on borrowings is not included in the cost of assets, but is recorded as an expense for the year in which the loans were contracted.
these assets are depreciated as of their date of commissioning using the straight-line method, in accordance with the estimated useful life. the principal depreciation periods applied are as follows:
Type of asset Depreciation period
Buildings 15-25 years
Fixtures and fittings 8-10 years
Equipment 8 years
Technical facilities 8-10 years
Office equipment 3 years
Vehicles and delivery equipment 4 years
Furniture 5 years
an impairment test is performed whenever there is an indication of a loss of value. an impairment provision is then recorded if the recoverable value of the asset is lower than its net book value.
asset useful lives are reviewed and, if necessary, adjusted at each year-end.
Gains or losses on disposals of pp&e are determined by comparing the income from the sale with the net book value of the asset sold. they are recognised on the income statement.
2.10. Lease agreements
2.10.1 . Finance leases
a lease agreement is considered a finance lease if it transfers to the Group substantially all of the risks and rewards attached to the ownership of the leased asset.
at the beginning of the lease term, finance leases are recognised as assets and liabilities on the balance sheet in equal amounts, at the fair value of the leased asset or, if lower, the discounted value of the minimum payments for the lease in question as at the beginning of the lease term.
payments made under the lease are broken down between financial expense and amortisation of outstanding debt.
140 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
the depreciation policy for assets acquired under finance lease is similar to the policy applied for property, plant and equipment acquired directly by the Company (see note 2.9 on property, plant & equipment).
2.10.2 . Operating leases
operating leases constitute lease agreements under which a significant portion of the risks and rewards attached to the ownership of the leased asset is effectively retained by the lessor. payments made under agreements of this kind are recognised according to the straight-line method over the term of the agreement.
2.11. Financial instruments
2.11.1 . Financial assets
the designation and classification of financial assets are carried out upon initial recognition and are reviewed at each financial year-end.
the Group initially recognises financial assets at the date on which the Group becomes a party to the contractual provisions of such financial assets. financial assets are measured at fair value plus direct transaction costs unless they are classified as financial assets measured at fair value through profit or loss (fVtpL).
the Group manages several categories of financial instruments, which are classified in accordance with the purpose of each acquisition. these categories break down as follows:
Loans and receivablesthese include financial assets, other than non-derivative financial instruments, with fixed or determinable payments and which are not listed on an active market. they are valued at amortised cost according to the effective interest rate method. in the event of loss of value, they are written down and a corresponding impairment charge is recorded on the income statement under “other financial income and expenses”.
Financial assets at fair value through profit or lossthese include financial assets that the Group has always had the intention of selling in the short term, generally within a period of less than 12 months. Changes in fair value are recognised on the income statement under “other financial income and expenses” for the period in which they occurred. this category specifically includes siCaV money-market funds and all derivative instruments.
Available-for-sale financial assetsassets not allocated to one of the aforementioned categories are classified as “available-for-sale assets”. items allocated to this category include shares in unlisted, non-consolidated companies which the Group intends to retain over the long term. these shares are presented on the balance sheet under financial assets.
“available-for-sale financial assets” are recognised at their fair value as at the acquisition date, which is in practice close to their acquisition cost. subsequent valuations are recognised as follows:
• When the fair value can be reliably determined, changes are recognised under other comprehensive income. in the event of a significant or extended decline in the fair value below the acquisition price, an impairment charge is recorded on the income statement.
• otherwise, the acquisition cost of the available-for-sale financial assets is maintained subject to an impairment test. a provision is recorded when their estimated closing value, based on financial criteria adapted for each company, is lower than the acquisition cost. these impairment provisions are recorded on the income statement.
2.11.2 . Fair value of financial instruments
the fair value of financial assets and liabilities traded on an active market is determined with reference to the stock market price at year-end for listed financial instruments.
the fair value measurement of other financial instruments, whether assets or liabilities, which are not listed on an active market, is based on different valuation methods and assumptions determined by the Group with regard to existing market conditions at year-end.
the fair value of current financial assets and liabilities is equal to the carrying amount, given the short-term maturity of these instruments.
the fair value of non-current financial assets and liabilities is calculated by discounting future cash flows.
2.11.3 . Factoring
for several years, the Group has sold receivables under recourse factoring agreements.
in accordance with ifrs, the legal analysis regarding the transfer of ownership is set out under ias 39 “financial instruments”, which deals with the sale of financial assets
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Annual f inancia l report 2015_2016
(including trade receivables). it requires successive analysis of the following three criteria:
• transfer of contractual rights to the cash flow of the transferred asset.
• transfer of substantially all the risks and rewards of owning the sold asset.
• transfer of control of the transferred asset.
Given the analysis of the factoring agreement carried out by the Group with regard to the foregoing criteria, the Group does not consider the agreement as entailing derecognition. therefore, factored receivables are recognised under “trade and other receivables” and a matching liability is recognised under “Borrowings and other current financing”.
this presentation may change in the future should amendments be made to agreements or the disposal process.
2.12. Inventories
pursuant to ias 2 “inventories”, inventories are measured at the lower of cost and net realisable value. net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.
the method for determining the cost is identical for inventories of similar nature and use within the same entity. inventories are valued according to the fifo method.
financial costs are not included in inventories but are recognised under financial expenses for the period in which they are incurred.
the Group may be required to record inventory impairment on the basis of expected run-off, if items are damaged or become partially or entirely obsolete, or if the sales price has fallen.
2.13. Trade and other receivables
trade receivables are initially recognised at fair value and subsequently valued at amortised cost less provisions for impairment. an impairment provision for trade receivables is recorded when there is an objective indication of the Group’s inability to recover the full amounts due, under the conditions initially provided for at the time of the transaction. significant financial difficulties encountered by the debtor, the probability of bankruptcy or debt restructuring, a breach of obligations or payment default constitute indicators of impairment of a receivable.
the amount of the provision corresponds to the difference between the carrying amount of the asset and the estimated future cash flows, discounted if material, at the initial effective interest rate. the provision is recognised on the income statement under “net depreciation, amortisation and provisions”.
2.14. Cash and cash equivalents
“Cash and cash equivalents” includes cash, bank sight deposits, other highly liquid short-term investments with initial maturities of no more than three months, and bank overdrafts. Bank overdrafts and factoring appear under current liabilities on the balance sheet, under “Borrowings and other current financing”.
foreign currency bank transactions are valued at the transaction date. at the end of each month, the accounts are revalued at the closing rate. the matching entry for this revaluation is a currency gain or loss account.
2.15. Treasury shares
ordinary shares are classified under shareholders’ equity.
LDLC.com treasury shares, including those acquired in relation to a share buy-back plan, are deducted from shareholders’ equity. no gain or loss is recognised at the time of the purchase, sale, issue, impairment or cancellation of treasury shares.
the transaction costs directly attributable to share buy-backs are also deducted from total shareholders’ equity.
Changes to treasury shares during the year are described under note 8.10.
2.16. Earnings per share
earnings per share corresponds to net income, Group share divided by the average number of shares outstanding during the financial year.
the Group had no potentially dilutive ordinary shares outstanding during the period. Diluted earnings per share is therefore identical to earnings per share.
When earnings per share is negative, diluted earnings per share is identical to this figure.
142 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
2.17. Tax
2.17.1 . Current tax
Current tax assets and liabilities correspond to the tax receivables and liabilities due in less than 12 months.
2.17.2 . Deferred tax
Deferred tax assets and liabilities of consolidated companies are presented under non-current assets and non-current liabilities, respectively.
the Group recognises deferred taxes using the liability method for all temporary differences between the tax base of the assets and liabilities and their carrying amount recorded on the consolidated balance sheet, excluding goodwill.
net deferred tax balances are determined based on the tax position of each company or the total earnings of all companies in the tax Group. a deferred tax asset or liability is valued at the tax rate expected to apply during the year in which the asset is realised or the liability settled, on the basis of tax rates adopted at year-end. net deferred tax assets are only recognised if the company or tax group is reasonably certain that it will recover them over subsequent years; assets corresponding to tax loss carryforwards are recorded on the balance sheet.
the recognition of deferred taxes relating to tax losses or loss carryforwards is limited to those that are likely to be recovered.
2.18. Provisions
2.18.1 . Long-term employee benefits
the Group recognises all long-term benefits granted to employees. these benefits exclusively relate to retirement bonuses for active employees. the actuarial assumptions used to determine these commitments are subject to periodic review. the valuation takes into account, on the basis of actuarial data, the level of remuneration, the estimated remaining working life of the employee, life expectancy and staff turnover. future commitments calculated in this way are discounted to determine their present value.
the Company has no hedging in place to finance this commitment.
pursuant to revised ias 19:
• impacts relating to actuarial assumptions are immediately recorded under non-reclassifiable items of other comprehensive income at their amount net of tax.
• impacts of changes to the benefit scheme are immediately recorded on the consolidated income statement. no changes were made to the scheme during the financial year.
• retirement commitments are presented on the balance sheet in their full amount.
the actuarial assumptions used to calculate retirement bonuses are described in note 8.12.
2.18.2 . Other provisions
a provision is recognised when the Group has a present legal or constructive obligation resulting from a previous event, the amount of which may be reliably estimated, settlement of which is expected to result in an outflow of resources for the Group.
2.19. Revenue recognition
income from ordinary operations corresponds to the fair value of the amounts received or receivable as consideration for the assets sold and services provided, in the ordinary course of the Group’s business. income from ordinary operations is presented net of Vat, goods returned, allowances and discounts, and less any inter-company sales. income from ordinary operations is recognised as follows:
2.19.1 . Sales of goods
income from sales of products is presented under “sales of goods” and is recognised when the following criteria have been satisfied:
• substantially all the risks and rewards of ownership have been transferred to the buyer,
• the amount of revenue and the costs related to the transaction can be measured reliably, and
• it is probable that the economic benefits associated with the transaction will flow to the Company.
the sales of goods to professionals and consumers presented in the income statement, excluding sales to stores and subsidiaries, are restated taking into account the effect of the last two days of sales, given that the Company considers that the risks and rewards of ownership have not yet been
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Annual f inancia l report 2015_2016
transferred to the buyer during this time in view of the average delivery periods recorded by carriers.
2.19.2 . Sales of services
sales of services are recognised during the period in which the services are rendered, depending on progress of the transaction valued on the basis of the ratio between services supplied and total services to be supplied.
2.20. Underlying EBIT
Underlying eBit equals total income from ordinary operations less total expenses related to ordinary operations. this is an important indicator enabling the Group’s performance to be measured.
2.21. EBIT
eBit corresponds to underlying eBit less non-recurring operating income and expenses.
items linked to a major event occurring during the financial year which is exceptional and infrequent in nature are recognised under non-recurring operating income and expenses.
in this regard, non-recurring operating expenses include acquisition costs for material.net shares (see note 9.4).
2.22. Net cost of debt
this refers to net financial income/expenses directly attributable to net cash.
• 3 i GROUP CONSOLIDATION SCOPE
the consolidation scope and consolidation methods applied are as follows:
Subsidiaries Business activity % interestDate
acquired Consolidation method
Hardware.fr Design, development and operation of websites, site content
100% 07/2000 Full consolidation
Textorm Wholesale trader of all computer hardware and software, plus all related services
100% 04/2001 Full consolidation
DLP-Connect Installation of cable networks and access control, CCTV and telecommunications systems
80% 01/2004 Full consolidation
LDLC Distribution Creation and development of a distribution network for the sale of all equipment and services, as well as the granting of all franchising or licensing rights
100% 01/2013 Full consolidation
Anikop Design, development and sale of software and provision of IT services, maintenance; secondary activity in customer service for goods sold, training
80% 12/2006 Full consolidation
L’École LDLC Higher education 100% 11/2014 Full consolidation
LDLC Villefranche Retail sale of all IT hardware and software and all multimedia and digital products
100% 03/2015 Full consolidation
Campus 2017 Acquisition of land and construction of buildings for use as office space via a finance lease, leasing of said buildings, acquisition and management of all movable property
100% 09/2015 Full consolidation
LDLC1 Retail sale of all IT hardware and software and all multimedia and digital products
100% 03/2016 Full consolidation
144 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
Subsidiaries Business activity % interestDate
acquired Consolidation method
LDLC2 Retail sale of all IT hardware and software and all multimedia and digital products
100% 03/2016 Full consolidation
LDLC3 Retail sale of all IT hardware and software and all multimedia and digital products
100% 03/2016 Full consolidation
Domisys Retail sale of all IT hardware, office, hifi and multimedia equipment and accessories
100% 03/2016 Full consolidation
Domimo 2 Acquisition, use and development of land 70% 03/2016 Full consolidation
Domimo 3 Acquisition, use and development of land for the construction and leasing of a building
90% 03/2016 Full consolidation
Domimo 2 and Domimo 3 are both held by Domisys and are therefore fully consolidated.
the LDLC.com Group holds minority interests in nLCL, immo fi 1 and presse non-stop; as the financial statements of these companies are not material, they were not consolidated as at 31 march 2016.
• 4 i RISK MANAGEMENT
Via its operations, the Group is exposed to different types of financial risks: market risks (specifically currency risk, risk of change in value due to rapid technological developments, and all other price risks), credit risk and liquidity risk.
4.1. Market risks
4.1.1 . Currency risk
the Group operates internationally and specifically sources supplies abroad: it is therefore exposed to foreign currency risk primarily regarding the Us dollar. Currency risk relates to future sales transactions, and assets and liabilities recorded in foreign currencies on the balance sheet.
in order to manage currency risk related to future sales transactions and assets and liabilities recorded in foreign currencies on the balance sheet, Group entities use foreign exchange forward contracts, entered into with financial institutions.
the ratio of goods (excluding Domisys) paid for in UsD is around 16%, and foreign exchange hedges were used during the year to settle around 44% of these purchases.
4.1.2 . Price risk
the Group is exposed to price risks impacting products in the it and high-tech sector. tools for analysing inventory turnover enable the Group to take precautions against deflation in this business by adapting the volumes it purchases.
4.2. Credit risk
Given its large number of clients, the Group does not consider itself to be highly exposed to credit risk. moreover, the Group has implemented policies that enable it to ensure that customers who buy its products have an appropriate credit history.
4.3. Interest rate risk
the Group has several overdraft facilities at its disposal (see note 8.13), and contracted a loan for the purchase of the materiel.net group, the details of which are provided in note 8.13.
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Annual f inancia l report 2015_2016
• 5 i OPERATING SEGMENTS
for its internal management requirements, and in order to meet ifrs 8 disclosure requirements, the Group analysed the breakdown of its business by operating segment. as a result of this analysis, the Group considers that it operates within a single, combined segment: the distribution of computer hardware and related services. furthermore, almost all Group revenues are generated in france and neighbouring french-speaking countries. accordingly, the Group considers that it operates in a single distinct geographical sector. the
Group’s chief operating decision makers measure the Group’s performance with regard to the gross margin generated by its business activities. for these reasons, Group management does not consider it necessary to identify distinct business segments in its internal reporting.
LDLC.com’s business activity - the distribution of computer hardware and related services - targets both professionals and individual customers. no single customer accounts for more than 5% of the Group’s sales in terms of revenues.
• 6 i POST-BALANCE SHEET EVENTS
none.
• 7 i RELATED PARTY TRANSACTIONS
During the financial year ended 31 march 2016, the Group did not enter into any transactions with related parties other
than those relating to the compensation of executive directors (see note 10.1).
• 8 i NOTES ON THE BALANCE SHEET
Consolidation is carried out on the basis of the financial statements for the year ended 31 march 2016.
the consolidated income statement includes the income statements of companies acquired or formed during the
financial year as of the date of acquisition or foundation, except for Domisys, Domimo 2 and Domimo 3 due to the fact that they were acquired on 31 march 2016. it also includes the income statements of companies sold during the financial year up until the disposal date.
8.1. Goodwill
Gross values 31/03/2015 Acquisitions Disposals 31/03/2016
Materiel.net group 0 27,143 0 27,143
Total 0 27,143 0 27,143
Amortisation and provisions 31/03/2015 Charges Write-backs 31/03/2016
Materiel.net group 0 0 0 0
Total 0 0 0 0
Goodwill recorded at 31 march 2016 is the result of the materiel.net group acquisition, which includes the companies Domisys, Domimo 2 and Domimo 3.
the goodwill presented in the financial statements for the year ended 31 march 2016 is provisional.
146 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
8.2. Intangible assets
intangible assets break down as follows:
Gross values 31/03/2015 AcquisitionsChange
in scope ReclassificationDisposals/retirement 31/03/2016
Software and other intangible assets 526 198 199 139 784
Total 526 198 199 0 139 784
intangible assets mainly consist of software.
acquisitions mainly comprise leasehold rights amounting to €170,000.
the change in consolidation scope of intangible assets relates to materiel.net.
Amortisation and provisions 31/03/2015Change
in scope Charges Write-backs 31/03/2016
Software and other intangible assets 434 149 92 139 535
Total 434 149 92 139 535
the change in consolidation scope affecting the amortisation of intangible assets relates to materiel.net.
8.3. Property, plant and equipment
property, plant and equipment break down as follows:
Gross values 31/03/2015 AcquisitionsChange
in scope ReclassificationDisposals/retirement 31/03/2016
Land 0 0 1,142 1,142
Buildings 391 0 11,431 11,822
Fixtures and fittings 5,702 545 3,534 (101) 278 9,402
Equipment 1,773 176 4,276 106 6,119
Office equipment and furniture 1,654 679 671 101 182 2,924
PP&E in progress 350 177 45 350 222
Total 9,869 1,577 21,100 0 915 31,632
the main changes in property, plant and equipment involved €606,000 of refurbishment costs for the paris store.
the change in consolidation scope affecting property, plant and equipment relates to the materiel.net acquisition.
147
Annual f inancia l report 2015_2016
Depreciation and provisions 31/03/2015Change
in scope Charges Write-backs 31/03/2016
Land 0 6 6
Buildings 215 4,156 37 4,408
Fixtures and fittings 3,498 2,661 478 276 6,360
Equipment 1,509 1,150 94 106 2,647
Office equipment and furniture 1,224 486 273 103 1,880
Total 6,445 8,458 882 484 15,301
the change in consolidation scope affecting the depreciation of pp&e relates to materiel.net.
8.4. Equity interests, other financial assets
Gross values 31/03/2015Change
in scope Reclassification AcquisitionsDisposals
/retirement 31/03/2016
Presse Non-Stop shares 0 51 51
Other shares 1 0 1
IMMO FI 1 shares 0 474 474
NLCL shares 0 1,500 1,500
Deposits and guarantees 580 277 (1) 42 1 898
Loans 0 1,500 1,500
Total 581 802 (1) 3,042 1 4,423
• LDLC.com acquired a 10% interest in nLCL following the capital increase carried out on 20 november 2015. LDLC.com paid a price of €1,500,000 for this transaction. nLCL is an online retail seller of pet products. its net assets as at 31 December 2015 amounted to €1,550,000.
• in order to finance the future investment in the LDLC.com Group’s head office, a €1,500,000 loan was granted to the lessor, finamur.
• the change in consolidation scope affecting financial assets relates to the materiel.net acquisition.
8.5. Inventories
From 01/04/2015 to 31/03/2016 From 01/04/2014 to 31/03/2015
Gross value Impairment Net value Gross value Impairment Net value
Goods for resale 68,019 410 67,609 48,932 211 48,720
Customer service inventories 1,934 483 1,451 1,629 207 1,422
Total goods inventories 69,953 892 69,060 50,561 418 50,143
Other supplies 27 0 27 34 0 34
Work in progress 3 0 3 46 0 46
Total inventories and WIP 69,983 892 69,091 50,641 418 50,223
148 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
inventories are written down in accordance with the age of the products and the expected difficulty of selling them, and/or in the case of products whose realisable value is lower than cost.
the increase in inventories as at 31 march 2016 includes an €18 million increase related to the acquisition of materiel.net.
8.6. Trade receivables
this item breaks down as follows:
From 01/04/2015 to 31/03/2016 From 01/04/2014 to 31/03/2015
Gross Imp. Net Gross Imp. Net
Trade receivables 20,204 492 19,713 12,051 265 11,786
all trade receivables are due in less than one year.
trade receivables include the receivables sold under a factoring arrangement and not yet settled by clients, which amounted to €3,699,000 as at 31 march 2016, compared to €3,278,000 as at 31 march 2015.
the increase in net trade receivables as at 31 march 2016 includes a €3.6 million increase related to materiel.net.
8.7. Other receivables
this item breaks down as follows:
From 01/04/2015 to 31/03/2016 From 01/04/2014 to 31/03/2015
Gross Imp. Net Gross Imp. Net
Advances and down payments 821 821 259 259
Supplier credits receivable 3,944 3,944 1,923 1,923
Government (income tax, VAT and other income receivable)
822 822 1,072 1,072
Current accounts 0 0 0 0
Accrued income receivable 95 95 75 75
Eurofactor current account and retainer 968 968 817 817
Sundry receivables 1,058 1,058 970 970
Other 1,354 1,354 1,599 1,599
Domicorp receivables 317 317 0 0
Prepaid expenses 2,023 2,023 1,648 1,648
Total 11,402 0 11,402 8,362 0 8,362
all other receivables and accruals are due or will be settled in less than one year.
sundry receivables include €1,015,000 corresponding to the amount paid by the Company in relation to the tax audit (see note 1).
the “other” line item relates to invoices for goods delivered after the financial year-end.
the increase in other receivables as at 31 march 2016 includes a €3 million increase related to the materiel.net acquisition.
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Annual f inancia l report 2015_2016
8.8. Deferred tax
this items breaks down as follows:
From 01/04/2015 to 31/03/2016
From 01/04/2014 to 31/03/2015
Deferred tax assets
• rel. to tax loss carryforwards 813 944
• rel. to temp. diff. and IFRS restat. 1,506 943
- profit sharing 602 330
- retirement benefits 448 297
Total 2,318 1,888
the increase in deferred tax at 31 march 2016 includes a €266,000 increase related to the materiel.net acquisition, including €94,000 related to profit sharing and €41,000 related to retirement bonuses.
8.9. Cash and cash equivalents
this item breaks down as follows:
From 01/04/2015 to 31/03/2016 From 01/04/2014 to 31/03/2015
Values Gross Prov. Net Gross Prov. Net
Cash 8,099 8,099 1,589 1,589
Short-term investments 71 (62) 9 150 0 150
Total 8,169 (62) 8,107 1,739 0 1,739
the increase in cash and cash equivalents at 31 march 2016 includes a €4.8 million increase related to the acquisition of materiel.net.
in July 2003, LDLC.com signed a master futures agreement with Crédit agricole for purchasing UsD. the Company must purchase the currency prior to the maturity date. as at 31 march 2016, two flexigain fixed-rate currency futures were outstanding:
Subscription date Maturity date Currency Exchange rate Contract amount Amount purchased
24/11/15 24/11/16 USD 1.067800 10,000,000 556,209
25/01/16 25/01/17 USD 1.087800 3,000,000 1,947,940
Total 13,000,000 2,504,149
at 31 march 2016, the fair value of this financial instrument was a €592,000 liability; it is recognised under “other payables”.
at 31 march 2015, the fair value of this financial instrument was a €145,000 asset; it was recognised under “other receivables”.
in January 2015, LDLC.com entered into a master agreement with Caisse d’Épargne relating to transactions on financial futures. there are no contracts outstanding as at 31 march 2016.
150 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
in accordance with ias 39, these financial instruments correspond to hedging instruments and accordingly meet the following criteria:
• the instrument only hedges purchases.
• the Company expects this hedge to be highly effective for the full term of the transaction.
• its effectiveness ranges between 80 and 125%.
• When a future transaction is hedged, it is highly probable that it will occur.
8.10. Share ownership
Shareholder breakdown at 31 March 2016as at 31 march 2016, LDLC.com increased its share capital by a nominal value of €103,451.76, from €1,034,527.32 to €1,137,979.08, by issuing 574,732 new shares with a par
value of €0.18 each, fully paid up at a price of €23.86 per share including a share premium of €23.68 per share.
at 31 march 2016, the share capital of LDLC.com consisted of 6,322,106 shares with a par value of €0.18 each.
the following shareholders held over 5% of the voting rights or share capital as at 31 march 2016:
ShareholdersNumber
of shares % Share capital % Voting rights
Laurent de la Clergerie 1,322,209 20.91% 26.95%
Domicorp 885,546 14.01% 9.52%
Caroline de la Clergerie 671,273 10.62% 12.93%
Olivier de la Clergerie 640,000 10.12% 12.20%
Suzanne de la Clergerie 89,421 1.41% 6.20%
as a reminder, the articles of association confer double voting rights on shares held in registered form for over two years, in accordance with article L.225-123 of the french Commercial Code.
Number
of sharesTreasury
sharesNumber
of bonus shares
Total at 31 March 2014 5,747,374 280,515 11,631
New shares Treasury shares purchased/(sold) 2,514 Bonus shares granted 161,746
Total at 31 March 2015 5,747,374 283,029 173,377
New shares 574,732 Treasury shares purchased/(sold) (92,746) Bonus shares granted (11,631)
Total at 31 March 2016 6,322,106 190,283 161,746
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Annual f inancia l report 2015_2016
8.11. Non-controlling interests
non-controlling interests break down as follows:
From 01/04/2015 to 31/03/2016
From 01/04/2014 to 31/03/2015
Balance b/fwd 0 0
Change in consolidation scope 0 0
Transfer of minority interest losses to Group 0 0
Share of earnings 0 0
Total 0 0
8.12. Provisions for risks and contingencies
provisions for risks and contingencies break down as follows:
From 01/04/2015 to 31/03/2016 From 01/04/2014 to 31/03/2015
Prov. b/
fwd
Prov.rec.
during FY
Prov.used
during FY
Prov.not
used Total
Prov. b/
fwd
Prov.rec.
during FY
Prov.used
during FY
Prov.not
used Total
Customer warranties 115 107 (115) 0 107 133 115 (133) 0 115
Retirement benefits 784 419 0 0 1,203 615 169 0 0 784
Employment disputes
0 222 0 0 222 0 0 0 0 0
Other provisions 16 47 (16) 0 47 37 16 (14) (23) 16
Total 914 795 (131) 0 1,579 785 299 (147) (23) 914
as at 31 march 2016, the Company is not aware of any circumstances that could require the recording of provisions for risks and contingencies other than the following:
Customer warrantiesa provision of €107,000 was recognised to cover:
• probable customer service costs arising from sales of goods, following the expiry of the supplier warranty;
• the contractual warranty awarded to customers on sales of goods, which was extended to 2 years from march 2008 or 5 years from the end of 2009 depending on the option selected by the customer.
Retirement benefitsthe main assumptions used to calculate the provision for retirement benefits as at 31 march 2016 are as follows:
• Discount rate: 1.39% versus 2% as at 31 march 2015.
• Wage growth rate: 2% versus 2.5% for non-managerial staff, 3% for managers aged up to 50 and 2% for managers aged over 50 as at 31 march 2015.
• retirement age: between 60 and 67 depending on the employee’s age, versus 62 for non-managerial staff and 64-66 for managers as at 31 march 2015.
• staff turnover: rate decreasing with age and depending on the actual number of departures from the Company.
152 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
• applicable collective bargaining agreements:
– Distance selling undertakings - iDCC 2198
– retail, stationery, office supply, office/it equipment and book sellers – iDCC 1539
– non-contractual private tuition – iDCC 2691
– manual labourers employed by construction companies – iDCC 1596
– Construction sector managers – iDCC 2420
– Construction employees, engineers and supervisors – iDCC 2609
– Journalists – iDCC 1480
the €419,000 increase in the provision consists of:
• the cost of services rendered and financial expenses, recognised under staff costs: €189,000
• actuarial differences recognised under shareholders’ equity: €111,000.
• a €119,000 provision relating to Domisys.
the increase in provisions at 31 march 2016 includes a €357,000 increase related to the materiel.net acquisition.
8.13. Borrowings
Borrowings break down as follows:
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Loans 9,659 0
Commercial paper 0 0
Due in > 5 years 9,659 0
Borrowings 20,695 195
Commercial paper 0 0
Due in 1-5 years 20,695 195
Total long-term borrowings 30,354 195
Loans 5,273 354
Commercial paper 0 0
Accrued interest on loans 15 0
Trade receivables assigned to Eurofactor 3,699 3,278
Due in < 1 year 8,988 3,633
Total short-term borrowings 8,988 3,633
Total borrowings 39,342 3,828
Guarantee deposits received 0 0
Bank borrowings 11,599 11,035
Bank overdrafts 0 0
Current accounts 170 0
Dividends payable 0 0
Borrowings 51,110 14,862
153
Annual f inancia l report 2015_2016
Short-term loansnew loans bear interest for an indefinite term based on the following rates, depending on the bank issuing the loan:
• from euribor 3m + 0.80% to euribor 3m + 1.30%
• eonia + 1%
as at 31 march 2016, LDLC.com had authorised overdrafts of €23 million excluding factored receivables. By 8 april 2016, these overdrafts had been reduced to €9.5 million, plus an overdraft of Chf300,000.
overdraft authorisations granted to Domisys amount to €1.5 million as at 31 march 2016.
on 31 march 2016, LDLC.com took out a €23 million loan to partly finance the acquisition of materiel.net, including related costs and fees. this loan is repayable over a 7-year term and bears interest at euribor 3 months, plus an acquisition loan margin subject to annual revision. the loan is subject to compliance with a number of covenants (ratios, capex limits, etc.). failure to comply with these covenants may under specific conditions trigger early repayment.
in accordance with the loan agreement, these covenants will be based on the consolidated financial statements for the years ended 31 march 2017 and thereafter.
the loan shown on the balance sheet is recognised at amortised cost according to the effective interest rate method, in an amount of €22.5 million, which corresponds to the contracted loan net of issuance costs. the interest expense is calculated by applying the effective interest rate including issuance costs. as of the next financial year, interest expense will be calculated by applying the effective interest rate including issuance costs.
the agreement also provides for a €15 million revolving credit facility, subject to minimum drawdowns of €1 million each, intended to partly finance working capital for LDLC.com and its subsidiaries. this facility is subject to interest based on the euribor rate plus a 1.30% revolving credit facility margin. no drawdowns had been made under this facility as at 31 march 2016.
the increase in borrowings at 31 march 2016 includes a €12 million increase related to materiel.net.
8.14. Trade payables
trade payables breaks down as follows:
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Trade payables 29,017 20,413
Supplier L/C & prom. notes payable 3,532 4,241
Supplier invoices not received 2,945 1,083
Total 35,494 25,737
all trade and related payables are due in less than one year. the increase in trade payables at 31 march 2016 includes a €9 million increase related to the acquisition of materiel.net.
154 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
8.15. Other payables
other payables break down as follows:
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Advances and down payments received on orders 2,283 952
Payable to employees 5,511 3,700
Payable to social security organisations 2,654 1,921
Payable to the government (income tax, VAT, etc.) 4,151 1,463
Other customer credit 1,671 1,154
Other 799 118
Deferred income 3,995 2,692
Total 21,064 11,999
all other payables are due in less than one year.
the “other” line item includes €592,000 relating to two flexigain contracts outstanding as at the balance sheet date and valued at the eCB rate on 31 march 2016.
the increase in other payables at 31 march 2016 includes a €4 million increase related to the acquisition of materiel.net.
• 9 i NOTES TO THE INCOME STATEMENT
9.1. Revenue breakdown
From 01/04/2015 to 31/03/2016 From 01/04/2014 to 31/03/2015
France Export Total France Export Total
Sales of goods 254,524 46,598 301,122 223,876 44,110 267,986
Sales of services* 13,219 6,378 19,597 12,400 5,229 17,629
Total 267,743 52,976 320,719 236,275 49,340 285,615
* Sales of services mainly comprise shipping costs.
9.2. Staff costs and headcount
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Wages and salaries (a) 15,476 13,666
Social security contributions 7,234 6,906
Employee profit-sharing 1,336 868
Total 24,047 21,440
Average headcount (b) 724 475
(a) Including €189,000 provision for retirement bonuses for the year ended 31 March 2016, compared to €53,000 in 2015.(b) Including 19 temporary employees for the year ended 31 March 2015 and 36 for the year ended 31 March 2016.
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Annual f inancia l report 2015_2016
the increase in headcount at 31 march 2016 includes 218 materiel.net employees, including 17 temporary workers.
the french competitiveness and employment tax credit (CiCe) is based on salaries not exceeding 2.5 times the french minimum wage (smiC) paid during the year, at a rate of 6%.
the CiCe is recognised as a reduction in staff costs, as a €608,000 credit entry under account no. 649000.
the CiCe tax credit is used to increase the Company’s competitiveness, primarily via initiatives that focus on investment, modernisation, hiring and training, as well as expenditure on improving health and safety conditions in the workplace.
Share-based paymentsBenefits granted by way of bonus shares are measured at fair value as at the date the share-based payments are granted.
Given that they relate to equity settled plans, these benefits are recognised under “staff costs” as a counter-entry to shareholders’ equity and are amortised on a straight-line basis over the vesting period.
161,746 existing bonus shares in LDLC.com were allotted on 9 July 2014, to be vested after a vesting period of 2-5 years and thereafter subject to a two-year lock-in period. the fair value of these shares amounts to €14.68 per share.
this bonus share plan is subject to a condition of presence in the Company but is not subject to any performance criteria.
for the year ended 31 march 2016, this benefit represented staff costs of €742,000.
During the year ended 31 march 2016, 11,631 shares were fully vested.
9.3. Net depreciation, amortisation and provisions
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Net depr./amort. of non-current assets (974) (922)
Net provisions for inventory impairment (307) 62
Net provisions for impairment of trade receivables 76 55
Net provisions for current account impairment 0 64
Net provisions for customer warranties 8 18
Other charges/write-backs (15) 19
Total net depreciation, amortisation and provisions (1,212) (705)
figures presented as (-) denote expenses.
9.4. Non-recurring operating income and expenses
this item breaks down as follows:
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Net book value of fixed assets sold 81 102
Other non-recurring expenses 584 168
Total non-recurring operating expenses 665 270
Income from fixed asset disposals 80 0
Other non-recurring income 1 93
Total non-recurring operating income 82 93
Net non-recurring operating income/(expenses) (583) (177)
other non-recurring expenses include €583,000 in acquisition costs relating to materiel.net group shares.
156 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
9.5. Net financial income/(expense)
net financial income/(expense) breaks down as follows:
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Interest on borrowings (14) (15)
Interest paid to banks (109) (78)
Financing commissions (34) (35)
Net cost of debt (157) (129)
Net income/expense on sale of ST investments 0 0
Write-back on provisions for risks 0 0
Other financial income and expenses 2 3
Total other financial income and expenses 2 3
Net financial income/(expense) (154) (126)
9.6. Income tax
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Net income, Group share 7,941 5,846
Tax income/(expense) (5,137) (3,818)
Net income from equity associates 0 4
Earnings before tax 13,078 9,660
Theoretical tax rate 38% 38%
Theoretical tax expense (4,970) (3,671)
Permanent differences (a) 202 174
Classification of CVAE as an income tax (343) (301)
Tax credits 30 22
Other effects 18 32
Dividend tax (74) (74)
Effective tax expense (5,137) (3,818)
(a) Including the CICE tax credit applicable to a tax base of €608,000.
in order to remain consistent with the treatment of similar taxes, the CVae is recognised under “income tax” in accordance with ias 12.
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Annual f inancia l report 2015_2016
9.7. Tax consolidation agreement
LDLC.com, hardware.fr and textorm have benefited from the combined reporting scheme since 1 april 2004 and LDLC Distribution since 1 april 2013.
LDLC Villefranche and École LDLC have been tax consolidated since 1 april 2015.
LDLC.com is the tax group parent company.
the tax consolidation agreement provides that each subsidiary shall pay an income tax charge equal to the charge they would have paid in the absence of such agreement.
tax consolidation arrangements led to a tax saving of €72,000 for the year ended 31 march 2016.
• 10 i OTHER NOTES
10.1. Compensation of corporate officers
From 01/04/2015
to 31/03/2016From 01/04/2014
to 31/03/2015
Management Board members 1,782 1,399
Supervisory Board members 38 38
all amounts correspond to short-term benefits (fixed and variable remuneration) with the exception of bonus shares of €734,000 allotted for the financial year ended 31 march 2016 (€578,000 for the year ended 31 march 2015).
10.2. Off balance sheet commitments
10.2.1 . Commitments given
√ foreign exchange hedges for LDLC.com (see note 2.14).
√ Domisys entered into notional accumulator agreements totalling €9.4 million. the notional amounts of the accumulators represent the maximum accumulated amounts until the termination of the agreement. all of these hedges are for less than one year.
√ Domisys entered into a flexi term contract on 10 December 2015 for a nominal amount of UsD1 million at an exchange rate of 1.1105. as at 31 march 2016, this hedge had not been used and the date limit for its use is 28 December 2016.
√ pledge of shares in Domisys, Domimo 2 and Domimo 3 as security for a €23 million loan.
Under the real estate lease purchase agreement entered into between finamur, LDLC.com and Campus 2017 on 30 november 2015:
√ pledge of all Campus 2017 shares, i.e. 150 shares representing its entire share capital, and voting rights held by LDLC.com in favour of finamur in the amount of €22 million.
√ Undertaking by LDLC.com not to sell or transfer its shares in Campus 2017 without finamur’s prior written consent.
√ personal joint and several guarantee given by LDLC.com to finamur on behalf of Campus 2017 until the end of the 12th year following the effective date of the lease purchase agreement, for the amount of €3 million during the first 3 years and €2 million thereafter.
√ pledge of the €1.5 million loan receivable by Campus 2017 in favour of finamur as guarantee for the payment of rents.
√ transfer of existing and future trade receivables held by Campus 2017 against any tenant for any reason whatsoever and in particular the borrower under the sub-letting agreement with a fixed term of ten years dated 30 november 2015.
158 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
√ Joint and several guarantee for 30% of the outstanding amount of the loan, granted by Domisys as security for the loan contracted between oseo, LCL and Domimo 2, i.e. €969,000 at 31 march 2016.
√ Lender’s lien granted by Domimo 3 for commercial premises located at 188 bis route de rennes, 44300 nantes, as security for the loan entered into between Domimo 3 and Crédit industriel de l’ouest on 15 may 2008.
√ an assignment of rent granted by Domimo 3 as security for the loan entered into between Domimo 3 and Crédit industriel de l’ouest on 15 may 2008.
√ securities, pledges, the registering of liens or other real rights granted by Domimo 2 over its assets, as security for the loan entered into between Domimo 2 and oseo financement on 29 february 2008:
– lender’s lien granted by Domimo 2 amounting to €448,000,
– full assignment of rent generated under the lease as guarantee in favour of Domisys, in competition with tameaud bank,
– full and conditional assignment of life/disability insurance policy taken out by Jean-philippe fleury with aGf to cover 50% of the loan,
– first mortgage of €3.6 million for a building located at Grandchamp-des-fontaines (44119) Zac de l’erette, cadastral section ZB, plot numbers 116,117 and 119.
√ mortgage granted by Domimi 2 up to a limit of €2.6 million for buildings located at Zac erette, rue olivier de serres, 44119 Grandchamps-des-fontaines, plots ZB – 116 – 117 – 119, as security for a loan contracted between Domimo 2 and Crédit industriel de l’ouest on 7 July 2010.
√ securities, pledges, the registering of liens or other real rights granted by Domimo 2 over its assets as security for a loan contracted between Domimo 2, LCL and oseo, dated 18 December 2012:
– first mortgage of €1.1 million for a building located at Grandchamps-des-fontaines (44119), rue olivier de serres, Zac de l’erette, cadastral section ZB, number 121,
– second mortgage of €1.1 million for a building located at Grandchamps-des-fontaines (44119), rue olivier de serres, Zac de l’erette, cadastral section ZB, numbers 116, 117 and 119,
– full assignment of rent generated under the lease in favour of Domisys,
– full and conditional assignment of life/disability insurance policy taken out by Jean-philippe fleury, to cover 50% of the loan.
10.3. Commitments received
√ Bnp paribas has granted sCi Blomet, represented by mr Chancel, company director, a €400,000 guarantee on behalf of LDLC.com to cover the rental payments due on its paris store.
√ Domisys benefits from a guarantee under the Renforcement Haut de Bilan fund, in respect of the loan taken out with oseo, amounting to 80% of its capital, i.e. €1.3 million as at 31 march 2016. a holdback of €100,000 was retained by the lender, oseo.
√ Domisys benefits from a guarantee under the fnG Prêt Numérique fund, in respect of the loan taken out with Bpi, amounting to 80% of its capital, i.e. €1.4 million at 31 march 2016. an €88,000 holdback was retained by lender Bpi as a cash pledge.
√ Domisys benefits from an rsi guarantee under the european investment fund, in respect of the loan taken out with Banque populaire, amounting to 50% of its capital, i.e. €578,000 at 31 march 2016.
159
Annual f inancia l report 2015_2016
Diagnostic Révision Conseil Cap Office Total
Amount (excl. tax) % Amount (excl. tax) % Amount (excl. tax) %
At
31/03/2015
At
31/03/2016
At
31/03/2015
At
31/03/2016
At
31/03/2015
At
31/03/2016
At
31/03/2015
At
31/03/2016
At
31/03/2015
At
31/03/2016
At
31/03/2015
At
31/03/2016
Audit Statutory audits, certification, review of Company and consolidated accounts
• Issuer 60 58 87.21% 78.38% 60 58 92.68% 87.39% 120 116 89.86% 82.64%
• Fully consolidated subsidiaries
9 16 12.79% 21.62% 5 8 7.32% 12.61% 14 24 10.14% 17.36%
(Anikop - LDLC Distribution - L’École LDLC - LDLC1 - LDLC2 - LDLC3 - Campus 2017 - LDLC Villefranche)
Audit sub-total
69 74 100% 100% 65 66 100% 100% 134 140 100% 100%
Other services
• Audit of CSR report
• Issuer 18 15 100% 100% 18 15 100% 100%
Other services sub-total
18 15 100% 100% 18 15 100% 100%
TOTAL 87 89 65 66 152 155
• 11 i FEES OF STATUTORY AUDITORS AND MEMBERS OF THEIR NETWORKS IN ACCORDANCE WITH ARTICLE 222-8 OF THE AMF GENERAL REGULATION
160 notes to the ConsoLiDateD finanCiaL statements for enD year enDeD 31 marCh 2016
• 12 i PROFORMA INFORMATION
LDLC GroupFrom 01/04/2015
to 31/03/2016
Materiel.net groupFrom 01/01/2015
to 31/12/2015 Total
Revenues 320,719 147,081 467,800
Gross margin 55,755 20,324 76,079
EBITDA 15,027 4,546 19,573
Underlying EBIT 13,815 3,017 16,832
the proforma financial information presented is intended to illustrate the impact which the combination of the LDLC.com and materiel.net groups could have on the LDLC.com’s Group’s consolidated financial statements for the year ended 31 march 2016.
the proforma financial information consists of the main significant aggregates for LDLC.com’s business covering the period from 1 april 2015 to 31 march 2016.
this information is presented for illustrative purposes only and is not an indication of the new Group’s operating earnings or financial position which would have been obtained if the transactions had taken place on 1 april 2015. nor is this information indicative of the new Group’s future operating earnings or financial position.
this information was prepared on the basis of:
• the consolidated financial statements (ifrs) of the LDLC.com Group for the year ended 31 march 2016;
• the audited financial statements of Domisys and the financial statements of the two real-estate investment companies Domimo 2 and Domimo 3 for the year ended 31 December 2015.
the proforma information was drawn up by totalling the data mentioned above. the revenues presented for the materiel.net group do not correspond to those of Domisys, given that the revenues of Domimo 2 and Domimo 3 only concern Group internal invoicing.
the gross margin and underlying eBit figures for materiel.net also take into account this cancellation of revenues.
furthermore, materiel.net’s underlying eBit includes the extension of the depreciation period of the production chain at Domisys.
no other items have been restated for materiel.net, as the Group is unable to process the other data given that the acquisition date was so close to the financial year-end.
161
Annual f inancia l report 2015_2016
STATUTORY AUDITORS’ REPORT ON THE IFRS CONSOLIDATED FINANCIAL STATEMENTS (for the year ended 31 march 2016)
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers. The Statutory Auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information is presented below the opinion on the consolidated financial statements and includes an explanatory paragraph discussing the Auditors’ assessments of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the consolidated financial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated financial statements.
This report also includes information relating to the specific verification of information given in the Group’s management report.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
to the shareholders,
in compliance with the assignment entrusted to us by your annual General meeting, we hereby report to you, for the year ended 31 march 2016, on:
• the audit of the accompanying consolidated financial statements of LDLC.com;
• the justification of our assessments;
• the specific verification required by law.
these consolidated financial statements have been approved by the management Board. our role is to express an opinion on these consolidated financial statements based on our audit.
I. 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 the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. an audit involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. an audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
in our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group at 31 march 2016 and of the results of its operations for the year then ended in accordance with international financial reporting standards as adopted by the european Union.
Without qualifying our opinion, we draw your attention to the matter set out in note 2.6 «Correction of ias 8 error» to the consolidated financial statements, which refers to the impacts of the correction of the error in the consolidated financial statements for the year ended 31 march 2015 in order to take account of the need to spread the revenue generated by «pack expert» sales, initially recognised at the same time as the sale of the equipment, over the duration of the service.
II. JUSTIFICATION OF OUR ASSESSMENTS
in accordance with the requirements of article L.823-9 of the french Commercial Code (Code de commerce) relating to the justification of our assessments, we bring to your attention the following matters:
• note 2.17.2 to the consolidated financial statements stipulates that future tax breaks resulting from the use of tax loss carryforwards are recognised when their use can be reasonably anticipated. We verified the reasonableness of the assumptions used to estimate the future taxable income justifying the recoverability of these deferred tax assets;
162 statUtory aUDitors’ report on the ifrs ConsoLiDateD finanCiaL statements
• furthermore, the Group recognises provisions, as described in notes 2.18 and 8.12 to the consolidated financial statements. our work consisted of assessing the data and assumptions on which these estimates were based, reviewing, on a test basis, the calculations performed by the Group and examining management’s procedures for approving these estimates. We assessed the reasonableness of the estimates made.
• these assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore contributed to the opinion we formed which is expressed in the first part of this report.
III. SPECIFIC VERIFICATION
as required by law and in accordance with professional standards applicable in france, we have also verified the information presented in the Group’s management report.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
Lyon, 13 July 2016
the statutory auditors
Cap office Diagnostic revision ConseilChristophe reymond hubert de rocquigny du fayel
163
Annual f inancia l report 2015_2016
ATTESTATIONSSTATUTORY AUDITORS’ STATEMENT ON THE INFORMATION PROVIDED IN ACCORDANCE WITH ARTICLE L.225-115-4 OF THE FRENCH COMMERCIAL CODE WITH RESPECT TO THE TOTAL COMPENSATION PAID TO THE HIGHEST PAID PERSONS FOR THE YEAR ENDED 31 MARCH 2016
(annual General meeting held to approve the financial statements for the year ended 31 march 2016)
This is a free translation into English of the Statutory Auditors’ statement issued in French and is provided solely for the convenience of English speaking readers. This statement should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
to the shareholders,
in our capacity as statutory auditors of LDLC.com, and in accordance with article L.225 115-4 of the french Commercial Code (Code de commerce), we have prepared this statement on the information relating to the total compensation paid to the highest paid persons for the year ended 31 march 2016. this information is detailed in the attached document.
the information was prepared under the Chief executive officer’s responsibility.
it is our responsibility to attest to the accuracy of this information.
We audited the Company’s financial statements for the year ended 31 march 2016 within the framework of our statutory audit engagement. the purpose of our audit, which was conducted according to professional standards applicable in france, was to express an opinion on the financial statements taken as a whole, and not on specific items of these financial statements that were used to determine the total compensation paid to the highest paid persons. Consequently, we did not perform any audit tests or sampling for this purpose and do not express an opinion on these individual items.
We performed the procedures that we deemed necessary in accordance with professional standards applicable in france to such engagements. these procedures, which constituted neither an audit nor a review, consisted in reconciling the total compensation paid to the highest paid persons with the accounting information used to determine this compensation and verifying that it was consistent with the data used to prepare the financial statements for the year ended 31 march 2016.
Based on our work, we have no matters to report on the consistency of the total compensation paid to the highest paid persons (€1,521,945), as detailed in the attached document, with the accounting information used to prepare the financial statements for the year ended 31 march 2016.
this statement certifies the accuracy of the total compensation paid to the highest paid persons within the meaning of article L.225-115-4 of the french Commercial Code.
it has been drawn up for your attention in the context described in the first paragraph above and may not be used, distributed or referred to for any other purpose.
Lyon, 13 July 2016
the statutory auditors
Cap office Diagnostic revision ConseilChristophe reymond hubert de rocquigny du fayel
164 attestations
STATEMENT IN ACCORDANCE WITH ARTICLE L. 225-115-5 OF THE FRENCH COMMERCIAL CODE
the total amount eligible for a tax credit in accordance with sections 1 and 4 of article 238 B of the french tax Code for the year ended 31 march 2016 amounted to €135,752.55.
Dardilly, 1 July 2016
olivier Villemonte de la Clergerie Chief executive officer
165
Annual f inancia l report 2015_2016
STATEMENT OF COMPENSATION IN ACCORDANCE WITH ARTICLE L.225-115-4 OF THE FRENCH COMMERCIAL CODE
the total amount paid (direct or indirect compensation) to the ten highest paid persons in the Company during the year ended 31 march 2016 amounted to €1,521,945.
Dardilly, 1 July 2016
olivier Villemonte de la Clergerie Chief executive officer
166 attestations
STATUTORY AUDITORS’ STATEMENT ON THE INFORMATION PROVIDED IN ACCORDANCE WITH ARTICLE L. 225-115-4 OF THE FRENCH COMMERCIAL CODE WITH RESPECT TO THE TOTAL AMOUNT OF PAYMENTS MADE PURSUANT TO PARAGRAPHS 1 AND 4 OF ARTICLE 238 B OF THE FRENCH TAX CODE
(for the year ended 31 march 2016)
this is a free translation into english of the statutory auditors’ statement issued in french and is provided solely for the convenience of english speaking readers. this statement should be read in conjunction with, and construed in accordance with, french law and professional auditing standards applicable in france.
to the shareholders,
In our capacity as Statutory Auditors of LDLC.com, and in accordance with Article L.225 115-5 of the French Commercial Code (Code de commerce), we have prepared this statement on the information relating to the total amount of payments made pursuant to paragraphs 1 and 4 of Article 238 B of the French Tax Code (Code général des impôts) for the year ended 31 March 2016. This information is detailed in the attached document.
the information was prepared under the Chief executive officer’s responsibility.
it is our responsibility to attest to the accuracy of this information.
We audited the Company’s financial statements for the year ended 31 march 2016 within the framework of our statutory audit engagement. the purpose of our audit, which was conducted according to professional standards applicable in france, was to express an opinion on the financial statements taken as a whole, and not on specific items of these financial statements that were used to determine the total amount of payments made pursuant to paragraphs 1 and 4 of article 238 B of the french tax Code. Consequently, we did not perform any audit tests or sampling for this purpose and do not express an opinion on these individual items.
We performed the procedures that we deemed necessary in accordance with professional standards applicable in france to such engagements. these procedures, which constituted neither an audit nor a review, consisted in reconciling the total amount of payments made pursuant to paragraphs 1 and 4 of article 238 B of the french tax Code with the accounting information used to determine this compensation and verifying that it was consistent with the data used to prepare the financial statements for the year ended 31 march 2016.
Based on our work, we have no matters to report on the consistency of the total amount of payments made pursuant to paragraphs 1 and 4 of article 238 B of the french tax Code (€135,752.55), as detailed in the attached document, with the accounting information used to prepare the financial statements for the year ended 31 march 2016.
this statement certifies the accuracy of the total amount of payments made pursuant to paragraphs 1 and 4 of article 238 B of the french tax Code within the meaning of article L.225 115-5 of the french Commercial Code.
it has been drawn up for your attention in the context described in the first paragraph above and may not be used, distributed or referred to for any other purpose.
Lyon, 13 July 2016
the statutory auditors
Cap office Diagnostic revision ConseilChristophe reymond hubert de rocquigny du fayel
167
Annual f inancia l report 2015_2016
STATUTORY AUDITORS’ REPORT ON THE ISSUE OF SHARES AND SECURITIES WITH AND/OR WITHOUT PRE EMPTIVE SUBSCRIPTION RIGHTS(annual General meeting of 30 september 2016 – tenth to seventeenth resolutions)
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
to the shareholders,
in our capacity as statutory auditors of LDLC.com and in accordance with articles L.228-92 and L.225 135 et seq. of the french Commercial Code (Code de commerce), we hereby report to you on the proposed delegations of authority to the management Board to issue shares and/or securities, which are submitted to you for approval.
on the basis of the management Board’s report, the shareholders are requested to:
• delegate to the management Board for a 26-month period from the date of this meeting, the authority to carry out the following operations and determine the final terms and conditions of the related issues and, if necessary, to waive their pre-emptive subscription rights for:
– the issue, with pre-emptive subscription rights, of ordinary shares in the Company and/or securities granting access to ordinary shares in the Company or rights to the allocation of debt securities (tenth resolution),
– the issue, without pre-emptive subscription rights, of ordinary shares in the Company and/or securities granting access to ordinary shares in the Company or rights to the allocation of debt securities, by way of a public offering (eleventh resolution),
– the issue, without pre-emptive subscription rights, of ordinary shares in the Company and/or securities granting access to ordinary shares in the Company or rights to the allocation of debt securities, by way of an offering referred to in paragraph ii of article L.411-2 of the french monetary and financial Code (Code monétaire et financier) and within the limit of 20% of the share capital per year (twelfth resolution),
– the issue of ordinary shares in the Company and/or securities granting access to ordinary shares in the Company or rights to the allocation of debt securities, in the event of a public exchange offer initiated by the Company (fifteenth resolution);
• delegate to the management Board, for a 26-month period, the necessary power to issue ordinary shares in the Company and/or securities granting access to ordinary shares in the Company as consideration for contributions in kind granted to the Company and consisting of shares or securities granting access to the share capital within the limit of 10% of the share capital (sixteenth resolution);
• authorise the management Board, within the framework of the delegation of authority granted under the eleventh and twelfth resolutions, to set the issue price within the annual limit of 10% of the share capital (thirteenth resolution).
according to the seventeenth resolution, the aggregate nominal amount of the share capital increases that may be carried out, either immediately or in the future, pursuant to the tenth to twelfth resolutions and the fourteenth to sixteenth resolutions, may not exceed €1,000,000.
also according to the seventeenth resolution, the aggregate nominal amount of the debt securities that may be issued pursuant to the tenth to twelfth resolutions and the fourteenth to sixteenth resolutions, may not exceed €1,000,000.
these limits take into account the additional securities to be issued in connection with the application of the delegations of authority provided for under the tenth, eleventh and twelfth resolutions in accordance with article L.225-135-1 of the french Commercial Code, in the event that the shareholders adopt the fourteenth resolution.
168 STATUTORY AUDITORS’ REPORT ON THE ISSUE OF SHARES AND SECURITIES WITH AND/OR WITHOUT PRE EMPTIVE SUBSCRIPTION RIGHTS
it is the management Board’s responsibility to prepare a report in accordance with articles r.225-113 et seq. of the french Commercial Code. it is our responsibility to express an opinion on the fairness of the information taken from the financial statements, regarding the proposed waiver of pre-emptive subscription rights and on other information relating to these operations, which is presented in this report.
We performed the procedures that we deemed necessary in accordance with professional standards applicable in france to such engagements. these procedures consisted in verifying the information disclosed in the management Board’s report relating to these operations and the methods used to set the issue price of the securities to be issued.
subject to a subsequent examination of the terms and conditions of any proposed issues, we have no matters to report as regards the methods used to set the issue price of the securities to be issued given in the management Board’s report in respect of the eleventh, twelfth and thirteenth resolutions.
in addition, as this report does not stipulate the methods used to set the issue price in the event that securities are issued pursuant to the tenth, fifteenth and sixteenth resolutions, we do not express an opinion on the choice of components used to calculate the issue price.
We do not express an opinion on the final terms and conditions of the issues because they have not been set, or consequently, on the proposed waiver of the pre-emptive subscription rights proposed to the shareholders in the eleventh and twelfth resolutions.
in accordance with article r.225-116 of the french Commercial Code, we will prepare an additional report if and when the management Board uses these delegations of authority to issue securities granting access to the share capital or the allocation of debt securities, to issue securities giving access to shares to be issued, and to issue shares without pre-emptive subscription rights.
Lyon, 13 July 2016
the statutory auditors
Cap office Diagnostic revision ConseilChristophe reymond hubert de rocquigny du fayel
169
Annual f inancia l report 2015_2016
STATUTORY AUDITORS’ REPORT ON THE ISSUE OF ORDINARY SHARES AND/OR SECURITIES TO MEMBERS OF AN EMPLOYEE SHARE OWNERSHIP PLAN(annual General meeting of 30 september 2016 – twentieth resolution)
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
to the shareholders,
in our capacity as statutory auditors of LDLC.com and in accordance with articles L.228-92 and L.225-135 et seq. of the french Commercial Code (Code de commerce), we hereby report to you on the proposed delegation of authority to the management Board to decide to issue ordinary shares and/or securities granting access to ordinary shares in the Company, without pre-emptive subscription rights, reserved for members of an employee share ownership plan of the Company or, where applicable, of the french or foreign companies related to it in accordance with article L.225-180 of the french Commercial Code and article L.3344-1 of the french Labour Code (Code du travail), for a maximum of €34,139.34, which is submitted to you for approval.
this issue is submitted to you for approval pursuant to the provisions of article L.225-129-6 of the french Commercial Code and articles L.3332-18 et seq. of the french Labour Code.
the shareholders are requested to delegate to the management Board, on the basis of its report and for a 26-month period from the date of this meeting, the authority to decide to issue shares and/or securities, and to waive their pre-emptive subscription rights in respect of the securities to be issued. Where applicable, the management Board will be responsible for setting the final terms and conditions of any such issue.
it is the management Board’s responsibility to prepare a report in accordance with articles r.225-113 et seq. of the french Commercial Code. it is our responsibility to express an opinion on the fairness of the financial information taken from the financial statements, regarding the proposal to waive your pre-emptive subscription rights and on the other information relating to the share issue provided in this report.
We performed the procedures that we deemed necessary in accordance with professional standards applicable in france to such engagements. these procedures consisted in verifying the information disclosed in the management Board’s report relating to this operation and the methods used to set the issue price of the securities to be issued.
subject to a subsequent examination of the terms and conditions of any proposed issues, we have no matters to report as regards the methods used to set the issue price of the shares and/or securities to be issued described in the management Board’s report.
We do not express an opinion on the final terms and conditions of the issue because they have not been set, or consequently, on the proposal to waive your pre-emptive subscription rights.
in accordance with article r.225-116 of the french Commercial Code, we will prepare an additional report if and when the management Board uses this delegation of authority.
Lyon, 13 July 2016
the statutory auditors
Cap office Diagnostic revision ConseilChristophe reymond hubert de rocquigny du fayel
170 statUtory aUDitors’ report on the share CapitaL reDUCtion
STATUTORY AUDITORS’ REPORT ON THE SHARE CAPITAL REDUCTION(annual General meeting of 30 september 2016 – ninth resolution)
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.
to the shareholders,
in our capacity as statutory auditors of LDLC.com and in accordance with article L.225-209 of the french Commercial Code (Code de commerce), applicable in the event of a share capital reduction by cancellation of treasury shares, we hereby report to you on our assessment of the reasons for and conditions of the planned share capital reduction.
the management Board is seeking an 18-month authorisation, from the date of this annual General meeting, to cancel, for up to a maximum of 10% of the share capital per 24 month-period, the shares bought back by LDLC.com pursuant to an authorisation to buy-back its own shares in accordance with the provisions of the aforementioned article.
We performed the procedures that we deemed necessary in accordance with professional standards applicable in france to such engagements. those standards require that we ensure that the reasons for and conditions of the planned share capital reduction, which is not considered to affect shareholder equality, comply with the applicable legal provisions.
We have no matters to report on the reasons for and conditions of the planned share capital reduction.
Lyon, 13 July 2016
the statutory auditors
Cap office Diagnostic revision ConseilChristophe reymond hubert de rocquigny du fayel
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