2014 ACTIVITY REPORT2014 ACTIVITY REPORT 9 SOFEMO offers point-of-sale financing solutions on behalf...

2014ACTIVITYREPORT

2014 ACTIVITY REPORT 2

Activity Consolidated financial statements at 31 December 2014COFIDIS Participations

GroupOur business 5Key dates 6Our retail chains 8

StrategyEuropean presence 12Our four pillars 14Our values 16Our commitment to sport 18

GovernanceManagement team 22Our shareholders 24Legal organisation chart 25

Corporate social and economic responsibilityA historical commitment 27Actions in our subsidiaries 28

2014Highlights of the year 32Chairman's message 34

Key figures �� 37

Consolidated balance sheet �� 38

Consolidated income statement �� 40

Net income and gains and losses directly recognised in shareholders' equity �� 41

Change in shareholders' equity �� 42

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


COFIDIS Participations Group

1


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.


1985 Cofidis establishes its in-ternational presence and opens Cofidis Belgium.

2000Cofidis expands into Central Europe with subsidiaries in Hungary and the Czech Republic.

2006Creatis joins the COFIDIS Participations Group.Banque Covefi is renamed monabanq. using the tagline "directement vôtre".

2009BFCM becomes the majority shareholder in the Group, alongside our historical shareholder, the 3 Suisses International Group.

1982Creation of Cofidis, the first specialist in consumer lending by telephone.

Key dates


1997• Cofidis embraces sports

sponsorship with a professional cycling team.

• Cofidis positions itself as an on-line credit provider.

2013Sofemo joins the COFODOS Participations Group, offering point-of-sale 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.


The Cofidis Participations Group includes five specialist retail chains:

Our retail chains

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.

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.


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.


Strategy

2



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.

European presence

Cofidis Portugal€827 m in gross outstanding loans401 staff

Lisbon

Creatis€1,684 m in gross outstanding loans258 staff

Cofidis France€4,750 m in gross outstanding loans1,312 staff

Sofémo€937 m in gross outstanding loans130 staff


Cofidis Spain

€1,080 m in gross outstanding loans750 staff

Barcelona

Lille

€4,750 m in gross outstanding loans1,312 staff

monabanq.€195 m in gross outstanding loans197 staff€442 m in gross outstanding savings

Cofidis Belgium€798 m in gross outstanding loans407 staff

Tournai

Milan

Cofidis Italy€182 m in gross outstanding loans138 staff

Cofidis Czech Republic and Slovakia€63 m in gross outstanding loans147 staff

Cofidis Hungary€86 m in gross outstanding loans158 staff

Budapest

Prague

SynerGie402 staff


Our four pillars

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.

To achieve the Group's aims, this strategy is built around major priorities:

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.

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 door-to-door, a popular sales method in Spain and Hungary.

Online creditwhere the distance doesn't matter

Sale of creditthrough our partners

- 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.


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.

Relational excellence

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 on-boarding 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.

Our teams are ready for the challengeand engaged


Our pillars are built on our strong core values, which are firmly embedded in the DNA of the Group and its subsidiaries:

Our values

transparent relations with all stakeholders, delivering performance while safeguarding our spirit of enterprise;

daring to share, surprise, take the initiative;

s h o w i n g c o n s i d e r a t i o n f o r colleagues, customers, shareholders and partners;

disseminating the convictions, expertise and energy that characterise the Group.


ClearAuthenticConsistentEfficientEnterprise spirit

ShareDecideSurpriseTake the initiativeChallenge

Our customersOur partnersOur shareholdersOur staff

Our art de vivreOur convictionsOur expertiseOur energy

BE

DARE

BE CONSIDERATE

CONVEY


Our commitmentto 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.

A historical commitment

The para-cycling team

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.

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 supportfrom Cofidis employeesfor the publicity caravan


Our commitmentto support

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!

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.

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.

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:

2015 ambition UP MY BIKE

- 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.


Governance

3



Management team

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

Supervisory board

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.

Executive committee (*Board members)

Alain ColinDirector for Diversified

Activities

Annie GAIN*Chairman of the

Board of Directors

Thierry Marois*Director,

Coordination of Synergies and

Central Resources

Luc-Bertrand SalusDirector, Cofidis

International

Gilles Sauret*Director,

Cofidis France

Thierry Vittu*Director, Human Resources and Communication

Vincent LaurinChief Financial, Risk

and Legal Officer


Subsidiary managing directors

Bence HolloDirector, Cofidis

Hungary

Jean-François RemyDirector, Cofidis Italy

Nicolas WallaertCofidis Portugal general management

Juan SitgesCofidis Spain general

management

Thomas KudelaDirector Cofidis Czech Republic and Slovakia

Bernard HazebrouckCréatis general management

Alain ColinDirector,

monabanq.

Céline MotteDirector, Cofidis Belgium

Gilles SauretDirector, Cofidis

France


Our shareholders

Major banking sector player in France and EuropeIts 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 structureStructured 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 INSURANCEThe Group's banking and insurance business offers an integrated product line-up to meet members' banking and insurance needs.

MUTUALIST PHILOSOPHYOur approach and actions are based on respectand trust. Members' interests take precedence in our structure.

TECHNOLOGYWe use new technologies in the service of members and the local banks.

LOCAL BANKINGWe 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.

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

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.

Brands:CONTENTIA, one of the top three collection companies in FranceDIREXI, connected marketing leader, insurance brokerBRUNEAU, BtoB e-commerce through Bruneau, the leading French operator in the office furniture and supplies for professionals segment.


Legal organisation chartat 31 December 2014

SynerGIE is a European Economic Interest Grouping (EEIG) formed of Cofidis France, monabanq, Créatis, Cofidis Belgium, Groupe Sofemo and Cofidis Italie.


Corporate social and economic responsibility

4


A historical commitmentThe 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:

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.

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.

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)

Building a sustainable relationship with our customers

Supportingeconomic development

Promoting a policy of responsible human resources

Combating exclusion

Limiting the impact of our activities on the environment

4


Actions in our subsidiaries

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.

A commitment to CrésusFor 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


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.

The forum brings together disabled workers, employers and organisations in the local area to promote opportunities for sustainable employment.

Handiflex: a forum to promote employment of the disabled

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 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.

An event eagerly awaited by more than 2000 staff in France: Oxyzen


2014

5



Highlights of the year

2014May July September October December

Cofidis Spainreaches the milestone of €1 billion in gross outstanding loans.

The Tour de Francein the North of France and the Cofidis cycling team supported by almost 400 staff who made a giant jersey for the occasion.

Sports and Family awardwith volunteers from all Cofidis Group volunteers for a friendly sports day.

Cofidis France and Spain

Agreement signedwith a view to the Group's acquisition of all of the capital in Banco Banif Mais in Portugal.

Cofidis Portugalwins the "Escolha Consumidor" award for the quality of the customer service.

6thHandiflex Forumforum to promote employment and training of the disabled.

wins "Customer Service of the Year Award 2015"(1)

*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.


January February March May

Cofidis France launches Upmybike. comcrowdfunding platform dedicated to bikes.

Inaugurationof the new Cofidis Bel-gium in Orcq

New product launch

family loans in the Czech Republic

Acquisition by Cofidis SAof all of the capital of Centax Spa in Italy

monabanq.launches its new "People before money" campaign

Cofidis Portugalranked third in the "Great Place to Work 2015" listing in the category of companies employing over 250 people.

2015

celebrates 10 years.

Cofidis Hungary


Chairman's message

MAJORSUCCESSES


Year after year,our group expands and goes from strength to stength.

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."


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

3 110

8 532

Gross outstanding loans (in million €)

9 124 9 0809 194

9 234

2008 201220112009 2010 2008 201220112009 2010

4 251

3 848

3 077

3 265

Financings (in million €)

Solvency ratio (in %)

2008 201220112009 2010

9,108,91

9,50

10,00 10,05

2008 201220112009 2010

Equity incl.subordinated debts

(in million €)

906911

938

1 0161 067

250100 100 100

10 574 10 602

2013 2014 2013

3 300

2014

4 119

2013

9,80

2013

1 141

100100

2014

9,61

2014

1 148

100


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

Central banks – –

Financial liabilities recognised at fair value through profit or loss IV.2 – –

Derivative hedging instruments 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

Debts related to non-current assets intended for sale – –

Insurance contract technical provisions – –

Provisions IV.16 31,938 43,859

Subordinated debt – –

TOTAL LIABILITIES 8,939,532 8,909,154

Equity attributable to Group shareholders IV.17 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

Minority interests 8 3

TOTAL EQUITY 1,255,985 1,280,673

TOTAL LIABILITIES 10,195,517 10,189,825


INCOME STATEMENT - In thousands of Euros Note 31/12/2014 31/12/2013

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

Net gains / (losses) on financial instruments

recognised at fair value through profit or loss 1,415 1,053

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 1,146,478 1,100,937

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 551,316 539,948

Cost of risk VI.4 – 354,021 – 366,108

OPERATING PROFIT 197,295 173,840

Share of net profit/(loss) of affiliates – –

Net gains or losses on other assets VI.5 – 289 – 1,732

Variations in the value of goodwill – –

PROFIT BEFORE TAXES 197,006 172,108

Tax on profits VI.6 – 64,049 – 56,964

Net profit for the year on discontinued operations or operations being discontinued

NET PROFIT 132,957 115,144

Minority interests – 1 – 12

NET PROFIT - ATTRIBUTABLE TO GROUP SHAREHOLDERS 132,958 115,157

Earnings per share (in €): 0.63 0.54

Consolidated income statement


Net income and gains and losses

directly recognised in shareholders' equity

In thousands of euro 31/12/2014 31/12/2013

Net profit attributable to Group shareholders 132,958 115,157

Foreign currency translation 73 (81)

Revaluation of derivative hedging instruments 3,486 4,136

Revaluation of long-term employee benefits – 2,011 49

Revaluation of financial assets

Total gains and losses recognised directly in equity attributable to Group shareholders 1,549 4,104

Net income and gains and losses recognised directly in equity attributable to Group shareholders

134,507 119,261

Net income and gains and losses directly recognised in equity attributable to minority shareholders

111 189

Net income and gains and losses directly recognised in shareholders' equity 134,618 119,450

Data are presented in the amount net of tax (if applicable).


in thousands of euro

Shareholders' equity at 1 January 2013

68,593 1,000,177 – 2,068 103,573 1,170,275 27 1,170,302

Increase in share capital 47,468 47,468 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 4,104 115,157 119,261 189 119,450

Effect of acquisitions and disposals on minority interests

24,860 24,860 24,860

Other changes – 405 – 405 – 208 – 613

Equity at 31 December 2013 140,921 997,863 2,036 115,157 1,255,977 8 1,255,985

Effect of changes in accounting methods

– 4,846 – 4,846 – 4,846

Change in shareholders' equity

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Shareholders' equity at 1 January 2014

140,921 993,017 2,036 115,157 1,251,131 8 1,251,139

Allocation of 2013 income 115,157 – 115,157 0 0

Repayment of capital equity notes – 1,306 – 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 10,202 0 – 115,157 – 104,955 0 – 104,955

Variation in gains and losses recognised directly in shareholders' equity

1,548 1,548 111 1,659

2014 Income 132,958 132,958 132,958

Sub-total 0 0 1,548 132,958 134,506 111 134,617

Effect of acquisitions and disposals – 13 – 13 – 116 – 129

Equity at 31 December 2014 140,921 1,003,206 3,584 132,958 1,280,669 3 1,280,672

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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

Depreciation of goodwill and other assets – 1,490 2,385

Net expenses for provisions 29,094 – 10,086

+/- Net loss/net gain from investment activities 560 845

Other movements – 4,434 – 9,080

Total of non-monetary items included in the net profit before tax and other adjustments

34,158 – 2,133

Flows from transactions with credit establishments 459,626 873,970

Flows from transactions with customers – 151,291 – 233,239

Flows from other transactions allocating financial assets or liabilities 335 – 1,626,235

Flows from other transactions allocating non-financial assets or liabilities 44,918 32,136

Tax paid – 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

Summary cash flow table


Flows from financial assets and holdings – 272 201,693

Flows from tangible and intangible assets – 12,379 – 9,544

Total cash flow generated from investing activities (B) – 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

Effect of exchange rate variation and scope variation (D) – 10,193 – 48,002

Net increase (decrease) in cash and cash equivalents (A+B+C+D) 4,547 – 746,316

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

Effect of exchange rate variation and scope variation (D) – 10,193 – 48,002

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 453,000 1,199,316Cash on hand, balances at central banks, ICP (Assets and Liabilities) - BEGINNING OF PERIOD

787 2,208

Demand accounts and loans/borrowing with credit institutions - BEGINNING OF PERIOD 452,213 1,197,108

CASH AND CASH EQUIVALENTS AT END OF PERIOD 457,548 453,000Cash on hand, balances at central banks, ICP (Assets and Liabilities) - END OF PERIOD 829 787

Demand accounts and loans/borrowing with credit institutions - END OF PERIOD 456,718 452,213

VARIATION IN NET CASH 4,547 – 746,316


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 IntroductionII General context 1. Description of the entity

2. Significant events of the accounting period

3. Simplified organisation chart for the COFIDIS Participations Group at 31 December 2014

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. Interest income and expenses

9. Net commission income

10. Judgements and estimates used in preparing the financial statements

IV Notes to the Consolidated balance sheet

1. Cash on hand, balances at central banks

2. Financial assets and liabilities at fair value through profit or loss

3. Derivative hedging instruments

4. Available-for-sale financial assets

5. Loans and advances to credit institutions

6. Loans and advances to customers

7. Accruals and miscellaneous assets

8. Property and equipment

9. Intangible assets

10. Goodwill

11. Debts to credit institutions

12. Debts to customers

13. Debts represented by a security

14. Current and deferred tax assets and liabilities

15. Accruals and miscellaneous liabilities

16. Provisions

17. Shareholders' equity

18. Summary of financial instrument classes by accounting categories

V Notes to off-consolidated balance sheet items

1. Finance and guarantee commitments

2. Term financial instruments

VI Notes to the Consolidated income statement

1. Net banking income

2. General operating costs

3. Amortisation expense and depreciation on tangible and intangible assets

4. Cost of risk

5. Net gains or losses on other assets

6. Taxes

7. Auditors' fees

VII Segment information

1. Definition of activity segments

2. Segment information by

geographical area: data from

income statement

3. Segment information by

geographical area: data from

balance sheet

VIII Employee benefits

1. Staff costs

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


I – Introduction

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.

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:

• 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;

• an application guide for situations where control is more difficult to assess. It provides clarification on the distinction between

substantive and protective rights and on the analysis of agent versus principle relations;

• the proportionate consolidation method is eliminated for joint ventures. These are now accounted for by the equity method;

• new disclosure requirements regarding determining the scope of consolidation and the risks associated with interests in other entities (subsidiaries, joint ventures, associates and non-con-solidated 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.

Standards and interpretations adopted by the European Union and not yet applied:

– IFRIC 21 on taxes and levies. Effective for annual periods begin-ning on or after 1 January 2015, expected to have limited impact.

NOTES TO THE 2014 CONSOLIDATED ACCOUNTS FOR COFIDIS PARTICIPATIONS S.A.


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 PARTICIPA-TIONS 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 adjust-ment 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 ad-justment 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.


3 – Simplified organisation chart for the COFIDIS Participations Group at 31 December 2014

COFIDIS Slovaquie

COFIDIS Rép.

tchèque

COFIDIS Espagne* GEIE

Synergie

COFIDISSA

CREATIS

MonabanqFrance

Sofémo

BelgiqueCOFIDIS COFIDIS

Portugal *ItalieCOFIDIS

*COFIDIS

Hongrie

* su

ccur

sale

s

4 – Events after the reporting periodOn 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.


Flows with consolidated companies under exclusive control, considered as related parties, are removed from the consolidated financial statements and are therefore not presented below:

Balance sheet position in K€

TOTAL Parent Company

Entities controlled

by the same parent

company

Other related parties

Derivative hedging instruments – Assets 26,972 72 26,901 0

Loans and advances to credit institutions 596,442 568,562 27,879 0

Accruals and miscellaneous assets 4,730 0 4,683 46

Total assets 628,144 568,634 59,463 46

Derivative hedging instruments – Liabilities 89,153 294 88,859 0

Debts to credit establishments 7,981,917 7,976,381 5,536 0

Debts represented by a security 50,001 50,001 0 0

Accruals and miscellaneous liabilities 3,381 0 2,360 1,021

Total liabilities 8,124,452 8,026,676 96,755 1,021

Commitments received 5,804,000 0 5,804,000 0

Commitments given 0 0 0 0

Income and expenditure in K€

TOTAL Parent Company

Entities controlled

by the same parent

company

Other related parties

Interest and similar income 19,856 2,777 17,329 – 251

Net gains or losses on Commissions 192,287 – 1 191,298 990

Net gains or losses on portfolios at fair value through profit or loss

0 0 0 0

Gains or losses on other assets – 15 0 – 15 0

Total income 212,128 2,776 208,613 739

Interest and similar expenses 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).

5 – Related party disclosuresThe parties related to the COFIDIS Participation Group are:

– the consolidated companies,

– the company controlling Cofidis Participations SA (Banque Fédérative du Crédit Mutuel),

– entities controlled by the same parent: the other entities in the Crédit Mutuel Group,

– other related parties: the entities in the 3 Suisses International group,

– the principal directors of Cofidis Participations SA or its share-holders.


6 – Consolidation scope and methods

6.1 ScopeThe 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

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:

List of companies Country location 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 con-trolled 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 transactionsThe 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

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 Securities

1.1.1 Classification of financial instrumentsThese 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


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 ac-quisition 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.

1.1.2 Valuation of securitiesFair 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.

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.

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

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 securitiesDepreciation 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 activityCredits 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:

– a statistical approach by uniform debt portfolio, given the in-significant nature of debts taken individually and their common characteristics in terms of credit risk,

– 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.).

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


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 liabilitiesIAS 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 instrumentsDerivative 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 micro- hedging.

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 instrumentsA 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 taxesIAS 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 tem-porary 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


capital gains recorded on the reporting date do not generate temporary differences giving rise to the recognition of deferred taxes.

Deferred tax is recognised in the net profit or loss for the period except to the extent that the tax is generated:

– 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 – AssetsIn 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

– Safety equipment: 3-10 years

– Movable equipment: 3-5 years

– Computer equipment: 3-5 years

– Software acquired or created internally: 1-10 years

– Acquired client base: 9-10 years (if acquiring customer contract portfolio)

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

determined by discounting future cash flows expected from the use of the asset and its disposal.

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).

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 recognitionAssets 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 UnitsIn 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 – ProvisionsThe 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.

In respect of these obligations, the COFIDIS Participations Group has constituted provisions that in particular cover:

– company commitments,

– 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.

6 – Employee benefits

6.1 – Employee benefitsUnder 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:

– defined post-employment benefits, by the immediate recogni-tion 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;

6.1.1 Short-term employee benefitsShort-term employee benefits include:

– salaries, remuneration and social security contributions,

– short-term paid absences (particularly annual leave and sick leave),

– profit sharing and bonuses,

– non-monetary benefits (medical aid, housing, company cars, etc.) granted to staff in active employment.

All of these short-term benefits are recognised as costs for the period.

6.1.2 Post-employment benefitsPost-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

the relevant commitments is reduced by the amount of the fair value of these funds.

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.

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 benefitsThese 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.

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:

– the location, function and approximate number of people affected,

– the benefits provided for each function or professional grade,

– the date on which the plan will be implemented.

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 notesThe 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 expenseIAS 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


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 expensesInterest 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 incomeThe 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 statementsIn 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

valueThe 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 benefitsCalculations 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 advancesThe 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 – ProvisionsThe 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 goodwillGoodwill 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 €)

31/12/2014 31/12/2013

Accounts open at central banks 0 0

Cash and cash equivalents 829 919

Total 829 919

2 - Financial assets recognised at fair value through profit or lossAt 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 instrumentsAt 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:


– 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 > 1 year and < 5 years > 5 years Total in market

value 31/12/2013

Swaps 4,809 9,741 15,882 30,432 22,309

Options 0 0 0 0 71

Total 4,809 9,741 15,882 30,432 22,380

31/12/2014 31/12/2013

Derivative cash flow hedging instruments 26,845 19,777

Foreign exchange rate derivative hedging instruments 3,552 261

Derivative fair value hedging instruments (1) 35 2,342

Total 30,432 22,380

Derivative hedging instruments – liability fair value (in thousands of €)

2014

< 1 year > 1 year and < 5 years > 5 years Total in market

value 31/12/2013

Swaps 64,808 20,072 4,308 89,187 64,402

Options 0 3,320 0 3,320 3,926

Total 64,808 23,392 4,308 92,507 68,327

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 68,327

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.


3.2 Fair value hierarchy for financial instrumentsThere 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 Level 2 Level 3 Total TransfersL1 => L2

TransfersL2 => L1

Financial assets

Available for sale assets 65 65 0 0

Assets recognised at fair value through profit or loss

28,262 28,262 0 0

Derivative hedging instruments 0 30,432 0 30,432 0 0

Total 0 58,758 0 58,758 0 0

Financial liabilities

Derivative hedging instruments 0 92,507 0 92,507 0 0

Total 0 92,507 0 92,507 0 0

3.3 Revaluation surplus for rate hedging portfolios

Fair value

2014Fair value

2013Change in fair

value

Fair value of interest rate risk by portfolios

• of financial assets 73,742 49,411 24,331

• of financial liabilities 0 0 0

4 - Available-for-sale financial assets

31/12/2014 31/12/2013

Negotiable debt instruments

Gross value 0 0

Impairment loss

Net value of negotiable loans 0 0

Accrued interest FCT Cofititrisation 0 0

Certificates of membership of deposit guarantee funds 65 65

Total of available-for-sale securities 65 65

Fair Value of

non-depreciated assets

Fair Value of depreciated

assets

Net carrying amount

Central administration – – –

Credit institutions 65 0 65

Institutions not credit establishments – – –


Large companies – – –

Retail customers – – –

Total 65 0 65

5 - Loans and advances to credit institutions (in thousands of €)

31/12/2014 31/12/2013

Accounts and loans 671,909 688,104

Associated advances 458 679

Total of loans and advances to credit establishments 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 31/12/2013

Advances to customers 10,601,903 10,574,349

Impairment 1,624,574 1,604,997

Total of loans and advances to customers 8,977,329 8,969,352

Breakdown of loans and advances to customers by due date (in thousands of €)

2014

Less than one year

More than one year Total

Loans and advances to customers 2,362,300 6,615,028 8,977,329

2013

Less than one year


Loans and advances to customers 2,226,220 6,743,131 8,969,352


Breakdown of loans and advances to customers by quality of credit (in thousands of €)

2014

SoundDepreciated

assets Gross value

Impairment Total

Loans and advances to customers 8,023,178 2,578,725 1,624,574 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

SoundDepreciated

assets Gross value

Impairment Total

Loans and advances to customers 8,069,750 2,504,598 1,604,997 8,969,352

For information, restructured outstanding loans amounted to €476,449 thousand.

Depreciation of loans and advances

31/12/2013 Charges Write-backs Other 31/12/2014

Depreciation of loans and advances to customers

1,604,997 20,023 (1,732) 1,624,574


7 - Accruals and miscellaneous assets

31/12/2014 31/12/2013

Miscellaneous debtors 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

Other 22,088 31,608

Total accruals 33,727 48,893

Total miscellaneous assets and accruals 71,936 95,274

8 – Tangible assetsVariations 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

Other tangible assets 5,630 10,769 (180) 395 16,614

Gross value of tangible assets 66,927 11,754 (6 031) (61) 72,590

Land 1,663 126 (133) 0 1,656

Computer equipment 20,048 1,278 (3 827) (16) 17,483

Office equipment 8,100 509 (797) (424) 7,388

Improvements to buildings 10,832 1,289 (112) (6) 12,003

Other tangible assets 3,809 859 (516) 401 4,554

Depreciation of tangible assets

44,451 4,062 (5 385) (44) 43,084

Provisions for tangible assets 2,707 0 (946) 1,761

Net value of tangible assets 19,769 7,692 300 (16) 27,745


9 – Intangible assetsVariations in the gross values of tangible assets and accrued depreciation are represented in the following table (in thousands of €):

31/12/2013 Increases Decreases Other 31/12/2014

Lease premium 247 0 (47) – 3 198

Trademarks acquired as part of grouping

11,328 0 0 0 11,328

Set-up costs 49 0 0 0 49

Franchises, patents and other licences

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

Gross value of intangible assets

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

10 - Goodwill (in thousands of €)The change in and breakdown of goodwill are presented as follows:

2013 Increases Reallocation 2014

Net value of goodwill 173,448 0 0 173,448

11 - Debts to credit institutions (in thousands of €)

31/12/2014 31/12/2013


Ordinary demand accounts 19,194 28,696

Ordinary term accounts 7,971,862 7,521,734

Other debts 8,069 10,130

Total debts to credit institutions 7,999,126 7,560,560

12 - Debts to customers (in thousands of €)

31/12/2014 31/12/2013

Ordinary accounts 44,055 44,132

Special savings accounts 409,243 497,770

Term creditor accounts 16,668 21,024

Other sums due 7,856 12,078

Total debts to customers 477,823 575,003

31/12/2014

Less than one year


Debts to customers 477,823 0 477,823

13 - Debts represented by a security (in thousands of €)

31/12/2014 31/12/2013

Negotiable debt instruments 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 liabilitiesCurrent 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

Net current tax assets 920 (7,811) (6,890)

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 2013 2014 2013

Assets Liabilities Assets Liabilities 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)

Employee benefits 6,041 1,799 1,688 75 4,241 1,613

Regulated provisions 1,208 1,501 (1,208) (1,501)

IAS 39 reclassifications 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 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 94,029 111,588

Expenses to be paid 81,915 59,154

Deferred income 5,568 6,512

Other 32,450 20,488

Total accruals 119,933 86,154

Total accruals and miscellaneous liabilities 213,962 197,741

16 – Provisions

31/12/2013 Charges Write-backs used

Write-backs not

usedOther 31/12/2014

Company commitments: pensions 5,342 9,521 (895) (1,877) 3,062 15,154

Company commitments: long-service awards

1,174 78 0 (8) (150) 1,093


Legal and tax risk 0 0 0 0 0 0

Provision for restructuring 0 0 0 0 0 0

Provisions for subsidiary risks 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

Total provisions 31,938 17,593 (920) (7,592) 2,840 43,859

Cofidis Hongary recognised a €3.2 million provision pursuant to the banking law of 4 July 2014.


17 – Shareholders' equity

17.1 Composition of share capitalThe 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 capitalFor information only, COFIDIS Participations SA declared a European solvency ratio greater than 8% in 2014.

17.3 Perpetual deeply subordinated notesConsolidated 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 €)


Balance at 31/12/2013

Change in fair value of derivatives

Recycling Balance at 31/12/2014

Cash flow hedge reserve 6,077 4,344 – 940 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.

– at 31 December 2013 (in thousands of €)


Balance at 31/12/2012

Change in fair value of derivatives

Recycling Balance at 31/12/2013

Cash flow hedge reserve 348 6,547 – 818 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.


18 – Summary of financial instrument classes by accounting categories– at 31 December 2014 (in thousands of €)

Financial instrument classes

Assets valued at fair value through

profit/(loss) (fair value

option)

Available for sale assets

Held-to-maturity assets

Loans and receivables

Derivative hedging

instruments

Liabilities at amortised

cost

Total carrying amount

Debt instruments 28,262 65 28,326

Loans and advances to credit institutions

672,366 672,366

Loans to customers 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 0 9,708,453


50,000 50,000

Bond issues 0 0

Securitisation 0


Ordinary and demand accounts

0

Debts to credit institutions 7,999,126 7,999,126

Other debts to credit establishments

0

Debts to customers 477,823 477,823

Other debts to customers 0

Subordinated liabilities 0


Derivatives 0

Loans and financial liabilities

0 0 0 0 92,507 8,526,950 8,619,457


– at 31 December 2013 (in thousands of €)

Financial instrument classes

Assets valued at fair value through

profit/(loss) (fair value

option)

Available for sale assets

Held-to-maturity assets

Loans and receivables

Derivative hedging

instruments

Liabilities at amortised

cost

Total carrying amount

Debt instruments 26,840 65 26,904

Loans and advances to credit institutions

688,783 688,783

Loans to customers 8,969,352 8,969,352


Derivatives 0

Other advances 0

Financial assets 26,840 65 0 9,658,135 22,380 0 9,707,420


70,000 70,000

Bond issues 400,000 400,000

Securitisation 0


Ordinary and demand accounts

0

Debts to credit institutions 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


Derivatives 0

Loans and financial liabilities

0 0 0 0 68,327 8,606,046 8,674,373


V - Notes to off-consolidated balance sheet items

1- Finance and guarantee commitmentsThe 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.

In thousands of euro 31/12/2014 31/12/2013

FINANCE COMMITMENTS

Commitments made to credit institutions 0 0

Commitments received from credit institutions 3,263 5,100

Commitments made to customers 2,836,265 3,090,785

GUARANTEE COMMITMENTS

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

2 - Term financial instrumentsIn 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

Interest and similar income 1,029,166 1,052,208 1,048,803

Interest and similar costs – 141,256 – 150,805 – 129,747

Other income and expenses 213,027 222,096 227,421

Net banking income 1,100,937 1,123,499 1,146,478

General operating costs – 544,802 – 552,773 – 586,224

Amort. exp., prov. and gains/losses on other assets – 17,919 – 17,931 – 9,227

GROSS OPERATING PROFIT 538,216 552,795 551,027

Cost of risk – 366,108 – 372,414 – 354,021

Operating profit 172,108 180,381 197,006

Tax on profits – 56,964 – 60,457 – 64,049

Net profit 115,144 119,924 132,957

Income to minority shareholders – 12 – 12 – 1

Net profit – Group share 115,157 119,936 132,958


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

Income from interest on hedging derivatives 20,451 19,773

Interest and similar income 1,048,803 1,029,165

Interest expenses paid on liabilities to credit institutions 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

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

Costs for other activities 924 863

Net gains or losses on Other activities 3,963 1,060

Net banking income 1,146,478 1,100,937

2 - General operating costs (in thousands of €)

31/12/2014 31/12/2013

Payroll (1) 219,335 213,469

Taxes and duties 11,097 11,881

Other operating expenses from recurring operations 355,792 319,452

Total general operating costs 586,224 544,802

(1) Payroll expenses are detailed in Note VIII "Employee benefits"


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 intangi-ble assets

8,938 16,187

4 - Cost of risk (in thousands of €)

31/12/2014 31/12/2013

Net provisions for depreciation 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 analysisReconciliation 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 31/12/2013

Consolidated profit or loss before taxes 197 172

Current tax rate in France 38.00% 38.00%

Theoretical tax at current French tax rate 74.9 65.4

Effect of permanent differences – 3.9 – 4.1

Differences in foreign tax rates – 10.7 – 9.7

Effect of unrecognised tax assets (1) 1.5 1.8

Rate change – 0.3 2.2

Tax on dividends 3.1 3.0

Other – 0.5 – 1.7

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' feesIn thousands of euroBefore tax 2014

Total fees KPMG MAZARS PWC Other

Certification 1,161 898 88 159 16

Ancillary missions

TOTAL 1,161 898 88 159 16

In thousands of euroBefore tax 2013

Total fees KPMG MAZARS PWC Other

Certification 1,074 825 96 136 16

Ancillary missions

TOTAL 1,074 825 96 136 16


VII – Segment information

1 - Definition of activity segmentsThe 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

France Southern Europe

Belgium & Eastern Europe Total

Income statement items

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



Income statement items

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



Balance sheet items

Loans and advances to customers 6,471,256 1,640,796 865,276 8,977,329

Loans and advances to banking institutions: 614,949 34,813 22,605 672,366

Total 7,086,205 1,675,609 887,881 9,649,695


31/12/2013



Balance sheet items

Loans and advances to customers 6,619,588 1,520,439 829,325 8,969,352

Loans and advances to banking institutions: 639,198 27,714 21,872 688,783

Total 7,258,785 1,548,153 851,197 9,658,135

VIII – Employee benefits

1 - Payroll

31/12/2014 31/12/2013

Salaries 145,303 137,773

Social charges 55,336 54,670

Profit sharing 7,650 8,443

Other 11,046 12,582

Total payroll (1) 219,335 213,469

(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 periodThe average workforce and the workforce on the reporting date are as follows:

Workforce at end of period at 31 December 2014

31/12/2014 31/12/2013

Managers Supervisors 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 31/12/2013

Managers Supervisors 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 schemesAll 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 benefitsEmployee 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.


5 – Actuarial assumptionsThe 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 provisionsThe 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

Actuarial gains and losses – 3

Return on scheme assets 100

Contributions to the scheme 447


Other (business combinations, liquidation) 0

31/12/2014 3,511

Provision

31/12/2013 – Reported 5,342

Correction 6,722

31/12/2013 – Corrected 12,064

Current service cost 1,382

Financial cost 360

Contributions to the scheme – 447

Actuarial gains and losses 3,062


Other (business combinations, liquidation) – 1,131

31/12/2014 15,154


7 - Financial hedging of the schemeFinancial hedging of the scheme can be analysed as follows:

31/12/2014 31/12/2013

Debt securities 2,923 2,715

Equity instruments 167 114

Property 386 388

Other 35 30

8 - Sensitivity analysisFinancial hedging of the scheme can be analysed as follows:

Discount rate: + 0.5% 16,696

Discount rate: - 0.5% 20,129


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 risksA 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 proceduresIn 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 an-ticipate 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 31/12/2013

Financial assets designated at Fair Value through profit or loss 28,262 26,840

Held-to-maturity assets – –

Derivative hedging instruments - assets 30,432 22,380

Available-for-sale financial assets 65 65

Loans and advances to credit institutions 672,366 688,783

Loans and advances to customers 8,977,329 8,969,352

Other advances 187,846 221,937

Firm loan commitments 2,836,265 3,090,785

Total 12,732,564 13,020,141

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.


3- Overall interest rate risk, liquidity risk and foreign exchange risk

3.1 Overall interest rate risk

3.1.1 Intervention strategy

The Treasury Management department of Cofidis Participations Group manages the refinancing and rate risk for the whole scope of Cofidis Participations.

Rate risk relates to:

– 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,

– 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.

3.1.2 – Instruments and practices

Private instruments used, traded on markets, are firm or optional: rate swaps, caps, floors and collars.

The bulk of our refinancing is variable rate, based mainly on Euribor, and variable rate based on Eonia.

3.2 - Liquidity risk

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.

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.

3.3 - Foreign exchange riskGroup 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 transactionsAt each month-end, a monitoring dashboard is prepared covering liquidity, rate, forex and counterparty risk for each entity.

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.

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

TCN 50 50 – – – 70

Short- medium term lines 7,980 1,896 2,124 3,760 199 7,531

Ordinary demand accounts 19 19 – – – 29

Total debts 8,049 1,965 2,124 3,760 199 8,030

Contacts

COFIDIS France Parc de la Haute Borne61 avenue Halley59667 VILLENEUVE-D’ASCQ CedexTel: +33 3 28 09 20 00www.cofidis.fr

monabanq. Parc de la Haute Borne61 avenue Halley59667 VILLENEUVE-D’ASCQ CedexTel: +33 3 20 28 34 34www.monabanq.com

Créatis: Parc de la Haute Borne61 avenue Halley59667 VILLENEUVE-D’ASCQ CedexTel: +33 3 28 09 20 00www.creatis.fr

Cofidis Portugal Avenida de Berna - 521069 046 Lisbon, PortugalTel: +35 1 21 761 18 00www.cofidis.pt

Cofidis Spain Pl. de la pau s/nEdificio1 - WTC Almeda Park08 940 Cornella de LlobregatTel: +34 9 3 253 56 00www.cofidis.es

COFIDIS BelgiumChaussée de Lille 422a7501 TOURNAITel: +32 69 25 12 70www.cofidis.be

COFIDIS Italy Via A Bono Cairoli, 3420 127 MILANO, ItalyTel: +39 02,366 PRAGUE 1www.cofidis.it

Cofidis Czech Republic Bucharova 1423/6158 00 PRAGUE 5CZECH REPUBLICTel: +42 0,234,120,120 Lisboa, Portu-galwww.cofidis.cz

COFIDIS HungaryBudapest, 1066Mozśar u.16HUNGARY - MagyarorsźagTel: +36 1,354 PRAGUE 01www.cofidis.hu

COFIDIS Compétition ZAC de Ravennes les Francs6 avenue Poincaré59 910 BONDUESTel: +33 3 20 66 23 00www.equipe-cofidis.com

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