SOLOCAL_Registration Document_2017

6

FINANCIAL STATEMENTS 6.1 Consolidated financial statements for the years ended 31 December 2016 and 2017

Balance at start of période

Releases of unused provisions

Release of used provisions

Balance at end of period

Other movements (1)

Allowances

(in thousands of euros)

2016 Trade debtors Other assets 2017 Trade debtors Other assets

21,379

8,783

(831)

(5,745)

- -

23,586

-

-

-

-

-

23,586

8,691

(3,749)

(6,946)

(108)

21,473

-

-

-

-

-

-

In 2017, sale of the company PJ Resto. (1)

Deferred income decreased from €408.3 million as at 31 December 2016 to €340.9 million as at 31 December 2017. This drop must be examined, the one hand, with the significant drop in the level of the “Print & Voice” business, and on the other hand, with a deformation in the Internet product mix towards mainly Digital Marketing products with a shorter lifespan.

Application of a provision rate according to the age of the receivables based on the collection history.

4.3

DEFERRED INCOME

Deferred income mainly comprise sales of billed advertizing products later recognized according to the online display period (Internet products) or the publication period (printed directories).

4.4

OTHER CURRENT ASSETS

The other current assets are made up as follows:

31/12/2017

31/12/2016

(in thousands of euros)

VAT receivable

19,864

20,114

Sundry accounts receivable

2,316 2,480 9,043

206

Trade payables – Advances and instalments

3,491 7,417

Other current assets

TOTAL

33,703

31,228

NOTE 5

PURCHASES AND OTHER EXPENSES

5.1

ADVERTIZING AND SIMILAR

5.3

TRADE CREDITORS

EXPENSES

Amounts owed to suppliers bear no interest and are payable in principle between 30 and 60 days.

Expenses for advertizing, promotion, sponsorship, communication and brand development are stated in full in the expenses for the year in which they are incurred.

5.4

PROVISIONS

5.2

ACQUISITION COSTS

In accordance with IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”, a provision is recognised when, at the end of the period, the Group has an obligation towards a third party resulting from a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation. This obligation may be legal, regulatory or contractual. It may also derive from the Group’s practices or public commitments, which have created a legitimate expectation among third parties concerned that the Group will meet certain responsibilities.

OF CONTRACTS

Acquisition costs of contracts represent the variable costs of the sales force relating to the marketing of advertizing products in the printed directories and on digital media. These direct and incremental costs in obtaining customer contracts are capitalised on the balance sheet in this item and are recognised as expense over the life of the customer orders, i.e. according to the publication of the advertisements and the recognition of the revenue.

158 2017 Registration Document SOLOCAL