MICROPOLE filed its 2014 reference document with the Autorité des Marchés Financiers on June 30, 2015 under no. D.15-0681.
This document includes:
- Annual Financial Report;
- The report of the Chairman of the Board of Directors on the conditions for preparing and organizing the work of the Board and on the risk management and internal control procedures implemented in accordance with Article L. 225-37 of the French Commercial Code, and the related Statutory Auditors' report;
- The Statutory Auditors' report on the consolidated financial statements for the year ended December 31, 2014 on page 59, which contains: (1) A reservation relating to note "1.12 Impairment of non-current assets", following their work on accounting estimates which led them to identify a divergence of assessment relating to the discount rate used, and in particular on the components relating to the risk-free rate and the specific risk premium The auditors' analysis led them to apply a discount rate of 11.7% for the France CGU and 10.4% for the Switzerland CGU (instead of the 7.89% and 8.43% respectively used by management). The application of these rates would have led to the recognition of a provision of 9.7 million euro. (2) As well as two observations drawing the reader's attention to (i) notes "4.8 Financial Indebtedness" and "4.9 Trade and Other Payables" whose cross-references relate in particular to the comparability of the balance sheet as of December 31, 2014 with the previous period, as well as to (ii) note "1.2 Basis of preparation" which presents an error correction related to the deconsolidation of the CICE pre-financing at December 31, 2013.Furthermore, the reservations formulated in the statutory auditors' report on the annual financial statements of Micropole SA are likely, with regard to the medium-term loan contract, to be interpreted as an event of default allowing the banks to request its immediate payability. Consequently, the long-term portion of this loan in the amount of EUR 6.9 million mentioned in §4.8 of the notes to the financial statements should have been reclassified as short-term debt and the resulting uncertainty about the continuity of operations mentioned in the notes to the financial statements.
- The statutory auditors' report on the financial statements for the year ended December 31, 2014 on page 72, which contains reservations respectively on the valuation of equity investments and the valuation of goodwill:(1) As part of their work on accounting estimates, the statutory auditors assessed the appropriateness of the assumptions used by Management and the relevance of the calculation model. This work led them to identify (i) a divergence of opinion concerning the discount rate used and in particular the components relating to the risk-free rate and the specific risk premium and (ii) methodological disagreements in the construction of the calculation model. The application of these rates and the correction of these calculation anomalies would have led to the recognition of a provision of 18 million euros on the shares of MICROPOLE Levallois 1, of 0.3 million euros on the shares and 2.4 million euros on the current accounts of MICROPOLE Levallois 5 as well as 0.1 million euros on the shares of Agence Wide (2) Goodwill includes, for a net value of 5 million euros, a technical loss allocated to the SPHERIS business and a merger loss with CSI. These assets were not transferred when the corresponding business assets were transferred to the subsidiaries concerned. Although management plans to regularize this situation by making additional contributions in 2015, which will require their valuation at the date of the contribution and the intervention of an auditor to confirm this value, the statutory auditors did not consider that they were able to assess the value of these assets at December 31, 2014 and the possible need for a provision, which could amount to between 0 and 5 million euros. These reserves are likely, in view of the documentation of the medium-term loan, to be interpreted as an event of default allowing the banks to request its immediate payability. As a consequence, the long-term debt mentioned in §5.10 of the notes to the financial statements should have been reclassified as current debt in the amount of 6,948 k€, and the resulting uncertainty about going concern mentioned in the notes;
- Information on fees paid to the statutory auditors.
