EX-99.1 3 d462944dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

DECEMBER 31, 2016

 

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Report of Independent

Auditors

ROBOPOLIS

December 31, 2016

ROBOPOLIS

11 Avenue Albert Einstein

69100 Villeurbanne

France

We have audited the accompanying consolidated financial statements of Robopolis, which comprise the consolidated balance sheet as of December 31, 2016 and 2015 and the related consolidated income statement, consolidated statement of other comprehensive income, consolidated cash flow statement and consolidated statement of changes in equity for the year then ended, and the related notes to the consolidated financial statements.

I.    Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free of material misstatement, whether due to fraud or error.

II.    Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly,


Report of Independent

Auditors

ROBOPOLIS

December 31, 2016

 

we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

III.     Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Robopolis as of December 31, 2016 and 2015 and the consolidated results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Caluire and Paris, France

September 25, 2017

 

BF AUDIT PARTENAIRES

 

/s/ Frédéric Brejon

Frédéric BREJON

Partner

  

    

Jean-François PLANTIN

 

/s/ Jean-François Plantin

 


Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

A – STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)                          

 

ASSETS

(In thousands of euros)

   Notes      12/31/2016          12/31/2015      
Goodwill      7        14,416        13,291  
Intangible assets      8        71        81  
Property, plant and equipment      9        925        978  
Financial assets      11        186        186  
Deferred tax assets      31        8        116  
Non-current assets               15,605        14,652  
Inventories      12        20,088        22,596  
Trade receivables      13        58,205        43,686  
Other current assets      14        4,161        9,204  
Financial assets at fair value      11        3,337        -  
Current tax assets      31        -        -  
Cash and cash equivalents      15        26,078        16,140  
Current assets               111,870        91,626  

 

Total assets

 

              127,475        106,277  
        

EQUITY AND LIABILITIES

(In thousands of euros)

   Notes      12/31/2016          12/31/2015      
Share capital      16        252        300  
Consolidated reserves         45,781        43,951  
Consolidated net income         19,604        14,071  
Equity attributable to owners of the Company         65,636        58,322  
Non-controlling interests               39        13  
Total equity               65,676        58,334  
Borrowings      18        608        1,181  
Employee-related liabilities      21        60        46  
Other non-current provisions      22        507        415  
Deferred tax      31        -        -  
Non-current liabilities               1,176        1,641  
Borrowings      18        762        785  
Down-payments received      19        
Trade payables      19        25,978        25,898  
Current tax liabilities         3,611        3,116  
Other current liabilities      23        30,273        16,503  
Current liabilities               60,624        46,302  
Total equity and liabilities               127,475        106,277  

 

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Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

B – CONSOLIDATED INCOME STATEMENT                                                             

 

 

(In thousands of euros)

 

   Notes      12/31/2016          12/31/2015      
                            
Revenue      24        128,964        105,468  
Cost of goods sold         (79,653)        (66,795)  
Other purchases and external expenses      25        (15,598)        (12,841)  
Employee benefits expense      26        (5,442)        (4,760)  
Taxes and duties other than income tax         (691)        (555)  
Charges to depreciation, amortization, provisions and impairment      27        (115)        272  
Other operating income and expenses      28        (6)        -  

Current operating income

        27,460        20,790  
Other income and expenses      29        1,518        82  
Net operating income               28,977        20,872  
Net finance costs         (72)        (75)  
Other financial income and expenses         8        (93)  
Net financial expense      30        (64)        (168)  
Net income before tax               28,914        20,705  
Income tax expense      31        (9,283)        (6,632)  
Share of net income of associates               -        -  
Net income for the year               19,630        14,072  
Attributable to non-controlling interests         27        1  
Attributable to owners of the Company               19,604        14,071  
                            
Basic earnings per share (in euros)      17        77.99        46.96  
Diluted earnings per share (in euros)      17        77.88        46.96  

 

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Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

C – STATEMENT OF COMPREHENSIVE INCOME                                                   

The Statement of Comprehensive Income is presented pursuant to IAS 1 revised, which requires the presentation below the Income Statement or in a separate statement, of income and expense items recognized directly in equity.

Comprehensive income is equal to net income for the year plus income and expense items recognized directly in equity.

 

 

(In thousands of euros)

 

           31/12/2016          31/12/2015      
                            
Net income from continuing operations               19,630        14,072  
        
Net fair value gains (losses)         -        -  
Gains (losses) on foreign currency translation         -        -  
                            
Comprehensive income from continuing operations               19,630        14,072  
Attributable to non-recurring interests         27        1  

Attributable to owners of the Company

        19,604        14,071  
                            

Basic comprehensive income per share

- in euros

     17        77.99        46.96  

Diluted comprehensive income per share

- in euros

     17        77.88        46.96  

 

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Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

D – STATEMENT OF CASH FLOWS                                                                                 

 

 

(In thousands of euros)

 

   Notes      12/31/2016      12/31/2015  
Net income of consolidated companies               19,630        14,072  
- Charges to depreciation, amortization, provisions and impairment         290        (272)  
- Income tax expense (income)      31        9,283        6,632  
- Net finance costs      30        72        75  
Operating cash flow before changes in operating working capital               29,275        20,507  
- Change in operating working capital         7,486        (10,056)  
- Income taxes paid               (9,283)        (6,632)  
Cash flows from operating activities (Total I)               27,477        3,819  
Investing activities         
Payments for intangible assets and property, plant and equipment         (127)        (169)  
Payments for shares         -        -  
Proceeds from disposal of intangible assets and property, plant and equipment         10        25  
Change in loans and advances granted         (3)        -  
Acquisitions/disposals of entities net of cash and cash equivalents acquired         (1,125)        -  
Other impacts of changes in scope               -        -  
Cash flows used in investing activities (Total II)               (1,245)        (144)  
Financing activities         
Dividends paid to owners of the Company         -        -  
Dividends paid to non-controlling interests in consolidated companies         -        -  
Proceeds from issues of shares for cash         -        1,782  
Treasury share repurchases and sales         (15,626)        -  
Change in current accounts         -        (1,938)  
Interest paid         (72)        (75)  
Proceeds from borrowings         -        -  
Repayments of borrowings               (555)        (588)  
Cash flow used in financing activities (Total III)               (16,252)        (818)  

Net increase (decrease) in cash and cash equivalents (I+II+III)

 

     9,980        2,857  
Cash and cash equivalents at the beginning of the year         15,928        14,429  
Cash and cash equivalents at the end of the year      15        25,907        15,928  
Effects of exchange rate changes                        (1,358)  
Net increase (decrease) in cash and cash equivalents               9,979        2,857  

 

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Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

Pursuant to IAS 7, the Group has elected to present the Statement of Cash Flows using the indirect method, commencing with net income.

Reconciliation of cash and cash equivalents in the Statement of Cash Flows and in the Statement of Financial Position

 

 

(In thousands of euros)

 

           12/31/2016*      12/31/2015  
                            
Cash assets      (1)        26,078        16,140  
Cash liabilities      (2)        171        212  
Net cash and cash equivalents in the Statement of Financial Position      (1) - (2)        25,907        15,928  
Cash and cash equivalents at the end of the year in the Statement of Cash Flows         25,907        15,928  

*2016 cash and cash equivalents excluding hedge transactions

 

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E – STATEMENT OF CHANGES IN EQUITY

 

(In thousands of euros)    Share
capital
     Share
premium
     Reserves      Foreign
currency
translation
reserve
     Equity
attributable
to owners
of the
Company
    

Non-

recurring
interests

     Total
equity
 
                                                                
As of December 31, 2014      283        16,512        25,674        1,358        43,828        11        43,839  
Net income for the year ended December 31, 2015            14,071           14,071        1        14,072  
Share capital increase      16        1,766              1,782           1,782  
Share capital reduction                     
Dividend distribution                     
Movements in consolidated reserves (change in scope)            (1)           (1)           (1)  
Changes in foreign currency translation reserve               (1,358)        (1,358)           (1,358)  
As of December 31, 2015      300        18,278        39,744        0        58,321        13        58,334  
Net income for the year ended December 31, 2016            19,604           19,604        27        19,630  
Share capital increase                     
Share capital reduction      (48)        (15,578)              (15,626)           (15,626)  
Dividend distribution                     
Movements in consolidated reserves (change in scope)                     
Changes in foreign currency translation reserve               3,337        3,337           3,337  
As of December 31, 2016      252        2,699        59,348        3,337        65,636        39        65,676  

 

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Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

F – NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                                

CONTENTS

Amounts are expressed in thousands of euros, unless otherwise indicated

 

NOTE 1. GENERAL INFORMATION      12  
NOTE 2. DECLARATION OF COMPLIANCE      12  
NOTE 3. ACCOUNTING BASIS      13  
NOTE 4. ACCOUNTING POLICIES      13  
NOTE 5. MAJOR EVENTS OF THE PERIOD      23  
NOTE 6. SUBSEQUENT EVENTS      24  
NOTE 7. GOODWILL      25  
NOTE 8. INTANGIBLE ASSETS      25  
NOTE 9. PROPERTY, PLANT AND EQUIPMENT      26  
NOTE 10. ASSET IMPAIRMENT      26  
NOTE 11. FINANCIAL ASSETS      27  
NOTE 12. INVENTORIES      28  
NOTE 13. TRADE RECEIVABLES      28  
NOTE 14. OTHER CURRENT ASSETS      28  
NOTE 15. CASH AND CASH EQUIVALENTS      28  
NOTE 16. SHARE CAPITAL      29  
NOTE 17. EARNINGS PER SHARE      29  
NOTE 18. BORROWINGS      30  
NOTE 19. FINANCIAL LIABILITIES BY CATEGORY      31  
NOTE 20. FINANCIAL RISK MANAGEMENT      32  
NOTE 21. RETIREMENT COMMITMENTS AND SIMILAR OBLIGATIONS      33  
NOTE 22. OTHER PROVISIONS      33  
NOTE 23. OTHER CURRENT LIABILITIES      34  
NOTE 24. REVENUE      34  
NOTE 25. OTHER PURCHASES      34  
NOTE 26. EMPLOYEE BENEFITS EXPENSE      35  
NOTE 27. CHARGES TO DEPRECIATION, AMORTIZATION, PROVISIONS AND IMPAIRMENT      35  
NOTE 28. OTHER OPERATING INCOME AND EXPENSES      35  
NOTE 29. OTHER INCOME AND EXPENSES      35  
NOTE 30. NET FINANCIAL EXPENSE      35  
NOTE 31. INCOME TAX EXPENSE      36  
NOTE 32. RELATED-PARTY DISCLOSURES      37  
NOTE 33. FINANCE LEASE COMMITMENTS      38  

 

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NOTE 34. COMMITMENTS AND CONTINGENT LIABILITIES      38  
NOTE 35. OPERATING SEGMENTS      39  
NOTE 36. EMPLOYEES      39  
NOTE 37. CONSOLIDATED COMPANIES AS OF DECEMBER 31, 2016      39  

 

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Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

Note 1. GENERAL INFORMATION

Robopolis (hereinafter “the Company”) is a simplified joint stock company (société par actions simplifiée) governed by French law. Its registered office is located in Villeurbanne, France.

The Group is the European leader in domestic robotics. It holds exclusive distribution contracts in the regions where it operates and primarily with the manufacturer, IRobot.

The consolidated financial statements cover the 12-month period from January 1, 2016 to December 31, 2016.

Note 2. DECLARATION OF COMPLIANCE

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Group applies all the standards and interpretations in effect at the year-end.

The Group has not identified any recent amendments to IFRS likely to impact its consolidated financial statements.

The Group has not elected to adopt early the standards, interpretations and amendments published by the IASB but not yet adopted by the European Union or which enter into effect after December 31, 2016.

 

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Note 3. ACCOUNTING BASIS

The consolidated financial statements comprise the financial statements of the simplified joint stock company, Robopolis and the subsidiaries it controls.

The financial statements are presented in thousands of euros, unless otherwise stated. Amounts are rounded up where the figure after the decimal is 500 or more.

The list of consolidated companies is presented in Note 37.

Preparation and presentation of the financial statements

The financial statements for the year ended December 31, 2016 and the notes thereto were adopted by the Board of Directors on September 22, 2017.

 

Note 4. ACCOUNTING POLICIES

 

4.1. General measurement methods   

The Group consolidated financial statements are prepared on a historical cost basis, with the exception of certain financial instruments measured at fair value. They are also prepared on a going concern basis.

 

4.2. Use of estimates   

The preparation of financial statements in accordance with International Financial Reporting Standards (IFRS) involves the use of estimates and assumptions by Group Management which impact the accounting value of certain asset, liability, income and expense items and information disclosed in certain notes to the financial statements.

These assumptions are uncertain in nature and future values could differ from these estimates. The Group regularly reviews estimates and assessments to take account of past experience and integrate factors considered relevant with respect to economic conditions.

The main accounts and disclosures concerned by significant estimates are goodwill, financial assets and provisions for contingencies and losses.

 

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4.3. Consolidation method   

All companies draw up their financial statements to December 31.

Subsidiaries

Subsidiaries are companies controlled by the Group. They are fully consolidated from the date control is obtained to the date control is transferred outside the Group. The Group is deemed to control a subsidiary where it holds the power, directly or indirectly, to govern its financial and operating policies so as to obtain the benefits of its activities. Companies are generally considered to be controlled by Robopolis where it holds, directly or indirectly, more than 50% of voting rights.

The consolidated financial statements include all assets, liabilities, income and expenses of the subsidiary. Equity and net income are split between amounts attributable to owners of the Company and amounts attributable to minority shareholders (non-controlling interests).

Financial statements are consolidated from the date of acquisition of control to the date control is lost.

Robopolis only has subsidiaries. It does not hold any interests in joint ventures and does not exercise significant influence over any other entity.

Transactions eliminated

Commercial and financial transactions and balances and the results of inter-company transactions are eliminated on consolidation.

 

4.4. Business combinations   

Goodwill

Any positive difference between the acquisition cost of a business combination and the interest in the fair value of identifiable assets and liabilities at the date of acquisition of control is recognized in assets in goodwill. Any negative difference is recognized immediately in profit or loss for the period.

Goodwill is not amortized. Impairment tests are performed at least once annually and more frequently where there is indication that an impairment loss may have occurred. Testing procedures seek to ensure that the recoverable amount of a Cash-Generating Unit (CGU) to which goodwill is allocated is at least equal to its net carrying amount.

A cash-generating unit is a distinguishable component of the Group that is engaged in providing products or services and that is subject to risks and returns that are different from those of other CGUs. The following criteria are considered when identifying CGUs:

 

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  -

how management monitors the entity’s operations or how management makes decisions about continuing or disposing of the entity’s assets and operations,

 

  -

if an active market exists for all or part of the output produced by the asset or group of assets,

 

  -

the independent nature of the CGU with regard to its management team, strategy and market.

As the Group has a uniform business, with flows exposed to the same risks and return, a single CGU has been identified. Goodwill is therefore allocated to this CGU in assets.

Non-controlling interests

Non-controlling interests are recognized based on the fair value of net assets purchased.

Acquisitions of non-controlling interests are equal to the difference between the consideration paid and the carrying amount of net assets purchased.

Following the changes introduced by IAS 27 revised, subsidiary losses may be allocated to non-controlling interests even where the minority’s interest in the subsidiary’s equity is negative.

 

4.5. Foreign currency translation   

Foreign currency-denominated transactions

Foreign currency-denominated transactions are translated into euros at the rates of exchange prevailing at the transaction dates.

Financial statements presented in foreign currencies

All Group companies present their assets and liabilities in euros. All foreign subsidiaries were located in the euro zone at the reporting date.

 

4.6. Intangible assets   

Measurement

Intangible assets are carried at acquisition cost net of accumulated amortization and any impairment.

Amortization

Amortization is calculated on a straight-line basis over an average useful life of 3 years.

 

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4.7. Property, plant and equipment   

Measurement

Property, plant and equipment are carried at acquisition cost net of accumulated depreciation and any impairment recognized in accordance with IAS 36, Impairment of assets.

The cost of borrowings that finance assets over a long period of commissioning or production are not added to the entry cost of such assets and are expensed to profit or loss of the period.

Any major asset components with a useful life that is less than the useful life of the main asset are identified and depreciated over their own useful life. Recurring maintenance costs and maintenance costs that do not meet the criteria for recognition in accordance with the components approach are expensed to profit or loss in the period incurred.

Depreciation

Property, plant and equipment are depreciated on a straight-line basis over the following useful lives.

Land is not depreciated.

 

-    Building fixtures and improvements      10 years     
-    Office furniture      4 years     
-    Vehicles      5 years     
-    Computer hardware      3 years     

Other

The Group did not receive any investment grants during the year.

Leases

Assets purchased under finance leases transferring to the Group substantially all the risks and rewards of ownership are recognized in balance sheet assets at their fair value or, if lower, at the present value of the minimum lease payments. The corresponding liability is recorded in financial liabilities.

Lease payments are apportioned between interest expense and amortization of the lease obligation so as to obtain a constant interest rate on the balance of the loan liability.

Assets purchased under finance lease are depreciated over the shorter of their useful life in accordance with Group rules and the lease term. They are tested for impairment annually in accordance with IAS 36, Impairment of assets.

 

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Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are expensed on a straight-line basis over the lease term.

 

4.8. Impairment of intangible assets and property, plant and equipment   

The Group reviews the carrying amounts of assets to identify any impairment losses:

 

  -

intangible assets with indefinite useful lives and goodwill: at the end of each reporting period;

 

  -

other assets: where there is indication that the asset may be impaired.

An impairment is recognized if the recoverable amount of an asset falls below its carrying amount. The recoverable amount of an asset (or group of assets) is the higher of its fair value less costs of disposal and its value in use.

The value in use is equal to the present value of the future cash flows expected to be derived from the asset (or group of assets) and its disposal. The Group uses forecast cash flows that are consistent with forecast business plans prepared by management.

The discount rate used reflects current market assessments of the time value of money and the risks specific to the asset or group of assets. It is based on the current market risk-free rate of interest, equal to the time value of money plus the margin necessary to cover the risk specific to the asset.

The discount rate is applied to post-tax cash flows, producing identical recoverable amounts to those obtained by applying pre-tax rates to pre-tax cash flows.

Any impairment losses are recognized directly in operating profit or loss.

Impairment tests have been performed on goodwill. The results were satisfactory and no impairment was recognized.

 

4.9. Inventories and WIP   

The Group has no production activity.

Goods and other supplies are carried at purchase price plus incidental expenses, net of any rebates and discounts obtained and valued using the weighted average unit cost method. Goods are impaired where necessary to reflect any risk of obsolescence. Impairment is recognized where the recoverable value falls below the carrying amount.

 

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As of December 31, 2016, inventory had a gross carrying amount of:

K20,555

Impairment totaled:

K467

Giving a carrying amount net of impairment of:

K20,088

 

4.10. Trade receivables   

Trade receivables are current financial assets.

They are recognized in the initial amount of invoices, net of any impairment provisions for irrecoverable amounts. The amount of doubtful receivables is estimated when the recovery in full of a receivable is no longer considered probable. Irrecoverable receivables are recognized as a loss when identified.

 

4.11. Other financial instruments   

Classification of asset financial instruments

Financial assets are classified in one of the following categories as appropriate:

  -

financial assets at fair value through profit or loss,

  -

loans and receivables,

  -

held-to-maturity investments, or

  -

available-for sale financial assets.

The Group determines the classification of financial assets on their initial recognition and reviews this classification at each reporting date when authorized and appropriate.

All investments are initially recognized at fair value, including investment acquisition costs.

Investments classified in the “fair value through profit or loss” and “available-for-sale” categories are remeasured to fair value at each reporting date.

Financial assets held by the Group relate exclusively to contractual receivables, measured at amortized cost at each reporting date and recorded net of any impairment.

The Group does not use derivative instruments.

 

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Classification of liability financial instruments

Financial liabilities are classified, as appropriate, in financial liabilities at amortized cost or financial liabilities at fair value through profit or loss.

 

4.12. Cash and cash equivalents   

Cash and cash equivalents include liquid assets and short-term investments with an initial maturity of less than three months at the acquisition date. Short-term investments are marked-to-market at each reporting date.

Cash equivalents do not include commitments in respect of transactions hedging foreign-currency purchases of goods. Only the unrealized exchange gain or loss previously taken to equity is now recorded in the Income Statement (effective hedge at the reporting date).

 

4.13. Employee benefits   

Pension plans

The Group provides supplementary pensions or other long-term benefits to employees, in accordance with customary or legal requirements. It offers these benefits through defined contribution or defined benefit plans.

In the case of defined-contribution plans, the Group’s only obligation is the payment of premiums. Contributions paid to the plans are recognized as expenses of the period. If applicable, provisions are recognized for outstanding contributions at the reporting date. The commitments presented in Note 21 solely concern employee remuneration. No assets are held to cover these commitments.

Type of commitments

 

  -

Retirement termination payments

Termination payments are due by French Group entities under the industry collective bargaining agreement. They comprise retirement termination payments and end-of-career payments paid on voluntary retirement or when an employee reaches the legal retirement age.

 

  -

Supplementary pension plans

Provisions are recognized for retirement commitments and similar obligations arising from defined benefit plans and are measured based on an actuarial calculation performed at least once a year. These commitments solely concern retirement termination payments. The projected unit credit method is applied as follows: each period of service creates an additional unit of benefit

 

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entitlement, and each of these units is measured separately to determine the Group’s employee benefit obligation.

The calculations take into account the specific features of the various plans and assumptions for the retirement date, career advancement, salary increases, as well as the probability of the employee still being employed by the Group at retirement age (turnover rates, mortality tables, etc.).

The obligation is discounted based on interest rates on long-term bonds issued by companies with the highest credit ratings. The obligation is provided net of any plan assets measured at fair value.

Actuarial gains and losses are generated by changes in assumptions and are recognized in profit or loss.

The net expense for retirement commitments and similar obligations is recorded in net operating income of the period, except for any discounting expense recorded in net financial expense.

 

4.14. Other provisions   

A provision is recognized when, at the reporting date, the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying future economic benefit will be required to settle the obligation.

Provisions are discounted to present value if the time value of money is material. The related increase in the provisions is recognized as a financial expense.

In the case of restructuring, a provision may be recognized only if, at the reporting date, the Company has announced the restructuring and drawn up a detailed plan or started to implement the plan.

Provisions are booked with regard to disputes (industrial tribunals, tax audits, customer disputes, etc.) if the Group has an uncontested obligation to a third party at the reporting date. They are determined based on the best estimate of the expense likely to be required to settle the obligation.

 

4.15. Borrowings   

Interest-bearing borrowings are recorded at the initial nominal value less related transaction costs. At each reporting date, financial liabilities are then measured at amortized cost using the effective interest rate method.

Borrowings are broken down between:

 

  -

current liabilities, comprising the portion to be repaid in the twelve months following the reporting date;

 

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  -

non-current liabilities for the portion maturing in more than twelve months.

Foreign exchange risk

The majority of Group sales are performed in euros, while purchases are generally denominated in U.S. dollars. The transactions performed by Group companies therefore generate a foreign exchange position.

Generally speaking, the Group systematically hedges foreign exchange risk arising on transactions performed in a currency other than the euro (notably the U.S. dollar). The Group hedges its foreign exchange risk through forward purchases of currency corresponding to budget estimates for purchases of goods.

Foreign exchange hedges are recorded at fair value, with the effective portion of gains and losses taken to equity and the ineffective portion of gains and losses taken to profit or loss in accordance with IAS 39. Current borrowings do not therefore include all commitments resulting from transactions hedging foreign currency purchases of goods but only any related unrealized exchange gains or losses.

The balance sheet accounts impacted by these transaction are presented in Notes 15 and 18.

 

4.16. Trade payables and other creditors   

Trade and other payables are recognized in the amount of the cash or consideration received, that is at the transaction price. They represent financial liabilities.

 

4.17. Income tax   

Deferred taxes are recognized, using the liability method, on temporary differences existing at the reporting date between the tax bases of assets and liabilities and their carrying amounts, as well as on unused tax losses.

Deferred tax assets and liabilities are calculated at tax rates expected to apply during the period in which the asset will be realized or the liability settled, based on tax regulations that have been enacted or substantively enacted at the reporting date.

Deferred taxes are calculated individually for each entity and are offset when the taxes are collected by the same tax authority and concern the same tax entity.

Deferred taxes payable are recognized as income or expenditure in the Income Statement unless they relate to a transaction or event that is recognized directly in equity.

Deferred taxes are presented on separate lines of the Balance Sheet under non-current assets and non-current liabilities.

 

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Deferred tax assets and liabilities are not discounted to present value.

 

4.18. Revenue   

Sales are recognized at the date of transfer of the risks and rewards of ownership, generally evidenced by the delivery of the goods.

Revenues are measured at the fair value of the consideration received or receivable in accordance with IAS 18, equal to the amount of cash or cash equivalents received or receivable, net of any trade discounts or volume rebates.

 

4.19. Current operating income   

The income statement format used by the Group employs a classification by expense.

Current operating income is equal to the difference between pre-tax income and expenses other than:

 

  -

other income and expenses;

 

  -

financial items;

 

  -

net income of associates;

 

  -

income or losses from discontinued operations or assets held for sale.

Any “Employee statutory profit-sharing” is included in the employee benefits expense.

Net operating income is equal to current operating income adjusted for other income and expenses that are unusual in nature or occur rarely and particularly:

 

  -

impairment of goodwill and non-current assets;

 

  -

significant restructuring expenses, or expenses related to adjustments to headcount as a result of major events or decisions;

 

  -

capital gains or losses on disposals of non-current assets;

 

  -

significant income and expenses resulting from litigation.

 

4.20. Earnings per share   

Earnings per share are calculated by dividing Group consolidated net income or loss by the weighted average number of shares outstanding during the period.

 

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4.21. Operating segments   

A segment is a distinguishable component of the Group that is engaged in providing products or services (business segment) and that is subject to risks and returns that are different from those of other business segments.

The Group has a single business segment.

The geographic segments adopted by Robopolis for secondary reporting purposes reflect customer invoicing addresses.

Segment assets are the non-current and current assets used by a segment. Any assets not allocated to a segment are presented on the line “Unallocated assets”.

Segment liabilities are those liabilities that result from the activities of a segment and that either are directly attributable to the segment or can be allocated to the segment on a reasonable basis. They include non-current and current liabilities. Any liabilities not allocated to a segment are presented on the line “Unallocated liabilities”.

IFRS 8 on segment reporting, which entered into mandatory effect for fiscal years beginning on or after January 1, 2009, only requires one level of segment reporting. A breakdown by geographic region is therefore no longer presented.

The Group operates exclusively in the euro zone. Its subsidiaries are located in Spain, Belgium, Germany, the Netherlands, Austria and Portugal.

Note 5. MAJOR EVENTS OF THE PERIOD

The Company developed its business in Portugal during the year, creating a wholly-owned subsidiary to further expand its distribution network. The company’s development also involved a number of asset disposals.

On December 31, 2016, Robopolis SAS purchased 46,728 of its own shares at a unit price of 334,409 per share, with a view to cancelling them. The consideration was settled partly in cash and partly via vendor credit.

There were no other major events during the period.

 

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Note 6. SUBSEQUENT EVENTS

The contract dated December 5, 2012 for the acquisition of 90% of the share capital of the subsidiary, Asimotion, included an option for the purchase by the Company of the remaining 10% of shares by December 31, 2017 at the latest. This share purchase transaction was completed and validated by a decision of the Board of Directors on March 16, 2017.

All the decisions approved by the General Assembly of Shareholders dated December 13, 2016 were fully performed including the payment in anticipation of all the Seller’s financing arrangements.

On July 25, 2017 Robopolis’ shareholders signed a Shares Purchase Agreement with iRobot, a US company being its main supplier and partner in order to sell 100% of the shares. The final closing is planned on October 2, 2017.

On August 31, 2017, the Robopolis SAS purchased 1 850 of its own shares at a unit price of € 496,569 per share in order to cancel them as per the decision of the General Assembly dated July 13, 2017. The consideration was settled fully in cash.

As part of the SPA conditions, Robopolis SAS has to sell all hedging positions before the closing.

As of today, ROBOPOLIS sold a third of the related position and plan to sell all remaining positions before the end of the month, as requested by the SPA. The total estimated costs for Robopolis to sell all hedging positions is approximately 5 million Euros.

 

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Note 7. GOODWILL

Breakdown of goodwill (net carrying amount)

 

Company or group    Year of
acquisition
   Currency   12/31/2016          12/31/2015      
RRDS SL (Spain)    2010    K     4,846        4,846  
Robopolis GmbH (Germany)    2011    K     6,281        6,281  
Robopolis SPRL (Belgium)    2011    K     1,045        1,045  
Robopolis BV (Netherlands)    2012    K     1,118        1,118  
Robotworld (Portugal)    2016    K     1,125     
Net carrying amount               14,416        13,291  

Note 8. INTANGIBLE ASSETS

 

(In thousands of euros)    Software          Websites          Trademarks          Total      
                                     
Opening gross carrying amount      514        125        3        640  
Foreign exchange translation            
Disposals / exits            
Reclassifications            
Changes in consolidation scope            
Acquisitions      21                          21  
Closing gross carrying amount      535        125        3        660  
                                     
Opening accumulated amortization      449        110        0        559  
Foreign exchange translation            
Disposals / exits            
Reclassifications            
Changes in consolidation scope            
Charge to amortization      21        10                 31  
Closing accumulated amortization      470        120        0        590  
           
Opening net carrying amount      64        15        3        81  
Closing net carrying amount      65        5        3        71  

 

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Note 9. PROPERTY, PLANT AND EQUIPMENT

 

(In thousands of euros)    Land and    
buildings    
    

 

General    
installations,    
fixtures    

 

     Office and IT    
equipment,    
furniture    
     Total      
                                     
Opening gross carrying amount      637        281        668        1,587  
Foreign exchange translation            
Disposals / exits            (70)        (70)  
Reclassifications            
Changes in consolidation scope            
Acquisitions               17        89        106  
Closing gross carrying amount      637        298        688        1,623  
                                     
Opening accumulated depreciation      83        135        390        609  
Foreign exchange translation            
Disposals / exits            (70)        (70)  
Reclassifications            3        3  
Changes in consolidation scope            
Charge to depreciation      15        30        110        156  
Closing accumulated depreciation      98        165        433        697  
           
Opening net carrying amount      554        147        278        978  
Closing net carrying amount      539        133        254        925  

Note 10. ASSET IMPAIRMENT

The impairment test methodology is presented in Note 4.8, Impairment losses. Recoverable amounts were calculated based solely on value in use and the Group’s most recent business plan.

Impairment tests did not result in the recognition of any asset impairment.

 

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Note 11. FINANCIAL ASSETS

The different financial instrument categories are presented at net carrying amount below.

As of December 31, 2016

 

(In thousands of euros)    As of
12/31/2016
    

Available-

for sale
financial
assets

     Loans and
receivables
    

Held-to-

maturity
investments

     Financial
assets at
fair value
through
profit or
loss
     Assets  
outside  
IAS 39  
scope  
 

Goodwill

     14,416        -        -        -        -        14,416  

Intangible assets

     71        -        -        -        -        71  

Property, plant and equipment

     925        -        -        -        -        925  

Financial assets

     186        -        186        -        -        -  
Deferred tax assets      8        -        -        -        -        8  
Non-current assets      15,606        -        186        -        -        15,420  

Inventories

     20,088        -        -        -        -        20,088  

Trade receivables

     58,205        -        58,205        -        -        -  

Other current assets

     4,161        -        4,161        -        -        -  

Current tax assets

     -        -        -        -        -        -  

Cash and cash equivalents

     29,415        -        26,078        -        3,337        -  
Current assets      111,870        -        88,444        -        3,337        20,088  

As of December 31, 2015

 

(In thousands of euros)    As of
12/31/2015
    

Available-

for sale
financial
assets

     Loans and
receivables
    

Held-to-

maturity
investments

     Financial
assets at
fair value
through
profit or
loss
     Assets  
outside  
IAS 39  
scope  
 

Goodwill

     13,291        -        -        -        -        13,291  

Intangible assets

     81        -        -        -        -        81  

Property, plant and equipment

     978        -        -        -        -        978  

Financial assets

     186        -        186        -        -        -  
Deferred tax assets      116        -        -        -        -        116  
Non-current assets      14,652        -        186        -        -        14,466  

Inventories

     22,596        -        -        -        -        22,596  

Trade receivables

     43,686        -        43,686        -        -        -  

Other current assets

     9,204        -        9,204        -        -        -  

Current tax assets

     -        -        -        -        -        -  

Cash and cash equivalents

     16,140        -        16,140        -        -        -  
Current assets      91,626        -        69,030        -        -        22,596  

 

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Note 12. INVENTORIES

 

(In thousands of euros)    12/31/2016          12/31/2015      
Goods      20,555        22,944  
Impairment      (467)        (348)  
Total      20,088        22,596  

Note 13. TRADE RECEIVABLES

 

(In thousands of euros)    12/31/2016      12/31/2015      
Trade receivables      58,446        44,051  
Impairment      (241)        (365)  
Total      58,205        43,686  

Note 14. OTHER CURRENT ASSETS

 

(In thousands of euros)    12/30/2016          12/31/2015      
Advances on supplier invoices and credit notes receivable      2,425            6,265  
Tax and employee-related receivables      1,615            2,858  
Other receivables      24            14  
Prepaid expenses      98            67  
Total      4,161        9,204  

Note 15. CASH AND CASH EQUIVALENTS

 

 

(In thousands of euros)

 

   12/31/2016      Change      12/31/2015  
Investment securities      -        -        -  
Bank guarantees      -        -        -  
Hedging instruments      3,337        3,337        -  
Cash at bank and in hand      26,078        9,938        16,140  
Cash and cash equivalents      29,415        13,275        16,140  
Hedging instruments      -        188        (188)  
Overdrafts and short-term bank borrowings      (171)        (147)        (24)  
Cash and cash equivalents, net      29,244        13,316        15,928  

 

Breakdown of hedging instruments:

 

        
Hedging instruments - Assets      3,337        3,337        -  
Hedging instruments - Liabilities      -        -        -  
Difference in consolidated equity      3,337        3,337        -  

 

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Foreign exchange gains and losses resulting from differences between closing exchange rates and financial instrument hedging rates are recognized in the Group accounts through profit or loss (equity).

See Note 4.15

Note 16. SHARE CAPITAL

Following the share capital reduction detailed in Note 5, the share capital comprises 251,711 fully paid-up shares with a par value of 1 each.

The Company does not hold any of its own shares.

Note 17. EARNINGS PER SHARE

 

     

 

12/31/2016

 

     12/31/2015  
Net income (loss) attributable to owners of the Company (in thousands)      19,604        14,071  
Weighted average number of shares      251,711        299,639  
Earnings per share (in euros)      77.88        46.96  
Net income (loss) attributable to owners of the Company (in thousands)      19,604        14,071  
Weighted average number of shares      251,711        299,639  
Adjustments for dilutive instruments      -        -  
Number of shares for calculating diluted earnings per share      251,711        299,639  
Diluted earnings per share      77.88        46.96  

 

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Note 18. BORROWINGS

Group net borrowings break down as follows:

 

(In thousands of euros)    Less
than 1
year
     1 to 5
years
     More
than 5
years
     12/31/2016      12/31/2015  
Bank borrowings      11        597        -        608        1,181  
Non-current borrowings      11        597        -        608        1,181  
Bank borrowings      591        -        -        591        573  
Shareholder current accounts      -        -        -        -        -  
Hedging instruments      -        -        -        -        188  
Overdrafts and short-term bank borrowings      171        -        -        171        24  
Current borrowings      762        -        -        762        785  
Total borrowings      773        597        -        1,370        1,966  
Investment securities               -        -  
Bank guarantees               -        -  
Hedging instruments               (3,337)        -  
Cash at bank and in hand               (26,078)        (16,140)  
Cash and cash equivalents                                 (29,415)        (16,140)  
Net debt                                 (28,045)        (14,174)  

The decrease in current borrowings is due to :

 

  -

a reduction in the debt of all Group companies;

 

  -

see Note 4.15.

 

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Note 19. FINANCIAL LIABILITIES BY CATEGORY

As of December 31, 2016

 

(In thousands of euros)    As of
12/31/2016
     Financial
liabilities at
amortized
cost
     Financial
assets at fair
value
through
profit or loss
     Cash flow
hedges
     Liabilities
outside IAS
39 scope
 
Borrowings      608        608        -        -        -  
Employee-related liabilities      60        -        -        -        60  
Other non-current provisions      507        -        -        -        507  
Non-current liabilities      1,176        608        -        -        567  
Borrowings      762        762        -        -        -  
Trade payables      25,978        25,978        -        -        -  
Current tax liabilities      3,611        -        -        -        3,611  
Current liabilities      30,273        -        -        -        30,273  
Current liabilities      60,624        26,740        -        -        33,884  

 

As of December 31, 2015

 

 

           
(In thousands of euros)    As of
12/31/2015
     Financial
liabilities at
amortized
cost
     Financial
assets at fair
value
through
profit or  loss
     Cash flow
hedges
     Liabilities
outside IAS
39 scope
 
Borrowings      1,181        1,181        -        -        -  
Employee-related liabilities      46        -        -        -        46  
Other non-current provisions      415        -        -        -        415  
Non-current liabilities      1,641        1,181        -        -        460  
Borrowings      785        785        -        -        -  
Trade payables      25,898        25,898        -        -        -  
Current tax liabilities      3,116        -        -        -        3,116  
Current liabilities      16,503        -        -        -        16,503  
Current liabilities      46,301        26,683        -        -        19,619  

Financial liabilities are recognized at fair value.

 

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Note 20. FINANCIAL RISK MANAGEMENT

Financial risk management is based on specific risk strategies for interest rate, foreign exchange, liquidity and credit risks.

Foreign exchange risk

See Note 4.15

Interest rate risk

As the Group is generally only exposed to very limited interest rate risk, Group management does not consider it necessary to implement a hedging strategy to mitigate or neutralize this risk.

Liquidity risk

The Group could be exposed to liquidity risk if all available import credit facilities are used. Assessed with respect to the Group’s financial structure, liquidity risk is considered non-existent at the reporting date.

Credit risk

In the majority of cases, sales are performed subject to a retention of ownership clause.

The credit risk is relatively low.

The Group considers that the accounting value of all financial assets and liabilities may be deemed the most representative of market value.

 

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Note 21. RETIREMENT COMMITMENTS AND SIMILAR OBLIGATIONS

Change in retirement commitments

 

(In thousands of euros)    12/31/2016          12/31/2015      
Opening balance      46        44  
Charge      14        1  
Utilizations and reversals      -        -  
Closing balance      60        46  

The above retirement commitments only concern the parent company. Retirement commitments of other Group companies are not material.

Underlying assumptions

 

     12/31/2016    12/31/2015
Discount rate    1.52%    1.66%
Rate of salary increase    5% declining    5% declining
Employee turnover    10% declining over 50 years    10% declining over 50 years
Mortality table    TG 05    TG 05
Retirement age    60 years    60 years
Social security contribution rate    40%    40%
Type of departure    Voluntary    Voluntary

The wholesale sector collective bargaining agreement is applicable in France.

Note 22. OTHER PROVISIONS

Change in other provisions

 

(In thousands of euros)    12/30/2016          12/31/2015      
Opening balance      415        415  
Charge      300     
Utilizations and reversals      207     
Closing balance      507        415  

 

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Note 23. OTHER CURRENT LIABILITIES

 

(In thousands of euros)    12/30/2016          12/31/2015      
Tax and employee-related liabilities      5,810        4,170  
Other liabilities      24,355        9,946  
Deferred income      108        2,386  
Total      30,273        16,503  

Note 24. REVENUE

 

(In thousands of euros)    12/31/2016      12/31/2015  
Sales of goods      128,752        105,352  
Sales of services      212        116  
Total      128,964        105,468  

Revenue totaled K128,964 in fiscal year 2016, up over 22% on fiscal year 2015 revenue of K105,468.

Note 25. OTHER PURCHASES

 

 

(In thousands of euros)

 

   12/31/2016          12/31/2015      
Supplies      580        538  
Out-sourcing      2,219        1,397  
Rental      687        541  
Maintenance      124        107  
Insurance      331        288  
Fees      2,648        2,848  
Advertising      5,440        3,660  
Transport      2,330        2,435  
Travel      827        558  
Post and telecommunications      124        131  
Bank services      288        341  
Other purchases      15,598        12,844  

 

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Note 26. EMPLOYEE BENEFITS EXPENSE

 

(In thousands of euros)    12/31/2016          12/31/2015      
Wages and salaries      4,130        3,596  
Social security contributions      1,311        1,164  
Total      5,442        4,760  

Note 27. CHARGES TO DEPRECIATION, AMORTIZATION, PROVISIONS AND IMPAIRMENT

 

(In thousands of euros)    12/31/2016          12/31/2015      
Charge to depreciation/amortization      186        227  
Net charge to / (reversal of) impairment on financial assets      2        9  
Net charge to / (reversal of) impairment on current assets      (5)        (511)  
Net charge to / (reversal of) provisions for contingencies and losses      106        2  
Total      290        (272)  

Note 28. OTHER OPERATING INCOME AND EXPENSES

 

(In thousands of euros)    12/31/2016          12/31/2015      
Other operating income and expenses      (6)        -  
Total      (6)        -  

Note 29. OTHER INCOME AND EXPENSES

 

(In thousands of euros)    12/31/2016          12/31/2015      
Other income      1,841        142  
Other expenses      (324)        (60)  
Total      1,518        82  

Note 30. NET FINANCIAL EXPENSE

 

(In thousands of euros)            12/31/2016                    12/31/2015         
Gross finance costs    (72)   (75)
Interest income    -   -
Net finance costs    (72)   (75)
Other financial income and expenses    1   96
Foreign exchange gains (losses)    7   (188)
Net financial expense    (64)   (168)

 

      Page 35          
   


Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

Note 31. INCOME TAX EXPENSE

The income tax expense breaks down as follows (in thousands of euros):

 

       12/31/2016          12/31/2015                         
Current tax    9,175    6,570                        
Deferred tax    108    63                        
  

 

  

 

Income tax expense

   9,283    6,632                        

Reconciliation of the theoretical income tax expense and the income tax expense recognized in profit or loss

 

(In thousands of euros)        12/31/2016           12/31/2015    
Net income before tax and minority interests    28,914   20,705
Income tax rate (theoretical parent company rate)    33.33%   33.33%
Theoretical income tax expense    9,638   6,902
Effect of different tax rates of foreign companies    (685)   (474)
Effect of unused tax losses not recognized as deferred tax assets     
Effect of additional contributions    146   73
Adjustments to prior years     
Other    184   131
Income tax expense recognized in profit or loss    9,283   6,632

 

Change in deferred tax assets

 

    
(In thousands of euros)    12/31/2016   12/31/2015
Opening balance    116   178
(Expense) Income    (108)   (63)
Closing balance    8   116

 

Change in deferred tax liabilities

 

None.

 

Breakdown of deferred tax assets

 

(In thousands of euros)        12/31/2016           12/31/2015    
Temporary differences    (12)   100
Permanent differences    20   15
Deferred tax assets (liabilities)    8   116

 

      Page 36          
   


Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

Deferred tax assets and liabilities

 

As of 12/31/2016            Assets               Liabilities                Net        
Security acquisition costs    3   -    3
Provisions for retirement commitments    20   -    20
Other provisions    (14)   1    (14)
Deferred tax assets (liabilities)    9   1    8

Note 32. RELATED-PARTY DISCLOSURES

Other than compensation granted to private individual executives of K112, the main transactions that could impact the financial position or results of the Group are presented below:

 

Related

party

   Group company
concerned
   Type of transaction    Amount invoiced
for fiscal year
ended
12/31/2016
    Balance as
of
12/31/2016
 
Aventalis    Robotica de Servicio SL (Spain)    Purchase of services      94       54  
IRA, SL    Robotica de Servicio SL (Spain)    Sale of services      -       -  
IRA, SL    Robotica de Servicio SL (Spain)    Purchase of services      526       150  
Klein AG    Robopolis GmbH    Purchase of services      364       90  
Kein & More    Robopolis GmbH    Purchase of services      336       77  
Kein & More    Robopolis GmbH    Purchase of goods      2       -  
Make Consult    Robopolis SPRL (Belgium)    Purchase of services      126       -  
Maos Consult    Robopolis SPRL (Belgium)    Purchase of services      126       -  
Finant Hold.    Robopolis BV (Netherlands)    Purchase of services      120       -  
Finant Hold.    Robopolis BV (Netherlands)    Sale of services      5       -  
Masbra Hold.    Robopolis BV (Netherlands)    Purchase of services      120       -  
Masbra Hold.    Robopolis BV (Netherlands)    Sale of services      5       -  
Ivolution    Robopolis SAS    Purchase of services      75       24  
High Five Inv.      Robopolis SAS    Purchase of services      1,625       712  

 

      Page 37          
   


Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

Note 33. FINANCE LEASE COMMITMENTS

No material commitments were identified in the finance lease agreements entered into by Group companies.

Note 34. COMMITMENTS AND CONTINGENT LIABILITIES

Commitments given

 

  -

Robopolis guarantees the financial commitments given by its Belgian subsidiaries to various banks.

 

Commitments at the year-end:    K260        

Commitments received

 

  -

USD-denominated import documentary credit facilities granted by various banks to Robopolis SAS.

 

Total amount due (euro equivalent):    K28,508        

 

  -

Currency forwards to hedge current or future USD purchases of goods totaling USD 71,618

(euro equivalent):    K67,942        

 

  -

Pursuant to the acquisition terms and conditions of the Dutch subsidiary (formerly ASIMOTION), the vendors granted Robopolis the following commitments:

  o

possibility to purchase the remaining 10% of the share capital retained by the vendors after the transaction, up to December 31, 2017. An agreement dated December 5, 2012 sets the secondary acquisition price at K129, payable by the presentation of 596 Robopolis shares.

  o

In the event of failure to attain the net income objectives defined in the agreement for fiscal years 2013 to 2015, Robopolis would be entitled to repurchase 1,800 of its own shares at a rate of 600 shares per year, at a fixed price of 1 per share.

 

      Page 38          
   


Consolidated annual financial report for the year ended December 31, 2016   LOGO

 

Note 35. OPERATING SEGMENTS

See Note 4.21.

Note 36. EMPLOYEES

The Group has 90 employees (81 in 2015), including management, in the following countries:

 

  -

France: 27

 

  -

Spain: 28

 

  -

Germany: 20

 

  -

Austria: 3

 

  -

Belgium: 5

 

  -

Netherlands: 5

 

  -

Portugal: 3

Note 37. CONSOLIDATED COMPANIES AS OF DECEMBER 31, 2016

 

Company   

 

Consolidation
method

 

       % voting    
rights
       % interest    
Robopolis SA (France)    Parent company    -    -
Robopolis Robotica de Servicio SL (Spain)      Fully consolidated      100.00    100.00
Robopolis SPRL (Belgium)    Fully consolidated    100.00    100.00
Robopolis GmbH (Germany)    Fully consolidated    100.00    100.00
Robopolis BV (Netherlands)    Fully consolidated    90.00    90.00
Robopolis Austria GmbH (Austria)    Fully consolidated    100.00    100.00
Robotworld LDA (Portugal)    Fully consolidated    100.00    100.00

 

      Page 39          
   


    

 

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED

DECEMBER 31, 2015

 

LOGO


Report of Independent

Auditors

ROBOPOLIS

December 31, 2015

ROBOPOLIS

11 Avenue Albert Einstein

69100 Villeurbanne

France

We have audited the accompanying consolidated financial statements of Robopolis, which comprise the consolidated balance sheet as of December 31, 2015 and 2014, and the related consolidated income statement, consolidated statement of other comprehensive income, consolidated cash flow statement and consolidated statement of changes in equity for the years then ended, and the related notes to the consolidated financial statements.

I.     Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free of material misstatement, whether due to fraud or error.

II.     Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly,


Report of Independent

Auditors

ROBOPOLIS

December 31, 2015

 

we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

III.     Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Robopolis as of December 31, 2015 and 2014, and the consolidated results of its operations and its cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Caluire and Paris, France

September 25, 2017

 

BF AUDIT PARTENAIRES

 

/s/ Frédéric Brejon

Frédéric BREJON

Partner

  

    

Jean-François PLANTIN

 

/s/ Jean-François Plantin

 


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

A – STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)                            

 

ASSETS

(In thousands of euros)

   Notes      12/31/2015          12/31/2014      
Goodwill      7        13,291        13,291  
Intangible assets      8        81        138  
Property, plant and equipment      9        978        1,021  
Financial assets      11        186        179  
Deferred tax assets      31        116        178  
Non-current assets               14,652        14,807  
Inventories      12        22,596        17,368  
Trade receivables      13        43,686        28,585  
Other current assets      14        9,204        4,220  
Current tax assets      31        -        -  
Cash and cash equivalents      15        16,140        14,596  
Current assets               91,626        64,768  

 

Total assets

 

              106,277        79,575  
        

EQUITY AND LIABILITIES

(In thousands of euros)

   Notes      12/31/2015          12/31/2014      
Share capital      16        300        283  
Consolidated reserves         43,951        34,444  
Consolidated net income         14,071        9,100  

Equity attributable to owners of the

Company

        58,322        43,827  
Non-controlling interests               13        11  
Total equity               58,334        43,839  
Borrowings      18        1,181        1,753  
Employee-related liabilities      21        46        44  
Other non-current provisions      22        415        415  
Deferred tax      31        -        -  
Non-current liabilities               1,641        2,212  
Borrowings      18        785        2,692  
Down-payments received      19        
Trade payables      19        25,898        17,714  
Current tax liabilities         3,116        1,476  
Other current liabilities      23        16,503        11,643  
Current liabilities               46,302        33,525  

 

Total equity and liabilities

 

              106,277        79,575  

 

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Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

B – CONSOLIDATED INCOME STATEMENT                                                             

 

 

(In thousands of euros)

 

   Notes    12/31/2015          12/31/2014      
                        
Revenue    24      105,468        87,012  
Cost of goods sold         (66,795)        (55,265)  
Other purchases and external expenses    25      (12,841)        (13,024)  
Employee benefits expense    26      (4,760)        (4,434)  
Taxes and duties other than income tax         (555)        (415)  
Charges to depreciation, amortization, provisions and impairment    27      272        (114)  
Other operating income and expenses    28      -        (93)  

Current operating income

        20,790        13,667  
Other income and expenses    29      82        31  
Net operating income           20,872        13,699  
Net finance costs         (75)        (117)  
Other financial income and expenses         (93)        87  
Net financial expense    30      (168)        (30)  
Net income before tax           20,705        13,669  
Income tax expense    31      (6,632)        (4,569)  
Share of net income of associates           -        -  
Net income for the year           14,072        9,100  
Attributable to non-controlling interests         1        0  
Attributable to owners of the Company           14,071        9,100  
                        
Basic earnings per share (in euros)    17      46.96        32.11  
Diluted earnings per share (in euros)    17      46.96        32.11  

 

      Page 3          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

C – STATEMENT OF COMPREHENSIVE INCOME                                                         

The Statement of Comprehensive Income is presented pursuant to IAS 1 revised, which requires the presentation below the Income Statement or in a separate statement, of income and expense items recognized directly in equity.

Comprehensive income is equal to net income for the year plus income and expense items recognized directly in equity.

 

 

(In thousands of euros)

 

           12/31/2015          12/31/2014      
                            
Net income from continuing operations               14,072        9,100  
        
Net fair value gains (losses)         -        1,358  
Gains (losses) on foreign currency translation         -        -  
                            
Comprehensive income from continuing operations               14,072        10,459  
Attributable to non-recurring interests         1        0  

Attributable to owners of the Company

        14,071        10,459  
                            

Basic comprehensive income per share

- in euros

     17        46.96        36.90  

Diluted comprehensive income per share

- in euros

     17        46.96        36.90  

 

      Page 4          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

D – STATEMENT OF CASH FLOWS                                                                     

 

 

(In thousands of euros)

 

   Notes     12/31/2015         12/31/2014      
Net income of consolidated companies              14,072       9,100  
- Charges to depreciation, amortization, provisions and impairment        (272)       114  
- Income tax expense (income)      31       6,632       4,569  
- Net finance costs      30       75       117  
Operating cash flow before changes in operating working capital              20,507       13,900  
- Change in operating working capital        (10,056)       (4,124)  
- Income taxes paid              (6,632)       (4,569)  
Cash flows from operating activities (Total I)              3,819       5,207  
Investing activities       
Payments for intangible assets and property, plant and equipment        (169)       (174)  
Payments for shares        -       -  
Proceeds from disposal of intangible assets and property, plant and equipment        25       54  
Change in loans and advances granted        -       (1)  
Acquisitions/disposals of entities net of cash and cash equivalents acquired        -       -  
Other impacts of changes in scope              -       -  
Cash flows used in investing activities (Total II)              (144)       (121)  
Financing activities       
Dividends paid to owners of the Company        -       (2,000)  
Dividends paid to non-controlling interests in consolidated companies        -       -  
Proceeds from issues of shares for cash        1,782       -  
Treasury share repurchases and sales        -       (1,266)  
Change in current accounts        (1,938)       1,771  
Interest paid        (75)       (117)  
Proceeds from borrowings        -       -  
Repayments of borrowings              (588)       (3,683)  
Cash flow used in financing activities (Total III)              (818)       (5,295)  
      
Net increase (decrease) in cash and cash equivalents (I+II+III)        2,857       (209)  
Cash and cash equivalents at the beginning of the year        14,429       12,846  
Cash and cash equivalents at the end of the year      15       15,928       14,429  
Effects of exchange rate changes              (1,358)       1,793  
Net increase (decrease) in cash and cash equivalents              2,857       (209)  

 

      Page 5          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

Pursuant to IAS 7, the Group has elected to present the Statement of Cash Flows using the indirect method, commencing with net income.

Reconciliation of cash and cash equivalents in the Statement of Cash Flows and in the Statement of Financial Position

 

 

(In thousands of euros)

 

           12/31/2015      12/31/2014  
                            
Cash assets      (1)        16,140        14,596  
Cash liabilities      (2)        212        166  
        
Net cash and cash equivalents in the Statement of Financial Position     

(1) -

(2)


 

     15,928        14,429  
                    
Cash and cash equivalents at the end of the year in the Statement of Cash Flows         15,928        14,429  

 

      Page 6          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

E – STATEMENT OF CHANGES IN EQUITY                                                     

 

(In thousands of euros)    Share    
capital    
     Share    
premium    
     Reserves          Foreign    
currency    
translation     
reserve    
     Equity    
attributable    
to owners    
of the    
Company    
    

Non-    

recurring    
interests    

     Total    
equity    
 
                                                                
As of December 31, 2013      296        16,511        19,828        (434)        36,201        11        36,212  
Net income for the year ended December 31, 2014            9,100           9,100           9,100  
Share capital increase (free share grant)                     
Share capital reduction      (13)        1        (1,254)           (1,266)           (1,266)  
Dividend distribution            (2,000)           (2,000)           (2,000)  
Movements in consolidated reserves (change in scope)                     
Changes in foreign currency translation reserve               1,793        1,793           1,793  
As of December 31, 2014      283        16,512        25,674        1,358        43,828        11        43,839  
Net income for the year ended December 31, 2015            14,071           14,071        1        14,072  
Share capital increase      16        1,766              1,782           1,782  
Share capital reduction                     
Dividend distribution                     
Movements in consolidated reserves (change in scope)            (1)           (1)           (1)  
Changes in foreign currency translation reserve               (1,358)        (1,358)           (1,358)  
As of December 31, 2015      300        18,278        39,744        0        58,321        13        58,334  

 

      Page 7          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

F – NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

Amounts are expressed in thousands of euros, unless otherwise indicated

 

NOTE 1. GENERAL INFORMATION      10  
NOTE 2. DECLARATION OF COMPLIANCE      10  
NOTE 3. ACCOUNTING BASIS      10  
NOTE 4. ACCOUNTING POLICIES      11  
NOTE 5. MAJOR EVENTS OF THE PERIOD      21  
NOTE 6. SUBSEQUENT EVENTS      22  
NOTE 7. GOODWILL      22  
NOTE 8. INTANGIBLE ASSETS      23  
NOTE 9. PROPERTY, PLANT AND EQUIPMENT      23  
NOTE 10. ASSET IMPAIRMENT      24  
NOTE 11. FINANCIAL ASSETS      25  
NOTE 12. INVENTORIES      26  
NOTE 13. TRADE RECEIVABLES      26  
NOTE 14. OTHER CURRENT ASSETS      26  
NOTE 15. CASH AND CASH EQUIVALENTS      26  
NOTE 16. SHARE CAPITAL      27  
NOTE 17. EARNINGS PER SHARE      27  
NOTE 18. BORROWINGS      28  
NOTE 19. FINANCIAL LIABILITIES BY CATEGORY      29  
NOTE 20. FINANCIAL RISK MANAGEMENT      30  
NOTE 21. RETIREMENT COMMITMENTS AND SIMILAR OBLIGATIONS      31  
NOTE 22. OTHER PROVISIONS      31  
NOTE 23. OTHER CURRENT LIABILITIES      32  
NOTE 24. REVENUE      32  
NOTE 25. OTHER PURCHASES      32  
NOTE 26. EMPLOYEE BENEFITS EXPENSE      33  
NOTE 27. CHARGES TO DEPRECIATION, AMORTIZATION, PROVISIONS AND IMPAIRMENT      33  
NOTE 28. OTHER OPERATING INCOME AND EXPENSES      33  
NOTE 29. OTHER INCOME AND EXPENSES      33  
NOTE 30. NET FINANCIAL EXPENSE      33  
NOTE 31. INCOME TAX EXPENSE      34  
NOTE 32. RELATED-PARTY DISCLOSURES      35  
NOTE 33. FINANCE LEASE COMMITMENTS      36  
NOTE 34. COMMITMENTS AND CONTINGENT LIABILITIES      36  

 

      Page 8          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

NOTE 35. OPERATING SEGMENTS      37  
NOTE 36. EMPLOYEES      37  
NOTE 37. CONSOLIDATED COMPANIES AS OF DECEMBER 31, 2015      37  

 

      Page 9          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

Note 1. GENERAL INFORMATION

Robopolis (hereinafter “the Company”) is a simplified joint stock company (société par actions simplifiée) governed by French law. Its registered office is located in Villeurbanne, France.

The Group is the European leader in domestic robotics. It holds exclusive distribution contracts in the regions where it operates and primarily with the manufacturer, IRobot.

The consolidated financial statements cover the 12-month period from January 1, 2015 to December 31, 2015.

Note 2. DECLARATION OF COMPLIANCE

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The Group applies all the standards and interpretations in effect at the year-end.

Recent changes in IFRS (see below) did not have a material impact on the Group’s consolidated financial statements.

 

 

Standard or interpretation

 

  

 

Amendment

 

AMENDMENT RESULTING FROM THE IFRS ANNUAL IMPROVEMENT PROCESS
Amendment to IAS 1   Presentation of financial statements   

Pursuant to Article 2 of Commission Regulation (EU) no. 149/2011, the Group applied the above amendments in preparing the financial statements for the reporting period.

The Group has not elected to adopt early the standards, interpretations and amendments published by the IASB but not yet adopted by the European Union or which enter into effect after December 31, 2015.

 

Note 3. ACCOUNTING BASIS

 

      Page 10          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

The consolidated financial statements comprise the financial statements of the simplified joint stock company, Robopolis and the subsidiaries it controls.

The financial statements are presented in thousands of euros, unless otherwise stated. Amounts are rounded up where the figure after the decimal is 500 or more.

The list of consolidated companies is presented in Note 37.

Preparation and presentation of the financial statements

The financial statements for the year ended December 31, 2015 and the notes thereto were adopted by the Board of Directors on September 22, 2017.

 

Note 4. ACCOUNTING POLICIES

 

4.1. General measurement methods   

The Group consolidated financial statements are prepared on a historical cost basis, with the exception of certain financial instruments measured at fair value. They are also prepared on a going concern basis.

 

4.2. Use of estimates   

The preparation of financial statements in accordance with International Financial Reporting Standards (IFRS) involves the use of estimates and assumptions by Group Management which impact the accounting value of certain asset, liability, income and expense items and information disclosed in certain notes to the financial statements.

These assumptions are uncertain in nature and future values could differ from these estimates. The Group regularly reviews estimates and assessments to take account of past experience and integrate factors considered relevant with respect to economic conditions.

The main accounts and disclosures concerned by significant estimates are goodwill, financial assets and provisions for contingencies and losses.

 

4.3. Consolidation method   

All companies draw up their financial statements to December 31.

Subsidiaries

 

      Page 11          
   


Consolidated annual financial report for the year ended December 31, 2015   LOGO

 

Subsidiaries are companies controlled by the Group. They are fully consolidated from the date control is obtained to the date control is transferred outside the Group. The Group is deemed to control a subsidiary where it holds the power, directly or indirectly, to govern its financial and operating policies so as to obtain the benefits of its activities. Companies are generally considered to be controlled by Robopolis where it holds, directly or indirectly, more than 50% of voting rights.

The consolidated financial statements include all assets, liabilities, income and expenses of the subsidiary. Equity and net income are split between amounts attributable to owners of the Company and amounts attributable to minority shareholders (non-controlling interests).

Financial statements are consolidated from the date of acquisition of control to the date control is lost.

Robopolis only has subsidiaries. It does not hold any interests in joint ventures and does not exercise significant influence over any other entity.

Transactions eliminated

Commercial and financial transactions and balances and the results of inter-company transactions are eliminated on consolidation.

 

4.4. Business combinations   

Goodwill

Any positive difference between the acquisition cost of a business combination and the interest in the fair value of identifiable assets and liabilities at the date of acquisition of control is recognized in assets in goodwill. Any negative difference is recognized immediately in profit or loss for the period.

Goodwill is not amortized. Impairment tests are performed at least once annually and more frequently where there is indication that an impairment loss may have occurred. Testing procedures seek to ensure that the recoverable amount of a Cash-Generating Unit (CGU) to which goodwill is allocated is at least equal to its net carrying amount.

A cash-generating unit is a distinguishable component of the Group that is engaged in providing products or services and that is subject to risks and returns that are different from those of other CGUs. The following criteria are considered when identifying CGUs:

 

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  -

how management monitors the entity’s operations or how management makes decisions about continuing or disposing of the entity’s assets and operations,

 

  -

if an active market exists for all or part of the output produced by the asset or group of assets,

 

  -

the independent nature of the CGU with regard to its management team, strategy and market.

As the Group has a uniform business, with flows exposed to the same risks and return, a single CGU has been identified. Goodwill is therefore allocated to this CGU in assets.

Non-controlling interests

Non-controlling interests are recognized based on the fair value of net assets purchased.

Acquisitions of non-controlling interests are equal to the difference between the consideration paid and the carrying amount of net assets purchased.

Following the changes introduced by IAS 27 revised, subsidiary losses may be allocated to non-controlling interests even where the minority’s interest in the subsidiary’s equity is negative.

 

4.5. Foreign currency translation   

Foreign currency-denominated transactions

Foreign currency-denominated transactions are translated into euros at the rates of exchange prevailing at the transaction dates.

Financial statements presented in foreign currencies

All Group companies present their assets and liabilities in euros. All foreign subsidiaries were located in the euro zone at the reporting date.

 

4.6. Intangible assets   

Measurement

Intangible assets are carried at acquisition cost net of accumulated amortization and any impairment.

Amortization

Amortization is calculated on a straight-line basis over an average useful life of 3 years.

 

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4.7. Property, plant and equipment   

Measurement

Property, plant and equipment are carried at acquisition cost net of accumulated depreciation and any impairment recognized in accordance with IAS 36, Impairment of assets.

The cost of borrowings that finance assets over a long period of commissioning or production are not added to the entry cost of such assets and are expensed to profit or loss of the period.

Any major asset components with a useful life that is less than the useful life of the main asset are identified and depreciated over their own useful life. Recurring maintenance costs and maintenance costs that do not meet the criteria for recognition in accordance with the components approach are expensed to profit or loss in the period incurred.

Depreciation

Property, plant and equipment are depreciated on a straight-line basis over the following useful lives.

Land is not depreciated.

 

-    Building fixtures and improvements      10 years     
-    Office furniture      4 years     
-    Vehicles      5 years     
-    Computer hardware      3 years     

Other

The Group did not receive any investment grants during the year.

Leases

Assets purchased under finance leases transferring to the Group substantially all the risks and rewards of ownership are recognized in balance sheet assets at their fair value or, if lower, at the present value of the minimum lease payments. The corresponding liability is recorded in financial liabilities.

Lease payments are apportioned between interest expense and amortization of the lease obligation so as to obtain a constant interest rate on the balance of the loan liability.

Assets purchased under finance lease are depreciated over the shorter of their useful life in accordance with Group rules and the lease term. They are tested for impairment annually in accordance with IAS 36, Impairment of assets.

 

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Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are expensed on a straight-line basis over the lease term.

 

4.8. Impairment of intangible assets and property, plant and equipment   

The Group reviews the carrying amounts of assets to identify any impairment losses:

 

  -

intangible assets with indefinite useful lives and goodwill: at the end of each reporting period;

 

  -

other assets: where there is indication that the asset may be impaired.

An impairment is recognized if the recoverable amount of an asset falls below its carrying amount. The recoverable amount of an asset (or group of assets) is the higher of its fair value less costs of disposal and its value in use.

The value in use is equal to the present value of the future cash flows expected to be derived from the asset (or group of assets) and its disposal. The Group uses forecast cash flows that are consistent with forecast business plans prepared by management.

The discount rate used reflects current market assessments of the time value of money and the risks specific to the asset or group of assets. It is based on the current market risk-free rate of interest, equal to the time value of money plus the margin necessary to cover the risk specific to the asset.

The discount rate is applied to post-tax cash flows, producing identical recoverable amounts to those obtained by applying pre-tax rates to pre-tax cash flows.

Any impairment losses are recognized directly in operating profit or loss.

Impairment tests have been performed on goodwill. The results were satisfactory and no impairment was recognized.

 

4.9. Inventories and WIP   

The Group has no production activity.

Goods and other supplies are carried at purchase price plus incidental expenses, net of any rebates and discounts obtained and valued using the weighted average unit cost method. Goods are impaired where necessary to reflect any risk of obsolescence. Impairment is recognized where the recoverable value falls below the carrying amount.

As of December 31, 2015, inventory had a gross carrying amount of:

 

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K22,944

Impairment totaled:

K348

Giving a carrying amount net of impairment of:

K€22,596

 

4.10. Trade receivables   

Trade receivables are current financial assets.

They are recognized in the initial amount of invoices, net of any impairment provisions for irrecoverable amounts. The amount of doubtful receivables is estimated when the recovery in full of a receivable is no longer considered probable. Irrecoverable receivables are recognized as a loss when identified.

 

4.11. Other financial instruments   

Classification of asset financial instruments

Financial assets are classified in one of the following categories as appropriate:

  -

financial assets at fair value through profit or loss,

 

  -

loans and receivables,

 

  -

held-to-maturity investments, or

 

  -

available-for sale financial assets.

The Group determines the classification of financial assets on their initial recognition and reviews this classification at each year-end when authorized and appropriate.

All investments are initially recognized at fair value, including investment acquisition costs.

Investments classified in the “fair value through profit or loss” and “available-for-sale” categories are remeasured to fair value at each reporting date.

Financial assets held by the Group relate exclusively to contractual receivables, measured at amortized cost at each reporting date and recorded net of any impairment.

The Group does not use derivative instruments.

 

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Classification of liability financial instruments

Financial liabilities are classified, as appropriate, in financial liabilities at amortized cost or financial liabilities at fair value through profit or loss.

 

4.12. Cash and cash equivalents   

Cash and cash equivalents include liquid assets and short-term investments with an initial maturity of less than three months at the acquisition date. Short-term investments are marked-to-market at each reporting date.

Cash equivalents do not include commitments in respect of transactions hedging foreign-currency purchases of goods. Only the unrealized exchange gain or loss previously taken to equity is now recorded in the Income Statement (ineffective hedge at the reporting date).

 

4.13. Employee benefits   

Pension plans

The Group provides supplementary pensions or other long-term benefits to employees, in accordance with customary or legal requirements. It offers these benefits through defined contribution or defined benefit plans.

In the case of defined-contribution plans, the Group’s only obligation is the payment of premiums. Contributions paid to the plans are recognized as expenses of the period. If applicable, provisions are recognized for outstanding contributions at the reporting date. The commitments presented in Note 21 solely concern employee remuneration. No assets are held to cover these commitments.

Type of commitments

 

  -

Retirement termination payments

Termination payments are due by French Group entities under the industry collective bargaining agreement. They comprise retirement termination payments and end-of-career payments paid on voluntary retirement or when an employee reaches the legal retirement age.

 

  -

Supplementary pension plans

Provisions are recognized for retirement commitments and similar obligations arising from defined benefit plans and are measured based on an actuarial calculation performed at least once a year. These commitments solely concern retirement termination payments. The projected unit credit method is applied as follows: each period of service creates an additional unit of benefit

 

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entitlement, and each of these units is measured separately to determine the Group’s employee benefit obligation.

The calculations take into account the specific features of the various plans and assumptions for the retirement date, career advancement, salary increases, as well as the probability of the employee still being employed by the Group at retirement age (turnover rates, mortality tables, etc.).

The obligation is discounted based on interest rates on long-term bonds issued by companies with the highest credit ratings. The obligation is provided net of any plan assets measured at fair value.

Actuarial gains and losses are generated by changes in assumptions and are recognized in profit or loss.

The net expense for retirement commitments and similar obligations is recorded in net operating income of the period, except for any discounting expense recorded in net financial expense.

 

4.14. Other provisions   

A provision is recognized when, at the reporting date, the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying future economic benefit will be required to settle the obligation.

Provisions are discounted to present value if the time value of money is material. The related increase in the provisions is recognized as a financial expense.

In the case of restructuring, a provision may be recognized only if, at the reporting date, the Company has announced the restructuring and drawn up a detailed plan or started to implement the plan.

Provisions are booked with regard to disputes (industrial tribunals, tax audits, customer disputes, etc.) if the Group has an uncontested obligation to a third party at the reporting date. They are determined based on the best estimate of the expense likely to be required to settle the obligation.

 

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4.15. Borrowings   

Interest-bearing borrowings are recorded at the initial nominal value less related transaction costs. At each reporting date, financial liabilities are then measured at amortized cost using the effective interest rate method.

Borrowings are broken down between:

  -

current liabilities, comprising the portion to be repaid in the twelve months following the reporting date;

 

  -

non-current liabilities for the portion maturing in more than twelve months.

Foreign exchange risk

The majority of Group sales are performed in euros, while purchases are generally denominated in U.S. dollars. The transactions performed by Group companies therefore generate a foreign exchange position.

Generally speaking, the Group systematically hedges foreign exchange risk arising on transactions performed in a currency other than the euro (notably the U.S. dollar). The Group hedges its foreign exchange risk through forward purchases of currency corresponding to budget estimates for purchases of goods.

Foreign exchange hedges are recorded at fair value, with the effective portion of gains and losses taken to equity and the ineffective portion of gains and losses taken to profit or loss in accordance with IAS 39. Current borrowings do not therefore include all commitments resulting from transactions hedging foreign currency purchases of goods but only any related unrealized exchange gains or losses.

The balance sheet accounts impacted by these transaction are presented in Notes 15 and 18.

 

4.16. Trade payables and other creditors   

Trade and other payables are recognized in the amount of the cash or consideration received, that is at the transaction price. They represent financial liabilities.

 

4.17. Income tax   

Deferred taxes are recognized, using the liability method, on temporary differences existing at the reporting date between the tax bases of assets and liabilities and their carrying amounts as well as on unused tax losses.

Deferred tax assets and liabilities are calculated at tax rates expected to apply during the period in which the asset will be realized or the liability settled, based on tax regulations that have been enacted or substantively enacted at the reporting date.

 

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Deferred taxes are calculated individually for each entity and are offset when the taxes are collected by the same tax authority and concern the same tax entity.

Deferred taxes payable are recognized as income or expenditure in the Income Statement unless they relate to a transaction or event that is recognized directly in equity.

Deferred taxes are presented on separate lines of the Balance Sheet under non-current assets and non-current liabilities.

Deferred tax assets and liabilities are not discounted to present value.

 

4.18. Revenue   

Sales are recognized at the date of transfer of the risks and rewards of ownership, generally evidenced by the delivery of the goods.

Revenues are measured at the fair value of the consideration received or receivable in accordance with IAS 18, equal to the amount of cash or cash equivalents received or receivable, net of any trade discounts or volume rebates.

 

4.19. Current operating income   

The income statement format used by the Group employs a classification by expense.

Current operating income is equal to the difference between pre-tax income and expenses other than:

  -

other income and expenses;

 

  -

financial items;

 

  -

net income of associates;

 

  -

income or losses from discontinued operations or assets held for sale.

Any “Employee statutory profit-sharing” is included in the employee benefits expense.

Net operating income is equal to current operating income adjusted for other income and expenses that are unusual in nature or occur rarely and particularly:

 

  -

impairment of goodwill and non-current assets;

 

  -

significant restructuring expenses, or expenses related to adjustments to headcount as a result of major events or decisions;

 

  -

capital gains or losses on disposals of non-current assets;

 

  -

significant income and expenses resulting from litigation.

 

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4.20. Earnings per share   

Earnings per share are calculated by dividing Group consolidated net income or loss by the weighted average number of shares outstanding during the period.

 

4.21. Operating segments   

A segment is a distinguishable component of the Group that is engaged in providing products or services (business segment) and that is subject to risks and returns that are different from those of other business segments.

The Group has a single business segment.

The geographic segments adopted by Robopolis for secondary reporting purposes reflect customer invoicing addresses.

Segment assets are the non-current and current assets used by a segment. Any assets not allocated to a segment are presented on the line “Unallocated assets”.

Segment liabilities are those liabilities that result from the activities of a segment and that either are directly attributable to the segment or can be allocated to the segment on a reasonable basis. They include non-current and current liabilities. Any liabilities not allocated to a segment are presented on the line “Unallocated liabilities”.

IFRS 8 on segment reporting, which entered into mandatory effect for fiscal years beginning on or after January 1, 2009, only requires one level of segment reporting. A breakdown by geographic region is therefore no longer presented.

The Group operates exclusively in the euro zone. Its subsidiaries are located in Spain, Belgium, Germany, the Netherlands and Austria.

Note 5. MAJOR EVENTS OF THE PERIOD

In May 2015, Robopolis SAS created a wholly-owned distribution subsidiary in Austria. This region was previously covered by the Group’s German subsidiary.

Robopolis SAS performed a share capital increase for cash reserved for Group operating management. 16,200 shares were created and issued at a price of 110 each, representing a total of 1,782,000, in accordance with the deliberations of the shareholders’ meeting of December 31, 2014.

There were no other major events during the period.

 

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Note 6. SUBSEQUENT EVENTS

At the beginning of 2016 Robopolis decided to go direct on the Austrian Market through its subsidiary Robopolis Austria GMBH.

In May 2016 Robopolis established a new 100 % subsidiary in Portugal and launched the direct activity at the end of June 2016. The company’s development also involved a number of asset disposals.

On December 31, 2016, Robopolis SAS purchased 46,728 of its own shares at a unit price of €334,409 per share, in order to cancel them. The consideration was settled partly in cash and partly via vendor credit.

The contract dated December 5, 2012 for the acquisition of 90% of the share capital of the subsidiary, Asimotion, included an option for the purchase by the Company of the remaining 10% of shares by December 31, 2017 at the latest. This share purchase transaction was completed and validated by a decision of the Board of Directors on March 16, 2017.

All the decisions approved by the General Assembly of Shareholders dated December 13, 2016 were fully performed including the payment in anticipation of all the Seller’s financing arrangements.

On July 25, 2017 Robopolis’ shareholders signed a Shares Purchase Agreement with iRrobot, a US company being its main supplier and partner in order to sell 100% of the shares. The final closing is planned on October 2, 2017.

On August 31, 2017, the Robopolis SAS purchased 1 850 of its own shares at a unit price of € 496,569 per share in order to cancel them as per the decision of the General Assembly dated July 13, 2017. The consideration was settled fully in cash.

As part of the SPA conditions, Robopolis SAS has to sell all hedging positions before the closing.

As of today, ROBOPOLIS sold a third of the related position and plan to sell all remaining positions before the end of the month, as requested by the SPA. The total estimated costs for Robopolis to sell all hedging position is approximately 5 million Euros.

 

 

 

Note 7. GODWILL

 

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Breakdown of goodwill (net carrying amount)

 

Company or group    Year of
acquisition
     Currency     12/31/2015          12/31/2014      
RRDS SL (formerly GES, Spain)      2010        K       4,846        4,846  
Robopolis GmbH (formerly Klein, Germany)      2011        K       6,281        6,281  
Robopolis SPRL (formerly Diapro, Belgium)      2011        K       1,045        1,045  
Asimotion BV (Netherlands)      2012        K       1,118        1,118  
Net carrying amount                       13,291        13,291  

Note 8. INTANGIBLE ASSETS

 

(In thousands of euros)    Software          Websites          Trademarks        Total    
                                     
Opening gross carrying amount      492        127        3        622  
Foreign exchange translation            
Disposals / exits      (6)              (6)  
Reclassifications      12        (10)           2  
Changes in consolidation scope            
Acquisitions      14        8                 22  
Closing gross carrying amount      513        125