Exhibit 99.2
INDEX TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
GL TRADE S.A.
Page | ||
Consolidated Statements of Income | 2 | |
Statement of Recognized Income and Expense | 2 | |
Consolidated Balance Sheet | 3 | |
Consolidated Statements of Changes in Shareholders’ Equity | 4 | |
Consolidated Statements of Cash Flows | 6 | |
Notes to the Unaudited Consolidated Financial Statements | 7 |
1
GL TRADE S.A.
Consolidated statements of income
Notes | Six months ended | |||||||
€’000s | 30 June 2008 | 30 June 2007 | ||||||
Revenue | (2) | 108,208 | 94,264 | |||||
Other operating income | 3 | 484 | ||||||
Personnel costs | (3) | (54,207 | ) | (48,724 | ) | |||
Depreciation, amortization and provisions | (2,301 | ) | (1,905 | ) | ||||
Other operating costs | (4) | (32,148 | ) | (27,565 | ) | |||
Operating income before amortization of intangible assets resulting from business combinations | 19,555 | 16,553 | ||||||
Amortization of intangible assets resulting from business combinations | (244 | ) | (417 | ) | ||||
Operating income | 19,311 | 16,136 | ||||||
Interest on cash and cash equivalents | 219 | 436 | ||||||
Other financial income | 2,936 | 1,429 | ||||||
Cost of financial debt | (1,003 | ) | (668 | ) | ||||
Other financial costs | (4,119 | ) | (1,490 | ) | ||||
Net financial income (loss) | (5) | (1,967 | ) | (292 | ) | |||
Share in income of associate companies | 36 | 0 | ||||||
Profit before income tax | 17,380 | 15,844 | ||||||
Income tax | (6) | (4,644 | ) | (5,200 | ) | |||
Net income from discontinued operations | 0 | 1,076 | ||||||
Net income | 12,736 | 11,720 | ||||||
Attributable to | ||||||||
- Equity holders | 12,702 | 11,687 | ||||||
- Minority interests | 34 | 33 | ||||||
Net income in € | 12,736 | 11,720 | ||||||
Earnings per share (attributable to holders of the parent company’s share) | (11) | 1.32 | 1.22 |
The accompanying notes are an integral part of these consolidated financial statements.
GL TRADE S.A.
Statement of recognised income and expense
Six months ended | ||||||
€’000s | 30 June 2008 | 30 June 2007 | ||||
Translation differences | (2,735 | ) | (1,356 | ) | ||
Actuarial differences | 62 | 0 | ||||
Total of income and costs recognized directly against equity | (2,673 | ) | (1,356 | ) | ||
Profit for the period | 12,736 | 11,720 | ||||
Income and expense recognized during the period | 10,063 | 10,364 | ||||
Attributable to: | ||||||
- Group Share | 10,029 | 10,331 | ||||
- Minority interests | 34 | 33 |
The accompanying notes are an integral part of these consolidated financial statements.
2
GL TRADE SA
Consolidated balance sheet
As at | ||||||
€’000s | Notes | 30 June 2008 | 31 December 2007 | |||
Property & equipment | 6,276 | 6,771 | ||||
Goodwill | (7) & (8) | 116,801 | 131,183 | |||
Other intangible assets | (9) | 5,816 | 4,890 | |||
Non-current financial assets | 3,227 | 3,039 | ||||
Investments accounted for under the equity method | (10) | 2,705 | 0 | |||
Deferred tax assets | (12) | 10,776 | 1,609 | |||
Non-current assets | 145,601 | 147,492 | ||||
Trade and other receivables | 59,120 | 62,689 | ||||
Current tax receivables | 1,366 | 428 | ||||
Current financial assets | 0 | 438 | ||||
Cash and cash equivalents | 30,823 | 23,354 | ||||
Current assets | 91,309 | 86,909 | ||||
Total assets | 236,910 | 234,401 | ||||
Share capital | 293 | 293 | ||||
Share premium | 1,583 | 1,583 | ||||
Reserves | 47,924 | 39,093 | ||||
Net income (attributable to the equity holders) | 12,702 | 23,740 | ||||
Shareholders’ equity (attributable to the equity holders) | 62,502 | 64,709 | ||||
Minority interests | 1,031 | 997 | ||||
Total equity | 63,533 | 65,706 | ||||
Non-current financial liabilities | (13) | 20,659 | 27,609 | |||
Deferred tax liabilities | (14) | 3,274 | 2,807 | |||
Retirement benefit obligation | (15) | 3 | 19 | |||
Other non-current liabilities | 0 | 2,899 | ||||
Non-current liabilities | 23,936 | 33,334 | ||||
Current financial liabilities | (16) | 27,777 | 22,997 | |||
Current tax liabilities | (17) | 2,960 | 2,669 | |||
Trade payable and other debts | (17) | 58,083 | 51,092 | |||
Provisions | 616 | 636 | ||||
Other current liabilities | 60,005 | 57,967 | ||||
Current liabilities | 149,441 | 135,361 | ||||
Total liabilities | 173,377 | 168,695 | ||||
Total liabilities and equity | 236,910 | 234,401 | ||||
The accompanying notes are an integral part of these consolidated financial statements.
3
GL TRADE SA
Consolidated statements of changes in shareholder’s equity
Attributable to equity holders of the parent | Minority interests | Total Shareholders’ equity | ||||||||||||||||||||||||||
€’000s | Share capital | Issue premium | Treasury shares | Stock option reserves | Actuarial differences | Hedging instrument reserves | Translation differences on foreign subsidiaries | Profit and retained earnings | Total | |||||||||||||||||||
Equity at 1 January 2007 | 293 | 1,277 | 0 | 878 | (169 | ) | 0 | (1,523 | ) | 55,883 | 56,639 | 914 | 57,553 | |||||||||||||||
Change in 2007 equity | ||||||||||||||||||||||||||||
Translation difference on foreign subsidiaries | (1,355 | ) | (1,355 | ) | (1,355 | ) | ||||||||||||||||||||||
Other income and expense recognized directly in equity | 0 | 0 | ||||||||||||||||||||||||||
Total items recognized directly in equity | 0 | 0 | 0 | 0 | 0 | 0 | (1,355 | ) | 0 | (1,355 | ) | (1,355 | ) | |||||||||||||||
Net income for the period | 11,687 | 11,687 | 33 | 11,720 | ||||||||||||||||||||||||
Total income and expense recognized in the period | 0 | 0 | 0 | 0 | 0 | 0 | (1,355 | ) | 11,687 | 10,332 | 33 | 10,365 | ||||||||||||||||
Dividend payments | (10,568 | ) | (10,568 | ) | (10,568 | ) | ||||||||||||||||||||||
Repurchases and cancellations of treasury shares | (4 | ) | (4 | ) | (4 | ) | ||||||||||||||||||||||
Exercise of options | 233 | 233 | 233 | |||||||||||||||||||||||||
Hedging instruments | 52 | 52 | 52 | |||||||||||||||||||||||||
Equity at 30 June 2007 | 293 | 1,510 | (4 | ) | 878 | (169 | ) | 52 | (2,878 | ) | 57,002 | 56,684 | 947 | 57,631 | ||||||||||||||
4
Attributable to equity holders of the parent | Minority interests | Total Shareholders’ equity | |||||||||||||||||||||||||||
€’ 000s | Share capital | Issue premium | Treasury shares | Stock option reserves | Actuarial differences | Hedging instrument reserves | Translation difference on foreign subsidiaries | Profit and retailed earnings | Total | ||||||||||||||||||||
Equity at 31 December 2007 | 293 | 1,583 | (143 | ) | 1,004 | (32 | ) | 54 | (7,113 | ) | 69,063 | 64,709 | 997 | 65,706 | |||||||||||||||
Change in 2008 equity | |||||||||||||||||||||||||||||
Translation difference on foreign subsidiaries | (2,735 | ) | (2,735 | ) | (2,735 | ) | |||||||||||||||||||||||
Other income and expense recognized directly in equity | 69 | 69 | 69 | ||||||||||||||||||||||||||
Total items recognized directly in equity | 0 | 0 | 0 | 0 | 69 | 0 | (2,735 | ) | 0 | (2,666 | ) | (2,666 | ) | ||||||||||||||||
Net income for the period | 12,702 | 12,702 | 34 | 12,736 | |||||||||||||||||||||||||
Total income and expense recognized in the period | 0 | 0 | 0 | 0 | 69 | 0 | (2,735 | ) | 12,702 | 10,036 | 34 | 10,070 | |||||||||||||||||
Dividend payments | (12,493 | ) | (12,493 | ) | (12,493 | ) | |||||||||||||||||||||||
Repurchases and cancellations of treasury shares | 121 | 2 | 123 | 123 | |||||||||||||||||||||||||
Exercise of options | 134 | 134 | 134 | ||||||||||||||||||||||||||
Hedging instruments | (7 | ) | (7 | ) | (7 | ) | |||||||||||||||||||||||
Equity at 30 June 2008 | 293 | 1,583 | (22 | ) | 1,138 | 37 | 47 | (9,848 | ) | 69,274 | 62,502 | 1,031 | 63,533 | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
GL TRADE SA
Consolidated statements of cash flows
Six months ended | ||||||||||||
30 June 2008 | 30 June 2007 | |||||||||||
€’000s | Continuing operations | Continuing operations | Discontinued operations | Continuing and Discontinued Operations | ||||||||
Net income | 12,736 | 11,720 | 11,720 | |||||||||
Add back depreciation, amortization and provisions | 2,525 | 2,210 | 2,210 | |||||||||
Add back changes in deferred taxes | 755 | 161 | 161 | |||||||||
Add back capital gains/(losses) on disposal | 12 | (846 | ) | (846 | ) | |||||||
Add back share in profit of associated companies | (36 | ) | 0 | 0 | ||||||||
Other non-cash items | 226 | 80 | 80 | |||||||||
Income tax expenses | 3,889 | 4,842 | 4,842 | |||||||||
Financial expenses | 994 | 655 | 655 | |||||||||
Cash flow from operations | 21,101 | 18,822 | 0 | 18,822 | ||||||||
Change in working capital used in operations | 2,192 | 7,006 | 7,006 | |||||||||
Income tax paid | (4,853 | ) | (6,623 | ) | (6,623 | ) | ||||||
Financial charges paid | (745 | ) | (235 | ) | (235 | ) | ||||||
Net cash provided/(used) by operating activities (A) | 17,695 | 18,970 | 0 | 18,970 | ||||||||
Acquisitions of fixed assets | (3,637 | ) | (4,148 | ) | (4,148 | ) | ||||||
Disposals of fixed assets | 801 | 190 | 190 | |||||||||
Short-term investments | 0 | 0 | 0 | |||||||||
Disposals of short-term investments | 0 | 1,139 | 1,139 | |||||||||
Acquisition of subsidiaries less cash acquired | (2,670 | ) | (24,333 | ) | (24,333 | ) | ||||||
Increase stakes in existing subsidiaries | (1,492 | ) | 0 | 0 | ||||||||
Disposals of subsidiaries | 0 | 0 | (217 | ) | (217 | ) | ||||||
Dividends from associated companies | 0 | 0 | 0 | |||||||||
Net cash provided/(used) by investing activities (B) | (6,998 | ) | (27,152 | ) | (217 | ) | (27,369 | ) | ||||
Dividends paid | 0 | 0 | 0 | |||||||||
Capital increase | 0 | 233 | 233 | |||||||||
Repurchase of own shares | (22 | ) | (4 | ) | (4 | ) | ||||||
Borrowings received | 4,602 | 15,224 | 15,224 | |||||||||
Repayments of borrowings | (7,008 | ) | (3,255 | ) | (3,255 | ) | ||||||
Net cash provided/(used) by financing activities (C) | (2,428 | ) | 12,198 | 0 | 12,198 | |||||||
Impact of changes in exchange rates (D) | (802 | ) | (596 | ) | (596 | ) | ||||||
Change in net cash (A)+(B)+(C)+(D) | 7,467 | 3,423 | (217 | ) | 3,206 | |||||||
Opening net cash | 23,354 | 36,829 | 36,829 | |||||||||
Closing net cash at 30 June 2008 | 30,823 | 40,252 | (217 | ) | 40,035 | |||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
GL TRADE S.A.
Notes to the unaudited consolidated financial statements
Accounting rules and methods
GL Trade SA is a company domiciled in France. The Company’s interim consolidated financial statements for the six months ended 30 June 2008 include the Company and its subsidiaries (together referred to as “the Group”) and the Group’s equity in associate or jointly controlled companies.
All the accounting rules and methods used by the Group are presented in the Group’s consolidated financial statements for the year ended 31 December 2007.
The Group’s consolidated financial statements for the year ended 31 December 2007 are available upon request from the Company’s registered offices at 42, rue Notre Dame des Victoires, 75002 Paris, or from thewww.gltrade.com website.
Statement of compliance
The interim consolidated financial statements have been prepared in accordance with IAS 34, “Interim financial reporting”. They should be read in conjunction with the Group’s financial statements for the year ended 31 December 2007. The financial statements for the six months ended 30 June 2008 were prepared in accordance with the International Financial Reporting Standards (IFRS) as those used to prepare the full-year consolidated 2007 financial statements.
The interim consolidated financial statements were approved by the Board of Directors on 27 August 2008.
Basis of preparation
The interim consolidated financial statements are presented in thousands of euros. They are established on the basis of historical cost, with the exception of those assets and liabilities recorded at fair value, i.e. derivative financial instruments, financial instruments held for trading purposes and financial instruments classified as available for sale.
Non-current assets and groups of assets held for sale are measured at the lower of their carrying amount and fair value less costs to sell.
Estimates
The preparation of the interim consolidated financial statements requires management to exercise judgment, make estimates and use assumptions that affect the application of accounting policies and reported amounts of asset, liability, income and expense amounts. Actual values may differ from the estimated amounts.
For the preparation of the interim consolidated financial statements, methods used in the exercising of judgement by management in applying the Group’s accounting methods and the main sources of uncertainty regarding its estimates are identical to those described in the full-year consolidated financial statements for 2007.
Accounting methods have been applied in a uniform manner by all Group companies.
7
Note 1 - Scope of consolidation
At 30 June 2008, the scope of consolidation included the following companies:
Head office | Holding company | 30 June 2008 | 30 June 2007 | |||||||||
Company | % | Method | % | Method | ||||||||
GL TRADE SA | France | Parent company | Parent company | |||||||||
GL MULTIMEDI@ SA | France | GL TRADE SA | 82.01% | FC | 82.01% | FC | ||||||
GL TRADE LTD | UK | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE AG | Germany | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE BV | Netherlands | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE IBERICA S.L. | Spain | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE SUISSE SA (**) (***) | Switzerland | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE BELGIUM SA | Belgium | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GLESIA SRL (*) | Italy | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE AMERICAS INC (ex GL CONSULTANTS INC) | USA | GL TRADE HOLDINGS INC | 100% | FC | 100% | FC | ||||||
GL TRADE SOLUTIONS PTE LTD | Singapore | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE SYSTEMS LTD HK | Hong Kong | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE AUSTRALIA PTY LTD | Australia | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE JAPAN KK | Japan | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL TRADE SOUTH AFRICA PTY LTD | South Africa | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL SETTLE LTD | UK | GL TRADE SA | 100% | FC | 100% | FC | ||||||
UBITRADE SA (****) | France | GL TRADE SA | Merged | FC | 100% | FC | ||||||
GL TRADE MENA SARL (ex UBITRADE MSP) | Tunisia | GL TRADE SA | 100% | FC | 100% | FC | ||||||
UBITRADE OSI SARL | Tunisia | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL SOFTWARE UNIPESSOAL LDA | Portugal | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL SETTLE INC (ex OASIS) | USA | GL TRADE HOLDINGS INC | 100% | FC | 100% | FC | ||||||
GL TRADE HOLDINGS INC | USA | GL TRADE SA | 100% | FC | 100% | FC | ||||||
EMOS FUTURES LTD | UK | GL TRADE SA | In liquidation | FC | In liquidation | FC | ||||||
GL TRADE OVERSEAS INC (ex NYFIX OVERSEAS INC) | USA | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL Bilglsayar Hizmetleri Ticaret Ltd Sirketi | Turkey | GL TRADE SA | 100% | FC | 100% | FC | ||||||
GL Trade Capital Market Solutions Inc. (ex FNX Limited Business Corporation) | USA | GL TRADE HOLDINGS INC | 100% | FC | 100% | FC | ||||||
FNI (I), L.L.C | USA | GL Trade Capital Market Solutions Inc. | 100% | FC | 100% | FC | ||||||
FNX (UK) LTD | UK | FNI (I), L.L.C | 100% | FC | 100% | FC | ||||||
FNX, L.L.C. | USA | GL Trade Capital Market Solutions Inc. | 100% | FC | 100% | FC | ||||||
FNX LTD, Mauritius | Mauritius | GL Trade Capital Market Solutions Inc. | 100% | FC | 100% | FC | ||||||
Prismlight Pte Ltd | Singapore | FNX LTD, Mauritius | 100% | FC | 100% | FC | ||||||
FNX Solutions (Thailand) Co., Ltd Juristinc Person, Limited Company | Thailand | GL Trade Capital Market Solutions Inc. | 100% | FC | 100% | FC | ||||||
FNX (Thailand) Co., Ltd Juristinc Person, Limited Company | Thailand | GL Trade Capital Market Solutions Inc. | 100% | FC | 100% | FC | ||||||
FNX India Software Private Limited | India | GL Trade Capital Market Solutions Inc. | 100% | FC | 100% | FC | ||||||
GL TRADE TUNISIA SARL | Tunisia | GL TRADE SA | 100% | FC | 100% | FC | ||||||
INFOTEC SA (***) | Switzerland | GL TRADE SA | Merged | FC | ||||||||
IFIS INFOTEC FRANCE Sarl | France | GL TRADE SUISSE SA | 100% | FC | ||||||||
INFOTEC (Deutchland) GmbH | Germany | GL TRADE SUISSE SA | 100% | FC | ||||||||
INFOTEC FINANCIAL (UK) LIMITED | UK | GL TRADE SUISSE SA | 100% | FC | ||||||||
IFIS INFOTEC (USA) INC. | USA | GL TRADE SUISSE SA | 100% | FC | ||||||||
GL TRADE SOFTWARE DOO BELGRADE LLC | Serbia | GL TRADE SA | 100% | FC | ||||||||
DECISION SOFTWARE INC. | USA | GL TRADE HOLDINGS INC | 100% | FC | ||||||||
NEXFI SAS | France | GL TRADE SA | 30% | EQ |
(*) | Legally 51% owned by GL Trade SA w/o application of IAS 32 and 39 |
(**) | Legally 93.054% owned by GL Trade SA w/o application of IAS 32 and 39 |
(***) | Merger of GL Trade Scweiz AG with Infotec SA at 30 Sept. 2007 |
(****) | Merger of GL Trade SA and Ubitrade SA at 28 January 2008 |
FC: full consolidation EQ: equity method
The Company has not carried out any securitization transactions or created any special-purpose entities.
8
Changes in the scope of consolidation
• | On 28 January 2008, UBITRADE SA was wound up without being liquidated, and all its assets and liabilities were transferred to its only shareholder, namely GL Trade SA. |
• | During February 2008, the GL Trade SA group acquired 30% of the share capital of NEXFI, a company having its registered office in France. |
Foreign currency translation
The exchange rates used at 30 June 2008 were as follows:
Currencies | Average euro exchange rate | Closing euro exchange rate | ||
1 AUD | 0.60441 | 0.61084 | ||
1 CHF | 0.62270 | 0.62282 | ||
1 GBP | 1.28988 | 1.26223 | ||
1 HKD | 0.08378 | 0.08134 | ||
1 INR | 0.01605 | 0.01478 | ||
1 JPY | 0.00623 | 0.00601 | ||
1 MUR | 0.02414 | 0.02327 | ||
1 SGD | 0.47100 | 0.46629 | ||
1 THB | 0.02062 | 0.01896 | ||
1 TND | 0.55235 | 0.54474 | ||
1 TRY | 0.52920 | 0.51752 | ||
1 USD | 0.65322 | 0.63436 | ||
1 ZAR | 0.08515 | 0.08102 |
9
Note 2 - Revenue
The comparable structure figures are calculated by excluding revenue from companies in the FNX, INFOTEC and DECISION SOFTWARE Inc. groups. INFOTEC and DECISION SOFTWARE Inc. were acquired during the second half of 2007. The FNX group, which was acquired on 28 February 2007, was not included in comparatives at comparable structure.
Revenue at constant exchange rates is calculated using June 2007 exchange rates.
• | Revenue by business line and by region at constant exchange rates and at a comparable structure |
€’000s | Six months ended 30 June 2008 | Six months ended 30 June 2007 | 2008/2007 | At constant exch. rates & Like-for- Like | |||||||
Trading Solutions and Client Connectivity BL | 70,550 | 70,831 | (0 | )% | 5 | % | |||||
France | 14,195 | 13,241 | 7 | % | 7 | % | |||||
UK | 12,925 | 14,872 | (13 | )% | (0 | )% | |||||
Emea | 21,829 | 22,182 | (2 | )% | (1 | )% | |||||
Asia | 15,034 | 11,770 | 28 | % | 36 | % | |||||
USA | 6,567 | 8,766 | (25 | )% | (14 | )% | |||||
Post Trade Derivatives BL | 16,036 | 11,931 | 34 | % | 45 | % | |||||
France | 4,819 | 3,875 | 24 | % | 25 | % | |||||
UK | 4,722 | 2,635 | 79 | % | 106 | % | |||||
Emea | 1,815 | 1,421 | 28 | % | 28 | % | |||||
Asia | 1,391 | 884 | 57 | % | 63 | % | |||||
USA | 3,289 | 3,116 | 6 | % | 22 | % | |||||
Capital Market Solutions BL | 7,916 | 7,905 | 0 | % | (10 | )% | |||||
France | 1,786 | 2,158 | (17 | )% | (2 | )% | |||||
UK | 324 | 213 | 52 | % | 0 | % | |||||
Emea | 16 | 23 | (30 | )% | 0 | % | |||||
Asia | 1,665 | 1,176 | 42 | % | 0 | % | |||||
USA | 4,125 | 4,335 | (5 | )% | 23 | % | |||||
Post Trade Securities BL | 3,968 | 3,597 | 10 | % | 23 | % | |||||
France | 43 | 0 | 0 | % | 0 | % | |||||
UK | 2,812 | 3,280 | (14 | )% | (2 | )% | |||||
Emea | 473 | 110 | 330 | % | 329 | % | |||||
Asia | 665 | 207 | 221 | % | 251 | % | |||||
USA | (25 | ) | 0 | n/a | n/a | ||||||
Information Services BL | 7,645 | n/a | n/a | n/a | |||||||
France | 130 | n/a | n/a | n/a | |||||||
UK | 549 | n/a | n/a | n/a | |||||||
Emea | 6,966 | n/a | n/a | n/a | |||||||
Asia | 0 | n/a | n/a | n/a | |||||||
USA | 0 | n/a | n/a | n/a | |||||||
Decision Software | 2,093 | n/a | n/a | n/a | |||||||
France | 0 | n/a | n/a | n/a | |||||||
UK | 0 | n/a | n/a | n/a | |||||||
Emea | 0 | n/a | n/a | n/a | |||||||
Asia | 0 | n/a | n/a | n/a | |||||||
USA | 2,093 | n/a | n/a | n/a | |||||||
Total turnover | 108,208 | 94,264 | 15 | % | 10 | % |
10
Note 3 - Personnel costs
• | Analysis of headcount by region |
Six months ended 30 June 2008 | Six months ended 30 June 2007 | Change in scope of consolidation | Like-for-Like | % change Like-for-Like | % change at current scope | |||||||||
France | 463 | 454 | 0 | 463 | 2 | % | 2 | % | ||||||
UK | 201 | 207 | 2 | 199 | (4 | )% | (3 | )% | ||||||
Emea | 373 | 296 | 41 | 332 | 12 | % | 26 | % | ||||||
Asia | 189 | 172 | 0 | 189 | 10 | % | 10 | % | ||||||
US | 200 | 194 | 14 | 186 | (4 | )% | 3 | % | ||||||
Total | 1,426 | 1,323 | 57 | 1,369 | 3 | % | 8 | % | ||||||
Personnel costs are the Group’s largest cost item and accounted for 50.1% of the consolidated revenue as opposed to 51.7% in 2007.
The Group continues its efforts to reduce its personnel costs in conjunction with revenue.
€’000s | Six months ended 30 June 2008 | Six months ended 30 June 2007 | ||
Fixed remuneration | 34,952 | 32,561 | ||
Variable remuneration* | 7,845 | 5,694 | ||
Social charges | 11,410 | 10,469 | ||
Total | 54,207 | 48,724 | ||
* | Included in 2008 is a non-recurring bonus of €2.3m awarded to 20 or so Group managers. |
11
Note 4 - Other operating costs
Other operating costs break down as follows:
Six months ended | |||||||
€’000s | Six months ended 30 June 2008 | Six months ended 30 June 2007 | % change 2008/2007 | ||||
Telecommunication costs | 3,373 | 2,918 | 16 | % | |||
GL Net and ASP site hosting costs | 1,675 | 1,767 | (5 | )% | |||
Acquisition of financial market information | 7,973 | 3,888 | 105 | % | |||
Outsourcing and distribution fees to SIA | 997 | 1,405 | (29 | )% | |||
Outsourced consulting | 282 | 114 | 148 | % | |||
Purchase of equipment charged to clients | 654 | 680 | (4 | )% | |||
Direct cost of sales | 14,954 | 10,772 | 39 | % | |||
Rent and service charges | 5,340 | 4,812 | 11 | % | |||
Travel and entertainment expenses | 2,840 | 2,725 | 4 | % | |||
Advertising, trade fairs, promotions | 723 | 789 | (8 | )% | |||
Telephone | 955 | 904 | 6 | % | |||
Recruitment, accounting, audit and legal fees | 3,267 | 3,407 | (4 | )% | |||
Temporary staff and IT outsourcing | 1,316 | 1,545 | (15 | )% | |||
Maintenance | 337 | 376 | (10 | )% | |||
Administrative supplies and minor items | 530 | 370 | 43 | % | |||
Insurance | 390 | 391 | (0 | )% | |||
Taxes other than on income | 1,006 | 1,012 | (1 | )% | |||
Other costs | 490 | 462 | 6 | % | |||
Total other costs | 17,194 | 16,793 | 2 | % | |||
Changes in the first half of 2008 came mainly from the increase in financial and stock market data procurement costs (up €4,085,000). This increase was attributable to the acquisition in July 2007 of the INFOTEC group specialized in the distribution of financial data.
12
Other expenses varied in proportion to revenue owing notably to the external growth transactions completed in 2007. The acquisitions of the INFOTEC group and of DECISION SOFTWARE Inc. were completed during the second half of 2007. Since the acquisition of the FNX group was completed on 28 February 2007, only four months of activity were included in the interim 2007 consolidated financial statements.
Note 5 - Net financial income (loss)
€’000s | Six months ended 30 June 2008 | Six months ended 30 June 2007 | ||||
Proceeds from sale of marketable securities and other income | 219 | 436 | ||||
Income from cash and cash equivalents (A) | 219 | 436 | ||||
Interest and similar charges | (1,003 | ) | (668 | ) | ||
Cost of debt (B) | (1,003 | ) | (668 | ) | ||
Foreign exchange losses | (3,233 | ) | (1,450 | ) | ||
Other | (886 | ) | (40 | ) | ||
Other financial costs (C) | (4,119 | ) | (1,490 | ) | ||
Foreign exchange gains | 2,602 | 1,400 | ||||
Other | 334 | 29 | ||||
Other financial income (D) | 2,936 | 1,429 | ||||
Net financial income/(loss) (A) + (B) + (C) + (D) | (1,967 | ) | (292 | ) | ||
Net financial income/(loss) in the first half of 2008 totalled (€1.967 million) versus (€0.292 million) in the year-earlier period.
Foreign exchange differences resulted in a loss for the Group of €631,000 in the first half of 2008, compared with a loss of €50,000 in the first half of 2007.
Cost of debt during the first half of 2008 exceeded those incurred in the first half of 2007 by €335,000 following the borrowings arranged in February and November 2007 in order to finance the Group’s external growth.
The Other financial costs item primarily reflects the dividends paid to minority shareholders in Glesia, which were accounted for under goodwill in the previous year.
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Note 6 - Income tax
€’000s | Six months ended 30 June 2008 | Six months ended 30 June 2007 | ||||
Consolidated pre-tax income | 17,380 | 15,844 | ||||
Theoretical tax rate (underlying rate applicable to parent company) | 34.43 | % | 34.43 | % | ||
Theoretical tax charge | 5,974 | 5,455 | ||||
Difference in foreign company tax rates | (1,514 | ) | (311 | ) | ||
Unused/uncapitalised tax losses for the year | 176 | 217 | ||||
Use of uncapitalised tax loss carryforwards | (327 | ) | 0 | |||
Permanent differences | 856 | (278 | ) | |||
Research tax credits | (633 | ) | 0 | |||
Other | 112 | (80 | ) | |||
Actual tax charge | 4,644 | 4,842 | ||||
Effective tax rate | 26.77 | % | 32.82 | % |
Note 7 - Goodwill
Company (€’000s) | 31 December 2007 | Opening adjustment | Acquisition | Earn-out | Put option | Goodwill allocation | Deferred tax | Increase/ Decrease | Foreign exchange differences | 30 June 2008 | |||||||||||||
GL TRADE LTD | 3,227 | (233 | ) | 2,994 | |||||||||||||||||||
GL TRADE AMERICAS INC. | 9,834 | (542 | ) | 9,292 | |||||||||||||||||||
GL MULTIMEDI@ SA | 1,075 | 1,075 | |||||||||||||||||||||
GL TRADE BV | 2,632 | 2,632 | |||||||||||||||||||||
GL TRADE JAPAN KK | 4,306 | 4,306 | |||||||||||||||||||||
GLESIA | 9,464 | 9,464 | |||||||||||||||||||||
GL SETTLE LTD | 7,578 | 7,578 | |||||||||||||||||||||
GL TRADE SYSTEMS LTD HK | 8,285 | 8,285 | |||||||||||||||||||||
UBITRADE SA | 18,283 | 18,283 | |||||||||||||||||||||
GL SETTLE INC. | 2,302 | (148 | ) | 2,154 | |||||||||||||||||||
EMOS SYSTEMS SAS | 4,165 | 9 | 4,174 | ||||||||||||||||||||
GL TRADE OVERSEAS INC. | 8,060 | (273 | ) | (524 | ) | 7,262 | |||||||||||||||||
FNX CORPORATION LTD | 25,954 | 94 | (1,496 | ) | (3,313 | ) | (1,580 | ) | 19,658 | ||||||||||||||
INFOTEC SA | 18,041 | (6,396 | ) | 550 | 12,195 | ||||||||||||||||||
DECISION SOFTWARE INC. | 7,977 | (528 | ) | 7,449 | |||||||||||||||||||
Total | 131,183 | 94 | 0 | (1,769 | ) | 0 | 0 | (9,709 | ) | 0 | (2,996 | ) | 116,801 | ||||||||||
GL TRADE OVERSEAS Inc.
The final earn-out payment to the former shareholders of GL OVERSEAS Inc. (previously NYFIX OVERSEAS Inc.) was made on 17 June 2008 amounting to US$2.296 million.
At 31 December 2007, the Group recognised US$2.714 million in respect of this earn-out payment.
FNX group
The GL TRADE group finalised its additional analysis concerning the allocation of the FNX goodwill to identifiable items separable from goodwill within the twelve-month period from the date of acquisition available under IFRS 3.
The goodwill value was impacted by an increase of US$143,000 following adjustments made to the opening balance sheet of the FNX group’s subsidiaries
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concerning current assets and a reduction of US$5.072 million deriving from the recognition of tax losses recognized prior to the acquisition of FNX LIMITED BUSINESS CORPORATION (see Note 12 on deferred tax assets).
In addition, the GL TRADE group revised its assumptions concerning the earn-out payment due to the former shareholders of the FNX group. It considers that no earn-out payment will have to be made and has recognised a reduction in goodwill of US$2.290 million.
INFOTEC group
The GL TRADE is currently carrying out additional analysis concerning the allocation of the INFOTEC goodwill to identifiable items separable from goodwill within the twelve-month period from the date of acquisition allowed under IFRS 3.
The goodwill value was impacted solely by the recognition of the tax losses recorded prior to the acquisition amounted by of CHF10.272 million (see Note 12 on deferred tax assets).
The assumptions concerning the measurement of the debt arising on the option to buy out minority shareholders were maintained, and the value recognised in goodwill stands at CHF4.239 million, which is identical to that recognised at 31 December 2007.
DECISION SOFTWARE Inc.
The acquisition of 100% of the shares in DECISION SOFTWARE Inc. on 16 November 2007 gave rise to the recognition of US$9.841 million in goodwill.
In parallel, the Group is conducting additional analyses to ensure that there are no other identifiable items separable from goodwill. Depending on the outcome, the value determined at 31 December 2007 may possibly be modified within the twelve-month period from the date of acquisition available under IFRS 3.
The acquisition agreement provides for an earn-out payment to be assessed based on projected revenue as at year-end 2008. At 31 December 2007, the Group set aside a provision for an earn-out payment of US$1.902 million. At 30 June 2008, this amount did not change.
Note 8 - Allocation of goodwill to the Cash-Generating Units
Goodwill allocated in €’000s | Trading Solutions & Client Connectivity | Post Trade Derivatives | Capital Market Solutions | Post Trade Securities | Information Services | Decision Software | Total | |||||||
GL TRADE LTD | 2,994 | 2,994 | ||||||||||||
GL TRADE AMERICAS INC. | 9,292 | 9,292 | ||||||||||||
GL MULTIMEDI@ SA | 1,075 | 1,075 | ||||||||||||
GL TRADE BV | 2,632 | 2,632 | ||||||||||||
GL TRADE JAPAN KK | 4,306 | 4,306 | ||||||||||||
GLESIA | 9,464 | 9,464 | ||||||||||||
GL SETTLE LTD | 2,173 | 5,405 | 7,578 | |||||||||||
GL TRADE SYSTEMS LTD HK | 8,285 | 8,285 | ||||||||||||
UBITRADE SA | 13,750 | 4,533 | 18,283 | |||||||||||
GL SETTLE INC. | 2,154 | 2,154 | ||||||||||||
EMOS SYSTEMS SAS | 4,174 | 4,174 | ||||||||||||
GL TRADE OVERSEAS INC. | 7,262 | 7,262 | ||||||||||||
FNX CORPORATION LTD | 19,658 | 19,658 | ||||||||||||
INFOTEC SA | 12,195 | 12,195 | ||||||||||||
DECISION SOFTWARE INC. | 7,449 | 7,449 | ||||||||||||
Total | 44,489 | 20,918 | 26,345 | 5,405 | 12,195 | 7,449 | 116,801 | |||||||
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Impairment tests
Management did not find any indication of impairment in the goodwill recognised at 30 June 2008.
In accordance with IAS 36, the GL TRADE group did not conduct any impairment test as at 30 June 2008.
Note 9 - Other intangible assets
The €1 million increase in other intangible assets is primarily due to:
• | the net change of €0.8 million in development costs, |
• | amortization of non-current assets arising from the allocation of goodwill, with a negative impact of €0.2 million, |
• | the net change of €0.1 million in production start-up costs for SAP software, and |
• | the remainder of €0.3 million, represents net acquisitions of office productivity and management software net of amortization. |
Management did not identify any indication of impairment in the other intangible assets recognised at 30 June 2008.
In accordance with IAS 36, the GL TRADE group did not conduct any impairment test as at 30 June 2008.
Note 10 - Investments accounted for under the equity method
NEXFI
On 18 February 2008, GL TRADE SA acquired 30% of the shares in NEXFI for €2.670 million. The equity value was deducted from the value of the investment recognised according to the equity method at €162,000.
Note 11 - Earnings per share
Six months ended | Six months ended | |||
€’000s | 30 June 2008 | 30 June 2007 | ||
Net income for the year (group share) | 12,702 | 11,687 | ||
(A) Net income attributable to holders of ordinary shares | 12,702 | 11,687 | ||
Opening number of ordinary shares in issue | 9,610,261 | 9,601,221 | ||
Shares issued/(cancelled) during the period | 0 | 6,320 | ||
Treasury shares | 600 | 100 | ||
(B) Closing number of ordinary shares | 9,609,661 | 9,607,641 | ||
Effect of options to issue | 12,575 | 52,903 | ||
(C) Potential capital | 9,622,236 | 9,660,544 | ||
(A)/(B) Earnings per share before dilution | 1.32 | 1.22 |
At 30 June 2008, GL TRADE SA’s share capital stood at €293,056 divided into 9,610,261 fully paid shares belonging to a single category with a nominal value of €0.03.
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Note 12 - Deferred tax assets
€’000s | As at 30 June 2008 | As at 31 December 2007 | ||
Property and equipment | 86 | 92 | ||
Tax loss carryforwards before acquisitions | 9,309 | 102 | ||
Employee benefits | 284 | 449 | ||
Provisions | 47 | 63 | ||
Working capital items | 1,050 | 903 | ||
Total | 10,776 | 1,609 | ||
The Group recognised tax losses incurred prior to the acquisition of the FNX and INFOTEC groups in respective amounts of €3.217 million and €6.398 million in accordance with IAS 12.
When these tax losses are subsequently used, the Group will recognise a tax charge to neutralise the impact of these tax savings on the income statement. The assumptions used to measure these deferred tax assets were determined under a loss utilisation plan deemed to be the most likely at present.
Employee benefits comprise the tax on employee profit sharing and the employer contribution to be paid to French employees.
The deferred tax asset on Working Capital Requirements (WCR) items primarily comprise prepaid income and provisions for personnel costs in foreign subsidiaries.
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Note 13 - Non-current financial liabilities
€’000s | As at 30 June 2008 | As at 31 December 2007 | ||
Bank borrowings | 13,200 | 17,700 | ||
Financial debts from option to buy out minority interests | 7,459 | 9,909 | ||
Total | 20,659 | 27,609 | ||
The assumptions used to measure the financial liabilities arising from the undertaking to buy out GLESIA are the same as those determined at 31 December 2007. An expense of €137,000 was recognised to take into account the discounting effect at 30 June 2008.
The financial debt representing the option to buy out the INFOTEC group’s minority interest was reclassified from non-current financial liabilities to current financial liabilities.
Note 14 - Deferred tax liabilities
€’000s | As at 30 June 2008 | As at 31 December 2007 | ||
Intangible assets | 1,633 | 1,419 | ||
Financial assets | 67 | 0 | ||
Employee benefits | 12 | 30 | ||
Provisions | 1,102 | 1,092 | ||
Other | 460 | 266 | ||
Total | 3,274 | 2,807 | ||
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Deferred tax liabilities on intangible assets comprise €1,328,000 from the capitalisation of R&D costs and €305,000 from the allocation of goodwill.
Of the deferred tax liabilities on provisions, €730,000 comprise the tax impact on the elimination of intercompany provisions for the INFOTEC group.
Note 15 - Employee benefits
In accordance with IAS 19 and Group policy the GL TRADE Group did not carry out an actuarial assessment as at 30 June 2008.
Note 16 - Current financial liabilities
€’000s | As at 30 June 2008 | As at 31 December 2007 | ||
Bank borrowings | 16,803 | 18,688 | ||
Financial debt from option to buy out minority interests | 2,720 | 0 | ||
Other borrowings | 8,254 | 4,309 | ||
Total | 27,777 | 22,997 | ||
Bank borrowings represent outstanding borrowings repayable in less than one year.
During the first half of 2008, GL TRADE SA repaid its bank borrowings for an amount of €7 million, compared with €3.3 million during the first half of 2007. The Group arranged a €4 million borrowing from NYSE Euronext.
The GL TRADE group recognised under current financial liabilities its undertaking to buy out INFOTEC Group’s minority interest in accordance with IAS 32 § 23 and AG 29. The debt recognised at 30 June 2008 amounted to €2,720,000. This financial liability was valued at the exercise price of the option determined in line with contractually agreed criteria and represents the discounted fair value of the minority shareholders’ investment in the INFOTEC group.
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The valuation assumptions are identical to those as at 31 December 2007. The change in liability was recognised through an adjustment to goodwill. A financial expense of €54,000 was recognised to take into account the discounting effect as at 30 June 2008.
Note 17 - Trade payables, other payables and current tax liabilities
€’000s | As at 30 June 2008 | As at 31 December 2007 | ||
Trade payables | 13,250 | 16,808 | ||
Current tax liabilities | 2,960 | 2,669 | ||
Advances and deposits received | 8,275 | 6,086 | ||
Social security contributions | 16,551 | 17,475 | ||
Tax liabilities | 5,010 | 6,953 | ||
Other liabilities | 14,997 | 3,769 | ||
Total | 61,043 | 53,761 | ||
Other liabilities include the €12,493,000 in dividend payments due to 11 July 2008. This item also includes an amount held in escrow and the earn-out payment due to DECISION SOFTWARE Inc’s shareholders which respectively amounts to €455,000 and €1,231,000.
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Note 18 - Litigation
In September 2005, US company Trading Technologies (TT) confirmed its claim against GL TRADE SA and GL TRADE Americas Inc before the Illinois Court, accusing the companies of having included in their software elements that TT claims were protected by its US patents. This claim follows a dozen other claims launched against some of its competitors and clients.
The proceedings are ongoing. To date, the plaintiff’s demands have not been quantified. The GL TRADE SA group, created several years before TT, believes that it has substantial prior art that would be an important point in its defence. Accordingly, no provision was set aside to cover this claim in the financial statements at 30 June 2008.
The legal fees recognised in relation to this dispute in the first half of 2008 amounted to €401,000.
The Group has not identified any other unprovisioned risks, litigation or exceptional event liable to have an impact on the Group’s financial position.
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Note 19 - Segment reporting
Primary segment reporting format: by business line
Trading Solutions / Client Connectivity | Post Trade Derivatives | Post Trade Securities | Capital Market Solutions | Information Services | Decision Software | Total | ||||||||||||||||||||||||||||||||||
€’000s | Jun-08 | Jun-07 | Jun-08 | Jun-07 | Jun-08 | Jun-07 | Jun-08 | Jun-07 | Jun-08 | Jun-07 | Jun-08 | Jun-07 | Jun-08 | Jun-07 | ||||||||||||||||||||||||||
Income statement items | ||||||||||||||||||||||||||||||||||||||||
Revenue | 70,549 | 70,831 | 16,036 | 11,931 | 3,968 | 3,597 | 7,916 | 7,905 | 7,645 | n/a | 2,093 | n/a | 108,208 | 94,264 | ||||||||||||||||||||||||||
Operating income (before amortisation of intangible assets created through business combinations) | 13,150 | 13,649 | 5,806 | 2,589 | 871 | 371 | -625 | -56 | -346 | n/a | 701 | n/a | 19,556 | 16,553 | ||||||||||||||||||||||||||
Percentage | 18.6 | % | 19.0 | % | 36.2 | % | 22.0 | % | 21.9 | % | 10.0 | % | -7.9 | % | -1.0 | % | -4.5 | % | n/a | 33.5 | % | n/a | 18.1 | % | 17.6 | % |
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Note 20 - Related party information
At 30 June 2008, GL TRADE SA was 55.2% owned by Holding Financière Montmartre, in which the NYSE Euronext group owns a 57.77% stake. The NYSE Euronext group also directly owns an 8.2% stake in GL TRADE SA. The GL TRADE sub-group is fully consolidated by the NYSE Euronext group.
GL TRADE group’s ultimate parent company is NYSE Euronext, 11 Wall Street, New York, New York 10005.
The founders and current directors of the GL TRADE group, Messrs Gatignol, Laurent and Morin, own 42.23% of Holding Financière Montmartre.
GL TRADE Group: Related party transactions
30 June 2008 | 30 June 2007 | |||||||||||||||
€’000s | Expense | Income | Loans | Borrowings | Expense | Income | Loans | Borrowings | ||||||||
Directors (1) | ||||||||||||||||
NYSE Euronext group (2) (3) | 865 | 8,057 | 349 | 115 | ||||||||||||
Holding Financière Montmartre | 1 | 3 | 5 | |||||||||||||
Logic Invest | ||||||||||||||||
Total | 865 | 1 | 0 | 8,060 | 349 | 120 | 0 | 0 | ||||||||
(1) | Excluding salary and director’s remuneration |
(2) | Services provided as part of the normal business activities of the two entities. |
(3) | Borrowings: a short-term (1 yr.) credit line for €10 million taken out in November 2007, with which GL TRADE can draw down and repay at its convenience. The terms and conditions of this credit line are comparable to those of the recent borrowings GL TRADE has contracted with its bankers. |
Transactions between GL TRADE SA and its subsidiaries, which are related parties, were eliminated during the consolidation process and are not presented in this note.
Note 21 - Commitments
Covenants
• | Calyon and Crédit Lyonnais borrowings |
Under the two loan agreements with CALYON and CRÉDIT LYONNAIS for an initial total of €22 million, GL TRADE SA gave undertakings to these two companies that for the durations of the agreements and until full repayment of the amounts due:
• | it would not grant nor allow to be granted by one or more of its major subsidiaries any lien or real or personal guarantee against any present or future borrowing without the prior agreement of the majority of the Banks and without granting to these lenders at the same time the same lien or guarantee having the same ranking and covering repayment of all amounts that might fall due under the loan agreement, |
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• | it would ensure that at the end of each financial year consolidated net debt shall be no more than: |
• | one times net shareholders’ equity; |
• | two times consolidated EBITDA (earnings before interest, tax, depreciation and amortisation). |
• | HSBC borrowing |
As a guarantee for the borrowing from HSBC France to finance the acquisition of the FNX Group, GL TRADE SA has pledged 30% of its shares in GL TRADE Holdings Inc., as collateral against the loan principal of €13 million.
In addition, GL TRADE SA undertook to maintain the ratio of total gross medium- and long-term debt and restated lease commitments to equity at less than 1 to 1, and the ratio of total gross medium- and long-term debt and restated lease commitments to EBITDA at less than 3 to 1.
• | SOCIÉTÉ GÉNÉRALE borrowing |
Under the borrowing agreement contracted with SOCIÉTÉ GÉNÉRALE to finance the acquisition of the FNX group, GL TRADE SA undertook that at each consolidated accounts approval date:
• | consolidated net debt to equity would be maintained at 1 to 1 or lower; |
• | the ratio of its consolidated net debt to consolidated gross operating income would remain below 3.5; |
• | consolidated net equity to consolidated total assets would remain above 20%; |
• | consolidated net cash would remain above €15 million. |
All these covenants were met at as at 31 December 2007.
Early redemption of LCL and CALYON loans
GL TRADE SA may, at each interest payment date, make a full early reimbursement of the borrowing, solely by making payment to the banks of:
• | the outstanding principal due under the loan, |
• | accrued interest on the loan, |
• | the re-application indemnity due under the loan agreement, |
• | all other sums due under the loan agreement. |
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Contingent liabilities
GLESIA:
As part of SIA’s purchase of an equity stake in GLESIA, formerly GL TRADE Italia, GL TRADE SA (51% owner) and SIA (49% owner) renewed their agreement for a three-year period from 1 January 2007, with the following main provisions:
• | SIA granted GLESIA non-exclusive distribution rights for its GAM and FinestWay products; |
• | SIA provided GLESIA with all Facility Management and Help Desk services. |
The General Meeting of Shareholders held in April 2008 for the 2007 financial year approved the payment of a €1,379,000 dividend, of which €703,000 was for GL TRADE SA. It was paid out in May 2008. There are no further preferred dividends to be paid from the 2007 financial year onwards.
As a reminder, under the terms of the new agreement, SIA and GL TRADE SA agreed that if one of the parties decides to terminate the agreement, SIA will sell its shares in Glesia, and GL TRADE SA will be obliged to purchase them at a price determined as follows: (0.49 x EBIT x n—net liabilities), where n is 4.2x if GL TRADE SA terminates the contract and 2.5x if SIA terminates the contract. This commitment was recognised under the Group’s non-current financial liabilities.
FNX group
Earn-out clause
The acquisition price for FNX will be increased by an amount based on 2007 revenue, backlog and 2008 FNX group, and GL Settle Inc.’s revenue.
This earn-out payment is capped at a maximum of US$5,000,000 at year-end 2007. Given the results recorded by the FNX business, no earn-out payment is due in respect of this period.
The earn-out payment is capped at a maximum of US$7,500,000 at year-end 2008 and payable during the second quarter of 2009. At 31 December 2007, a liability of US$2,500,000, i.e. €1,698,000, was recognised in respect of this item (excluding the unwinding of the discount). The discounted value of the liability stood at €1,607,000 at 31 December 2007. Given the results recorded by the FNX business, no provision was booked for an earn-out payment at 30 June 2008. The existing liability at 31 December 2007 was cancelled.
FERMAT
Earn-out clause
The disposal price set in the sale agreement for FERMAT distribution agreement will be increased by 10% of the amount of services performed in 2007 by the FERMAT group in Germany and Austria, or for its existing customers at the date of the discontinuation of the business, capped at €500,000. Where appropriate, Fermat will make any earn-out payment during the first half of 2008.
A balance of €250,000 on the initial price is also due by FERMAT in the first quarter of 2009. At this stage of the year, no earn-out payments have been recognised in the financial statements.
INFOTEC group
Put Option clause
On 1 July 2007, GL TRADE SA acquired more than 90% of the shares in Swiss company INFOTEC SA. Each minority shareholder undertook to sell its shares on the terms set out below, and GL TRADE SA took a put option to buy out the Infotec SA shares held by minorities in 2009.
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The share disposal price depends on the turnover growth of the INFOTEC business in 2007 and 2008, and on EBIT margin for 2008.
The total consideration for the shares may not exceed CHF6 million and will be paid in the second quarter of 2009.
At 30 June 2008, this liability was recognised at a value of CHF4.5 million, i.e. €2,803,000 (excluding the discounting effect) in the Group’s financial statements. The discounted value of this liability amounts to €2,720,000 at 30 June 2008.
The merger of INFOTEC SA into GL TRADE Suisse SA, formerly GL TRADE Schweiz AG, did not change the terms of the undertaking.
DECISION SOFTWARe Inc.
Earn-out clause
The acquisition price will be increased by an amount depending on revenue from new contracts signed in 2008 and is capped at US$2 million.
At 30 June 2008, a US$2m liability, i.e. €1,269,000, was recognised (excluding the discounting effect). The discounted value of this liability stands at €1,231,000 at 30 June 2008. The definitive amount will be payable in the first quarter of 2009.
NEXFI
Promise to sell
In connection with the acquisition of a 30% interest in NEXFI by GL TRADE SA, a shareholders’ agreement was signed on 18 February 2008. In Article 3 of which NEXFI’s Founders have a put option to sell to GL all their shares in GL TRADE SA.
It is stated that this promise to sell granted by the founders will have to be exercised by GL TRADE SA during the second quarter of 2010, with the effective sale of the shares taking place during the first half of 2011 within 15 days of the approval of NEXFI’s financial statements for the year ending on 31 December 2010.
The cost of each Share will be correspond to the value of NEXFI group, to be calculated by multiplying the 2010 financial year revenue, in line with GL’s GAAP, by a factor (“the Multiple”) as described in the shareholders’ agreement, adjusted by the amount of Nexfi’s working capital at the date on which the transaction took place, this value will be divided by the total number of Shares in NEXFI’s share capital at the completion date of the transaction.
To the best of the Company’s knowledge, there are no significant off-balance sheet commitments other than those presented in this note.
Note 22 - Events occurring after the balance sheet date
• | On 1 October 2008, SunGard Data Systems LLC, a global leader in software and processing solutions for financial services, higher education and the public sector, completed its acquisition of a majority interest in GL TRADE. SunGard acquired from Euronext Paris S.A. and GL TRADE’s three founders, Messrs. Pierre Gatignol, Louis-Christophe Laurent and Frédéric Morin, together with entities controlled by them, 6,200,030 shares of GL TRADE, representing 64.51% of GL TRADE’s share capital, at a price of €41.70 per share. The transaction puts a value of €400.7 million on 100% of GL TRADE’s share capital (excluding the effect of outstanding stock options). |
In accordance with the AMF General Regulation (“règlement général de l’AMF”), Paris-based Oddo Corporate Finance launched on SunGard’s behalf an all-cash tender offer under the simplified procedure (“offre publique d’achat simplifiée”) for the remainder of GL TRADE’s share capital at the same price of €41.70 per share. At 28 November 2008, SunGard owns approximately 99% of GL TRADE.
• | In connection with SunGard’s acquisition of GL Trade, the loan from the parent company, EURONEXT PARIS, was fully repaid. |
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