EX-99.2 4 v421704_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

Farncombe France SARL

 

Financial accounts

 

As of ended December 31, 2014

 

 

 

 

 

 

Cabinet NAC SARL

33, rue de Miromesnil – 75008 Paris - France

Tel : +33 1 53 30 73 30 / Fax : +33 1 53 30 73 31

contact@nacaudit.com

 

 

  

 

  

  Farncomb France SARL
  To the shareholders
  243 rue de Vaugirard
  75015 Paris
   
  Paris, October 5th, 2015

 

Independent Auditors’ Report

 

To the Board of France Farncombe SARL,

 

In accordance with our engagement letter dated of May 04, 2015 and the complementary engagement letter on September 21, 2015; we have audited the accompanying financial statements of Farncombe France SARL for the year ended 31 December 2014, which comprise the Balance Sheet, the related Profit and Loss Account, and Cash Flows.

 

This report has been performed according the acquisition project from Cartesian of Farncombe France entity’s shares.

 

Management's Responsibility for the Financial Statements

 

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in France and with International Standards on Auditing (ISA); this includes the design, implementation, and maintenance of Internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error.

 

Our responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in France and in accordance with the US GAAS standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

 

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Auditors' Responsibility

 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's Internal Control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

 

Opinion

 

In our opinion, the financial statements referred to above presents fairly, in all material respects, the financial position of Farncombe France SARL as of December 31, 2014, and the profits of their operations and their cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).

 

  Cabinet NAC
  /s/ Samuel Najarian

 

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Balance sheet as of December 31, 2014

In Thousands of euros      As at 
Dec 31, 2014		 
Non-Current assets          
Fixtures, fittings and equipment   (1.2)   2,0 
         2,0 
Current assets          
Trade debtors   (1.3)   624,0 
Rent deposit   (1.4)   9,6 
VAT assets   (1.5)   79,2 
Loan to Farncombe Technologie   (1.11)   98,9 
Cash at bank and in hand   (1.6)   175,4 
         987,1 
Creditors : due within one year          
Trade creditors   (1.8)   129,6 
PAYE & NI   (1.9)   143,6 
VAT Liability   (1.5)   75,3 
Accruals(1.9)   27,0      
Other creditors   (1.10)   5,4 
Shareholders current account   (1.11)   6,0 
         386,9 
           
Net current assets        600,2 
           
Total assets less current liabilties        602,2 
Income Tax (+receivable/-debt)   (1.5)   40,8 
Deferred taxation        0 
           
Net assets        643,0 
           
Equity          
Called up share capital   (1.7)   377,5 
Profit and loss account        265,5 
Shareholders’ funds        643,0 

 

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Profit & Loss as of December 31, 2014

  

In Thousands of euros      As at
Dec 31, 2014		 
Revenue          
Third party sales        1 373,3  
Interdivisional sales        364,0 
           
TOTAL REVENUE    (1.12)   1 737,3  
           
Cost of sales          
Third party cost of sales        452,9 
Interdivisional cost of sales        202,9 
           
           
Gross profit/(loss)        1 081,5 
           
Administrative expenses    (1.13)   168,7 
Tax expenses   (1.13)   11,7 
Salaries, wages    (1.13)   609,0 
           
Operating Profit/(loss)    (1.15)   292,1 
           
Depreciation        0,5 
           
Profit (-) / Loss(+) on disposal of fixed assets (1.14)        2,3 
           
Interest        0,2 
Gain & Lost exchange          
           
Profit/(Loss) on ordinary activities before taxation        289,1 
           
Tax on profit/(loss) on ordinary activities (1.15)        23,6 
           
Profit/(Loss) on ordinary activities after taxation        265,5 

 

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Statement of Cash Flows

 

 In thousands of euros  Dec 31, 2014 
Cash flow from operating activities     
Operating (loss)/profit   265,5 
Reconciliation to cash generated from operations:     
Depreciation   0,5 
Decrease/(increase) in debtors   -331,8 
(Decrease)/increase in creditors   79,2 
    13,4 
Investing activities     
Purchase of intangible fixed assets   -1,9 
Proceeds from sale of tangible fixed assets -   2,3 
    0,4 
Financing activities     
Interest paid   -0,2 
Tax paid   23,6 
Dividends paid -   0 
    23,4 
Net increase/(decrease) in cash    37,2 
Cash at bank and in hand less overdrafts at 1 January   138,2 
Cash at bank and in hand less overdrafts at 31 December   175,4 
Consisting of:     
Cash at bank and in hand   175,4 

  

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Disclosures

 

The total of balance sheets represents 643,0 thousands of euros, and the result of the year represents 265,5 thousand of euros with a total of turnover of 1.737,3 thousand of euros.

 

1.1Summary of significant accounting policies

 

Basis of Accounting

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in France and IFRS. No major adjustment has been identified between French GAAP and IFRS.

 

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

 

Turnover

Turnover represents the value, net of value added tax and discounts, of goods provided to customers and work carried out in respect of services provided to customers.

 

Fixed assets

Property and equipment are stated at cost.

Expenditures for repairs and maintenance are charged to expense as incurred.

 

For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in income for the period.

 

Depreciation

Depreciation has been provided at the following rates in order to write off the assets over their estimated useful lives.

Tangible assets: 3 years straight-line

 

Deferred taxation

Full provision is made for deferred taxation resulting from timing differences between the recognition of gains and losses in the accounts and their recognition for tax purposes.

 

Deferred taxation is calculated on an un-discounted basis at the tax rates which are expected to apply in the periods when the timing differences will reverse.

 

As the end of the year ended December 31, 2014, no deferred tax has been booked, as the management has not identified any specific deferred tax.

 

Pension

No pension has been estimated or booked in the entries. The staff is young and new, so the total amount to be booked would be not material.

 

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1.2Non-current assets

 

In thousands of euros  Dec 31, 2013   +   -   Dec 31, 2014 
Tangible assets   6,5    1,9    2,6    5,8 
Amortization of tangible assets   -3,7    -0,5    -0,4    -3,8 
Total   2,8    1,4    2,2    2,0 

 

1.3Accouts receivables

 

In thousands of euros  Dec 31, 2014
(A)		 
Accounts receivables   614,0 
AR – to be billed   10,0 

 

1.4 

Rent deposit

 

In thousand of euros  Dec 31, 2013   +   -   Dec 31, 2014 
Rent deposit   9,8    0    0,2    9,6 
Total Rent deposit   9,8    0    0,2    9,6 

 

The financial assets are the guarantee given for the office’s rental. This amount is in accordance with the contract signed with the owner and with the yearly adjustment.

 

1.5Tax

 

In thousands of euros (- debit + credit)  Dec 31, 2014 
VAT to be paid   -75,3 
VAT to be received   79,2 
Income TAX   40,8 
      
Total Tax   44,7 

 

VAT to be paid or to be receied

 

The VAT in France represents 20% tax on products.

 

The VAT on receivables should be paid when the receivable has been received. The same position for the VAT to be paid, the payment will be done when the payables have been paid.

 

Income tax

 

Income tax represents in France 15% for the first 38.120 euro of benefits. After this level, the rate is 33,33%.

 

The amount of the income tax for the year 2014 is 91,5 thousand of euros.

 

The government propose a reduction for companies who invest in the research of new technology called Tax credit on research (Crédit impôt Recherche - CIR)

 

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For information, this credit for the year 2012 for a total of 40,9 thousand of euros has not received yet. The local manager has obtained the following information that the file is approved by the tax department, and the amount is in process, and should be paid.

 

The risk, in case of control is the total amount of CIR for the year 2012, 2013, and 2014, which represent a total of amount of 156,0 thousand of euros.

 

1.6Cash

 

In thousands of
euros		  Dec 31, 2014
(A)		 
     
Bank accounts   175,4 
Total   175,4 

 

1.7Shareholders’ equity

 

In thousands of
euros		  Dec 31, 2013   Results of
the year		  
Other		   Dec 31, 2014 
Equity   2,0              2,0 
Legal report   0,2              0,2 
Report   171,3    204,1         375,4 
Net income of the year   204,1    -204,1    265,5    265,5 
                     
Total   377,6    0,0    265,5    643,1 

 

The nominal value of the shares is ONE euros. The number of shares is: 2.000.

 

1.8Accounts Payables

 

In thousands of
euros		  Dec 31, 2014
(A)		 
Accounts payables   115,3 
AP – To be received   14,3 
Total AP   129,6 

 

1.9Social tax

 

In thousands of euros (- debit + credit)  Dec 31, 2014 
Salaries   0,1 
Accruals vacations   27,0 
Social Tax   89,3 
Bonus   15,1 
Accruals Social tax - manager   39,1 
Total social tax   170,6 

 

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Accruals – vacations

 

The evaluation at year end of this provision is in accordance with French law.

 

Management Social tax

 

The manager wages for the year 2014 represent 106,4 thousand of euros, and social tax related to its wages represent 37,4 thousand of euros. The total cost for the manager is 143,8 thousand of euros for the year 2014.

 

To be noted that when managers (gérant) hold more than 50% of shares of the company, the treatment of their social tax is independent from the employees.

 

1.10Other payables

 


In thousands of euros (- debit + credit)		  Dec 31, 2014 
     
Others   - 5,4 
Total    - 5,4 

 

1.11Shareholders’ accounts

 

In thousands of euros (- debit + credit)  Dec 31, 2014 
     
C/C Lionel Tranchard   - 6,0 
Farncomb Technologie   98,9 
Total    92,9 

 

1.12Revenue and margin

 

In thousands of euros  Dec 31, 2014 
Revenue     
Third party sales   1 373,3  
Interdivisional sales   364,0 
      
TOTAL REVENUE   1 737,3  

 

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Gross profit

 

In thousands of euros  Dec 31, 2014 
TOTAL REVENUE   1 737,3  
Third party cost of sales   452,9 
Interdivisional cost of sales   202,9 
      
Gross profit/(loss)   1 081,5 

 

Increase of the gross profit is mainly due to the business realized with the Farncomb Group.

 

1.13Operating profit

 

In thousands of euros  Dec 31, 2014 
     K €  
      
Administrative expenses    168,7 
Tax expenses   11,7 
Salaries, wages   609,0 
      
Operating profit   292,1 

 

Administrative expenses

 

In thousands of euros  Dec 31, 2014 
Office rental   41,2 
Outpocket expenses   96,1 
Fees   10 
Telecom   7,1 
Bank fees   3,8 
Other   10,5 
Total   168,7 

 

Tax expenses

 

In thousands of euros  Dec 31, 2014 
Employee tax   3,1 
Rental tax   3,9 
Other tax   0,6 
Total   11,7 

 

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Salaries, wages

 

In thousands of euros  Dec 31, 2014 
Employees salaries   329,3 
Employees salaries tax   123,7 
Management salaries   106,4 
Management salaries tax   49,5 
Total   609,0 

 

Farncombe France SARL hires 6 employees which represent a global cost of 452 thousand of euros.

 

The 2 managers’ wages represents a total of 155 thousands euros by the year.

 

1.14Exceptional result

 

In thousands of euros  Dec 31, 2014 
Exceptional result   -2,3 

 

1.15Tax income

 

In thousands of euros  Dec 31, 2014 
Tax income   90,1 
Credit tax income   -66,5 
Total   23,6 

 

1.16Net income

 

 In thousands of euros  Dec 31, 2014 
    K €  
Profit/(Loss) on ordinary activities before taxation   289,1 
      
Tax on profit/(loss) on ordinary activities   23,6 
      
Profit/(Loss) on ordinary activities after taxation   265,5 

 

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