SOLOCAL_Registration Document_2017

2

RISK FACTORS 2.4 Insurance and risk management

referred the matter to the Amicable Settlement Commission. On the other hand, URSSAF Rhône-Alpes reimbursed Leadformance. PagesJaunes is the subject of a tax inspection in respect of the financial years 2010 to 2013 and has received reassessment notices for Tax Credit for Research. We have taken the view that the counts for adjustment are without basis and have disputed them with the tax authorities. A hierarchical appeal was made on 19 July 2016 and a departmental meeting on 28 November 2016. The departmental contact person abandoned part of the adjustments. The Company sent a contentious claim in February 2018 to obtain a partial refund of the sums remaining adjusted. It has set aside a provision to cover the risks in 2014, 2015 and 2016. Since the sums not eligible for the research tax credit were paid on 18 April 2017, the provision was included in the accounts as at 31 December 2017. Income will be recorded in the event of a favourable outcome of this appeal. In 2016, the French Financial Markets Authority (AMF) launched an investigation into the SoLocal Group's financial information from 1 January 2014. At this stage no complaints against the SoLocal The Group has set up an insurance and risk management programme to cover the main risks related to damage, civil liability and personal insurance risks. The Company seeks to continuously optimise the management of risks that can be transferred to insurers. Information exchanges, in particular between the Legal department, the Audit, Risks and Internal Control department, have been systematized so that everyone can benefit from a consolidated and as comprehensive as possible vision of the Group’s risks, based in particular on risk mapping. Insurance cover is negotiated with major insurance companies and with the assistance of one of the most influential brokers in the market, in order to put in place the most appropriate coverage for the Group’s insurable risks. “Damage to property and operating losses”: With the exception of those specifically excluded, this policy covers damage resulting from fire, explosions, water damage, theft, natural events affecting the property (buildings, furniture, equipment, goods or services). IT installations) and those charged to the Group, and against the operating losses resulting from these damages, for a period estimated to be necessary for a normal resumption of activity. In 2017, the maximum annual coverage amount is €49.9 million for operating losses and losses (with a sub-limit of €40 million for the operating loss). The policy’s limits and deductibles are in line with current market practices.

Group have been upheld. In the event of complaints being upheld by the AMF's Enforcement Commitee, a financial penalty may be imposed. Moreover, in common with other companies in the sector, SoLocal Group is frequently the subject of court proceedings brought in relation to errors in the publication of directories and other media. Generally the financial risk represented by each of these proceedings is relatively limited. However, an increase in their number may constitute a significant risk. As at 31 December 2017, there were four separate these proceedings ongoing, for a total amount of claims of approximately €0.3 million. In these proceedings, our entities endeavour to negotiate out-of-court compensation, which significantly reduces the final total cost of such proceedings. However, no guarantee can be given that these proceedings will not have an adverse impact on our financial position. Liaising with the General Management and our subsidiaries, our Legal department, assisted by law firms, monitors the risks connected with the most significant disputes. “Civil Liability”: This policy covers the civil liability related to the Group’s operations and professional activities both vis-à-vis customers and third parties. The policy is an “all risks, subject to exclusions” policy, which means that all bodily injuries, property damage and consequential damage are automatically covered, including damage from computer viruses, unless expressly excluded. The deductibles provided for by this policy were determined according to the risks incurred but also the scope of each subsidiary. This has enabled us to cover most of the Group’s risks without increasing the premium. The maximum annual cover amount is €20 million for operating civil liability and €20 million for professional civil liability. An invitation to tender for brokers and insurance companies was launched on July 2017, to optimise the costs and management of the Group’s risks coverage for 2018. The appointment of a new broker and the renegotiation of the “Property Damage” and “Third Party Liability” policies have made it possible to put in place, as at 1 January 2018, a first level of coverage specific to the cyber-risks to which the Group is exposed. The maximum annual coverage amount is €1 million with the objective of increasing this coverage. This invitation to tender also entailed risk visits to certain strategic sites of the SoLocal Group in partnership with the Group’s insurance broker, IT services, the Real Estate department and the Head of Prevention.

INSURANCE AND RISK MANAGEMENT 2.4

42

2017 Registration Document SOLOCAL