2014 activity report - Cofidis Participations Group

Transcript

2014
ACTIVITY
REPORT
Activity
Consolidated
financial statements
at 31 December 2014
COFIDIS Participations
Group
Our business
Key dates
Our retail chains
5
6
8
Consolidated balance sheet�� 38
Strategy
European presence
Our four pillars
Our values
Our commitment to sport
12
14
16
18
Consolidated income statement�� 40
22
24
25
Change in shareholders' equity�� 42
Governance
Management team
Our shareholders
Legal organisation chart
Corporate social and
economic responsibility
A historical commitment
Actions in our subsidiaries
27
28
2014
Highlights of the year
Chairman's message 2 2014 ACTIVITY REPORT
Key figures�� 37
32
34
Net income and gains and losses
directly recognised in shareholders'
equity�� 41
Summary cash flow table�� 44
Notes to the 2014
consolidated financial
statements for Cofidis
Participations S.A
Introduction�� 48
General framework�� 49
Accounting principles and methods�� 53
Notes to the consolidated balance sheet
�� 59
Notes to off-consolidated balance sheet
items�� 72
Notes to the consolidated income
statement�� 72
Segment information�� 76
Employee benefits�� 77
Risk exposure and hedging policy�� 80
2014 ACTIVITY REPORT
3
1
COFIDIS Participations
Group
4 2014 ACTIVITY REPORT
Our business
Through its four commercial brands, Cofidis, monabanq.,
Créatis and Sofémo, the COFIDIS Participations Group
creates, sells and manages a wide range of financial
services, including consumer credit, payment solutions,
insurance solutions, loan refinancing and banking services.
The three pillars of our business model are Trust, Soundness
and Responsibility.
Founded in 1982, innovation has always been at the forefront
for the COFIDIS Participations Group. It introduced a totally
new concept: consumer lending exclusively by telephone.
COFIDIS developed unique expertise in direct to consumer
lending and personalised remote customer relations
management.
5
Key dates
1982
Creation of Cofidis, the
first specialist in consumer
lending by telephone.
1985
Cofidis establishes its international presence and
opens Cofidis Belgium.
2000
Cofidis expands into
Central Europe with
subsidiaries in Hungary
and the Czech Republic.
2006
Creatis joins the COFIDIS
Participations Group.
Banque Covefi is renamed
monabanq. using the tagline
"directement vôtre".
2009
BFCM becomes the majority
shareholder in the Group, alongside
our historical shareholder,
the 3 Suisses International Group.
1997
• Cofidis embraces sports
sponsorship with a professional
cycling team.
• Cofidis positions itself as an on-line
credit provider.
2013
Sofemo joins the
COFODOS Participations
Group, offering point-ofsale financing solutions in
a national network of more
than 70,000 partners.
2014
The COFIDIS Participations
Group hits the symbolic
milestone of €10 billion in
gross outstanding loans.
7
Our retail chains
The Cofidis Participations Group includes five specialist retail
chains:
Founded in 1982, innovation has always been at the forefront for
Cofidis France. It introduced a totally new concept: consumer
lending exclusively by telephone. Cofidis developed unique expertise
in direct to consumer lending and personalised customer relations
management.
1997 marked a turning point for Cofidis when it set up its first website
and positioned itself as an on-line credit provider. The Group is at
the forefront of development with a steady stream of new functions,
including on-line credit applications, a diverse range of contact
methods for customers suited to their requirements and to keep
pace with technological developments.
Cofidis has made customer relations the focus of its expertise
and strategy since the outset and consistently strives to achieve
excellence in all relations with customers.
Today, the COFIDIS Participations Group has a presence in eight
European countries: France, Belgium, Spain, Italy, Portugal, the
Czech Republic, Hungary and Slovakia.
A credit institution established in 1998, CREATIS is a leading loan
refinancing player in France.
Its philosophy is to empower its customers to manage their budget,
their plans and their savings, with the assistance of CREATIS
financing solutions.
To ensure it remains independent, CREATIS draws on the sales force
of its network of partner intermediaries in banking transactions and
payment services. Its 250-strong team is dedicated to listening to
their customers and providing the highest level of customer services
according to an innovative model of banking and finance solutions.
SOFEMO offers point-of-sale financing solutions on behalf of
business and corporate customers.
It offers two types of financing:
- The product known as "Action Libre", which is intended for all
distribution channels and is especially suited for individuals.
- The instalment payment programme (PnF) for all business
and corporate customers, which is a simple payment solution
designed to complement the products offered by the CM-CIC
branch network.
Maintaining close customer relations is the philosophy at monabanq.
Its services combine the best that traditional banking has to offer
– professionalism, availability and personalised advice – with the
advantages of on-line banking – innovation, responsiveness and
services on demand.
It offers a simple and transparent "all-inclusive current account",
marking it out from other competitors in the market.
SynerGIE is a European Economic Interest Grouping (EEIG) formed to
provide a range of corporate and support functions to its members.
It promotes synergy and sharing of best practices, while improving
consistency across the Group.
9
Strategy
2
11
European presence
Cofidis France
€4,750 m in gross outstanding loans
1,312 staff
Creatis
€1,684 m in gross outstanding
loans
258 staff
Sofémo
€937 m in gross outstanding
loans
130 staff
A pioneer in online credit, the COFIDIS Participations
Group has experienced significant and continuous
growth of its activities over three decades, both in terms
of international expansion and diversifying its range and
services.
Lisbon
Cofidis Portugal
loans
401 staff
SynerGie
402 staff
monabanq.
€195 m in gross outstanding loans
197 staff
€442 m in gross outstanding savings
Cofidis Belgium
loans
407 staff
Cofidis Czech Republic
and Slovakia
€63 m in gross outstanding loans
147 staff
Lille
Tournai
Prague
Budapest
Milan
Cofidis Hungary
loans
158 staff
Barcelona
Cofidis Italy
Cofidis Spain
loans
138 staff
€1,080 m in gross outstanding
loans
750 staff
13
Our four pillars
Online credit
where the distance doesn't matter
Sale of credit
through our partners
COFIDIS grew its business in Europe based on a
unique concept, distance lending. This daring
business model calls for constant innovation, not
only to create new products and services, but also to
foster close customer relations and to stay abreast of
technological developments.
The Group's retail chains have expanded their range
of credit products and offer their expertise to several
hundred partners, including telephone operators,
distributors' networks, specialist retailers and others.
To achieve the Group's aims, this strategy is built
around major priorities:
-
customer relations based on listening and
consideration;
- control of risk, notably through providing support
for our customers to manage their budgets;
- efficiency of IT tools, which is especially important
since our business is conducted remotely;
- development of partnerships, which have always
been central to the Group's legacy and expertise.
These national brands have selected the expertise of
the Group's retail chains to offer financing solutions
to their customers.
Another Group strength is its international reach,
providing it with the ability to support its partners in
their plans to expand within Europe.
COFIDIS currently offers services to its partners
through the Group's European subsidiaries across
a range of distribution channels: in points of sale,
specialist distribution networks, on the Web and doorto-door, a popular sales method in Spain and Hungary.
Relational excellence
Our teams are ready for the challenge
and engaged
The COFIDIS Participations Group's long track
record of excellent customer relations distinguishes
it from its competitors.
Firmly committed to providing support to its
customers for their everyday needs, the core
values championed in the Group's retail chains are
transparency, close relations, responsibility, human
values and innovation to ensure that the excellence
of our customer relations is a major differentiating
factor. The hallmark of each of our retail chains is the
close relationship fostered with its customers, tailored
to each application and to individual situations,
even when services are provided remotely. The
relationship factor is a key differentiator.
True to its reputation for customer relations
excellence, Cofidis France (for the third year), Cofidis
Spain (for the second year) and Cofidis Portugal
(for the third consecutive year) have been rewarded
for the quality of their customer relations across all
channels. This latest distinction bears testimony to
the confidence placed in COFIDIS by its customers.
Our human resources policy is based on the
acceptance of difference and sharing in cultural
diversity. Everybody has a place in the company
and is afforded the opportunity for personal and
career development, regardless of age, professional
background or sociocultural origin.
Day-to-day customer service is built on rigorous
standards, perseverance and an open attitude. Since
every position forms part of a team, there is an onboarding process for all new employees to provide
them with a basic knowledge of our core businesses,
lenders and customers.
The wellbeing of our staff is a priority in subsidiaries.
Cofidis Portugal introduced a fitness programme
known as "Em forma" including sport, nutrition and
relaxation options. Cofidis Spain wants to encourage a
more active lifestyle with "Muevete con Cofidis" to promote
sport and cycling in particular.
15
Our values
Our pillars are built on our strong core
values, which are firmly embedded in the
DNA of the Group and its subsidiaries:
transparent relations with all
stakeholders, delivering performance
while safeguarding our spirit of
enterprise;
daring to share, surprise, take the
initiative;
showing consideration for
colleagues, customers, shareholders
and partners;
disseminating the convictions,
expertise and energy that characterise
the Group.
BE
Clear
Authentic
Consistent
Efficient
Enterprise spirit
DARE
Share
Decide
Surprise
Take the initiative
Challenge
BE CONSIDERATE
Our customers
Our partners
Our shareholders
Our staff
CONVEY
Our art de vivre
Our convictions
Our expertise
Our energy
17
Our commitment
to support
Cofidis first invested in cycling sponsorship
in 1996. The company chose the popular
sport of cycling, which conveys values, such
as courage, striving to excel and team spirit.
The investment in cycling sponsorship has
paid dividends. The Cofidis brand is now well
known to the general public and enjoys very
powerful brand recognition.
As an on-line provider, this is a wonderful
opportunity for Cofidis to go out and meet
its customers through the various following
vehicles.
Competing in most major French and
international cycle races, the Cofidis cycling
team represents the core values its members
have striven to embody for close to 20 years:
professionalism, team spirit, total respect for
the highest moral and ethical standards.
The para-cycling team
COFIDIS was the first professional cycling team
in France to include disabled riders among its
number by forming a disabled cycling section.
This is an ambitious, consistent with the team
sponsor's policies of implementing projects
in all its subsidiaries to counter exclusion of
the disabled.
Huge support
from Cofidis employees
for the publicity caravan
The publicity caravan runs ahead of the
cyclists in the race. In a colourful spectacle,
the two Cofidis floats are staffed by company
personnel and travel almost 9,000 km every
year.
2015 ambition
UP MY BIKE
To achieve its ambitious goals for 2015,
the team announced—much to the envy of
other teams—it had signed Nacer Bouhanni,
champion of France in 2012, and winner of
various stages of the Giro and the Vuelta in
2014. He comes to the Cofidis colours with
the reputation as a winner and a "true leader
of men", according to team manager Yvon
Sanquer.
Cofidis launched upmybike.com, a dedicated
cycling crowdfunding site open to all. Up My
Bike.com is a brilliant opportunity for Cofidis
to combine its business expertise and its
historical engagement with the sport. It is also
the ideal vehicle to convey the humanitarian
values of the Group's social responsibility
policy. Cofidis assists projects in a number
of ways:
The 2015 team comprising 25 cyclists from
seven different countries will add a burst of
colour bringing some sunshine to the races
it competes in.
- A helping hand to improve visibility: all Up
my Bike projects get more visibility through
the Cofidis social networks.
- A helping hand to raise funding: projects
that share our corporate values are selected
by a Committee to receive a financial boost.
Want to find out more?
more than 50,000 fans follow us on Facebook.
Join us and see all the Team Cofidis news first hand!
19
Governance
3
21
Management team
Supervisory board
As of 22 May 2015, the composition of the Supervisory Board is as follows:
Alain Fradin (Chairman)
François Migraine (Vice-Chairman)
Denis Terrien
Eric Platiau
Pascal Laugel
Christian Klein
Jean-Marie Frerejacques
Executive committee (*Board members)
The Executive Committee is the Group's management body.
It helps to define strategy and ensure coordination between
the holding company and its subsidiaries in France and further
afield. It is responsible for overseeing the running of the Group's
businesses and implementation of policy.
Annie GAIN*
Chairman of the
Board of Directors
Gilles Sauret*
Director,
Cofidis France
Luc-Bertrand Salus
Director, Cofidis
International
Alain Colin
Director for Diversified
Activities
Vincent Laurin
Chief Financial, Risk
and Legal Officer
Thierry Marois*
Director,
Coordination of
Synergies and
Central Resources
Thierry Vittu*
Director, Human
Resources and
Communication
Subsidiary managing directors
Gilles Sauret
Director, Cofidis
France
Céline Motte
Director, Cofidis
Belgium
Juan Sitges
Cofidis Spain general
management
Nicolas Wallaert
Cofidis Portugal
general management
Alain Colin
Director,
monabanq.
Bernard Hazebrouck
Créatis general
management
Bence Hollo
Director, Cofidis
Hungary
Jean-François Remy
Director, Cofidis Italy
Thomas Kudela
Director Cofidis Czech
Republic and Slovakia
23
Our shareholders
Major banking sector player in France and
Europe
Its retail chains, Crédit Mutuel and CIC, make
up a network with more than 6,000 outlets.
Employing more than 70,000 people, the Group
uses its expertise in all areas of finance to serve
its 30.1 million individual, business, corporate and
organisation customers.
Dynamic yet prudent cooperative structure
Structured as a mutual and enjoying sound
fundamentals, Crédit Mutuel is a major player
in banking in France and Europe. It has a core
tier one ratio of 14.5%, making it one of the best
capitalised banking groups in Europe. Its good
financial results have been welcomed in the
specialist financial press. In 2015, the Crédit Mutuel
Group was voted Best Developed Markets Bank/
France by Global Finance.
A strategy that revolves around four priorities:
BANKING AND INSURANCE
The Group's banking and insurance business offers
an integrated product line-up to meet members'
banking and insurance needs.
MUTUALIST PHILOSOPHY
Our approach and actions are based on respect
and trust. Members' interests take precedence in
our structure.
TECHNOLOGY
We use new technologies in the service of
members and the local banks.
LOCAL BANKING
We build relations with our members through
• independent local banks that are part of the fabric
of the local community
• the use of online banking tools.
Argosyn took over the BtoB e-commerce and
financial activities from the 3 Suisses International
Group. Its retail chains are growing from strength
to strength with leadership positions in their
markets. They are known for their capacity for
innovation and performance.
Financial services through its Contentia
-
(collection) and Direxi (insurance broker)
subsidiaries, and its holding in the COFIDIS
Participations Group (payment solutions and
banking services).
-
BtoB e-commerce through Bruneau, the
leading French operator in the office furniture
and supplies for professionals segment.
* Minority shareholding.
Key figures at 31.12.2014:
- 1,200 staff
-  Present in four countries in Europe
(France, Belgium, Spain and Luxembourg)
- €400 million in revenue, excluding
shareholdings
Brands:
CONTENTIA, one of the top three collection
companies in France
DIREXI, connected marketing leader, insurance
broker
BRUNEAU, BtoB e-commerce through
Bruneau, the leading French operator in the
office furniture and supplies for professionals
segment.
Legal organisation chart
at 31 December 2014
SynerGIE is a European Economic Interest Grouping (EEIG)
formed of Cofidis France, monabanq, Créatis, Cofidis
Belgium, Groupe Sofemo and Cofidis Italie.
25
Corporate social
and economic
responsibility
The COFIDIS Participations Group works to promote lasting, sustainable development and
includes the three dimensions of sustainable development in its business activity: economic,
social and environmental.
Thus the Group has adopted five major commitments in each of the retail chains and at all levels
of the company, applied to all areas from strategy to operating practices:
Building a sustainable
Supporting
relationship with our customers economic development
Since its origin, the COFIDIS Participations
Group has paid particular attention to
constantly improving support for its
customers, whether in managing their credit,
their budget or their bank account.
Consumer credit is an essential tool to sustain
household consumption, both in France and
other European countries. Credit is a financing
solution for everyday consumer goods.
Promoting a policy of
responsible human
resources
Combating exclusion
Because its staff is so diverse, the COFIDIS
Participations Group is committed to personal
and career development and implements
a responsible human resources policy.
Managers promote close relationships
based on independence, openness and trust.
They are encouraged to conduct individual
assessments and hold regular discussion
meetings with their teams.
Committed to human rights and all forms of
diversity, the COFIDIS Participations Group
has established partnerships with a range of
organisations to help people in need.
At local level, retail chains thus support a lot
of associations, either though funding or the
involvement of teams on the ground. (Jardins de
Cocagne, Telethon, Face Foundation, Alliance
Networks and Crésus)
Limiting the impact of our activities on the environment
The COFIDIS Participations Group is also conducting numerous operations to reduce its
ecological footprint, including dematerialising documents, designing buildings to comply with
High Quality Environmental, eco-friendly use of consumables… Retail chains are also making
their staff aware of the environmental issues, in order to involve them in the changes.
27
Actions in our subsidiaries
A commitment to
Crésus
For example, the retail chains in France signed
a partnership agreement with the French
regional debt support network, CRESUS
(Chambre REgionnale du SUrendettement
Social).
CRESUS is recognised as a public interest
organisation. It comprises 18 associations
in 14 regions in France, governed by a
code of ethics and forming a local network
dedicated to providing advice and support
for households in debt and preventing
financial and economic exclusion
Cofidis voted a Great
Place To Work in Portugal
Every year, Great Place to Work selects the
companies that are the best workplaces and
publishes the awards and rankings.
Cofidis Portugal made the list at number 3
in the 2015 Great Place to Work awards for
companies employing over 250 people.
The study points to the warm welcome,
ambience, team spirit and relations between
employees and the company as factors that
were highly prized. Similarly, the premises
and user-friendliness of the workspace also
contribute to employees' positive perception
of their employer.
Handiflex: a forum to
promote employment
of the disabled
An event eagerly awaited
by more than 2000 staff in
France: Oxyzen
For the sixth consecutive year, the Cofidis
Participations Group organised the Handiflex
Forum. The half-day Handiflex forum puts
disabled workers in touch with a vast
network of companies, organisations and
training groups with the view to entering the
labour market.
For a week during the winter months and for
the last two consecutive years, employees of
the French subsidiaries had the opportunity
to learn relaxation methods in workshops
and talks given by professionals.
The forum brings together disabled workers,
employers and organisations in the local
area to promote opportunities for sustainable
employment.
The COFIDIS Participations Group decided
to offer the opportunity for all Campus staff
to meet with professionals and learn about
many different relaxation techniques during
our sport and wellbeing week.
The initiative went down a treat! Our
satisfaction survey after the event showed
that almost 65% of respondents scored their
satisfaction at 8/10 or higher.
29
2014
5
31
Highlights of the year
Sports and
Family award
with volunteers from all
Cofidis Group volunteers
for a friendly sports day.
Cofidis Spain
reaches the milestone
of €1 billion in gross
outstanding loans.
Agreement
signed
with a view to
the Group's
acquisition of all
of the capital in
Banco Banif Mais
in Portugal.
2014
May
July
September
The Tour de France
in the North of France
and the Cofidis cycling
team supported by
almost 400 staff who
made a giant jersey for
the occasion.
October
December
6th
Handiflex Forum
forum to promote
employment and
training of the disabled.
Cofidis France
and Spain
wins "Customer Service of
the Year Award 2015"(1)
Cofidis Portugal
*Credit Institution category - Inference
Operations – Viséo Conseil research
conducted from May to July 2013, using
mystery customers, with 215 contacts by
telephone, email, Internet and social networks.
wins the "Escolha
Consumidor" award
for the quality of the
customer service.
Inauguration
Cofidis France
launches
Upmybike. com
crowdfunding platform
dedicated to bikes.
of the new Cofidis Belgium in Orcq
New product
launch
family loans in the
Czech Republic
Acquisition by
Cofidis SA
of all of the capital of
Centax Spa in Italy
2015
January
Cofidis
Hungary
celebrates 10 years.
February
Cofidis
Portugal
March
ranked third in the
"Great Place to Work
2015" listing in the
category of companies
employing over 250
people.
May
monabanq.
launches its new
"People before money"
campaign
33
Chairman's message
MAJOR
SUCCESSES
Year after year,
and
our group expands
to stength.
th
g
en
tr
s
om
fr
s
goe
Annie Gain
"The COFIDIS Participations Group made progress
across all its strategic priorities in 2014. New
commercial synergies with the Crédit Mutuel Group
were generated. We signed new partnership deals,
including with Bouygues Télécom in France, Ixina
in Belgium and Afflelou in Spain, all of which boost
Cofidis's position in these markets. Our award for
Best Customer Service of the year in France and
in Spain and the equivalent accolade in Portugal
provide ample proof of the resources we have
committed to continuously optimising our services
and nurturing ever closer links with our customers in
a long-term relationship founded on our key values
of close relations, daring, and consideration.
A major focus in 2015 will be to expand our insurance
line-up and integrate Banif Mais, Banco Banif's
specialist car financing subsidiary, into our Group.
This is a very worthwhile acquisition for the Cofidis
Group in a sector where our presence was limited.
It will add valuable expertise to the Group's portfolio.
2015 will also see the IT convergence of our credit
businesses in France. Migrating all our French
companies to a single IT system will ensure
consistency between our subsidiaries, improve
efficiency and help us to deliver an even better
service to our customers.
We look forward to meeting these important
challenges in the year ahead. I know that I can rely
on the energy and commitment of each and every
person in our Group."
35
Consolidated financial statements
at 31 December 2014
Key figures................................................................................................................. 37
Consolidated balance sheet.......................................................................... 38
Consolidated income statement................................................................ 40
Net income and gains and losses directly recognised in
shareholders' equity............................................................................................ 41
Changes in shareholders' equity................................................................ 42
Summary cash flow table............................................................................... 44
Key figures
10 602
10 574
9 234
8 532
9 124
9 194
9 080
4 251
3 300
3 848
4 119
3 265
3 110
3 077
2008 2009 2010
2011
2012
2013
2014
2008 2009 2010
Gross outstanding loans
1 016
911
906
2008 2009 2010
100
2011
9,80
9,61
2013
2014
1 148
10,00
100
2014
1 067
938
100
2013
(in million €)
9,10
250
2012
Financings
(in million €)
1 141
2011
100
2012
100
2013
Equity incl.
subordinated debts
8,91
10,05
9,50
100
2014
2008 2009 2010
2011
2012
Solvency ratio
(in %)
(in million €)
37
Consolidated
balance sheet
ASSETS - In thousands of €
Note
31/12/2013
31/12/2014
Cash on hand, balances at central banks
IV.1
919
829
Financial assets recognised at fair value through profit or loss
IV.2
26,840
28,262
Derivative hedging instruments
IV.3
22,380
30,432
Available-for-sale financial assets
IV.4
65
65
Loans and advances to credit institutions
IV.5
688,783
672,366
Loans and advances to customers
IV.6
8,969,352
8,977,329
Revaluation surplus for rate hedging portfolios
IV.3
49,411
73,742
–
–
Held-to-maturity financial assets
Current tax assets
IV.14
22,462
14,085
Deferred tax assets
IV.14
104,200
101,824
Accruals and miscellaneous assets
IV.7
95,274
71,937
–
–
–
–
–
–
Non-current assets intended for sale
Interests in affiliates
Investment properties
Property and equipment
IV.8
19,769
27,745
Intangible assets
IV.9
22,614
17,762
Goodwill
IV.10
173,448
173,448
TOTAL ASSETS
10,195,517
10,189,825
LIABILITIES - In thousands of €
Note
31/12/2013
31/12/2014
–
–
Financial liabilities recognised at fair value through profit or loss
IV.2
–
–
IV.3
68,327
92,507
Debts to credit institutions
IV.11
7,560,560
7,999,126
Debts to customers
IV.12
575,003
477,823
Debts represented by a security
IV.13
470,483
50,001
Revaluation surplus for rate hedging portfolios
IV.3
–
–
Current tax liabilities
IV.14
21,542
20,976
Deferred tax liabilities
IV.14
13,938
10,900
Accruals and miscellaneous liabilities
IV.15
197,741
213,962
–
–
–
–
31,938
43,859
–
–
Central banks
Debts related to non-current assets intended for sale
Insurance contract technical provisions
Provisions
IV.16
Subordinated debt
TOTAL LIABILITIES
Equity attributable to Group shareholders
8,939,532
IV.17
8,909,154
1,255,977
1,280,669
Capital and associated reserves
116,062
116,062
Consolidated reserves
1,022,690
1,028,033
Unrealised or deferred gains / losses
2,068
3,616
Profit for the period
115,157
132,958
8
3
Minority interests
TOTAL EQUITY
TOTAL LIABILITIES
1,255,985
10,195,517
1,280,673
10,189,825
39
Consolidated income
statement
INCOME STATEMENT - In thousands of Euros Note Interest and similar income
1,048,803
1,029,166
Interest and similar costs
– 129,747
– 141,256
Commissions (income)
240,792
229,917
Commissions (costs)
– 18,478
– 19,889
1,415
1,053
Net gains / (losses) on financial instruments
recognised at fair value through profit or loss
31/12/2014
31/12/2013
Net gains / (losses) on available-for-sale financial assets
– 271
886
Income from other activities
4,886
1,923
Costs for other activities
– 924
– 863
NET BANKING INCOME
VI.1
General operating costs
VI.2
– 586,224
– 544,802
Amortisation expense/Write-backs and provisions on tangible and intangible
assets
VI.3
– 8,938
– 16,187
GROSS OPERATING PROFIT
551,316
Cost of risk
VI.4
OPERATING PROFIT
Share of net profit/(loss) of affiliates
Net gains or losses on other assets
VI.5
Variations in the value of goodwill
PROFIT BEFORE TAXES
Tax on profits
VI.6
Net profit for the year on discontinued operations or operations being
discontinued
NET PROFIT
Minority interests
NET PROFIT - ATTRIBUTABLE TO GROUP SHAREHOLDERS
Earnings per share (in €):
1,146,478
– 354,021
197,295
1,100,937
539,948
– 366,108
173,840
–
–
– 289
– 1,732
–
–
197,006
172,108
– 64,049
– 56,964
132,957
– 1
132,958
0.63
115,144
– 12
115,157
0.54
Net income and
gains and losses
directly recognised in
shareholders' equity
In thousands of euro
Net profit attributable to Group shareholders
Foreign currency translation
Revaluation of derivative hedging instruments
Revaluation of long-term employee benefits
Revaluation of financial assets
Total gains and losses recognised directly in equity attributable to Group shareholders
Net income and gains and losses recognised directly in equity attributable to Group
shareholders
Net income and gains and losses directly recognised in equity attributable to minority
shareholders
Net income and gains and losses directly recognised in shareholders' equity
31/12/2014
132,958
31/12/2013
115,157
73
(81)
3,486
4,136
– 2,011
49
1,549
4,104
134,507
119,261
111
189
134,618
119,450
Data are presented in the amount net of tax (if applicable).
41
Shareholders' equity at 1 January
2013
68,593
Increase in share capital
47,468
1,000,177
– 2,068
103,573
1,170,275
47,468
Total shareholders' equity
Equity attributable to minority
shareholders
Equity attributable to Group
shareholders
Total gains and losses
recognised directly in
Net profit attributable to Group
shareholders
in thousands of euro
Change in shareholders'
equity
27
1,170,302
47,468
Allocation of 2012 income
103,573
– 103,573
0
0
Repayment of capital equity notes
– 1,270
– 1,270
– 1,270
Distribution in 2013 in respect of
2012
– 65,635
– 65,635
– 65,635
Interim dividends
– 38,577
– 38,577
– 38,577
Sub-total of movements linked to
relations with shareholders
47,468
– 1,909
0
– 103,573
– 58,014
0
– 58,014
Variation in gains and losses
recognised directly in shareholders'
equity
4,104
4,104
202
4,306
2013 Income
115,157
115,157
– 13
115,144
Sub-total
0
0
115,157
119,261
189
119,450
Effect of acquisitions and disposals
on minority interests
Other changes
Equity at 31 December 2013
Effect of changes in accounting
methods
4,104
24,860
24,860
24,860
– 405
– 405
– 208
– 613
1,255,977
8
1,255,985
– 4,846
– 4,846
140,921
997,863
– 4,846
2,036
115,157
Shareholders' equity at 1 January
2014
140,921
993,017
2,036
115,157
1,251,131
Total shareholders' equity
Equity attributable to minority
shareholders
Equity attributable to Group
shareholders
Net profit attributable to Group
shareholders
Total gains and losses
recognised directly in
8
1,251,139
Allocation of 2013 income
115,157
– 115,157
0
0
– 1,306
Repayment of capital equity notes
– 1,306
– 1,306
Distribution in 2014 in respect of
2013
– 61,257
– 61,257
– 61,257
Interim dividends
– 42,392
– 42,392
– 42,392
Sub-total of movements linked to
relations with shareholders
0
Variation in gains and losses
recognised directly in shareholders'
equity
1,548
2014 Income
Sub-total
0
0
Effect of acquisitions and disposals
Equity at 31 December 2014
140,921
10,202
– 13
1,003,206
0
1,548
3,584
– 115,157
– 104,955
0
– 104,955
1,548
111
1,659
132,958
132,958
132,958
132,958
134,506
111
134,617
– 13
– 116
– 129
1,280,669
3
1,280,672
132,958
43
Summary cash flow table
SUMMARY CASH FLOW TABLE in thousands of €
2014
2013
EARNINGS BEFORE TAXES
197,006
172,108
Net amortisation expense on tangible and intangible assets
10,427
13,801
– 1,490
2,385
29,094
– 10,086
560
845
– 4,434
– 9,080
34,158
– 2,133
Depreciation of goodwill and other assets
Net expenses for provisions
+/- Net loss/net gain from investment activities
Other movements
Total of non-monetary items included in the net profit before tax and other
adjustments
Flows from transactions with credit establishments
Flows from transactions with customers
Flows from other transactions allocating financial assets or liabilities
459,626
873,970
– 151,291
– 233,239
335
– 1,626,235
44,918
32,136
– 46,975
– 51,846
Net decrease (increase) in assets and liabilities from operating activities
306,613
– 1,005,214
Total net cash flow generated from operating activities (A)
537,777
– 835,239
Flows from other transactions allocating non-financial assets or liabilities
Tax paid
– 272
201,693
Flows from tangible and intangible assets
– 12,379
– 9,544
Total cash flow generated from investing activities (B)
Flows from financial assets and holdings
– 12,651
192,149
Cash flow coming from or going to shareholders
– 110,386
– 55,224
Other net cash flows from financing activities
– 400,000
0
Total cash flow generated from financing activities (C)
– 510,386
– 55,224
– 10,193
– 48,002
4,547
– 746,316
Effect of exchange rate variation and scope variation (D)
Net increase (decrease) in cash and cash equivalents (A+B+C+D)
Total net cash flow generated from operating activities (A)
537,777
– 835,239
Total cash flow generated from investing activities (B)
– 12,651
192,149
Total cash flow generated from financing activities (C)
– 510,386
– 55,224
– 10,193
– 48,002
Effect of exchange rate variation and scope variation (D)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
Cash on hand, balances at central banks, ICP (Assets and Liabilities) - BEGINNING OF
PERIOD
Demand accounts and loans/borrowing with credit institutions - BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS AT END OF PERIOD
Cash on hand, balances at central banks, ICP (Assets and Liabilities) - END OF PERIOD
Demand accounts and loans/borrowing with credit institutions - END OF PERIOD
VARIATION IN NET CASH
453,000
1,199,316
787
2,208
452,213
1,197,108
457,548
453,000
829
787
456,718
452,213
4,547
– 746,316
45
Notes to the 2014
consolidated financial
statements for Cofidis
Participations S.A
Introduction��48
General context��49
Accounting principles and policies��53
Notes to the consolidated balance sheet��60
Notes to off-consolidated balance sheet
items��72
Notes to the consolidated income statement
��72
Segment information��76
Employee benefits��77
Risk exposure and hedging policy��80
I Introduction
II General context
5.Loans and advances to credit
institutions
7.Auditors' fees
6.Loans and advances to
customers
VII Segment
information
2.Significant events of the
accounting period
7.Accruals and miscellaneous assets
1.Definition of activity segments
3.Simplified organisation chart
for the COFIDIS Participations
Group at 31 December 2014
9.Intangible assets
1. Description of the entity
4.Events after the reporting period
5.Related party disclosures
6.Consolidation scope and
methods
III Accounting
principles and
methods
1.Financial instruments
2.Deferred tax
3.Fixed assets
4.Goodwill
5.Provisions
6.Employee benefits
7.Equity instruments: deeply
subordinated notes
8.Property and equipment
10.Goodwill
11.Debts to credit institutions
12.Debts to customers
3.Segment information by
14. C
urrent and deferred tax assets
and liabilities
balance sheet
16.Provisions
VIII Employee
benefits
17.Shareholders' equity
1.Staff costs
15.Accruals and miscellaneous liabilities
18.Summary of financial instrument
classes by accounting
categories
V Notes to offconsolidated
balance sheet
items
9.Net commission income
2.Term financial instruments
10.Judgements and estimates
used in preparing the financial
statements
VI Notes to the
Consolidated
income statement
2.Financial assets and liabilities at
fair value through profit or loss
income statement
geographical area: data from
1.Finance and guarantee
commitments
1.Cash on hand, balances at
central banks
geographical area: data from
13.Debts represented by a security
8.Interest income and expenses
IV Notes to the
Consolidated
balance sheet
2.Segment information by
1.Net banking income
2.General operating costs
3.Amortisation expense and
depreciation on tangible and
intangible assets
4.Cost of risk
3.Derivative hedging instruments
5.Net gains or losses on other
assets
4.Available-for-sale financial assets
6.Taxes
2.Manpower for the period
3.Post-employment benefits defined benefit schemes
4.Other long-term benefits
5.Actuarial assumptions
6.Reconciliation of balance sheet
provisions
7.Financial hedging of the scheme
8.Sensitivity analysis
IX Risk exposure and
hedging policy
1.Credit risk
2.Counterparty risk for financial
transactions
3.Overall interest rate and liquidity
risk
4.Foreign exchange risk
47
NOTES TO THE 2014 CONSOLIDATED
ACCOUNTS
FOR COFIDIS PARTICIPATIONS S.A.
I – Introduction
substantive and protective rights and on the analysis of agent
versus principle relations;
Pursuant to Regulation (EC) 1606/2002 on the application of
international accounting standards and Regulation (EC) 1126/2008
on their adoption, the consolidated financial statements for the
period have been prepared in accordance with IFRS, as adopted
by the European Union as at 31 December 2014. This IFRS
framework includes IAS 1 to 41, IFRS 1 to 8 and IFRS 10 to 12,
and their SIC and IFRIC interpretations adopted at this date. No
standard not adopted by the European Union has been applied.
• the proportionate consolidation method is eliminated for joint
ventures. These are now accounted for by the equity method;
All IAS/IFRS were updated on 3 November 2008 by Regulation
1126/2008, which replaced regulation 1725/2003. This framework
is available on the European Commission web site: http://ec.europa.
eu/internal_market/accounting/ias/index_fr.htm
The financial statements are prepared in the format approved by
recommendation 2013-04 of the French accounting standards
board, the Autorité des Normes Comptables, as regards IFRS
summary financial statements. They comply with international
financial reporting standards as adopted by the European Union.
Information relating to risk management required by IFRS 7 is
presented in a separate chapter in the activity report.
Standards and interpretations applied as of 1 January 2014:
–– IFRS 10, 11, 12 and IAS 28R relative to consolidation, which
introduce the following changes:
• new disclosure requirements regarding determining the scope
of consolidation and the risks associated with interests in other
entities (subsidiaries, joint ventures, associates and non-consolidated structured entities).
The first-time adoption of the standards have no material impact
on the Group's financial statements.
–– Amendments to:
• IAS 32 clarifying the conditions under which financial assets
and liabilities may be offset;
• IAS 39 on the novation of derivatives. This amendment provides
an exception to the requirement to discontinue hedge accounting
in situations where derivatives designated as hedging instruments
are novated to a central counterparty as a consequence of laws
or regulations;
• IAS 36 to clarify the scope of disclosures required on the
recoverable value of non-financial assets.
These amendments have no material impact on the Group's
financial statements.
• a model according to which consolidation is based solely on
the concept of control, with a single definition of control applicable
to all types of entity, either conventional or ad hoc;
Standards and interpretations adopted by the European Union
and not yet applied:
• an application guide for situations where control is more difficult
to assess. It provides clarification on the distinction between
–– IFRIC 21 on taxes and levies. Effective for annual periods beginning on or after 1 January 2015, expected to have limited impact.
II – General framework
1 – Description of the entity
The principle activity of COFIDIS Participations SA and its subsidiaries
is to grant consumer credit and personal loans, as well as issuing
and managing payment methods.
COFIDIS Participations SA was founded in 1982 by the 3SI Group,
specialist in home-shopping. On 23 March 2009, the Banque
Fédérative du Crédit Mutuel (BFCM) took control of COFIDIS
Participations SA of which COFIDIS SA is the direct subsidiary.
COFIDIS Participations SA, registered under company number 378
176 291, is a public limited company registered and domiciled in
France. Its registered head office is located at the following address:
Parc de la haute Borne, 61 avenue Halley, 59667 Villeneuve
d’Ascq, France.
The consolidated financial statements will be submitted for
shareholder approval. They have been prepared from the accounts
at 31 December 2014 for companies included within the scope
of the Cofidis Participations Group. The financial statements are
expressed in thousands of euro, unless otherwise indicated.
2 – Significant events of the accounting period
Significant events during the accounting period are as follows:
• Disposal of Ficodis SA securities held by Cofidis PARTICIPATIONS to BNP Paribas Personal Finance SA for €1. The securities
were 100% provisioned in the individual financial statements.
• On 2 April 2014, the Board of Directors of monabanq. decided
to discontinue the activities of its Belgian branch, effective as
of 30 June 2014. This decision has no impact, inasmuch as no
staff were employed by the branch.
• On 19 December 2014, Créatis received a proposed adjustment following an audit of the financial years 2011 to 2013.
Créatis responded to the tax authorities with its comments in
its correspondence dated 9 February 2015.
• On 28 November 2014, Sofemos received a proposed adjustment following an audit of the financial years 2011 to 2013.
The adjustments are minor and were accepted.
• On 12 December 2014, Cofidis Participations signed an
agreement for the acquisition of 100% of Banif Mais in Portugal.
The acquisition is subject to conditions precedent, primarily the
approval of the Bank of Portugal, the National Bank of Hungary
and the European Commission. Cofidis Participations does not
have control over the entity in the intervening period between the
date of signature of the agreement and fulfilment of the conditions
precedent; therefore, the entity has not been consolidated as at
31 December 2014, pursuant to IFRS 10, 11 and 12.
49
3 – Simplified organisation chart for the COFIDIS Participations Group at 31 December 2014
CREATIS
Monabanq
France
Sofémo
COFIDIS
Slovaquie
COFIDIS
Rép.
tchèque
COFIDIS
Belgique
COFIDIS
Espagne*
GEIE
Synergie
COFIDIS
Italie
COFIDIS
Hongrie *
COFIDIS
Portugal *
* succursales
COFIDIS
SA
4 – Events after the reporting period
On 30 April 2013, an agreement of purchase and sale relating to the
Campus was signed between Argosyn and Cofidis Participations
(with the option to substitute for one of its wholly owned subsidiaries).
The sale agreement between Argosyn and Cofidis SA was signed
at 7 January 2015 for €103 million.
5 – Related party disclosures
–– the consolidated companies,
–– other related parties: the entities in the 3 Suisses International
group,
–– the company controlling Cofidis Participations SA (Banque
Fédérative du Crédit Mutuel),
–– the principal directors of Cofidis Participations SA or its shareholders.
The parties related to the COFIDIS Participation Group are:
–– entities controlled by the same parent: the other entities in the
Crédit Mutuel Group,
Flows with consolidated companies under exclusive control, considered as related parties, are removed from the consolidated financial
statements and are therefore not presented below:
Entities
controlled
by the same
parent
company
Parent
Company
TOTAL
Balance sheet position in K€
Other
related
parties
Derivative hedging instruments – Assets
26,972
72
26,901
0
596,442
568,562
27,879
0
4,730
0
4,683
46
Accruals and miscellaneous assets
Total assets
628,144
Derivative hedging instruments – Liabilities
89,153
294
88,859
0
7,981,917
7,976,381
5,536
0
50,001
50,001
0
0
3,381
0
2,360
1,021
Debts to credit establishments
Debts represented by a security
Accruals and miscellaneous liabilities
568,634
59,463
46
Total liabilities
8,124,452
8,026,676
96,755
1,021
Commitments received
5,804,000
0
5,804,000
0
0
0
0
0
Commitments given
Entities
controlled
by the same
parent
company
Parent
Company
TOTAL
Income and expenditure in K€
Interest and similar income
Net gains or losses on Commissions
Net gains or losses on portfolios at fair value through
profit or loss
Gains or losses on other assets
Total income
Interest and similar expenses
Other
related
parties
19,856
2,777
17,329
– 251
192,287
– 1
191,298
990
0
0
0
0
– 15
0
– 15
0
212,128
2,776
208,613
739
115,790
67,540
48,078
171
Operating costs
62,219
0
40,453
21,767
Total expenses
178,009
67,540
88,531
21,938
Transactions with the directors of COFIDIS Participations SA are limited exclusively to employee benefits (§ VIII).
51
6 – Consolidation scope and methods
6.1 Scope
The consolidated financial statements for the COFIDIS Participations
Group bring together all the companies under exclusive control,
under joint control or under significant influence. These companies
List of companies
Country location
are consolidated according to the full consolidation and equity
methods, respectively.
The consolidated financial statements include the accounts of
COFIDIS Participations SA and those of all its subsidiaries:
Consolidation method
% holding at 31
December 2014
% holding at
31/12/2013
COFIDIS
PARTICIPATIONS
France
COFIDIS SA and
branches
France, Spain, Portugal,
Hungary
Full consolidation
99.99
99.99
FICODIS SA
Argentina
Full consolidation
Disposed of
66.00
CREATIS SA
France
Full consolidation
99.99
99.99
COFIDIS Belgium
Belgium
Full consolidation
99.99
99.99
COFIDIS Ceska
Czech Republic
Full consolidation
99.99
99.99
COFIDIS Spa
Italy
Full consolidation
99.99
99.99
COFIDIS Slovakia
Slovakia
Full consolidation
99.99
99.99
SYNERGIE
France
Full consolidation
99.98
99.98
Monabanq France
France
Full consolidation
99.99
99.99
Monabanq Belgium
Belgium
Full consolidation
Liquidated
99.99
Sofémo
France
Full consolidation
99.99
99.99
Changes in method and variation in scope
Liquidation of the monabanq. branch in Belgium on 30 June 2014
and disposal of Ficodis SA on 4 December 2014.
6.2 Concepts of control
In accordance with international standards, all entities under exclusive
control, joint control or significant influence are consolidated.
–– Exclusively controlled entities: exclusive control is presumed
to exist when the Group has power over the entity, is exposed or
has rights to variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. The financial statements of controlled entities are fully
consolidated.
–– Entities under joint control: joint control is the contractually
agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require the unanimous
consent of the parties sharing control. Two or more parties that
exercise joint control constitute a partnership, which is either a
joint operation or a joint venture:
• a joint operation is a partnership in which the parties that
exercise joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the entity:
they recognise the assets, liabilities, income and expense in
relation to their interest;
• a joint venture is a partnership in which the parties that have
joint control of the arrangement have rights to the net assets of
the entity: a joint venture is accounted for by the equity method.
–– Entities under significant influence: entities that are not controlled by the consolidating entity, but over which there exists the
power to participate in financial and operational policy. The Group
accounts for securities and entities over which it has significant
influence by the equity method.
6.3 Consolidation methods
The consolidation methods used are:
–– Full consolidation: This method consists of substituting for the
value of securities each of the assets and liabilities elements of
each subsidiary and separating the share of minority interests in
equity and income. It applies to all entities under exclusive control,
including those with a different accounting structure, regardless of
whether the business is a direct extension of the consolidating entity.
–– Equity method: Under this method, the Group's share in the
shareholders' equity and profit/(loss) of the company is substituted
for the value of the securities. It applies to all entities under joint
control classified as joint ventures and to all entities over of which
the Group exercises a significant influence.
6.4 Foreign currency transactions
The financial statements of COFIDIS Participations Group are
prepared in euros. The balance sheet for foreign subsidiaries and
branches whose functional currency is not the euro is translated
into euro at the exchange rate on the reporting date. Items in the
income statement are translated using the average rate for the
accounting period. Foreign currency translation adjustments are
shown for consolidated companies that are not part of the euro
zone (Cofidis Argentina, Cofidis Hungary, and Cofidis Ceska).
For the Group's interests, foreign currency translations are included
in shareholders' equity under "Foreign currency translations" and
for third party interests under "Minority interests".
The following parities were used to translate the financial statements of foreign subsidiaries and branches:
Average rate 2014
Rate at end of period
Rate at beginning of
period
Average rate 2013
Argentine Peso
0.0922090
0.0976219
0.1112359
0.1353922
Czech Crown
0.0363163
0.0360555
0.0364604
0.0384806
Hungarian Florin
0.0032393
0.0031692
0.0033665
0.0033677
1.1 Securities
6.5 Treatment of acquisitions and goodwill
Goodwill is the difference between the acquisition price and the
acquirer's interest share in the fair value of the identifiable assets
and liabilities at the acquisition date. On this date, this difference
is entered in the acquirer's assets if it is positive and is recognised
in profit if it is negative. Goodwill is recognised in the functional
currency of the acquired company and is converted at the current
exchange rate on the reporting date. In accordance with revised
IFRS 3, goodwill is not depreciated but is tested for impairment.
The procedures for performing these tests are described in Note
III.4 of the accounting principles.
Pursuant to revised IAS 27, increases in the percentage holding
in an entity already controlled are recognised in equity.
III - Accounting principles and
methods
1 – Financial instruments
In the 2014 consolidated financial statements, financial assets and
liabilities are treated in accordance with the provisions of IAS 39,
as adopted by the European Commission on 19 November 2004
and supplemented by regulations 1751/2005 dated 25 October
2005 and 1864/2005 dated 15 November 2005, relating to the
use of the "fair value option", and by regulation 1004/2008 dated
15 October 2008, relating to the transfer of financial assets.
Fair value is defined as the amount for which an asset could be
exchanged, or a liability settled, between knowledgeable, willing
parties in an arm's length transaction. The existence of quotations
published on an active market gives the best indication of fair value
for financial instruments. In the absence of such quotations, fair
value is determined by applying recognised valuation techniques
using "observable market data".
1.1.1 Classification of financial instruments
These are classified according to four categories of assets applicable
to securities defined by IAS 39:
–– financial assets recognised at fair value through profit or loss,
–– held-to-maturity investments,
–– available-for-sale financial assets,
–– Loans and receivables.
1.1.1.1 Financial assets at fair value through profit or loss.
According to IAS 39, this portfolio comprises securities where
classification as a financial asset recognised at fair value through
profit or loss results either in a real intention to trade or an option
taken by the COFIDIS Participations Group under the conditions
described by the standard.
Financial assets or liabilities recognised at fair value through profit
or loss are by nature assets or liabilities acquired or generated
principally for the purpose of making a profit associated with
short-term price fluctuations or an arbitrage margin.
Securities classified as financial assets recognised at fair value
through profit or loss are initially recognised at fair value, excluding
transaction costs directly attributable to the acquisition (which are
passed directly to profit or loss) and including accrued coupons.
They are valued at their fair value and variations in fair value are
recognised in profit or loss.
1.1.1.2 Held-to-maturity investments
The category "Held-to-maturity investments" includes securities
with fixed or determinable payments that the COFIDIS Participations
Group intends and is able to hold to maturity, other than:
–– those that the Cofidis Participations Group designates on initial
recognition as assets recognised at fair value through profit or loss,
–– those that the Cofidis Participations Group designates as
available for sale,
–– those that meet the definition of loans and advances.
Securities held to maturity are initially recognised at their
acquisition price, including transaction costs directly attributable
53
to the acquisition and accrued coupons. These securities are
later recognised according to the amortised cost method at the
effective interest rate.
If there is an objective indicator of impairment, a depreciation is
recorded for the difference between the carrying amount and the
estimated discounted recoverable amount at the original effective
interest rate. If it improves later, the surplus provision is written back.
The COFIDIS Participations Group does not hold securities falling
within the "Held-to-maturity investments" category.
1.1.1.3 Securities in the "Loans and Advances" portfolio
The "Loans and Advances" category recognises unquoted
financial assets with fixed or determinable payments. Securities
are recognised at amortised cost using the effective interest rate
method corrected for any impairment provisions.
If there is an objective indicator of impairment loss, a depreciation
must be recorded for the difference between the carrying amount
and the estimated recoverable amount discounted at the original
effective interest rate.
The COFIDIS Participations Group does not hold securities falling
within the "Loans and Advances" category.
1.1.1.4 Available-for-sale financial assets
The "Available-for-sale financial assets" category is defined by IAS
39 as the default category.
According to the provisions of IAS 39, the accounting principles
for securities classified as "Available-for-sale financial assets" are
as follows:
–– securities available for sale are initially recognised at their acquisition price, including transaction costs directly attributable to
the acquisition and accrued coupons,
–– accrued interest on available-for-sale securities are carried over to
the attached advances account in compensation for profit or loss,
–– changes in fair value are recognised in equity. In the event of
disposal, these variations are reversed and recorded in profit or
loss. Depreciation over time of any higher / lower value for fixed
payment securities is recognised in profit or loss according to the
effective interest rate method,
–– in the event of an objective sign of significant or long-lasting
depreciation for equity securities, and realised by a credit risk
arising for debt securities, the unrealised capital loss recognised
in equity is reversed and recognised in profit or loss for the period.
If it improves later, this depreciation is written back through profit
or loss for debt instruments only. On the other hand, for equity
instruments, if written back, the positive variation in fair value is
recognised in a recyclable equity account.
such as determination of the re-valued net asset or any other
valuation method for equity securities.
If no technique is able to give satisfaction, or if the various techniques
used give estimates that are too dissimilar, the security remains
valued at cost and is maintained in the "Available-for-sale financial
assets" category. However, if such a case arises, information will
be provided in the notes.
1.1.3 Depreciation of securities
Depreciation is recorded where there are objective signs of
impairment loss for assets other than those classified as "Fair
value through profit or loss".
It is realised through a lasting or significant fall in value of the
security for equity securities, or by the appearance of a significant
deterioration in the credit risk evidence by a risk of non-collection
for debt securities.
A provision is only constituted to the extent that the depreciation
will result in a probable loss of all or part of the amount invested.
1.2 Credit activity
Credits are allocated to the "Loans and Advances" category. Thus,
in accordance with IAS 39, they are initially valued at fair value,
and later at amortised cost according to the effective interest rate
method. The effective interest rate is the rate that exactly discounts
the future cash flows to the original net outstanding loan. This rate
includes losses in value as well as income and transaction costs
included in the effective interest rate, if appropriate.
Accrued interest on advances is carried over to the attached
advances account in compensation for profit or loss.
In accordance with IAS 39, advances allocated to "Loans and
Advances" are depreciated when they present one or more loss
events occurring after realisation of these advances. Depreciation
is thus constituted for customer advances with a proven credit
risk matching one of the following situations:
–– when there are one or more unpaid debts given the special
characteristics of these credits,
–– when the situation of a counterparty has characteristics such
that independently of the existence of any unpaid loans, a proven
risk can be said to exist,
–– if dispute proceedings exist between the establishment and
the counterparty.
Depreciation is equal to the difference between the carrying amount
of the loans (amortised cost) and the sum of the estimated future
flows, discounted at the original effective interest rate for revolving
credits. Calculation of depreciation is based on:
1.1.2 Valuation of securities
–– a statistical approach by uniform debt portfolio, given the insignificant nature of debts taken individually and their common
characteristics in terms of credit risk,
Fair value is the valuation method selected for all financial instruments
classified in the "Financial assets at fair value through profit or loss"
or "Available-for-sale financial assets" categories.
–– the probabilities of default and losses based on the risk level
of each of the categories of outstanding loans (number of late
monthly payments, specific reasons, etc.).
Prices quoted on an active market form the basic valuation method.
By default, the COFIDIS Participations Group uses recognised
valuation methods by referring particularly to recent transactions.
The amount of depreciation is obtained by applying statistical
modelling of collection and loss flows by including all possible
movements between the different layers, based on observed
historical data. In accordance with the provisions of ISA 39, cash
inflows used in the statistical models are discounted. Depreciation
calculated on a debt presenting a proven credit risk is recognised
When there is no quoted price for an equity security and there is no
recognised valuation technique, the Cofidis Participations Group
chooses techniques based on objective and verifiable indications
in cost of risk. Counting from depreciation of the debt, the "interest
and similar income" entry in the income statement recognises the
repayment of the net carrying amount of the debt, calculated at
the rate used to discount the recoverable flows.
1.3 Financial liabilities
IAS 39 adopted by the European Union recognises two categories
of financial liabilities:
–– financial liabilities valued by type at fair value in through profit
or loss. Their variations in fair value affect profit or loss at the
end of accounting periods. However it is noted that the COFIDIS
Participations Group does not hold liabilities at fair value through
profit or loss.
–– other financial liabilities: this category includes all other financial
liabilities. This portfolio is recognised at original fair value (including
income and transaction costs) then recognised later at amortised
cost according to the effective interest rate method.
1.4 Derivative instruments
Derivative instruments are financial assets or liabilities and are
recognised on the balance sheet at the original fair value of the
transaction. At the end of each accounting period, these derivatives
are measured at fair value whether they are held for trading or they
are part of a hedging relationship.
The counterpart of the revaluation of derivatives on the balance
sheet is recognised in the income statement (except in the special
case of a cash flow hedging relationship)
The objective of fair value hedging is to reduce the risk of changes
in the fair value of a financial asset or liability.
The objective of cash flow hedging is to reduce the inherent risk in
variability of future cash flows on financial instruments.
As part of a micro-hedging management intention, the following
conditions must be met in order to benefit from hedge accounting:
–– eligibility of the hedging instrument and the instrument hedged,
–– documentation formalised from the start, particularly including
the individual designation and characteristics of the hedged item,
the hedging instrument, the nature of the hedging relationship and
the nature of the risk being hedged,
–– demonstration of the hedging effectiveness, at the start and
retrospectively.
The revaluation of the derivative is recognised in the accounts
as follows:
–– fair value hedge: revaluation of the derivative is recognised in
profit or loss symmetrically to the revaluation of the hedged item
up to the limit of the hedged risk and only any ineffectiveness of
hedging appears as net value through profit or loss,
–– cash flow hedge: revaluation of the derivative is carried over to
the balance sheet as counterpart to a specific recyclable equity
account and the inefficient part of the hedging is recognised
through profit or loss, as appropriate. Accrued interest from the
derivative is recognised through profit or loss symmetrically to the
hedged transactions.
As regards macro-hedging (portfolio hedging), the Group documents
transactions as cash flow hedges for variable rate loans and as fair
value hedges for the depreciable loans portfolio. Since the 2009
reporting date, the Group has been using provisions relating to
fair value hedging of a portfolio of interest rate items.
For portfolios of depreciable assets (fixed-rate assets), the Group
verifies that there is no over-hedging by applying the provisions
of IAS 39 Carve Out.
After a cash flow or fair value macro-hedge has been documented,
the revaluation of the derivative is recognised in the accounts
according to the same principles as those described for microhedging.
The variation in fair value of portfolios of fair-value hedged instruments
is recognised on a specific line of the balance sheet, "Revaluation
difference for portfolios hedged by rate", through the counterpart
of the income statement.
1.5 Non-recognition of financial instruments
A financial asset (or Group of financial assets) is derecognised in
whole or part:
–– when the contractual rights to the cash flows associated with
it expire or are transferred, and
–– when nearly all the risks and benefits associated with this financial
asset are transferred.
Then the contractual rights to cash flows are transferred but only
a part of the risks and benefits, as well as control, are retained,
the entity continues to recognise the financial asset to the extent
that it is involved in this asset.
2 – Deferred taxes
IAS 12 requires recognition of deferred taxes under the following
conditions:
–– a deferred tax liability must be recognised for all taxable temporary
differences in the accounting value of an asset or liability on the
balance sheet and its tax base, except to the extent that the deferred
tax liability is generated by: the original recognition of goodwill, or
initial recognition of an asset or liability in a transaction that is not a
business combination, which, at the time of the transaction, does
not affect the accounting or the taxable profit (tax loss);
–– a deferred tax asset must be recognised for all deductible temporary differences, between the accounting value of an asset or
liability on the balance sheet and its tax base, to the extent that it
is likely that a taxable profit, on which these deductible temporary
differences could be charged, will be available, unless the deferred
tax asset was not generated by the initial recognition of an asset
or a liability in a transaction that is not a business combination and
that affects neither the accounting profit nor the taxable profit (tax
loss) on the date of the transaction.
–– a deferred tax asset must also be recognised for carrying forward
unused tax losses and tax credits, to the extent that it is likely that
there will be future taxable profit to which these unused tax losses
and tax credits may be charged.
Deferred tax assets and liabilities are measured at the tax rates
that are expected to apply when the asset is realised or the liability
is settled, to the extent that these rates have been adopted at the
reporting date.
Gains on equity securities, as defined by the French General Tax
Code and falling within the long-term tax system, are exempt for
the fiscal years starting from 1 January 2007. Therefore, unrealised
55
capital gains recorded on the reporting date do not generate
temporary differences giving rise to the recognition of deferred taxes.
determined by discounting future cash flows expected from the
use of the asset and its disposal.
Deferred tax is recognised in the net profit or loss for the period
except to the extent that the tax is generated:
Where the recoverable amount would be less than the carrying
amount, an impairment loss is recognised for the difference between
these two amounts. Impairment losses relating to intangible assets
can be reversed subsequently if the recoverable value becomes
greater than the carrying amount (up to the limit of the initially
recognised depreciation).
–– either by a transaction or an event that is recognised directly in
equity, in the same period or a different period, in which case it is
directly debited or credited in equity,
–– or by a business combination.
Deferred tax assets and liabilities are offset if and only if:
–– the entity has a legally enforceable right to offset due tax assets
and liabilities, and
–– the deferred tax assets and liabilities relate to taxes on profits
levied by the same tax authority, either on the same taxable entity,
or on different taxable entities that have the intention, either to settle
the due tax assets and liabilities based on their net amount, or to
realise the assets and settle the liabilities simultaneously, during
each future accounting period in the course of which it is expected
that significant amounts of deferred tax assets or liabilities will be
settled or recovered.
Calculations of deferred taxes are not discounted.
3 – Assets
In compliance with IAS 16, when a fixed asset is structured through
components with different useful lives, these are recognised and
depreciated as distinct items. The depreciable base takes account
of any residual value of fixed assets.
When it appears from the terms of a lease contract in which the
COFIDIS Participations Group is lessee that practically all the risks
and benefits inherent in ownership are transferred by the lessor to
the lessee, the corresponding assets are recorded at the time of
first recognition as tangible assets on the COFIDIS Participations
Group's balance sheet, in an amount equal to the fair value of the
leased asset or the discounted value of the minimum payments
made in respect of the lease, if this is lower. This sum is then
reduced by depreciation and impairment recorded. The financial
commitments arising from it are entered in financial debts.
Fixed assets are depreciated by the linear method over the
foreseeable useful life of the assets. Principal useful lives selected:
–– Land, landscaping, utility services: 15-30 years
–– Constructions – carcass structure: 20-80 years (depending on
the type of building concerned)
–– Constructions – equipment: 10-40 years
–– Fixtures and fittings: 5-15 years
–– Furniture and office equipment: 5-10 years
Based on the information on fixed asset values available to it,
the COFIDIS Participations Group can conclude that impairment
testing would not result in modifying the values recorded on the
balance sheet at 31 December 2014.
4 - Goodwill
4.1 Initial recognition
Assets and liabilities acquired as part of a business combination
are recognised according to the acquisition method: assets and
liabilities are then recorded at fair value. The residual difference
between the acquisition price and the re-valued assets and liabilities
is recognised under "Goodwill", if necessary).
4.2 Impairment tests and Cash Generating
Units
In accordance with revised IFRS 3 "Business combinations",
goodwill is no longer subject to systematic annual depreciation: the
net value of intangible items is subject to periodic analysis based
on discounting future financial flows corresponding to the most
probable assumptions made by Management. This impairment test
is based on assumptions in terms of growth rate, discount rate and
tax rate. The selected assumptions are based on business plans
for future years. This valuation is carried out on an annual basis or
when a significant event requires it. Depreciation is recognised when
the valuation reveals undervaluing of the intangible items assessed.
To perform this impairment test, goodwill must be allocated to
each of the Cash-Generating Units, forming a unified Group jointly
generating identifiable cash flows and which are largely independent
from the cash inflows generated by other asset Groups. The value
in use of these units is determined by reference to discounted net
future cash flows. When the carrying amount of the CGU is greater
than the value in use, an impairment loss is recognised for the
difference and charged in the first instance to goodwill.
As part of its transition to IFRS, the Group considered that the
legal entities constituted CGUs.
5 – Provisions
–– Software acquired or created internally: 1-10 years
The COFIDIS Participations Group has identified all its obligations
(legal or implicit), resulting from a past event, for which it is likely
that settlement is expected to result in an outflow of resources,
for which the timing or amount are uncertain but for which the
estimate can be determined reliably.
–– Acquired client base: 9-10 years (if acquiring customer contract
portfolio)
In respect of these obligations, the COFIDIS Participations Group
has constituted provisions that in particular cover:
In accordance with IAS 36 "Impairment of assets", when events or
changes in the market environment indicate a risk of impairment of
intangible and tangible assets, they must be reviewed in detail to
determine if their carrying amount is lower than their recoverable
value, this being defined as the higher of the fair value (reduced
by the disposal cost) and the value in use. The value in use is
–– company commitments,
–– Safety equipment: 3-10 years
–– Movable equipment: 3-5 years
–– Computer equipment: 3-5 years
–– legal risks.
These provisions are estimated according to their nature, taking
account of the most likely assumptions. The amount of the obligation,
whether it is legal, regulatory or contractual, is discounted to
determine the amount of the provision, once such discounting
represents a significant feature.
the relevant commitments is reduced by the amount of the fair
value of these funds.
6 – Employee benefits
The differences generated by changes in these assumptions and by
differences between previous assumptions and what has actually
occurred constitute actuarial gains and losses. When the plan has
assets, they are measured at fair value and their expected return
is recognised in profit or loss. The difference between the actual
return and the expected return is also an actuarial gain or loss.
6.1 – Employee benefits
Under IAS 19, employee benefits are grouped into four categories:
–– short-term employee benefits,
–– post-employment benefits,
–– long-term employee benefits,
–– termination benefits.
From 1 January 2012, they are recognised in accordance with IAS
19R, which is applied in advance. The new provisions result in:
Actuarial gains and losses are posted to unrealised or deferred gains
or losses and recognised in equity. Plan reductions and liquidations
result in a change in the commitment, which is recognised in profit
or loss for the period.
6.1.3 Termination benefits
–– defined post-employment benefits, by the immediate recognition of actuarial gains and losses in unrealised gains or losses or
deferred and recognised in equity, and the changes to the plan
in income, the application to the plan assets, of the discount rate
for debt and improved disclosures;
These benefits are recognised if and only if the company is
"demonstrably committed" to terminate the employment of one
or more members of staff before the normal retirement age, or
to provide these benefits following an offer made to encourage
voluntary redundancy.
6.1.1 Short-term employee benefits
–– salaries, remuneration and social security contributions,
IAS 19 states that the company is "demonstrably committed" to a
termination when, and only when it has a detailed formal plan for
the termination and is without realistic possibility of withdrawal. It
adds that such a plan must, as a minimum, indicate:
–– short-term paid absences (particularly annual leave and sick leave),
–– the location, function and approximate number of people affected,
–– profit sharing and bonuses,
–– the benefits provided for each function or professional grade,
–– non-monetary benefits (medical aid, housing, company cars,
etc.) granted to staff in active employment.
–– the date on which the plan will be implemented.
Short-term employee benefits include:
All of these short-term benefits are recognised as costs for the period.
6.1.2 Post-employment benefits
Post-employment benefits essentially relate to retirement and are
governed by arrangements classified into two categories:
–– defined contribution plans: those under which the Group's
commitment is limited only to the payment of a contribution, but
includes no commitment by the Group as to the level of benefits
provided. The contributions paid are recognised as costs in the
accounting period.
–– defined benefit plans: these are schemes for which the Group is
committed formally or by implicit obligation to an amount or a level
of benefits and therefore assumes the medium or long-term risk.
The principle is that the cost of the post-employment benefits must
be recognised as costs during the employee's period of employment
and not at the time they effectively receive these benefits:
–– in a defined contributions scheme, the company is discharged
from any obligation once it has paid its contributions to the funds.
The cost of post-employment benefits therefore corresponds quite
simply to the contributions over the period,
–– in a defined benefits scheme, the cost of post-employment
benefits depends partly on the variation in the amount of the
company's commitments during the accounting period and partly
on the change in the value of the fund's assets.
A provision is recognised in the balance sheet liabilities in order to
cover all the retirement commitments. The valuation performed on a
minimum annual basis incorporates demographic assumptions, early
retirements, increases in salaries and discount and inflation rates.
When these schemes are financed by external funds meeting the
assets definition of the scheme, the provision intended to cover
These benefits are subject to a provision at the end of the
accounting period.
7– Equity instruments: deeply subordinated
notes
7.1 Characteristics of deeply subordinated
notes
The French Financial Security Law of 2003 introduced the possibility
of issuing securities qualified as "deeply subordinated". These
securities are perpetual and are therefore issued for a unlimited
period, no repayment date being contractually established. In the
event of the issuer going into official receivership, the eligibility
of holders of such securities ranks lower than that of all other
categories of bonds. Usually, the issuer has a repayment option
starting from a given maturity date and is bound to pay interest
to bearers of the securities when it proceeded to pay dividends
during the accounting period.
7.2 Accounting treatment: nominal and
interest expense
IAS 32 and IAS 39, relating to the presentation and recognition of
financial instruments, distinguish between debt instruments and
equity instruments, in particular based on the substance of the
instruments' contractual characteristics.
According to IAS 32, a financial instrument for which repayment
is not provided in own shares is an equity instrument if there is no
contractual obligation to settle in cash or another financial asset
under potentially unfavourable conditions for the issuer. When
repayment of the capital is at the sole discretion of the issuer, the
classification of issued securities as debt instruments or as equity
instruments is determined on the basis of other rights attached to
57
them. When repayment of the securities is at the discretion of the
issuer, the securities are equity instruments.
Non-redeemable deeply subordinated notes, except at the issuer's
initiative, and for which the payment of a coupon is not obligatory,
constitute consolidated equity and are therefore recognised for the
cash amount received.
The coupons attaching to them are entered as financial expenses
for the accounting period in the individual financial statements of
the issuer and, in the consolidated financial statements, are carried
over to reduce equity by the amount paid net of tax.
8 – Interest income and expenses
Interest income and expenses are recognised in the income
statement for all financial instruments valued at amortised cost
using the effective interest rate method.
The effective interest rate is the rate used to discount future cash
inflows or outflows over the estimated lifetime of the financial
instrument so as to obtain the carrying amount of the financial
asset or liability. To determine the effective interest rate, the Group
estimates the cash flows taking contractual procedures into
consideration. This calculation includes the commissions paid
or received between the parties to the contract or intermediaries
once they are linked to the yield from the financial instrument, as
well as the transaction costs and losses.
As soon as a financial asset or a group of similar financial assets
has been depreciated following an impairment loss, subsequent
interest income is recognised in the income statement under "Interest
and similar income" based on the original effective interest rate.
9– Net commission income
The Group recognises commission income and expenses on services
through profit or loss based on the nature of the services to which
they are related. Commission remunerating continuous services
is spread through profit or loss over the duration of the service
rendered. Commissions remunerating occasional services, such as
penalties on payment incidents, are fully recognised through profit
or loss, under "Commission income", when the service is delivered.
10 – Judgements and estimates used in
preparing the financial statements
In preparing the financial statements as at 31 December 2014,
management is required to make valuations, which by their nature,
require making assumptions and include risks and uncertainties
regarding their future realisation.
These can be influenced by many factors, particularly:
–– activities in national and international markets,
–– fluctuations in interest and exchange rates,
–– the economic and political situation in some business segments
or countries,
–– changes in regulations or in legislation.
This list is not exhaustive.
Accounting estimates that require assumptions to be made are
used principally for the following valuations:
10.1 Financial instruments measured at fair
value
The fair value is the amount for which an asset could be exchanged,
or a liability settled, between knowledgeable, willing parties in an
arm's length transaction.
The fair value selected to measure a financial instrument is firstly
the quoted market price for the financial instrument when it is listed
on an active market. If a market for a financial instrument is not
active, fair value is then determined using valuation techniques.
A financial instrument is considered as listed on an active market
if prices are easily and regularly available from a stock exchange,
broker, trader or regulatory agency, and these prices represent actual
transactions and take place regularly in arm's length transactions
on the market.
When a financial instrument is handled on different markets and
the Group has immediate access to these markets, the fair value
of the financial instrument is represented by the market price.
When there are no listings for a given financial instrument but the
components of this financial instrument are listed, the fair value is
equal to the sum of the prices listed for the different components
of the financial instrument including the purchase and sale price
of the net position.
If a market for a financial instrument is not active, its fair value is
determined using valuation techniques. Depending on the financial
instrument, these include using data from recent transactions, fair
values of comparable financial instruments and valuation models
based on discounting future cash flows.
10.2 Retirement schemes and other future
financial benefits
Calculations relating to expenses associated with pensions and
future financial benefits are based on assumptions for discount
rates, staff turnover or rates of growth for salary and social security
contributions, made by management. If the actual figures differ from
the assumptions used, the expense associated with pensions can
increase or decrease during future accounting periods.
Management also estimates the predicted yield rate for assets in
these schemes. Estimated yields are based on the predicted yield
from fixed payment securities, particularly the yield from bonds.
10.3 Depreciation of customer advances
The value of the "Loans and advances" entry is adjusted using a
provision relating to depreciated advances when there is a proven
risk of non-recovery for these debts.
The value of this provision is estimated on a discounted basis
depending on a certain number of factors. It is possible that
future credit risk evaluations may differ significantly from current
evaluations, which could necessitate an increase or reduction in
the amount of the provision.
10.4 – Provisions
The measurement of other provisions may also be the subject of
estimates, particularly provisions for legal risks that result from
Management's best assessment, given the information in its
possession at 31 December 2011.
10.5 Depreciation of goodwill
Goodwill is subject to depreciation tests at least once a year. Selected
assumptions in terms of business growth and discount rates for
future financial flows may influence the amount of any impairment
losses to be recognised. A description of the method applied is
detailed in the section "Consolidation principles and methods".
IV - Notes to the consolidated
balance sheet
1 - Cash on hand, balances at central banks
(in thousands of €)
Accounts open at central banks
Cash and cash equivalents
Total
2 - Financial assets recognised at fair value
through profit or loss
At 31 December 2014, financial assets recognised at fair value
through the income statement stood at €28,262 k. The Group
does not hold financial liabilities at fair value through the income
statement.
Financial assets at fair value through the income statement exclusively
comprise debt securities with a 100% capital guarantee at maturity.
3 – Derivative instruments
3.1 - Derivative hedging instruments
At 31 December 2014, financial instrument interest rate swaps
amounted to €30,432 k in assets and €92,507 k in liabilities. The
portfolio is broken down as follows:
59
–– swaps paying a fixed rate used to hedge the risks associated with financing fixed rate outstanding debts,
–– swaps receiving a fixed rate used to hedge the risks associated with loans granted at variable rates,
–– interest rate options (particularly CAP guaranteeing a ceiling rate) used to guard against a rise in the financing cost for variable rate
loans arising from a large increase in rates.
–– Currency swaps paying a fixed rate in Hungarian florins used to hedge the risk associated with refinancing the Hungarian branch.
Derivative hedging instruments – asset fair value (in thousands of €)
2014
> 1 year and <
5 years
< 1 year
Swaps
31/12/2013
4,809
9,741
15,882
30,432
22,309
0
0
0
0
71
Options
Total
Total in market
value
> 5 years
4,809
9,741
15,882
30,432
31/12/2014
Derivative cash flow hedging instruments
22,380
31/12/2013
26,845
19,777
3,552
261
35
2,342
30,432
22,380
Foreign exchange rate derivative hedging instruments
Derivative fair value hedging instruments (1)
Total
Derivative hedging instruments – liability fair value (in thousands of €)
2014
Swaps
Total in market
value
> 5 years
31/12/2013
64,808
20,072
4,308
89,187
64,402
0
3,320
0
3,320
3,926
92,507
68,327
Options
Total
> 1 year and <
5 years
< 1 year
64,808
23,392
4,308
31/12/2014
31/12/2013
Derivative cash flow hedging instruments
12,544
10,022
Derivative fair value hedging instruments (1)
79,962
58,306
Total
92,507
The strategy for using hedging instruments is explained in detail in note IX "Risk exposure and hedging policy".
(1) For fair value hedging, refer to § III.1.4.
68,327
3.2 Fair value hierarchy for financial instruments
There are three levels of fair value for financial instruments, according to the definitions in IFRS 7:
–– Level 1: prices quoted on active markets for identical assets or liabilities;
–– Level 2 data other than quoted prices as in Level 1, that is observable for the relevant asset or liability, either directly (i.e. prices) or
indirectly (i.e. price-derived data);
–– Level 3 data relating to the asset or liability that are not based on observable market data (unobservable data).
Level 1
Financial assets
Level 2
Available for sale assets
Assets recognised at fair value
through profit or loss
0
Total
Total
0
Transfers
L2 => L1
65
65
0
0
28,262
28,262
0
0
30,432
0
0
0
58,758
0
Transfers
L1 => L2
Total
30,432
0
Financial liabilities
Level 3
0
58,758
0
92,507
0
92,507
92,507
0
0
0
0
92,507
0
0
Fair value
2013
Change in fair
value
3.3 Revaluation surplus for rate hedging portfolios
Fair value
2014
Fair value of interest rate risk by portfolios
• of financial assets
• of financial liabilities
73,742
49,411
24,331
0
0
0
4 - Available-for-sale financial assets
31/12/2014
Negotiable debt instruments
31/12/2013
Gross value
0
0
Impairment loss
Net value of negotiable loans
0
0
Accrued interest FCT Cofititrisation
0
0
65
65
Certificates of membership of deposit guarantee funds
Total of available-for-sale securities
Central administration
Credit institutions
Institutions not credit establishments
65
Fair Value of
non-depreciated
assets
65
Fair Value of
depreciated
assets
Net carrying
amount
–
–
–
65
0
65
–
–
–
61
Large companies
–
–
–
Retail customers
–
–
–
Total
65
0
65
5 - Loans and advances to credit institutions (in thousands of €)
31/12/2014
Accounts and loans
671,909
688,104
458
679
Associated advances
Total of loans and advances to credit establishments
31/12/2013
672,366
688,783
The "Loans and advances to credit institutions" entry does not include depreciation.
6 - Loans and advances to customers (in thousands of €)
31/12/2014
Advances to customers
Impairment
Total of loans and advances to customers
31/12/2013
10,601,903
10,574,349
1,624,574
1,604,997
8,977,329
8,969,352
Breakdown of loans and advances to customers by due date (in thousands of €)
2014
Less than one
year
2,362,300
6,615,028
Total
8,977,329
2013
More than one
year
Less than one
year
2,226,220
More than one
year
6,743,131
Total
8,969,352
Breakdown of loans and advances to customers by quality of credit (in thousands of €)
2014
Sound
8,023,178
Depreciated
assets
Gross value
Impairment
2,578,725
1,624,574
Total
8,977,329
For information, restructured outstanding loans amounted to €477,331 thousand (before discount). They are presented with the sound
loans for an amount net of discount (discounted differential of cash inflows).
2013
Sound
8,069,750
Depreciated
assets
Gross value
2,504,598
Impairment
1,604,997
Total
8,969,352
For information, restructured outstanding loans amounted to €476,449 thousand.
Depreciation of loans and advances
31/12/2013
Depreciation of loans and advances to
customers
1,604,997
Charges
Write-backs
20,023
Other
(1,732)
31/12/2014
1,624,574
63
7 - Accruals and miscellaneous assets
31/12/2014
Miscellaneous debtors
31/12/2013
33,134
41,494
Other
5,075
4,887
Total miscellaneous assets
38,210
46,381
Income receivable
7,846
10,124
Prepaid expenses
3,794
7,162
22,088
31,608
Other
Total accruals
33,727
48,893
Total miscellaneous assets and accruals
71,936
95,274
8 – Tangible assets
Variations in the gross values of tangible assets and accrued depreciation are represented in the following table (in thousands of euro):
31/12/2013
Increases
Decreases
Other
31/12/2014
Land
10,291
4
(574)
(0)
9,721
Computer equipment
24,909
227
(4 341)
(19)
20,776
Office equipment
10,204
655
(816)
(456)
9,587
Improvements to buildings
15,894
99
(120)
20
15,893
5,630
10,769
(180)
395
16,614
66,927
11,754
(6 031)
(61)
72,590
1,663
126
(133)
0
1,656
20,048
1,278
(3 827)
(16)
17,483
8,100
509
(797)
(424)
7,388
10,832
1,289
(112)
(6)
12,003
3,809
859
(516)
401
4,554
44,451
4,062
(5 385)
(44)
43,084
2,707
0
(946)
1,761
19,769
7,692
300
(16)
27,745
Other tangible assets
Gross value of tangible assets
Land
Computer equipment
Office equipment
Improvements to buildings
Other tangible assets
Depreciation of tangible
assets
Provisions for tangible assets
Net value of tangible assets
9 – Intangible assets
Variations in the gross values of tangible assets and accrued depreciation are represented in the following table (in thousands of €):
31/12/2013
Lease premium
Increases
Decreases
Other
31/12/2014
247
0
(47)
– 3
198
11,328
0
0
0
11,328
49
0
0
0
49
0
0
0
0
0
Software purchased
42,141
797
(8,025)
87
35,000
Software produced internally
15,691
217
0
0
15,908
Advances and deposits
113
45
0
(158)
0
Other intangible assets
319
42
0
– 3
358
69,889
1,101
(8,073)
(76)
62,841
Lease premium
24
6
0
– 2
29
Set-up costs
49
0
0
0
49
Software purchased
35,908
3,917
(7,954)
– 63
31,808
Software produced internally
11,094
2,389
(542)
0
12,941
Advances and deposits
0
0
– 2
2
0
Other intangible assets
200
53
0
– 2
251
Depreciation and provisions
for intangible assets
47,275
6,366
(8,497)
(65)
45,078
Net value of intangible assets
22,614
(5,265)
425
(11)
17,762
Trademarks acquired as part of
grouping
Set-up costs
Franchises, patents and other
licences
Gross value of intangible
assets
10 - Goodwill (in thousands of €)
The change in and breakdown of goodwill are presented as follows:
2013
Net value of goodwill
173,448
Increases
Reallocation
0
2014
0
173,448
11 - Debts to credit institutions (in thousands of €)
31/12/2014
31/12/2013
65
Ordinary demand accounts
Ordinary term accounts
19,194
28,696
7,971,862
7,521,734
8,069
10,130
Other debts
Total debts to credit institutions
7,999,126
7,560,560
12 - Debts to customers (in thousands of €)
31/12/2014
Ordinary accounts
Special savings accounts
Term creditor accounts
44,055
44,132
409,243
497,770
16,668
21,024
7,856
12,078
477,823
575,003
Other sums due
Total debts to customers
31/12/2013
31/12/2014
Less than one
year
Debts to customers
More than one
year
477,823
Total
0
477,823
13 - Debts represented by a security (in thousands of €)
31/12/2014
31/12/2013
50,000
70,000
Bond issues
0
400,000
Deposit receipts and savings bonds
0
0
Accrued interest
1
483
Total debts represented by a security
50,001
470,483
Negotiable debt instruments are securities representing a lien for a fixed period and are negotiable on a regulated or private market.
Group financing for this category of debt is made up of:
–– medium-term negotiable notes, where the term is greater than one year,
–– short-term securities, where the term is less than one year, such as certificates of deposit.
Bond issues:
Bonds matured on 11 July 2014.
Current and deferred tax assets and liabilities (in thousands of €)
14.1 - Changes in current and deferred tax assets and liabilities
Current tax assets and liabilities
31/12/2013
Net variation
31/12/2014
Current tax assets
22,462
(8,377)
14,085
Current tax liabilities
21,542
(566)
20,976
920
(7,811)
(6,890)
Net current tax assets
Current tax assets are principally tax credits. The liabilities correspond to the balance of corporation tax to be paid at the end of the
accounting period as well as miscellaneous taxes.
14.2 Origin of deferred taxes
2014
Assets
2013
Liabilities
Assets
Liabilities
2014
2013
Net
Net
Temporary differences
109,165
18,241
104,200
13,938
90,924
90,262
Non-deductible provisions
84,829
68
86,308
89
84,762
86,218
Organic, Employee contributions
583
0
488
0
583
488
Assets and depreciation
624
765
1
101
(141)
(99)
6,041
1,799
1,688
75
4,241
1,613
1,208
1,501
(1,208)
(1,501)
4,929
8,912
4,107
6,324
(3,983)
(2,217)
Other
12,158
5,489
11,608
5,848
6,669
5,760
Offsetting assets/liabilities
(7,341)
(7,341)
0
0
Total deferred taxation
101,824
Employee benefits
Regulated provisions
IAS 39 reclassifications
10,900
104,200
13,938
90,924
90,262
Deferred taxes in France are calculated at a rate of 34.43%. For foreign subsidiaries, tax was calculated at the local rate. Offsetting of
assets and liabilities was performed for each entity.
15 - Accruals and miscellaneous liabilities
31/12/2014
31/12/2013
Miscellaneous creditors
61,932
77,616
Miscellaneous company debts
32,097
33,971
Total miscellaneous assets
94,029
Expenses to be paid
111,588
81,915
59,154
5,568
6,512
Other
32,450
20,488
Total accruals
119,933
86,154
Total accruals and miscellaneous liabilities
213,962
197,741
Deferred income
16 – Provisions
31/12/2013
Charges
Writebacks used
Writebacks not
used
Other
31/12/2014
Company commitments: pensions
5,342
9,521
(895)
(1,877)
3,062
15,154
Company commitments: longservice awards
1,174
78
0
(8)
(150)
1,093
67
Legal and tax risk
0
0
0
0
0
0
Provision for restructuring
0
0
0
0
0
0
70
0
0
0
(70)
0
Provision for costs and procedural
risk
11,486
1,222
0
(2,448)
(2,000)
8,261
Miscellaneous risks and expenses
13,866
6,771
(25)
(3,259)
1,998
19,351
17,593
(920)
Provisions for subsidiary risks
Total provisions
31,938
(7,592)
Cofidis Hongary recognised a €3.2 million provision pursuant to the banking law of 4 July 2014.
2,840
43,859
17 – Shareholders' equity
17.1 Composition of share capital
The share capital of COFIDIS Participations SA comprises 211,960,789 fully paid-up ordinary shares, of the same rank, at a par value
of €0.15 per share, for a total of €31,794,118.3.
17.2 Management of share capital
For information only, COFIDIS Participations SA declared a European solvency ratio greater than 8% in 2014.
17.3 Perpetual deeply subordinated notes
Consolidated reserves include a perpetual deeply subordinated note of €100 million issued in October 2006 by COFIDIS SA. Interest
paid is carried forward as a deduction from consolidated reserves.
17.6 Change in the cash flow hedge reserve
– at 31 December 2014 (in thousands of €)
Cash flow hedge reserve
Balance at
31/12/2013
6,077
Change in
fair value of
derivatives
4,344
Recycling
– 940
Balance at
31/12/2014
11,361
Note: The data shown in this table are gross of deferred taxes.
The effect of deferred tax on changes during FY 2014 is €(1,798) thousand.
The cash flow hedge reserve relating to derivative instruments designated as fair value hedge at 1 January 2009 stood at
€(2,677) thousand at beginning of period and at €(1,470) thousand at the close. Depreciation for the period, recognised
through profit or loss, was €1,207 k.
Cash flow hedge reserve
Balance at
31/12/2012
348
Change in
fair value of
derivatives
6,547
Recycling
– 818
Balance at
31/12/2013
6,077
Note: The data shown in this table are gross of deferred taxes.
The effect of deferred tax on changes during FY 2013 is €(1,588) thousand.
The cash flow hedge reserve relating to derivative instruments designated as fair value hedge at 1 January 2009 stood at
€(4,473) thousand at beginning of period and at €(2,677) thousand at the close. Depreciation for the period, recognised
through profit or loss, was €1,796 k.
69
18 – Summary of financial instrument classes by accounting categories
Financial instrument
classes
Debt instruments
Assets
valued at
fair value
through
profit/(loss)
(fair value
option)
28,262
Available
for sale
assets
Held-tomaturity
assets
Loans and
receivables
Derivative
hedging
instruments
Liabilities at
amortised
cost
Total
carrying
amount
28,326
65
Loans and advances to
credit institutions
Loans to customers
672,366
672,366
8,977,329
8,977,329
Hedging derivatives
30,432
30,432
Derivatives
0
Other advances
0
Financial assets
28,262
65
0
9,649,695
30,432
Negotiable debt
instruments
Bond issues
0
9,708,453
50,000
50,000
0
0
0
Securitisation
Accrued interest
1
Ordinary and demand
accounts
1
0
7,999,126
Other debts to credit
establishments
7,999,126
0
Debts to customers
477,823
477,823
Other debts to customers
0
Subordinated liabilities
0
Hedging derivatives
92,507
92,507
0
Derivatives
Loans and financial
liabilities
0
0
0
0
92,507
8,526,950
8,619,457
Financial instrument
classes
Debt instruments
Assets
valued at
fair value
through
profit/(loss)
(fair value
option)
Available for
sale assets
Held-tomaturity
assets
Loans and
receivables
26,904
688,783
688,783
8,969,352
8,969,352
22,380
22,380
0
0
65
Loans and advances to
credit institutions
Loans to customers
Hedging derivatives
Derivatives
Other advances
26,840
Total
carrying
amount
26,840
Financial assets
Derivative Liabilities at
hedging
amortised
instruments
cost
65
Negotiable debt
instruments
Bond issues
Securitisation
Accrued interest
0
9,658,135
22,380
0
9,707,420
70,000
70,000
400,000
400,000
0
483
483
Ordinary and demand
accounts
0
7,560,560
7,560,560
Other debts to credit
establishments
0
Debts to customers
575,003
575,003
Other debts to customers
0
Subordinated liabilities
0
Hedging derivatives
68,327
68,327
Derivatives
0
Loans and financial
liabilities
0
0
0
0
68,327
8,606,046
8,674,373
71
V - Notes to off-consolidated balance sheet items
1- Finance and guarantee commitments
The lending that the Group has irrevocably undertaken to grant to its customers, on their request (in the context of opening revolving
credit facilities) amounted to €2,836 million at 31 December 2014.
31/12/2014
31/12/2013
FINANCE COMMITMENTS
Commitments made to credit institutions
0
0
3,263
5,100
2,836,265
3,090,785
Guarantees, sureties, and other guarantees on the request of credit
establishments
650
650
Guarantees, sureties and other guarantees received from credit
establishments
465
621
Guarantees on request from customers
37,805
40,812
Guarantees received from customers
26,755
33,431
Commitments received from credit institutions
Commitments made to customers
GUARANTEE COMMITMENTS
2 - Term financial instruments
In accounting terms, all transactions are considered from their conclusion, even if the period covered is deferred.
VI – Notes to the consolidated income statement
In 2013, the data included eight months for Sofémo, against 12 months in 2014.
dec-13
sofemo 8 mths
dec-13
sofemo 12 mths
dec-14
1,029,166
1,052,208
1,048,803
Interest and similar costs
– 141,256
– 150,805
– 129,747
213,027
222,096
227,421
1,100,937
1,123,499
1,146,478
Other income and expenses
Net banking income
General operating costs
Amort. exp., prov. and gains/losses on other assets
GROSS OPERATING PROFIT
Cost of risk
Operating profit
Tax on profits
Net profit
Income to minority shareholders
Net profit – Group share
– 544,802
– 552,773
– 586,224
– 17,919
– 17,931
– 9,227
538,216
– 366,108
172,108
– 56,964
115,144
– 12
115,157
552,795
– 372,414
180,381
– 60,457
119,924
– 12
119,936
551,027
– 354,021
197,006
– 64,049
132,957
– 1
132,958
1 - Net banking income (in thousands of €)
2014
2013
Income from interest on advances to credit institutions
4,505
5,517
Income from interest on advances to customers
1,023,847
1,003,876
Income from interest on available-for-sale assets
0
0
20,451
19,773
1,048,803
1,029,165
67,362
62,078
Interest expenses paid to customers
6,419
14,612
Interest expenses on debts represented by a security and subordinated
debt
1,613
2,691
Interest expenses on hedging derivatives
54,352
61,875
Interest and similar expenses
129,747
141,256
Income from interest on hedging derivatives
Interest expenses paid on liabilities to credit institutions
Commissions (Income)
240,792
229,917
Commissions (Expenses)
18,478
19,889
Net gains or losses on Commissions
222,313
210,028
Net gains or losses from portfolios at fair value through profit or loss
1,415
1,053
Net gains or losses on available-for-sale financial assets
– 271
886
Income from other activities
4,887
1,923
924
863
3,963
1,060
1,146,478
1,100,937
Costs for other activities
Net gains or losses on Other activities
Net banking income
2 - General operating costs (in thousands of €)
31/12/2014
Payroll (1)
Taxes and duties
Other operating expenses from recurring operations
Total general operating costs
31/12/2013
219,335
213,469
11,097
11,881
355,792
319,452
586,224
544,802
(1) Payroll expenses are detailed in Note VIII "Employee benefits"
73
3- Amortisation expense and depreciation of tangible and intangible assets (in thousands of €)
31/12/2014
31/12/2013
Provision for depreciation of intangible assets
6,366
9,948
Provision for depreciation of tangible assets
4,062
7,635
Total amortisation expense and depreciation of assets
10,427
17,584
Write-back of provisions on intangible assets
1,490
1,397
Amortisation expense/Write-backs and provisions on tangible and intangible assets
8,938
16,187
4 - Cost of risk (in thousands of €)
31/12/2014
Net provisions for depreciation
31/12/2013
15,759
15,863
Recovery of depreciated advances
(29,176)
(34,431)
Transfer to losses
368,662
382,460
Change in operating risk provisions
(1,225)
2,217
Cost of customer risk
354,021
366,108
5 - Net gains or losses on other assets (in thousands of €)
31/12/2014
31/12/2013
Income from asset disposals
(78)
(50)
Capital loss on asset disposals
367
1,781
Gains or losses on other assets
(289)
(1,732)
6 - Taxes (in thousands of €)
6.1 Tax expense
31/12/2014
31/12/2013
Current tax expense 62,842
51,764
Deferred tax expense
1,207
5,200
Tax expense for the period
64,049
56,964
6.2 Tax analysis
Reconciliation between the theoretical tax expense and the tax expense entered in the income statement for the Group is detailed as
follows (in millions of euro):
31/12/2014
Consolidated profit or loss before taxes
31/12/2013
197
172
Current tax rate in France
38.00%
38.00%
74.9
65.4
Effect of permanent differences
– 3.9
– 4.1
Differences in foreign tax rates
– 10.7
– 9.7
1.5
1.8
– 0.3
2.2
3.1
3.0
– 0.5
– 1.7
Theoretical tax at current French tax rate
Effect of unrecognised tax assets (1)
Rate change
Tax on dividends
Other
Group tax charge
64.0
57.0
Effective tax rate
32.51%
33.10%
(1) Unrecognised tax assets notably concern the non-activation of deficits, and for Cofidis Italy, the non-recognition of deferred tax
assets on customer depreciation.
7 - Auditors' fees
Before tax
2014
Total fees
Certification
Ancillary missions
TOTAL
KPMG
1,161
MAZARS
898
88
1,161
Certification
Ancillary missions
TOTAL
Other
159
16
898
88
Before tax
PWC
159
16
2013
Total fees
KPMG
MAZARS
PWC
Other
1,074
825
96
136
16
825
96
136
16
1,074
75
VII – Segment information
1 - Definition of activity segments
The entities in the COFIDIS Participations Group conduct business in a single segment of activity, namely consumer credit to private
individuals. Accordingly, in application of IFRS 8 relating to operating segments, we are required to disclose information on the geographical
breakdown of the areas in which we operate, which is the only segment information provided by the Group.
There are three regions in the geographical breakdown, namely France, Southern Europe and Belgium & Eastern Europe.
2 - Segment information by geographical area: data from the income statement (in thousands
of €)
Transactions between business centres are concluded under market conditions and segment assets are determined based on the
accounting items making up the balance sheet for each business centre.
31/12/2014
Southern
Europe
France
Income statement items
Belgium &
Eastern Europe
Total
Interest income
675,822
273,941
99,041
1,048,803
Interest expenses
118,889
7,294
3,563
129,747
Net banking income
705,847
317,709
122,922
1,146,478
OPERATING PROFIT
71,638
106,824
18,833
197,295
Tax on profits
29,261
33,164
1,624
64,049
31/12/2013
Southern
Europe
France
Income statement items
Belgium &
Eastern Europe
Total
Interest income
654,235
275,147
99,784
1,029,166
Interest expenses
126,812
11,219
3,225
141,256
Net banking income
666,903
310,191
123,843
1,100,937
OPERATING PROFIT
49,743
95,788
28,309
173,840
Tax on profits
23,191
30,226
3,548
56,964
3 - Segment information by geographical area: data from balance sheet
31/12/2014
Southern
Europe
France
Balance sheet items
Loans and advances to banking institutions:
Total
Belgium &
Eastern Europe
Total
6,471,256
1,640,796
865,276
8,977,329
614,949
34,813
22,605
672,366
7,086,205
1,675,609
887,881
9,649,695
31/12/2013
Southern
Europe
France
Balance sheet items
Loans and advances to banking institutions:
Total
Belgium &
Eastern Europe
Total
6,619,588
1,520,439
829,325
8,969,352
639,198
27,714
21,872
688,783
7,258,785
1,548,153
851,197
9,658,135
VIII – Employee benefits
1 - Payroll
31/12/2014
Salaries
31/12/2013
145,303
137,773
55,336
54,670
7,650
8,443
Other
11,046
12,582
Total payroll (1)
219,335
213,469
Social charges
Profit sharing
(1) Including €2,994 k in Competitiveness and Employment Tax Credit (CICE), effective on 1 January 2014 (Art 66 LFR 2012) and
recognised as a credit to the staff costs account.
2 - Workforce for the period
The average workforce and the workforce on the reporting date are as follows:
Workforce at end of period at 31 December 2014
31/12/2014
Managers
Supervisors
31/12/2013
Employees
Total
Total
Women
587
315
2061
2963
2831
Men
446
110
801
1357
1543
Total workforce at end of period
1033
425
2862
4320
4374
Average workforce at 31 December 2014
31/12/2014
Managers
Supervisors
31/12/2013
Employees
Total
Total
Women
609
291
2067
2967
2732
Men
445
104
783
1332
1432
Total average workforce
1054
396
2849
4299
4164
3 - Post-employment benefits - defined benefit schemes
All French and Belgian entities are concerned by the defined benefits scheme. For the main schemes, an actuarial valuation is performed
every year. These defined-benefit schemes relate to end-of-career benefits.
4 - Other long-term benefits
Employee benefits that do not fall due and are not paid in full within twelve months after the end of the accounting period. These
benefits concern long-service awards.
77
5 – Actuarial assumptions
The main actuarial assumptions have been determined for each country.
The rates used to estimate the obligations are as follows:
31 December 2014
31/12/2013
Discount rate
1.70%
3.00%
Expected rate of salary increase
2.84%
2.68%
6 - Reconciliation of balance sheet provisions
The following balance sheet variations in pension provisions and similar commitments were recognised (in thousands of euro):
Commitment
31/12/2013 – Reported
8,589
Correction
6,722
31/12/2013 – Corrected
15,311
Current service cost
1,382
Financial cost
460
Actuarial gains and losses
3,060
Payment to beneficiaries
– 419
Other (business combinations, liquidation)
– 1,131
31 December 2014
18,664
Scheme assets
31/12/2013
3,248
– 3
Return on scheme assets
100
Contributions to the scheme
447
– 282
0
31/12/2014
3,511
Provision
31/12/2013 – Reported
Correction
5,342
6,722
31/12/2013 – Corrected
Current service cost
12,064
1,382
Financial cost
360
Contributions to the scheme
– 447
3,062
– 137
– 1,131
31/12/2014
15,154
7 - Financial hedging of the scheme
Financial hedging of the scheme can be analysed as follows:
31/12/2014
Debt securities
31/12/2013
2,923
2,715
Equity instruments
167
114
Property
386
388
35
30
Other
8 - Sensitivity analysis
Financial hedging of the scheme can be analysed as follows:
Discount rate: + 0.5%
16,696
Discount rate: - 0.5%
20,129
79
IX - Risk exposure and hedging policy
The risks incurred by the COFIDIS Participations Group are those
of a credit institution offering revolving, redeemable and credit card
type consumer credit, in its own name or through its network of
partners.
Credit operations are conducted directly through customer relations
centres or Internet sites, as well as through partners. Bank and private
cards are provided to customers. The internal control mechanisms
in place have been gradually adapted to deliver satisfactory solutions
to the challenges of controlling new risks incurred.
1 - Credit risk
1.1 - General remarks on credit risks
A credit risk occurs when a counterparty is unable to meet its
obligations and these obligations have a positive inventory value
in the company's ledgers. For the COFIDIS Participations Group,
the bulk of credit risk relates to loans granted to individuals, and
this risk is spread over a large number of customers with limited
individual commitment.
1.2 - Credit risk management procedures
In particular, the methods used to control credit risk are based on
resources dedicated to:
–– risk assessments and applying scores and acceptance rules,
–– operational teams responsible for the outstanding payment chain,
–– risk management audit to ensure monitoring and steering and
to support the function with adequate provision.
The system for controlling this risk uses a number of tools to
implement preventive, corrective and strategic actions.
The forecasting system is based on:
–– a system of scores and acceptance rules that enable us to anticipate customer behaviour and safeguard the future profitability
of transactions,
–– the three-year budget-plan, prepared at the end of the third
quarter, establishing strategic objectives. Two budget extrapolations
are performed annually.
The monthly credit risk monitoring dashboard is used to monitor
changes in customer risk according to multiple criteria: product,
history of outstanding payments, account opening generation or
recruitment channel. Information collected in this dashboard is used
to monitor and analyse the cost of risk, and to implement a customer
risk provisioning policy. In addition, the COFIDIS Participations
information system has the capability to provide information on
outstanding loans under management and to compile inventories
by risk level categories.
COFIDIS Participations has also set up a curative management
system to back its credit risk preventive management system and
has thus developed collection sequences that the organisation varies
according to maturity and market practices. These sequences can
include the following phases and features: pre-collection, amicable
collection, pre-litigation, over-indebtedness and legal recovery. After
these internal collection procedures, disputed outstanding debts
can be outsourced to an external management contractor, or sold.
A monthly "Credit Dashboard" report provides information on the
cost of risk as well as its proportion of total outstanding debt from
month to month. It is produced by the Management Audit department
and is circulated to members of the executive committee, managing
directors and managers and heads of the relevant departments.
The provisioning system is generally based on the definition and
statistical use of average rates of movement from one category of
unpaid outstanding debt to another from one month to another.
The calculation for each category is based on statistical observation
of the change in unpaid outstanding debt and actual or probable
losses, for each of the products.
Scoring systems, acceptance and collection rules, as well as
provisioning systems must be open-ended and are reviewed as
required from time to time. In this way, the organisation ensures that
all outstanding debt categories, process developments, behavioural
or regulatory changes are taken into account by the system. Similarly,
the provisioning method is reviewed by adjusting the provisioning
rates by category of outstanding debt to environmental needs
(markets, customers, regulators).
The maximum credit risk exposure accepted by the Group at 31 December 2014 is detailed as follows (in thousands of €):
31/12/2014
Financial assets designated at Fair Value through profit or loss
31/12/2013
28,262
26,840
–
–
30,432
22,380
65
65
672,366
688,783
8,977,329
8,969,352
187,846
221,937
Firm loan commitments
2,836,265
3,090,785
Total
12,732,564
13,020,141
Held-to-maturity assets
Derivative hedging instruments - assets
Available-for-sale financial assets
Other advances
Analysis of outstanding assets:
A financial asset is considered as outstanding when a counterparty
has not made a payment at the contractual due date. The provisioning
policy applied by the Group is to make individual provision on the
statistical basis of outstanding loans from the first default event.
2 – Counterparty risk\for financial transactions
COFIDIS Participations SA is exposed to a counterparty risk in
the context of cash flow management and implementing loan and
hedging transactions (rates in the main). Banking counterparties
are assessed by the CM CIC Group on a regular basis. Based
on this assessment, counterparties are classified according to a
number of criteria and related procedures, which could lead to the
closure of the account.
Note that flows of French companies are centralised in accounts
opened with the CM CIC Group. Surplus liquidity of foreign entities
is centralised preferentially, or allocated to CM CIC Group accounts
in France, or to related company accounts outside France.
Moreover, rate hedging transactions are handled with CM-CIC Group.
Potential new bank counterparties must be approved by the CM
CIC Group.
81
3- Overall interest rate risk, liquidity risk and 3.1.2 – Instruments and practices
foreign exchange risk
Private instruments used, traded on markets, are firm or optional:
3.1 Overall interest rate risk
rate swaps, caps, floors and collars.
3.1.1 Intervention strategy
The bulk of our refinancing is variable rate, based mainly on Euribor,
and variable rate based on Eonia.
The Treasury Management department of Cofidis Participations
Group manages the refinancing and rate risk for the whole scope
of Cofidis Participations.
3.2 - Liquidity risk
–– fixed-rate customer credit for which the Central Treasury provides
a hedge for outstanding loans in compliance with the limits set by
the CM CIC Group's ALM management,
As a credit institution, COFIDIS Participations is structurally a
borrower. BFCM, which is the sole company involved in capital
markets for the CM-CIC Group, handles the operating financing
requirements for companies in the COFIDIS Participations Group,
ensuring the Group has the liquidity required for its business.
–– on revisable rate credits for which the short-term aim of the
hedging policy is to limit the exposure of COFIDIS Participations
Group entities to any rate rises or reductions and their repercussions
on customer rates within a longer or shorter time frame.
Besides daily management of liquidity needs, Group Central Treasury
approves future needs based on forecast outstanding loans for
renewable and redeemable products and the refinancing needs
expressed by entities in the Group.
Rate risk relates to:
The details of the repayment schedule for debts at 31 December 2014 are as follows (in millions of euro):
31/12/2014
Less than one
year
1 to 2 years
2 to 5 years
More than 5
years
31/12/2013
Bond issues
0
–
–
–
–
400
Securitisation
0
–
–
–
–
0
50
50
–
–
–
70
7,980
1,896
2,124
3,760
199
7,531
19
19
–
–
–
29
TCN
Short- medium term lines
Ordinary demand accounts
Total debts
8,049
1,965
3.3 - Foreign exchange risk
Group policy includes management of foreign exchange risk.
Entities borrowing currencies or a converted to currencies with
no foreign exchange risk on the capital borrowed from BFCM or
from Cofidis SA.
Purchases in foreign currencies are limited to current operating
costs. Currency positions are monitored and swiftly unwound.
4 – Control of transactions
At each month-end, a monitoring dashboard is prepared covering
liquidity, rate, forex and counterparty risk for each entity.
2,124
3,760
199
8,030
It is used to formally check the compliance of transactions handled
during the past month relative to objectives.
During its monthly meeting, based on events in the previous month
and the needs expressed by entities in the COFIDIS Participations
Group, the Treasury Committee defines hedging requirements
(margin for manoeuvre in terms of volume and duration, according
to market conditions and developments), as well as new market
intervention strategies. This committee comprises the team in
charge of monitoring risks, its Director, the Group's Chief Financial
Officer and monabanq's Chief Financial Officer.
Contacts
COFIDIS France
Parc de la Haute Borne
61 avenue Halley
59667 VILLENEUVE-D’ASCQ Cedex
Tel: +33 3 28 09 20 00
www.cofidis.fr
monabanq.
61 avenue Halley
Tel: +33 3 20 28 34 34
www.monabanq.com
Créatis:
61 avenue Halley
Tel: +33 3 28 09 20 00
www.creatis.fr
COFIDIS Belgium
Chaussée de Lille 422a
7501 TOURNAI
Tel: +32 69 25 12 70
www.cofidis.be
COFIDIS Italy
Via A Bono Cairoli, 34
20 127 MILANO, Italy
Tel: +39 02,366 PRAGUE 1
www.cofidis.it
Cofidis Czech Republic
Bucharova 1423/6
158 00 PRAGUE 5
CZECH REPUBLIC
Tel: +42 0,234,120,120 Lisboa, Portugal
www.cofidis.cz
Cofidis Portugal
Avenida de Berna - 52
1069 046 Lisbon, Portugal
Tel: +35 1 21 761 18 00
www.cofidis.pt
COFIDIS Hungary
Budapest, 1066
Mozśar u.16
HUNGARY - Magyarorsźag
Tel: +36 1,354 PRAGUE 01
www.cofidis.hu
Cofidis Spain
Pl. de la pau s/n
Edificio1 - WTC Almeda Park
08 940 Cornella de Llobregat
Tel: +34 9 3 253 56 00
www.cofidis.es
COFIDIS Compétition
ZAC de Ravennes les Francs
6 avenue Poincaré
59 910 BONDUES
Tel: +33 3 20 66 23 00
www.equipe-cofidis.com

2014 activity report - Cofidis Participations Group

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