Annual Report - Groupe Cofidis Participations · 2015-01-22 · Retail fashion, home, office and...

Annual Report

2011

CONTENTS

4 / A WORD FROM THE CHAIRMAN

5 / PRIORITY PROJECTS

8 / GOVERNANCE

• Our business

• Our retail chains

• Our shareholders

• A benchmark European player

• Supervisory Board

• Management team

12 / RETAIL CHAINS IN FRANCE

• Cofidis France

• Créatis

• monabanq

22 / RETAIL CHAINS IN EUROPE

• Spain

• Portugal

• Belgium

• Italy

• Czech Republic and Slovakia

• Hungary

34 / SPORTS SPONSORSHIP

37-47 / FINANCIAL REPORT

• Structure of Cofidis Participations

• Key figures

• Consolidated balance sheet

• Consolidated income statement

• Net income and gains and losses directly recognised in shareholders' equity

• Variation in shareholders' equity

• Cash flow table

48 - 99 / NOTES

• Introduction

• General context

• Accounting principles and methods

• Notes to the consolidated balance sheet

• Notes to off-consolidated-balance sheet items

• Sector information

• Employee benefits

• Risk exposure and hedging policy

3 - NOTES2 - FINANCIALS1 - ACTIVITY

2011 ANNUAL REPORT COFIDIS PARTICIPATIONS GROUP / 2-3

2011: A YEAR OF GROWTH FOR ALL RETAIL CHAINS IN THE GROUP

The environment for the Cofidis Participations Group is one of profound economic, regulatory and technological change across Europe. The year was characterised by volatile markets, limited growth and recession in some areas, all against a backdrop of reforms to the legal framework.

Our teams are ready for the challengeTo meet these challenges, our teams conducted a large number of projects simultaneously, including adapting our sales models, boosting our local customer relationship presence and consolidating links with shareholders.

These are major projects for the companies in the Group, and are vital to enable them to successfully deliver on their growth plans in a very complex economic and financial environment.

Initiatives include a number of projects launched with the aim of pooling our resources and concentrating them in our core business. The headline challenge will be to transition from a culture of individual professionalism to a collective professional culture.

Customer relations: the key to differentiationTo support business development, retail chains have all implemented initiatives to boost customer support.

Launched in 2009, these actions have borne fruit, and the rigorous and sustained attention to preventive and remedial risks resulted in a reduction in the cost of risk in 2011, compared with 2010.

Strict control of the expenditure associated with this reduced cost of risk enabled us to offset the decline in sales and maintain 2011 income at almost the same level as in 2010.

2012 is shaping up to be a tough year with income expected to fall, eroded in particular by the reduction in lending rates in France.

But, as each year, the key to our Group's success lies in the commitment of all our employees, and I would like to take this opportunity to thank them for the dedication they demonstrate on a daily basis.

ANNIE GAINChairman of the Board of Directors Cofidis Participations Group

A Word from the Chairman

While 2011 marked the return to growth, this upturn was driven by the contribution of many restructuring projects.

REGULATORY CHANGESThe European Consumer Credit Directive, adopted in April 2008, has been gradually transposed into national law by the Member States. France's proposed reforms of its consumer credit legislation, enforcing the provisions of this Directive voted into EU law by the European Parliament, were implemented throughout 2011.

The draft law, known as the "Consumer Credit Reform Act" sets out to standardise and enhance the transparency of consumer credit in Europe.

The headline measures of the wide-ranging reform include regulating advertising and point-of-sale financing, enforcing greater obligations and responsibilities on lenders, especially regarding prior assessment of borrowers' solvency, the reform of loyalty programmes, as well as new rules for early repayment, minimum amortization of the capital at each payment date, and extending the cooling-off period.

This consumer credit reform was revolutionary in its impact on the Group's companies.

It is the first time that a regulation introduced such wide-ranging reform of consumer credit in general in such a short period of time.

The law has had a substantial impact on our internal processes, requiring the Group to completely overhaul all loan agreements and establish a new relationship with our customers.

Priority projects

€9,194 M

€3,265 M

4,308

FINANCE:

AVERAGE WORKFORCE

GROSS OUTSTANDING LOANS:


COMMERCIAL SYNERGIES WITH THE CREDIT MUTUELBorrowers' loan insurance was successfully switched to Assurances Crédit Mutuel (ACM), effective on 1 January 2011.

The move enables the Cofidis Participations Group to expand its range of insurance products, for all retail chains in France and internationally.

The synergies generated also led to the diversification of Cofidis France's offer with the launch of competitively priced mobile phone plans, offered through NRJ-mobile, with no phone purchase and no fixed-term contract.

Our retail chains are engaged in a two-pronged approach to diversify their business and build loyalty.

NEW LOGO FOR COFIDIS RETAIL CHAINS IN EUROPE1996 saw the launch of the Cofidis Participations professional cycling team, and with it the Group's visual branding creating strong public recognition.

In the 15 years since then, the brand has used the powerful symbol of the sun to create a strong reputation as the friendly bank.

The Group is now changing its visual identity in line with its new values, while reaffirming the pillars of its founding principles. The rebranded Cofidis identity is more modern and based around the upper case C in Cofidis.

The rays of light symbolise excellence in customer relations and Cofidis's expertise. The modernised typography reinforces the local dimension.

This new logo anchors the Group's new brand positioning as an open and dynamic company, and conveys the powerful values that have been the basis for the company's success: transparency, trust and close relationships.

CORPORATE SOCIAL RESPONSIBILITY AT THE HEART OF OURCOMMITMENTSAll retail chains in the Cofidis Participations Group have pursued their commitment to corporate social responsibility, and are engaged in every aspect of sustainable development, including economic, social and environmental.

In 2011, the retail chains launched a series of actions to deliver on the Group's five major commitments:

•Build sustainable relations with customers, especially through measures to fight over-indebtedness,

•Support economic development in an increasingly stringent regulatory environment,

•Promote a policy of responsible human resources,

•Commit against exclusion, especially of people with disabilities,

•Limit the impact of our activities on the environment.

The fight against over-indebtedness is not only central to our everyday business concerns, but is also of primary importance to the CSR policies of our retail chains. Measures vary by country and may be in the form of financial support for organisations dealing with problems of over-indebtedness, the development of new Web and mobile phone applications, or the establishment of a new approach to customer relations aimed at providing more wide-ranging support.

In addition, the creation of a central consumer credit database in France will provide an overview of all loans contracted by customers, thereby providing us with an additional guarantee.

Turning to disability, a prime example of the Group's efforts to ensure the integration of disabled employees was the organisation of the third Handiflex forum by the Group's three companies. The aim of the forum is to

provide support, promote dialogue and encourage the recruitment of disabled workers, above and beyond the regulatory requirements. Almost 160 disabled workers participated in the 2011 forum.

COMMUNICATION

TRAINING

DEVELOPMENT

HUMAN

BUSINESSES

GROUP

IDENTITY

COMMITMENT

SYNERGIESRESPONSIVENESS

PROJECTS

TOOLS

RELATIONSGUARANTEE

INFORMATION TECHNOLOGY

FUTURE

FACILITATINGLAW RESPECT

RESPONSIBILITIESCUSTOMERS


GovernanceOUR BUSINESS

The COFIDIS Participations Group creates, sells and manages a wide range of financial services, such as consumer credit, payment solutions and banking services, through its companies, Cofidis, Créatis and monabanq.

OUR RETAIL CHAINS The Cofidis Participations Group includes three specialist retail chains:

Cofidis: the European on-line credit specialist,Créatis: the French credit consolidation market leader,monabanq. : the new-generation on-line bank

OUR SHAREHOLDERS

The Group is backed by the additional expertise of its shareholders: the CM-CIC Group and the 3 Suisses International Group.

With its CIC subsidiary, Crédit Mutuel is a major player in retail banking with more than 4,000 sales outlets in France.

The Caisses de Crédit Mutuel, owned by their customer members, control the Banque Fédérative du Crédit Mutuel (BFCM), a Group holding company that holds equity in the French and overseas subsidiaries (consumer credit, insurance, leasing, development capital, data processing, telephony, etc.). The Caisses are active in the international financial markets to provide refinancing for all the Group's business units.

The 3 Suisses International Group is the third largest e-commerce group in France, 10th in Europe* and one of the only French groups to combine e-commerce with related e-commerce services.

Active in 30 countries, the 3 Suisses International Group's complementary business lines are broken down between:

•Retail fashion, home, office and leisure products,

•Services to retail operations, including digital image processing, customer relations, mailings, distribution and financial services.

*Source Internet Retailer 2012.

A BENCHMARK EUROPEAN PLAYER

A pioneer in on-line credit, the COFIDIS Participations Group has seen significant and continuous growth in its activities over three decades, both in terms of international expansion and diversification of its range of products and services.

The COFIDIS concept was developed internationally, with openings in Belgium and Southern Europe during the 1990s, followed by Central Europe during the 2000s. Through Cofidis, the COFIDIS Participations Group currently has a presence in eight European countries: France, Belgium, Spain, Italy, Portugal, the Czech Republic, Hungary and Slovakia.


THE SUPERVISORY BOARD

COFIDIS Participations and COFIDIS SA are organised in the form of a Board of Directors, responsible for proposing and implementing strategy, and a Supervisory Board with an advice and oversight role.

ChairmanAlain FRADIN

Vice-ChairmanFrançois MIGRAINE

Members Nicolas THERY Pascal LAUGELStelli PREMAOR

Eric PLATIAU Denis TERRIEN

THE MANAGEMENT TEAM (AT 31/05/2012)

Annie GAIN*Chairman of the Board of

Directors

Thierry MAROIS*Director, Coordination

of Synergies and Central Resources

Gilles SAURET*Director, Cofidis

France

Luc-Bertrand SALUSDirector, Cofidis

International

Alain COLINDirector, Diversified

Activities

Thierry VITTU*Director, Human Resources and

Communication

Vincent LAURINChief Financial, Risk and Legal

Officer

* Members of the Board of Directors.


IN FRANCE, THREE SPECIALIST RETAIL CHAINS

Figures at 31/12/2011

4,498 GROSS OUTSTANDING LOANS IN M€

FINANCE IN M€

AVERAGE WORKFORCE

1,7471,716

1,283 GROSS OUTSTANDING LOANS IN M€

FINANCE IN M€

AVERAGE WORKFORCE

396 299

507 469

GROSS OUTSTANDING LOANS IN M€

GROSS OUTSTANDING SAVINGS in M€

FINANCE IN M€

AVERAGE WORKFORCE

98

378


THE LAGARDE ACT REVOLUTIONISES

CONSUMER LENDINGPlaced on the statute books in 2011, the Lagarde Act has redefined the consumer credit landscape in France. With sluggish growth, this market contracted 0.4% year on year, while Cofidis's share of the revolving credit segment - among its historic products - declined a further 6% this year. (Sources: ASF)

While the Lagarde Act increases the onus on financial institutions to provide additional warning and information to customers, it has also complicated the loan-application process and redefined the type of advice provided to consumers. Process, contracts, products and services have all changed, with a resulting need for further recruitment and training. In the space of three months, a total of 9,514 training hours were dispensed to some 2,400 employees, during sessions varying from two hours to

three days, depending on function. Despite the economic impacts of the new legislation, Cofidis performed well with an increase in new customer numbers and significant growth in credit extended.

The retail chain also successfully absorbed regulatory changes, reflected on the one hand in an increase in market share for all products, and the "Customer Service of the Year Award 2012".

COFIDIS WINS "CUSTOMER

SERVICE OF THE YEAR AWARD 2012"(1) Although customer service has long been a key commitment for Cofidis, being awarded the "Customer Service of the Year Award 2012" in the Credit Institution category, coinciding with its 30th anniversary, rewards its long-standing

commitment to excellence in customer service. In addition, Cofidis conducts customer satisfaction surveys every month to optimise customer relations management. 200 existing and prospective customers are surveyed monthly by telephone to measure their satisfaction level. 92% of customers have expressed satisfaction with the services provided by Cofidis. (1) Inférence Opérations - Viséo Conseil study conducted from May to July 2011, using mystery customers, with 215 contacts by telephone, Internet and postal services.

CofidisCofidis France celebrates 30 years with an increase in market share in a radically changing environment

€4,498 M

1,716

GROSS OUTSTANDING LOANS:

FINANCE

AVERAGE WORKFORCE

€1,747 M

SUPPORTING ITS CUSTOMERS DAY TO DAY

The economic crisis has driven some more vulnerable households even deeper into insecurity. In response, Cofidis is continuing to adapt its acceptance and collection procedures. New-generation account openings have lower risk levels, which, combined with acceptance rates in line with our development strategy, ensures a good balance between business growth and support for customers.

NEW BRAND POSITIONINGIn a context of profound economic, regulatory and technological change, Cofidis adopted a firm customer-focus strategy in 2011, known as "Crédit sous un nouveau jour" ("Credit in a new light"). Cofidis aims to position itself as a trailblazer in the market, providing support to consumers to manage budgets and loans. This strategy was rolled out throughout 2011 with many initiatives designed to offer practical help to customers, backed by advertising campaigns aimed at the general public.

The first commercial synergies between Cofidis and the Crédit Mutuel-CIC Group have been successfully achieved. For example, Cofidis launched a range of

flexible mobile phone plans aimed at users who are keen to optimise their budget. Cofidis Mobile is a limited and clear range of packages based on a fixed-rate plan with no phone purchase and no contract term. During a period of fundamental change in the consumer lending market, the launch of these products represents a strategic diversification, firmly positioning Cofidis in the services segment.


New services ...Cofidis continues to innovate with new services, applications and on-line tools. Pocket Docs is an app to photograph, save and share important administrative and legal documents in a few clicks.This simple, free mobile app received an award during the Digital Commerce Stars 2011, organised in partnership with the VAD e-commerce trade show.

Budget management coaching... Cofidis and the Lille-based Bartholomé Masurel association (providing aid and advice to people in financial difficulty) teamed up in 2011 to offer budget management coaching.

This is a personalised service for customers in the Lille area to offer support and advice and prevent the risks of financial difficulties.

The personal support, covered by professional secrecy and confidentiality, is provided by expert advisers who provide practical solutions, advice and tips on how to resolve difficult financial circumstances.

Cofidis also signed a partnership arrangement with Crésus, the French organisation formed to prevent over-indebtedness, with the first actions expected during 2012.

AT COFIDIS, PARTNERSHIP

IS EVERYBODY'S BUSINESS! Explore new sources of recruiting customers and new customer targets, develop new loyalty programs to boost mid-term profitability: these are some of the challenges Cofidis faced in 2011. Teaming up with major brands to offer payment solutions to customers has been a core area of expertise for Cofidis since its creation in 1982.

Cofidis France restructured its organisation as part of its drive to attract new partners. This policy has already proved its mettle, notably with the entrance of new partners, such as MDA, already a significant partner in terms of contribution.

2011 saw Cofidis reinforce its dedicated partnership teams and develop a B-to-B culture across all its business lines in the areas of partner risk management, management control and marketing.

This new, ambitious and partner-centric organisation is set to further strengthen our local approach and ensure a proactive response as we work with each partner to optimise their development plans. Regional managers throughout France play a key role in creating and promoting this local approach, ensuring the roll-out and promotion of Cofidis's products and services in the retail outlets.

A COMPANY THAT IS GOOD TO WORK IN, ACCORDING TO

THE GREAT PLACE TO WORK INSTITUTE 2012 SURVEYCofidis enters the ranks of the 2012 prizewinners placed 12th of 62 companies with more than 500 employees. It is the only financial sector company to be nominated.

Based on a qualitative assessment of the company's culture and HR practices, this distinction is testimony

to Cofidis's commitment to social responsibility and to preserving work-life balance.

It is especially proud of this ranking, which demonstrates that in the current economic environment and faced with major changes, its work and investment in human resources management are both necessary and worthwhile.

People have always been a core value for the company. Cofidis continues to strive to ensure integration, and to provide training and support for all its employees.Maintaining simple and close relationships with others, values that are also vital in our relations with customers, will continue to differentiate Cofidis and ensure its future.

Cofidis signed a partnership agreement with MDA, a household appliances distributor that offers financing solutions as an additional service to its customers.

With 90 stores in France, MDA has a good financing rate.

Cofidis will roll out its services in MDA's stores in stages. The "Fraxio" product is specific to MDA and covers the entire MDA network.


créatis

RESTRUCTURING IN THE MARKET

The debt consolidation market returned to growth in 2010, due in the main to extending services to new customer profiles. This growth has led to restructuring and a drive to increase professionalism in the sector. Significant developments in 2011 included an increase in the number of brokers, the growth of franchises, restructuring of a number of Banking Intermediaries (IOB), and a decline in some specialist operators.

The most significant consequence of these market developments, combined with new regulations

has been diversification. Operators can now offer insurance products and/or dedicated services to specific target groups, such as the liberal professions.

In this rapidly changing market, Créatis has diversified its network and now works with a large number of operators.

It is concentrating its efforts on a new partner remuneration system, focusing on the quality of contacts with a view to limiting risk.

CLOSER RELATIONS WITH PARTNERS AND

END CUSTOMERSInnovation was the watchword for 2011 for all aspects of customer relations with a range of new measures. Créatis introduced a new Extranet portal for its partners and telephone-based CRM tools for end customers.

€3,077 M

A market leader for the purchase of unsecured consumer loans with a 34-% market share, Créatis saw further growth in 2011.

€1,283 M

299

GROSS OUTSTANDING LOANS

FINANCE

AVERAGE WORKFORCE

€396 M

BUDGET MANAGEMENT ADVICE

Créatis specialises in partnership relations, but up to 2009 was only in direct contact with its end customers in the context of collection procedures in the event of non-payment. The financial crisis in 2008 and ensuing budget difficulties encountered by some of its customers have changed the picture.

Créatis now reaches out to its customers with its Personalised Budget Support program, offering a very detailed financial analysis of all budget items and proposing solutions to optimise both income and expenditure. This support is also a factor in risk control. Building on the positive customer response to this budget review, Créatis is expanding its offering to a more comprehensive solution, Créatis Budget Support (ABC - Accompagnement Budgétaire Créatis). This tool helps Créatis to establish a new partnership relationship with customers, offering them services and solutions in line with their needs and expectations.ABC is set to become a key factor in building relationships and increasing customer loyalty.

POWER TO ACTFor Créatis, the "power to act"

is a two-prong approach: assisting partners to develop their sales strategy on the one hand, while enabling end customers to take control of their finances through a budget review and the option of loan consolidation, on the other.

Créatis intends to expand its range of products and services in 2012, through innovative offerings and joint schemes with partners and customers.


monabanq.MONABANQ. TURNS

TO SAVINGSThe changes ushered in by the Lagarde Act mark a decisive turning point for monabanq. as it changes its growth strategy.

In May 2011, the company decided to stop recruiting new customers through credit offers, concentrating instead on the vehicle of savings products aimed at a new target group.

The strategy paid off, and in December 2011, monabanq. had achieved its objective of 10,000 new customers recruited through attractive savings products combined with high-quality banking facilities. The bank's total savings increased 30% in 2011.

BEING DIFFERENT IS WHAT MONABANQ.

IS ALL ABOUTAware of saturation in this market, which saw the number of sales offers double between the first and second half of 2011, monabanq. opted to stay out of the rates war and shock campaigns favoured by other operators hungry for deposits.

While the majority of products on the market mix high introductory rates and very limited terms, monabanq. offers 3.3% per month for 12 months.

It has opted to pursue a strategy of differentiation from other banking groups, combined with a retention policy aimed at customers who prefer a long-term and stable relationship.


monabanq.: a decisive turning.

€507 M

378

FINANCE

AVERAGE WORKFORCE

€98 M

€469 MGROSSOUTSTANDING SAVINGS

To build customer loyalty, monabanq. launched the "savings review" to assess the needs of new customers. The on-line bank also expanded its range of savings products, with MonaTerme, a time deposit account with a guaranteed fixed rate for the entire term of 1 to 24 months. A new process and new organisation also contributed to achieving this result.

RAISING PROFESSIONAL

STANDARDS

monabanq. established the Ecole des Métiers in January 2011 to provide sector-specific professional training to its staff to enhance their career and personal development. Continuing training programs focus on increasing expertise across all of Monabanq.'s business lines, including products, services and the banking environment.

The knowledge acquired during these courses is immediately put into practice on the ground as part of our commitment to continued customer service excellence.

By ensuring its teams receive the appropriate training, monabanq. consistently maintains the high standards of its customer contacts and advice.

AWARDS FROM THE DOSSIERS

DE L'EPARGNEEach year the independent French site, the Dossiers de l’Epargne, carries out a completely independent review of the insurance and savings market. In 2012 monabanq. was awarded three Excellence labels by this prestigious body.

These Excellence labels are awarded by experts to the best contracts in the market. Monabanq. was recognised for its All-inclusive account, Current Account, and Livret Jeune young person's savings account.


EUROPEAN PRESENCE

Figures at 31/12/2011

Portugal 945 GROSS OUTSTANDING LOANS IN M€

FINANCE IN M€

AVERAGE WORKFORCE

126 392

Belgium 726 GROSS OUTSTANDING LOANS IN M€

FINANCE IN M€ 443

Italy 86 GROSS OUTSTANDING LOANS IN M€

FINANCE IN M€ 20

CzechRepublic &

Slovakia

82 GROSS OUTSTANDING LOANS IN M€

FINANCE IN M€ 21

Hungary 42 GROSS OUTSTANDING LOANS IN M€

FINANCE IN M€ 39

Spain 1,025 GROSS OUTSTANDING LOANS IN M€

FINANCE IN M€ 351

AVERAGE WORKFORCE 374






HIGH UNEMPLOYMENT STYMIES GROWTH

Following a deep recession in 2009, the outlook for growth in the Spanish economy remains weak and uncertain. With a high budget deficit and rising unemployment, Spain is in turbulent waters. The country's growth to 2007 was driven mainly by household spending and construction. As the resulting property bubble burst and the economic crisis took hold, unemployment rose to 23% of the active population and to almost 50% for 16-24 year-olds.

SERIOUS REPERCUSSIONS FOR

THE FINANCIAL SECTOR TURNED AROUND TO COFIDIS'S ADVANTAGEAccording to the Banco de España, consumer credit shrank 13% in 2011, having contracted 32% during the 2008 crisis. The sector has been hard hit by the crisis and is experiencing a period of profound

change. In this challenging environment, several operators have exited the market. Meanwhile, Cofidis reviewed its entire collection philosophy to respond to the sharp rise in the number of households in straitened financial circumstances. With measures in place to detect customers in potential difficulty as early as possible and more training for teams, the professional standards at Cofidis are amongst the highest in the sector. Cofidis Spain's gross outstanding loans topped the €1-billion mark in 2011, a success achieved by taking advantage of fewer competitors on the scene and overhauling its collection procedures.

NEW BRAND COMMITMENTS

The withdrawal of many competitors from the market was a real opportunity seized by the brand to consolidate its new position and leverage its rebranded colours as the only operator to

advertise through the major media. Cofidis set out to reposition the brand, expand its customer base and gain market share. It created two new ads in 2011, redefining its image to convey a strong focus on customer support, with, in the background, symbols of the solid yet fast service that has become the hallmark of the brand.

Spain

€1,025 M

759


FINANCE

AVERAGE WORKFORCE

€351 M

Gross outstanding loans top the €1-billion mark in a complicated economic and social environment

COMMITMENT EXTENDING BEYOND

CYCLING SPONSORSHIPCofidis Spain sponsors the Junior Vuelta, an original programme as part of the Vuelta cycling race bringing together education and cycling. During the school year, professional cyclists visit the schools on the Vuelta route to talk to the students about their passion for the sport and to teach them about road safety. Cycling is used as a vehicle for teaching in the schools.

Cofidis also sponsors events in the various finish towns for the stages of the race, encouraging visitors to "Pedal for Children" as part of the "pédalon solidario". Cofidis pays €1 to a charity for each kilometre pedalled. In 2011, two foundations received €24,980: the Queen Sofia Foundation, which works to prevent Alzheimer's disease, and "Aldeas Infantiles", which provides host families for children. Cofidis Spain will also sponsor the Spanish Paralympic team during the London 2012 Games.

SUMAMOS+, A NEW BUSINESS PLAN

Cofidis Spain has entered a new phase of change after two years of coping with the financial crisis. The Spanish credit specialist has embarked on a new business plan, known as Sumamos+, with the overwhelming support of its employees and justified by its new positioning. Sumamos+ means "yet more effort for even more value".

Cofidis Spain set out the principles underpinning ownership of the plan and its successful deployment: focus on team work, reinforce synergies wherever possible, listen to the needs and expectations of employees and improve internal communication.

The aim of Sumamos+ is to join together and motivate all employees to work on a new model to ensure the future growth of the retail chain.

Sumamos+ depends for its success on the men and women of Cofidis Spain, their ideas and opinions, and the motivational ambition and values that characterise the bank.

COFIDIS SPAIN BECOMES A BRANCH

Established in Barcelona since 1990, Cofidis was the first on-line credit finance company. Preparations to change its legal status started in 2011 and came into effect on 1 January 2012. Cofidis Spain is now a branch of Cofidis SA.

The aim of this change is to simplify the administrative structure of the company and to improve coordination between the Spanish and French systems. Under this new structure, the assets and liabilities of Cofidis Spain were transferred to Cofidis SA, and Cofidis Spain is now governed by the French prudential control authority, the ACP.

The change has no employment consequences for Spanish employees, whose terms of employment are governed by Spanish law.


A DIFFICULT PERIOD IN PORTUGUESE

HISTORYDeclining growth prospects for 2012, a series of sovereign debt and bank downgrades, limited government reserves and upcoming key bond maturity dates in an uncertain political climate: the bad news continues and the pressure is piled on the economy and the financial sector.

The new government passed a series of austerity measures in June of the previous year to put the country's fiscal house in order and restore confidence in the Portuguese economy. These were crucial and complex times for Portugal as austerity triggered a downward spiral of recession. In May 2011, the government requested aid from the European Union and the IMF.

Portugal's bailout package came with a programme of budget consolidation measures, including a once-off tax, higher rates of VAT on energy, cuts in social services, benefits and other public spending. The measures have hit the middle classes hard, but should allow the country to return to the markets in 2013.

CONTRACTING CONSUMER

CREDIT MARKET Having remained stable in the first half of 2011, consumption declined in the latter half of the year, with a resulting contraction in the credit market. Competition is aggressive and retaining market share is a key concern for all market operators. The response has been a rates war and attractive conditions offered to retailers in the bid to attract new partners.

In this environment, Cofidis Portugal increased production of new credit focusing on redeemable personal loans and partnerships. 2011 also saw a marked reduction in the cost of risk, which stabilised for new credit and declined for earlier loans. An extensive training plan for customer advisers, backed by close management supervision, also bore fruit with a very strong operational performance in collections.

Portugal

€945 M

392


FINANCE

AVERAGE WORKFORCE

€126 M

Cofidis Portugal celebrated its 15th anniversary in 2011... unveiling its new positioning to the general public.

TRANSFORMING ITS COMMERCIAL MODEL

Cofidis reinvents itself in the current economic climate in Portugal... A new range of credit products

Cofidis developed a new range of credit products with a major focus on project loans with competitive interest rates, designed to adapt to

customers' repayment abilities.

Shift in positioningThe bank presented its new brand logo to mark 15 years in Portugal in 2011: “De Pessoas para Pessoas” (For people by people). The four pillars of this new positioning are: flexibility of product range and processes, advice to customers throughout their loan history, transparency to establish

long-lasting relations, and the innovation that defines its business as an on-line bank.

More robust partnership strategy A leading finance company via on-line companies, this year saw Cofidis expand its business through in-store partnerships. The brand made its entry to a number of traditional retail sectors, including sound equipment with Minison, IT with Staples, electrical appliances with Audilar and mobile telephony with Ensitel.

These partnerships are not only a means of attracting new customers, but also allow Cofidis to grow its sales and expand its customer base,while retailers can offer high value-added services to their customers.

New Web siteThe cofidis.pt site was upgraded to improve both design and browsing functionality. It is clearer and provides accurate and transparent information on credit conditions.

Loan applications are easier to fill in and the presentation of the insurance and loan company has been enhanced. A simulator has been added to the site, and customers can compare offers and choose the solution that is right for them!

EMPLOYEE ENGAGEMENT WITH

SOCIAL RESPONSIBILITYFor almost 15 years, Cofidis Portugal has encouraged its employees to engage in actions of benefit to the community, particularly in the area of combating exclusion.

Our employees are involved in the corporate project, "O Valor Que Damos" (What we value), throughout the year. They work on a voluntary basis (donations or volunteering) with four organisations in Lisbon, the Associação Sol (organisation helping children with Aids), Associação Coração Amarelo (organisation working with the elderly), Escola E.B.1 Mestre Arnaldo Louro de Almeida (a school for children of disadvantages families) and União Zoófila (an animal welfare association).


Belgium formed a government in December 2011, ending the long-running political crisis that had prevented it from implementing similar reform measures to those of its European neighbours.

The country is faced with the daunting task of trimming in excess of €11 billion from its budget to bring its deficit down to under 3% in 2012 to meet EU fiscal rules. Historically unprecedented, these measures are generating a sluggish economic climate in which Belgians prefer to save, whenever they can.

At the same time, regulatory pressure on the consumer credit market continues with the transposition of the European Consumer Credit Directive and its enforcement orders. A new method for the calculation of the Effective Annual Interest Rate came into effect in September 2011 and work commenced on "Zeroing" (date by which the entire credit must be paid by the customer to the bank), which is due to apply to all revolving credit contracts from 1 January 2013.

COFIDIS MODULATES ITS PRODUCT RANGE TO ATTRACT NEW TARGETSKeen to expand to new types of customers in both Flanders and Wallonia, Cofidis Belgium launched a new range of car finance and home improvement loans.

It ran a major advertising campaign nationwide, timed to coincide with the annual Brussels Motor Show. The successful multi-channel campaign featured Internet, press, television and poster advertising and delivered powerful exposure, visibility and repetition.

Belgium

€726 M

374


FINANCE

AVERAGE WORKFORCE

€443 M

Cofidis meets the challenges of the Belgian market...

NEW TOOL FOR PREVENTIVE

RISK MANAGEMENT IN BELGIUM2011 marked an important milestone for Cofidis Belgium when it became the first Group company to roll out a new tool, BRMS, as part of the plan to achieve convergence of information systems by 2014: Business Rules Management System.

By increasing the autonomy of risk analysts, this new system ensures they can be more responsive in implementing the lending approval rules.

BRMS increases efficiency in managing risk levels and enhances our ability to adapt loan offers according to customer profiles.

This this long-term project, involving a large number of Group employees, was initiated in 2009 and rolled out in November 2011. Its success stems from the involvement, engagement, creativity and demanding standards of all those involved.

EMPLOYER BRANDING: REFLECTING THE

GROUP'S KEY VALUESThe Human Resources teams work consistently to optimise the company's image in the employment market and its workforce to attract the best applicants, efficiently fill vacancies and reduce internal turnover.

The HR teams analysed the employment market, employer brands and practices of other large employers in Belgium. They then conducted an internal audit to highlight the distinctive values and motivations that were most important for Cofidis employees.

As a result, they quickly implemented measures to develop brand visibility in job fairs, schools and colleges, the specialist press and on dedicated Web sites.

In-house, Cofidis Belgium reviewed the on-boarding process for new hires and formed a Career Development core group.

Plans for 2012 include a corporate presentation video and social network immersion.


Italy, the third largest economy in the euro zone, officially entered recession in Q4 2011. The past two years saw the Italian government step up efforts to curb its colossal debt burden with a series of austerity plans and structural reforms, which are hampering overall weak economic activity in 2011. The implications for the financial sector have included the exit of some players or a significant contraction in their loan acceptance rates as they narrow their target focus.

OPPORTUNITY FOR COFIDIS

After an unprecedented risk crisis, results for Cofidis Italy are in line with its budget targets and growth strategy. Overhauling procedures and mobilising its teams were vital factors in its success. Moreover, the report on the bank's management following an audit of its processes by the General Inspectorate of the Bank of Italy was positive.

FUNDAMENTAL CHANGE OF DIRECTION

Yet to gain a firm foothold in the Italian market, the sluggish economic climate provided the opportunity for a radical reinvention of Cofidis Italy. By deciding to switch to an atypical and solely partnership-based model (in stores, mail-order selling and door-to-door), the retail chain is now concentrated on the B to B to C market.

MAJOR CENTAX-COFIDIS

PARTNERSHIPCofidis signed a broad agreement with Centax, the Italian industry leader for in-store cheque payment processing. Formed in 1988, Centax was the first company to offer a cheque guarantee service. Over the years, this innovative solution developed into a valuable resource for the retail sector, due in the main to Centax's unique risk-management expertise. Under this agreement, Cofidis Italy will manage relations with the 30,000 Centax partner outlets, responsible

for generating close to one million transactions annually for 800,000 customers.

SUPPORTING ITS TEAMS DAY TO DAY

Goals for the immediate future are ambitious , both in terms of recruiting new partners, especially in the retail sector, and the development of new, attractive and profitable offers. Since the success of this new positioning, which reverses previous relations, depends on the commitment of all our workforce, communication and training of teams has been stepped up. The change-management process under way is essential for the structure and culture of the organisation to adapt to this new commercial reality.

Italy

€86 M

121

FINANCE

AVERAGE WORKFORCE

€20 M

2011: a year of change to withstand a difficult economic context

Czech RepublicGROWTH MAINTAINED

DESPITE TOUGHENING AUSTERITY PLANSAfter a sharp recession in 2009, the Czech Republic returned to growth in 2010 and recorded 1.7% growth in 2011. The government's fiscal consolidation policy aims to reduce the deficit to 2.9% in 2013, with a raft of measures already implemented, including pension reform and higher VAT rates. Anti-corruption measures and improved competitiveness also form part of the programme for government. Personal bankruptcies continue to rise against the backdrop of a tense labour relations climate and high unemployment. Nevertheless, Cofidis reduced the cost of risk by adapting its loan approval procedures to personal circumstances and providing tailored support for customers in difficulty. In addition, the bank has optimised the quality of its customer relations in response to the data protection laws and the transposition of the European

Consumer Credit Directive, which have changed the conditions for operators in the Czech Republic.

LAUNCH OF REDEEMABLE CREDIT

Cofidis Czech Republic launched "Cofiklasik" for the financing of projects up to €12,000. Marketing this product led to changes in the company's on-line marketing processes and loan-approval procedures,, as well as the creation of new publicity materials.

The many changes in the Czech Republic arm in 2011 were all aimed at establishing a new strategy concentrating on partnerships.

CUSTOMER-FOCUSEven stronger emphasis is

placed on customer relations in the Czech Republic, given the very competitive market and strong presence of banks in the sector. Customer relations form the core of our development strategy in this market. "We are all customers" is the new guiding principle of Cofidis Czech Republic and all our teams are working hard to determine and identify the main actions required to improve the company's customer relations policy. The focus is on simple but vital actions that constantly remind us that customers expect quality, informed advice, respect and professionalism.

€82 M

107


FINANCE

AVERAGE WORKFORCE

€21 M

Cofidis Czech Republic paved the way for its future in 2011...



Despite the rebound in its economy to 1.4% growth in GDP in 2011, Hungary faces difficult times. Recession is forecast for 2012 as industry and consumer confidence falters, borrowing conditions harden and the Government targets major debt reduction.

CHANGE OF DIRECTION FOR THE COFIDIS

BRAND IN HUNGARYMirroring the situation in all countries where Cofidis has a presence, the consumer credit market in Hungary is changing. To hold their own, banks and credit institutions must do more to appeal to increasingly well-informed and demanding consumers.

To meet this challenge, Cofidis Hungary has changed direction in a bid to stand out from the competition and establish a relation of trust with its customers.

Aiming to offer a simple, comprehensive and tailored range of financial products and services delivered through all distribution channels, the credit specialist has redefined its positioning and increased transparency. Assisting consumers to manage their budget in the long term by offering on-line financial solutions is Cofidis Hungary's promise to its customers in response to weak economic sentiment.

The company invested in a marketing campaign based on short, rational and clear messages and using a simple and factual tone to establish this new positioning

and highlight the advantages of its credit products.

HSBC AND COFIDIS HUNGARY SIGN A

SALE AGREEMENT2011 saw Cofidis Hungary agree to purchase HSBC's consumer credit portfolio and activities in Hungary.

Effective on 1 December 2011, the deal increases the Hungarian subsidiary's assets and customer book by some 50%.

This is a very positive development for the credit specialist and will accelerate its growth in the market, meeting one of its key objectives, namely to increase market share and quickly achieve critical mass.

Hungary

€42 M

84


FINANCE

AVERAGE WORKFORCE

€39 M

With a crisis of confidence in Hungary, Cofidis launches "Cofidis credit: as clear as day "


1996: THe STORy BEGINS

Cofidis's decision to invest in cycling sponsorship dates back to 1996, when the company was at a crucial stage in its development.

As a medium to enhance brand recognition with the general public, Cofidis chose the popular sport of cycling. It conveys strong human values, such as courage, striving to excel and solidarity, values that are shared by all our staff.As an on-line provider, this is a wonderful opportunity for Cofidis to go out and meet its customers through the various following vehicles.

Competing in most major French and international cycle races, the Cofidis cycling team represents

the core values its members have striven to embody for more than 15 years: professionalism, team spirit, total respect for the highest moral and ethical standards.Cycling is part of the history that binds employees to the company. For some, the members of the cycling team have become opinion leaders and ambassadors for the brand.

THE ROAD TEAM

Cofidis notched up 19 wins and 42 Top 3 classifications during the 2011 season. Samuel Dumoulin, David Moncoutié and Rein Taaramae were the main movers racking up 12 wins between them.Tony Gallopin won the Coupe de France for Cofidis for the second year in a row, after Leonardo Duque in 2010. Adrien Petit, a neo-pro rider in 2011, won the under-23s silver medal in the World Championships in Copenhagen.

THE HANDISPORT TEAM

Originating in our desire to raise awareness of disability in the company and in sport in general, in 2010 Cofidis was the first professional cycling team in France to include disabled riders among its number.

Diversity has been rooted in the company's genes since its creation. There is a place for everyone, whatever their origin, age, social background or the particularity of individuals.

The five top-level athletes in the Cofidis para-cycling team compete in all categories and are ambassadors for the brand and for France during major international and Paralympic competitions.

Sports Sponsorship NEW COLOURS The 2012 team

comprising 24 cyclists from six different countries will add

a burst of colour bringing some sunshine

to the races it competes in. No less than 27 people are on the technical staff working throughout the season to support the team.

Cofidis has a considerable investment in cycling sponsorship and it provides ideal exposure to express the brand's new positioning and corporate image, launched in 2011.

Riders will sport a new team kit in 2012, based on the new Cofidis logo and its values. The team will sport the new gear for the first time during races in Europe, with the web addresses (cofidis.be, cofidis.es and cofidis.fr) and baselines ("Online credit", "El dinero directo", "Le crédit en ligne").

PUBLICITY CARAVANSince 1997, the publicity

caravan runs ahead of the cyclists in a colourful spectacle. Cofidis's two emblematic vehicles are red and travel some 9,000 kilometres every year meeting members of the public. They have always been staffed by company employees who distribute gifts, such as Cofidis-branded key rings, pens and baseball caps. The team's calendar includes the Tour de France, Paris-Roubaix, the 4 Jours de Dunkerque and Denain Grand Prix. The caravan has ventured outside France in the past few years, to Belgium and to the Volta a Portugal in 2008. It has been a feature of the Spanish Vuelta for the past two years, in addition to the company's sponsorship activities for this cycling fixture.

INTERNATIONAL PRESENCE

The season this year will centre around two major events: the Tour de France, one of the mainstays of the French sporting and cultural calendar, and the Vuelta (Tour of Spain), which will see David Moncoutié, who has ridden in the Cofidis colours for more than 15 years, defend his best climber jersey for the fifth year in a row.

The Cofidis team will also compete in the Paris-Nice, Paris-Roubaix and Critérium du Dauphiné races in France, while elsewhere in Europe, the Vuelta de Catalonia, Tour du Luxembourg and Belgian classics are on the cards.

Not only has the Coupe de France been a goal of the team for three consecutive years, but it also provides a valuable training and improvement ground for some of the younger cyclists who have recently joined the team.

Competing in most major French and international races, the Cofidis cycling team represents the core values its members have striven to embody for more than 15 years: excelling, professionalism, team spirit, and respect for the highest moral and ethical standards.


2Consolidated financial statements

at 31 December 2011

38 / STRUCTURE OF COFIDIS PARTICIPATIONS

39 / KEY FIGURES

40 -41 / CONSOLIDATED BALANCE SHEET

42 / CONSOLIDATED INCOME STATEMENT

43 / NET INCOME AND GAINS AND LOSSES DIRECTLY RECOGNISED

IN SHAREHOLDERS' EQUITY

44 - 45 / VARIATION IN SHAREHOLDERS' EQUITY

46 - 47 / CASH FLOW TABLE


KEY FIGURESSTRUCTURE OF COFIDIS PARTICIPATIONS AT 19/01/2012

LEGAL ORGANISATION CHART3,110

7,796

Gross outstanding loans (in M€)

9,124 9,0809,194

2007 201120102008 2009 2007 201120102008 2009

4,251

3848

3,077

3,265

Finance (in M€)

Solvency ratio (%)

2007 201120102008 2009

11.74

9.108.91

9.50

10.00

2007 201120102008 2009

Shareholders' equity, including subordinated debt

(In M€)

992

906911

938

1,016

250 250100 100 100


LIABILITIES Note 31/12/2011 31/12/2010

Central banks – –Financial liabilities recognised at fair value through profit or loss IV.2 – –Derivative hedging instruments IV.3 66,747 105,501Debts to credit institutions IV.11 4,050,116 3,634,338Debts to customers IV.12 497,630 391,254Debts represented by a security IV.13 3,790,615 3,808,651Revaluation surplus for rate hedging portfolios IV.3 –Current tax liabilities IV.14 23,428 24,805Deferred tax liabilities IV.14 21,032 13,435Settlement accounts and miscellaneous liabilities IV.15 172,519 153,304Debts related to non-current assets intended for sale –Insurance contract technical provisions –Provisions IV.16 25,577 23,261Subordinated debt 0 –

TOTAL LIABILITIES 8,647,664 8,154,547

Equity attributable to group shareholders IV.17 1,146,482 1,076,774Capital and associated reserves 68,594 68,593Consolidated reserves 953,481 884,794Unrealised or deferred gains / losses – 6,468 – 15,505Profit for the accounting period 130,876 138,892Minority interests 96 106

TOTAL EQUITY 1,146,578 1,076,880

TOTAL LIABILITIES 9,794,242 9,231,427

ASSeTS - In thousands of € Note 31/12/2011 31/12/2010

Cash on hand, balances at central banks IV.1 3,909 59,392Financial assets recognised at fair value through profit or loss IV.2 35,750 35,753Derivative hedging instruments IV.3 17,645 66,732Available-for-sale financial assets IV.4 65 265,164Loans and advances to credit institutions IV.5 1,614,166 770,678Loans and advances to customers IV.6 7,638,248 7,576,100Revaluation surplus for rate hedging portfolios IV.3 36,225 6,190Held-to-maturity financial assets – –Current tax assets IV.14 30,863 29,181Deferred tax assets IV.14 116,199 108,239Settlement accounts and miscellaneous assets IV.7 68,025 73,293Non-current assets intended for sale – –Interests in affiliates – –Investment properties – –Tangible assets IV.8 23,753 25,636Intangible assets IV.9 35,948 41,623Goodwill IV.10 173,448 173,448

TOTAL ASSETS 9,794,242 9,231,427

Consolidated balance sheet


In thousands of € 31/12/2011 31/12/2010

Net profit attributable to Group shareholders 130,876 138,892Foreign currency translation – 667 8,316Revaluation of derivative hedging instruments 9,702 5,724Revaluation of financial assets

Total gains and losses directly recognised in equity attributable to Group shareholders 9,035 14,040

Net income and gains and losses directly recognised in equity attributable to Group shareholders 139,911 152,932

Net income and gains and losses directly recognised in equity attributable to minority shareholders – 10 200

Net income and gains and losses directly recognised in shareholders' equity 139,901 153,132

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

INCOMe STATeMeNT - In thousands of € Note 31/12/2011 31/12/2010

Interest and similar income 1,155,843 1,155,903Interest and similar costs – 245,181 – 185,412Commissions (income) 233,368 250,841Commissions (costs) – 21,574 – 21,946Net gains / (losses) on financial instruments recognised at fair value through profit or loss 3,158 – 1,315

Net gains (losses) on available-for-sale financial assets 175 –Income from other activities 2,568 3,882Costs for other activities – 785 – 803

NET BANKING INCOME VI.2 1,127,573 1,201,150

General operating costs VI.3 – 507,156 – 469,999

Amortisation expense and provisions on tangible and intangible assets VI.4 – 14,904 – 14,746

GROSS OPERATING PROFIT 605,513 716,405

Cost of risk VI.5 – 411,502 – 501,153

OPERATING PROFIT 194,012 215,252

Share of net profit/(loss) of affiliates –Net gains or losses on other assets VI.6 – 2,354 – 271Variations in the value of goodwill 0 – 1,842

EARNINGS BEFORE TAXES 191,657 213,139

Tax on profits VI.7 – 60,781 – 74,047Net profit for the year on discontinued operations or operations being discontinued

NET PROFIT 130,876 139,092

Minority interests 0 – 200

NET PROFIT - ATTRIBUTABLE TO GROUP SHAREHOLDERS 130,876 138,892

Earnings per share (in €): 0.67 0.71

Consolidated income statement Net income and gains and losses directly recognised in shareholders' equity


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Shareholders' equity at 1 January 2011 68,593 885,147 -15,505 138,892 1,077,127 106 1,077,233

Increase in share capital 0 0Shareholders' equity component of hybrid instruments 0 0

Allocation of 2010 income 138,892 – 138,892 0 0Repayment of perpetual subordinated capital securities – 1,599 – 1,599 – 1,599

Interim dividends – 69,672 – 69,672 – 69,672Sub-total of movements linked to relationships with shareholders 0 67,621 0 – 138,892 – 71,271 0 – 71,271

Variation in gains and losses directly recognised in shareholders' equity

9,035 9,035 – 10 9,025

2011 Income 130,876 130,876 130,876Sub-total 0 0 9,035 130,876 139,911 – 10 139,901Effect of acquisitions and disposals on minority interests 0 0

Other variations 715 715 715

Shareholders' equity at 31 December 2011 68,593 953,483 – 6,470 130,876 1,146,482 96 1,146,578

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Shareholders' equity at 1 January 2010 68,593 825,381 – 29,545 70,079 934,508 25,540 960,048

Increase in share capital 0 0Shareholders' equity component of hybrid instruments 0 0

Allocation of 2009 income 70,079 – 70 079 0 0Repayment of perpetual subordinated capital securities – 1,618 – 1,618 – 1 618

Distribution in 2010 in respect of 2009 0 0

Sub-total of movements linked to relationships with shareholders 0 68,461 0 – 70,079 – 1,618 0 – 1,618

Variation in gains and losses directly recognised in shareholders' equity

– 6,803 14,040 7,237 7,237

Income 2010 138,892 138,892 200 139,092Sub-total 0 – 6,803 14,040 138,892 146,129 200 146,329Effect of acquisitions and disposals on minority interests – 2,239 – 2,239 – 25,112 – 27,351

Other variations – 6 – 6 – 522 – 528

Shareholders' equity at 31 December 2010 68,593 884,794 – 15,505 138,892 1,076,774 106 1,076,880

Effect of changes in accounting methods 0 0

Effect of correcting errors 353 353 353

Variation in shareholders' equity


In thousands of € 2011 2010

Cash flow coming from or going to shareholders – 67,837 – 531Other net cash flows from financing activities 0 – 27,175Financing readjustments 0 0Total cash flow generated from financing activities (C) – 67,837 – 27 706Effect of exchange rate variation and scope variation (D) 2,876 2,753Net increase (decrease) in cash and cash equivalents (A+B+C+D) 609,399 605,549Total net cash flow generated from operating activities (A) 689,287 642,816Total net cash flow generated from investment activities (B) – 14,928 – 12,314Total net cash flow generated from financing activities (C) – 67,837 – 27,706Effect of exchange rate variation and scope variation (D) 2,876 2,753CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 790,997 185,448Cash on hand, balances at central banks, ICP (Assets and Liabilities) - BEGINNING OF PERIOD 59,392 67,413Demand accounts and loans/borrowing with credit institutions - BEGINNING OF PERIOD 731,605 118,035CASH AND CASH EQUIVALENTS AT END OF PERIOD 1,400,395 790,997Cash on hand, balances at central banks, ICP (Assets and Liabilities) - END OF PERIOD 3,909 59,392Demand accounts and loans/borrowing with credit institutions - END OF PERIOD 1,396,486 731,605VARIATION IN NET CASH 609,398 605,548

In thousands of € 2011 2010

EARNINGS BEFORE TAXES 191,657 213,139Net amortisation expense on tangible and intangible assets 14,881 13,326Depreciation of goodwill and other assets 23 3,262Net expenses for provisions 3,599 125,922Share of income in affiliates 0 0+/- Net loss/net gain from investment activities 7,541 271Income and expenses of financing activities – 27 0Other movements – 27,805 – 36,783

Total of non-monetary items included in net earnings before tax and other adjustments – 1,788 105,997

Flows from transactions with credit institutions 245,021 1,104,856Flows from transactions with customers – 39,826 98,297Flows from other transactions allocating financial assets or liabilities 262,071 – 848,968Flows from other transactions allocating non-financial assets or liabilities 99,281 17,165Tax paid – 67,130 – 47,670

Net decrease (increase) in assets and liabilities from operating activities 499,418 323,680

Total net cash flow generated from operating activities (A) 689,287 642,816Flows from financial assets and holdings – 5,183 0Flows from investment property 0 0Flows from tangible and intangible assets – 9,744 – 12,314Investments readjustments 0 0Total cash flow generated from investment activities (B) – 14,928 – 12,314

Summary cash flow table



50 / INTRODUCTION

51 / GENERAL CONTExT

<?> / ACCOUNTING PRINCIPLES AND METHODS

67 / NOTES TO THE CONSOLIDATED BALANCE SHEET

83 / NOTES TO OFF-CONSOLIDATED BALANCE SHEET ITEMS

84 / NOTES TO THE CONSOLIDATED INCOME STATEMENT

88 / SECTOR INFORMATION

90 / EMPLOYEE BENEFITS

94 / RISK ExPOSURE AND HEDGING POLICY

Notesto the 2011 consolidated financial statements for Cofidis Participations S.A

3 I INTRODUCTION

II GENERAL CONTExT1 – Description of the entity

2 – Significant events of the

accounting period

3 – Simplified organisation chart for

the Cofidis Participations Group

at 31 December 2011

4 – Events after the reporting period

5 – Related party disclosures

6 – Consolidation scope and methods

III ACCOUNTING PRINCIPLES AND METHODS

1 – Financial instruments

2 – Deferred taxes

3 – Assets

4 – Goodwill

5 – Provisions

6 – Employee benefits

7– Equity instruments: deeply

subordinated notes

8 – Interest income and expenses

9 – Net commission income

10 – Judgements and estimates used in

preparing the financial statements

IV NOTES TO THE CONSOLIDATED BALANCE SHEET

1 – Cash on hand, balances at central banks

2 – Financial assets recognised at fair value

through profit or loss

3 – Derivative hedging instruments

4 – Available-for-sale financial assets

5 – Loans and advances to credit institutions

6 – Loans and advances to customers

7 – Settlement accounts and

miscellaneous assets

8 – Tangible assets

9 – Intangible assets

10 – Goodwill

11 – Debts to credit institutions

12 – Debts to customers

13 – Debts represented by a security

14 – Current and deferred tax assets

and liabilities

15 – Settlement accounts and

miscellaneous liabilities

16 – Provisions

17 – Shareholders' equity

18 – Summary of financial instrument

classes by accounting categories

V NOTES TO OFF-CONSOLIDATED BALANCE SHEET ITEMS

1 – Finance and guarantee commitments

2 – Term financial instruments

VI NOTES TO THE CONSOLIDATED INCOME STATEMENT

1 – Net banking income

2 – General operating costs

3 – Amortisation expense and depreciation

of tangible and intangible assets

4 – Cost of risk

5 – Net gains or losses on other assets

6 – Taxes

7 – Auditors' fees

VII SEGMENT INFORMATION1 – Definition of activity sectors

2 – Sector information by geographical zone:

data from income statement

3 – Sector information by geographical zone:

data from balance sheet

VIII EMPLOYEE BENEFITS1 – Payroll

2 – Workforce for the period

3 – Post-employment benefits -

defined contribution schemes

4 – Other long-term benefits

5 – Actuarial assumptions

6 – Component of the expense for the period

7 – Reconciliation of balance sheet provisions

8 – Financial hedging of the scheme

Ix RISK ExPOSURE AND HEDGING POLICY

1 – Credit risk

2 – Counterparty risk for financial transactions

3 – Overall interest rate and liquidity risk

4 – Foreign exchange risk

II – General framework1 – Description of the entityThe principle activity of Cofidis Participations SA and its subsidiaries is to grant consumer credit and personal loans, as well as issuing and managing payment methods. Cofidis Participations SA was founded in 1982 by the 3SI group, specialist in home-shopping. On 23 March 2009, the Banque Fédérative du Crédit Mutuel (BFCM) took control of Cofidis Participations SA of which Cofidis SA is the direct subsidiary.Cofidis Participations SA, registered under company number 378 176 291, is a public limited company registered and domiciled in France. Its registered head

office is located at the following address: Parc de la haute Borne, 61 avenue Halley, 59667 Villeneuve d’Ascq, France.The consolidated financial statements have been prepared based on the accounts at 31 December 2011 for companies included within the scope of the Cofidis Participations Group. The financial statements are expressed in thousands of euro, unless otherwise indicated.

2 – Significant events of the accounting periodSignificant events during the accounting period are as follows:

•Inclusion of monabanq. SA in the tax consolidation group, with

Cofidis Participations SA as the head company in the group.

•Approval by the general shareholders' meeting on 1 September 2011 of the cross-border merger between Cofidis SA (the acquiring company) and Cofidis Hispania EFC, SAU (the acquired company), according to the terms and conditions set out in the draft joint merger agreement dated 1 June 2011, authorised by a decision of the Cofidis SA Board of Directors on the same date, and by the Board of Directors of Cofidis Hispania EFC, SAU. Under the terms of the merger, all the assets and liabilities acquired by Cofidis SA were simultaneously

Notes to the 2011 consolidated financial statements for Cofidis Participations S.AI – IntroductionPursuant to Regulation (EC) 1606/2002 on the application of international accounting standards and Regulation (EC) 1126/2008 on their adoption, the consolidated financial statements for the period have been prepared in accordance with IFRS, as adopted by the European Union as at 31 December 2011. This IFRS framework includes IAS 1 to 41, IFRS 1 to 8 and their SIC and IFRIC interpretations adopted at this date. No standard not adopted by the European Union has been applied. Summary documents are presented in accordance with recommendation 2009-R.04 of the French national accounting board (Conseil national de la comptabilité - CNC).

All IAS/IFRS were updated on 3 November 2008 by Regulation 1126/2008, which replaced regulation 1725/2003. This framework is available on the European Commission web site: http://ec.europa.eu/internal_market/accounting/ias/index_fr.htm

New accounting rules applicable from 1 January 2011

IASB target application date

(reporting periods starting on)

Date of application in the EU


IAS 32 – On the classification of rights issues 01/02/2010 01/02/2010IFRIC 19 – Extinguishing Financial Liabilities with Equity Instruments 01/07/2010 01/07/2010IAS 24 – Related Party Disclosures 01/01/2011 01/01/2011IFRIC 14 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction 01/01/2011 01/01/2011

Amendments to existing standards

IFRS 3 Amendments – Business Combinations 01/07/2010 01/07/2010IFRS 7 Amendment – Financial Instruments - Disclosures 01/01/2011 01/01/2011IAS 1 Amendment – Presentation of Financial Statements 01/01/2011 01/01/2011 IFRIC 13 Amendment – Customer Loyalty Programmes 01/01/2011 01/01/2011IAS 34 Amendment – Interim Financial Reporting 01/01/2011 01/01/2011

Standards and interpretations not yet applied

IASB target application date


Date of application in the EU


IFRS 7 Amendment – Disclosures – Transfers of Financial Assets 01/07/2011 01/07/2011IAS 12 Amendment – Deferred tax: Recovery of Underlying Assets 01/01/2012 Not adoptedIFRS 9 – Financial Instruments 01/01/2015 Not adoptedIFRS 10 – Consolidated Financial Statements 01/01/2013 Not adoptedIFRS 11 – Joint arrangements 01/01/2013 Not adoptedIFRS 12 – Disclosures of Interests in Other Entities 01/01/2013 Not adoptedIFRS 13 – Fair Value Measurement 01/01/2013 Not adoptedIAS 28 – Investments in Associates and Joint Ventures 01/01/2013 Not adoptedIAS19 – Employee Benefits 01/01/2013 Not adoptedIAS 1 Interim Financial Reporting – Presentation of Financial Statements – Presentation of Items of Other Comprehensive Income 01/01/2013 Not adopted

IFRIC 20 – Stripping Costs in the Production Phase of a Surface Mine 01/01/2013 Not adopted


3 – Simplified organisation chart for the Cofidis Participations Group at 31 December 2011

COFIDIS S.A

COFIDISSlovakia

COFIDISCzech

Republic

COFIDISBelgium

COFIDISSpain*

COFIDISItaly

C2C COFIDISPortugal*

COFIDISHungary*

*subsidiaries

FICODISS.A

MONABANQFrance

MONABANQBelgium*

assigned by full transfer of assets as a result of the merger to Cofidis SA , Sucursal En España, the Cofidis branch in Spain.

The conditions precedent for the completion of the cross-border merger between Cofidis SA and Cofidis Hispania were as follows:– Approval of the merger by Cofidis

SA, the sole shareholder in Cofidis Hispania, EFC SAU.

– Opening of a branch in Spain by Cofidis SA operating as Cofidis SA, Succursal en España.

– Approval of the cross-border merger by the Spanish Ministry for Finance, as proposed by the

Banco de España, in accordance with the provisions of Article 10 of Royal Decree 692/1996 of 26 April relative to the legal framework for credit institutions, and Article 45.c) of the Spanish Law of 31 December, 1946 relative to bank regulation.

– Analysis by Cofidis SA of any notification from the Banco de Españal regarding the conditions according to which the branch may conduct business.

The Board of Directors meeting on 19 December 2011 recorded that the conditions precedent for the completion of the cross-border

merger between Cofidis SA and Cofidis Hispania had been fulfilled.

•The Board of Directors of Cofidis Participations SA meeting on 13 July 2011 decided to pay an interim divided for a total of €69,672,296.45, i.e. a dividend per share of €0.355 (196,259,990 shares).

•On 2 November 2011, C2C transferred full ownership to Cofidis SA of contracts and customer advances plus interest due and all their incidental contracts, including borrowers' insurance and sureties.

4 – Events after the reporting periodTransfer of 100% of the share capital of C2C held by Cofidis SA to the Banque Fédérative du Crédit Mutuel on 19 January 2012. In view of the insignificant nature of the assets and liabilities concerned by this transfer (since C2C’s outstanding loans were transferred to Cofidis SA on 1 November 2011), the provisions of IFRS 5 “Non-current Assets Held for Sale

and Discontinued Operations” have not been applied.

5 – Related party disclosuresParties related to the Cofidis Participation Group are:- the consolidated companies,- the company controlling Cofidis

Participations SA (Banque Fédérative du Crédit Mutuel),

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

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

- the principal directors of Cofidis Participations SA or its shareholders.


6 – Consolidation scope and methods6.1 ScopeThe consolidated financial statements for the Cofidis Participations Group bring together all the companies under exclusive control, under joint control or under significant influence. These companies are respectively consolidated according to the

full consolidation, proportionate consolidation and equity methods.The Group consolidates distinct legal structures created specifically to manage a transaction or a group of similar transactions (ad hoc entities) to the extent that it exercises control over them.

Applying these principles, the securitisation transactions performed by the Group are consolidated. This relates to the FCT Cofititrisation Securitisation Mutual Fund, which was liquidated in June 2011. The consolidated financial statements include the accounts of Cofidis Participations SA and those of all its subsidiaries:

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

Balance sheet position in K€ TOTAL Parent companyentities controlled

by the same parent company

Other related parties

Derivative hedging instruments – Assets 16,929 555 16,374 0Loans and advances to credit institutions 1,511,431 1,510,834 597 0Settlement accounts and miscellaneous assets 7,424 0 4,435 2,989

Total assets 1,535,783 1,511,389 21,406 2,989

Derivative hedging instruments – Liabilities 29,469 1,874 27,595 0Debts to credit institutions 3,787,672 3,787,672 0 0Debts represented by a security 785,023 720,034 64,988 0Settlement accounts and miscellaneous liabilities 14,451 4 2,014 12,433

Total liabilities 4,616,614 4,509,584 94,597 12,433

Commitments received 2,900,000 0 2,900,000 0

Commitments given 2,525 0 0 2,525

Income and expenditure in K€ TOTAL Parent company

entities controlled by the same

parent company

Other related parties

Interest and similar income 79,985 82,111 166 – 2,292Net gains or losses on Commissions 195,656 – 80 194,721 1,015Net gains or losses on portfolios at fair value through profit or loss 1,072 1,072 0 0

Gains or losses on other assets 1,331 0 – 4 1,334

Total income 278,043 83,104 194,882 57

Interest and similar expenses 126,451 120,300 6,142 9Operating costs 22,691 0 4,605 18,086

Total expenses 149,142 120,300 10,747 18,094

Transactions with directors of Cofidis Participations SA are limited exclusively to employee benefits (§ VIII).

List of subsidiaries, joint companies and related companies

Country location Consolidation method

% holding at 31/12/2011

% holding at 31/12/2010

Cofidis Participations FranceCofidis SA and branches France, Spain, Portugal, Hungary Full consolidation 99.99 99.99Ficodis SA Argentina Full consolidation 66 66Créatis SA France Full consolidation 99.99 99.99C2C SA France Full consolidation 99.99 99.99Cofidis Belgium Belgium Full consolidation 99.99 99.99Cofidis Ceska Czech Republic Full consolidation 99.99 99.99Cofidis Ifn Romania Full consolidation liquidated 99.99VECOFIN Italy Full consolidation 99.99 99.99Cofidis Slovakia Slovakia Full consolidation 99.99 99.99FCT Cofititri France Full consolidation liquidated 99.99

monabanq. France France Full consolidation 99.99 99.99

monabanq. Belgium Belgium Full consolidation 99.99 99.99

Changes in method and variation in scopeLiquidation of the FCT Cofititrisation Securitisation Mutual Fund on 30 June 2011, and liquidation of Cofidis Romania on 30 September 2011.


The following parities were used to translate the financial statements of foreign subsidiaries and branches:

Average rate 2011 Rate at end of period Rate at beginning of period Average rate 2010

Argentine Peso 0.1726627 0.1794366 0.1895088 0.1935086Czech Crown 0.0406686 0.0387792 0.0399026 0.0395352Hungarian Florin 0.0035803 0.0031788 0.0035978 0.0036317Romanian Leu 0.2359292 0.2313048 0.2346316 0.2374981

6.2 Concepts of controlIn accordance with international standards, all entities under exclusive control, joint control or significant influence are consolidated.Exclusive control is presumed to exist when Cofidis Participations SA holds, directly or indirectly through subsidiaries, more than half the voting rights of an entity, except if, under exceptional circumstances, it can be clearly demonstrated that this holding does not allow control. Exclusive control also exists when Cofidis Participations SA, holding half or less than half of the voting rights in an entity, has the majority of power in the management bodies. Joint control is exercised in joint companies, under which two or more joint businesses are related by a contractual holding establishing joint control.Significant influence is usually evidenced by the power to participate in the financial and operational policies of a company, without holding control. Cofidis Participations SA is presumed to have significant influence when it holds, directly or indirectly, 20% or more of the voting rights in an entity.

6.3 Consolidation methodsConsolidation methods are fixed respectively by standards IFRS 3 revised, IAS 27 revised, IAS 28 and 31

and result from the type of control exercised by Cofidis Participations SA over entities that may be consolidated, regardless of the nature of their business and their legal personality:

– full consolidation, for exclusively controlled entities, including entities with different accounts structures, even if their activity is not an extension of the activity of Cofidis Participations SA. Full consolidation consists of recognising the value of each subsidiary's assets and liabilities instead of the value of the securities. The share of minority interests in shareholders' equity and in profit/(loss) appears separately on the balance sheet and the consolidated income statement.

– Proportionate consolidation, for jointly controlled entities, including entities with different accounts structures, even if their activity is not an extension of the activity of Cofidis Participations SA. Under proportionate consolidation, the representative fraction of its interests on the balance sheet and in the profit/(loss) of the consolidated company is substituted for the value of the securities in the parent company’s accounts;

- the equity method, for entities under significant influence or jointly controlled entities. When a jointly controlled entity is consolidated using the equity method, the information is disclosed in the Notes. Under the equity method, the Group's share in the shareholders' equity and profit/(loss) of the company is substituted for the value of the securities.

6.4 Foreign currency transactionsThe financial statements of Cofidis Participations group are prepared in euro. The balance sheet for foreign subsidiaries and branches whose functional currency is not the euro is translated into euro at the exchange rate on the reporting date. Items in the income statement are translated using the average rate for the accounting period. Foreign currency translations are shown for consolidated companies that are not part of the euro zone (Cofidis Argentina, Cofidis Hungary, Cofidis Romania and Cofidis Ceska).For the Group's interests, foreign currency translations are included in shareholders' equity under "Foreign currency translations" and for third party interests under "Minority interests".

6.5 Treatment of acquisitions and goodwillGoodwill is the difference between the acquisition price and the acquirer's interest share in the fair value of the identifiable assets and liabilities at the acquisition date. On this date, this difference is entered in the acquirer's assets if it is positive and is recognised in profit/(loss) if it is negative. Goodwill is recognised in the functional currency of the acquired company and is converted at the current exchange rate on the reporting date. In accordance with revised IFRS 3, goodwill is not depreciated but is tested for impairment. The procedures for performing these tests are described in Note III.4 of the accounting principles.Pursuant to revised IAS 27, increases in the percentage holding in an entity already controlled are recognised in equity.

III – Accounting principles and methods1 – Financial instrumentsIn the 2011 consolidated financial statements, financial assets and liabilities are treated in accordance with the provisions of IAS 39, as adopted by the European Commission on 19 November 2004 and supplemented by regulations 1751/2005 dated 25 October 2005 and 1864/2005 dated 15 November 2005, relating to the use of the "fair value option", and by regulation 1004/2008 dated 15 October 2008, relating to the transfer of financial assets.Fair value is defined as the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. The existence of quotations published on an active market gives the best indication of fair value for financial instruments. In the absence of such quotations, fair value is determined by applying recognised valuation techniques using "observable market data".

1.1 Securities1.1.1 Classification of financial instrumentsThese are classified according to four categories of assets applicable to securities defined by IAS 39:

- financial assets at fair value through profit or loss,

- held-to-maturity investments, - available-for-sale financial assets, - loans and advances.

1.1.1.1 Financial assets at fair value through profit or loss.According to IAS 39, this portfolio comprises securities where classification as a financial asset recognised at fair value through profit or loss results either in a real intention to trade or an option taken by the Cofidis Participations Group under the conditions described by the standard. Financial assets or liabilities recognised at fair value through profit or loss are by nature assets or liabilities acquired or generated principally for the purpose of making a profit associated with short-term price fluctuations or an arbitrage margin.


On the other hand, for equity instruments, if written back, the positive variation in fair value is recognised in a recyclable equity account.

1.1.2 Valuation of securitiesFair value is the valuation method selected for all financial instruments classified in the "Financial assets at fair value through profit or loss" or "Available-for-sale financial assets" categories. Prices quoted on an active market form the basic valuation method. By default, the Cofidis Participations group uses recognised valuation methods by referring particularly to recent transactions.When there is no quoted price for an equity security and there is no recognised valuation technique, the Cofidis Participations Group chooses techniques based on objective and verifiable indications, such as determination of the re-valued net asset or any other valuation method for equity securities. If no technique is able to give satisfaction, or if the various techniques used give estimates that are too dissimilar, the security remains valued at cost and is maintained in the "Available-for-sale financial assets" category. However, if such a case arises, information will be provided in the notes.

1.1.3 Depreciation of securitiesDepreciation is recorded where there are objective signs of impairment loss for assets other than those classified as "Fair value through profit or loss".It is realised through a lasting or significant fall in value of the security for equity securities, or by the appearance of a significant deterioration in the credit risk evidenced by a risk of non-collection for debt securities.A provision is only constituted to the extent that the depreciation will result in a probable loss of all or part of the amount invested.

1.2 Credit activityCredits are allocated to the "Loans and Advances" category. Thus, in accordance with IAS 39, they are initially valued at fair value, and later at amortised cost according to the effective interest rate method. The effective interest rate is the rate that exactly discounts the future cash flows to the original net outstanding loan. This rate includes losses in value as well as income and transaction costs included in the effective interest rate, if appropriate.Accrued interest on advances is carried over to the attached advances account in compensation for profit or loss.

In accordance with IAS 39, advances allocated to "Loans and Advances" are depreciated when they present one or more loss events occurring after realisation of these advances. Depreciation is thus constituted for customer advances with a proven credit risk matching one of the following situations:

- when there are one or more unpaid debts given the special characteristics of these credits,

- when the situation of a counterparty has characteristics such that independently of the existence of any unpaid loans, a proven risk can be said to exist,

- if dispute proceedings exist between the institution and the counterparty.

Depreciation is equal to the difference between the carrying amount of the loans (amortised cost) and the sum of the estimated future flows, discounted at the original effective interest rate for revolving credits. Calculation of depreciation is based on:

- a statistical approach by homogeneous portfolio of advances, given the insignificant nature of the advances taken individually and their common characteristics in terms of credit risk,

Securities classified as financial assets recognised at fair value through profit or loss are initially recognised at fair value, excluding transaction costs directly attributable to the acquisition (which are passed directly to profit or loss) and including accrued coupons. They are valued at their fair value and variations in fair value are recognised in profit or loss.

1.1.1.2 Held-to-maturity investmentsThe category "Held-to-maturity investments" includes securities with fixed or determinable payments that the Cofidis Participations Group intends and is able to hold to maturity, other than:

- those that the Cofidis Participations Group designates on initial recognition as assets recognised at fair value through profit or loss,

- those that the Cofidis Participations Group designates as available for sale,

- those that meet the definition of loans and advances.

Securities held to maturity are initially recognised at their acquisition price, including transaction costs directly attributable to the acquisition and accrued coupons. These securities are later recognised according to the amortised cost method at the effective interest rate.

If there is an objective indicator of impairment loss, a depreciation is recorded for the difference between the carrying amount and the estimated discounted recoverable amount at the original effective interest rate. If it improves later, the surplus provision is written back.The Cofidis Participations Group does not hold securities falling within the "Held-to-maturity investments" category.

1.1.1.3 Securities in the "Loans and Advances" portfolioThe "Loans and Advances" category recognises unquoted financial assets with fixed or determinable payments. Securities are recognised at amortised cost using the effective interest rate method corrected for any impairment provisions.If there is an objective indicator of impairment loss, a depreciation must be recorded for the difference between the carrying amount and the estimated recoverable amount discounted at the original effective interest rate.The Cofidis Participations Group does not hold securities falling within the "Loans and Advances" category.

1.1.1.4 Available-for-sale financial assetsThe "Available-for-sale financial assets" category is defined by IAS 39 as the default category.

According to the provisions of IAS 39, the accounting principles for securities classified as "Available-for-sale financial assets" are as follows:

– securities available for sale are initially recognised at their acquisition price, including transaction costs directly attributable to the acquisition and accrued coupons,

– accrued interest on available-for-sale securities are carried over to the attached advances account in compensation for profit or loss,

- variations in fair value are recognised in equity. In the event of disposal, these variations are reversed and recorded in profit or loss. Depreciation over time of any higher / lower value for fixed payment securities is recognised in profit or loss according to the effective interest rate method,

- in the event of an objective sign of significant or long-lasting depreciation for equity securities, and realised by a credit risk arising for debt securities, the unrealised capital loss recognised in equity is reversed and recognised in profit or loss for the period. If it improves later, this depreciation is written back through profit or loss for debt instruments only.


In terms of macro-hedging (portfolio hedging), the Group documents transactions as cash flow hedges for variable rate loans and as fair value hedges for the depreciable loans portfolio. Since the 2009 reporting date, the Group has been using provisions relating to fair value hedging of a portfolio of interest rate items.For portfolios of depreciable assets (fixed rate assets), the Group verifies that there is no over-hedging by applying the provisions of IAS 39 Carve Out.After a cash flow or fair value macro hedge has been documented, the revaluation of the derivative is recognised in the financial statements according to the same principles as those described for macro hedging.The variation in fair value of portfolios of fair-value hedged instruments is recognised on a specific line of the balance sheet, "Revaluation difference for portfolios hedged by rate", through the counterpart of the income statement.

1.5 Derecognition of financial instrumentsA financial asset (or group of financial assets) is derecognised in whole or part:

- when the contractual rights to the cash flows associated with it expire or are transferred, and

- when nearly all the risks and benefits associated with this financial asset are transferred.

When the contractual rights to cash flows are transferred but only a part of the risks and benefits, as well as control, are retained, the entity continues to recognise the financial asset to the extent that it is involved in this asset.

2 – Deferred taxesIAS 12 requires recognition of deferred taxes under the following conditions:

– a deferred tax liability must be recognised for all taxable temporary differences in the accounting value of an asset or liability on the balance sheet and its tax base, except to the extent that the deferred tax liability is generated by: the original recognition of goodwill, or initial recognition of an asset or liability in a transaction that is not a business combination, which, at the time of the transaction, does not affect the accounting or the taxable profit (tax loss);

- a deferred tax asset must be recognised for all deductible temporary differences, between the accounting value of an asset or liability on the balance sheet and its tax base, to the extent that it is likely that a taxable profit, on which these deductible temporary differences could be charged, will be available, unless the deferred tax asset was not generated by the initial recognition of an asset

or a liability in a transaction that is not a business combination and that affects neither the accounting profit nor the taxable profit (tax loss) on the date of the transaction.

- a deferred tax asset must also be recognised for carrying forward unused tax losses and tax credits, to the extent that it is likely that there will be future taxable profit to which these unused tax losses and tax credits may be charged.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply when the asset is realised or the liability is settled, to the extent that these rates have been adopted at the reporting date.Gains on equity securities, as defined by the French General Tax Code and falling within the long-term tax system, are exempt for the fiscal years starting from 1 January 2007. Therefore, unrealised capital gains recorded on the reporting date do not generate temporary differences giving rise to the recognition of deferred taxes.Deferred tax is recognised in the net profit or loss for the period except to the extent that the tax is generated:

- either by a transaction or an event that is recognised directly in equity, in the same period or a different period, in which case it is directly debited or credited in equity,

- or by a business combination.

- the probabilities of default and losses based on the risk level of each of the categories of outstanding loans (number of late monthly payments, specific reasons, etc.).

The amount of depreciation is obtained by applying statistical modelling of collection and loss flows by including all possible movements between the different layers, based on observed historical data. In accordance with the provisions of IAS 39, the cash inflows used in the statistical models are discounted. Depreciation calculated on a debt presenting a proven credit risk is recognised in cost of risk. Counting from depreciation of the debt, the "Interest and similar income" entry in the income statement recognises the repayment of the carrying amount for the debt, calculated at the rate used to discount the recoverable flows.

1.3 Financial liabilitiesIAS 39 adopted by the European Union recognises two categories of financial liabilities:

- financial liabilities valued by type at fair value in compensation for profit or loss. Their variations in fair value affect profit or loss at the end of accounting periods. However it is noted that the Cofidis Participations Group does not hold liabilities at fair value through profit or loss.

– other financial liabilities: this category includes all other financial liabilities. This portfolio is recognised at original fair value (including income and transaction costs) then recognised later at amortised cost according to the effective interest rate method.

1.4 Derivative instrumentsDerivative instruments are financial assets or liabilities and are recognised on the balance sheet at the original fair value of the transaction. At the end of each accounting period, these derivatives are measured at fair value whether they are held for trading or they are part of a hedging relationship.The counterpart of the revaluation of derivatives on the balance sheet is recognised in the income statement (except in the special case of a cash flow hedging relationship)

The objective of fair value hedging is to reduce the risk of changes in the fair value of a financial asset or liability.

The objective of cash flow hedging is to reduce the inherent risk in variability of future cash flows on financial instruments. As part of a micro-hedging management intention, the following conditions must be met in order to benefit from hedge accounting:

- eligibility of the hedging instrument and the instrument hedged,

- documentation formalised from the start, particularly including the individual designation and characteristics of the hedged item, the hedging instrument, the nature of the hedging relationship and the nature of the risk being hedged,

- demonstration of the hedging effectiveness, at the start and retrospectively.

The revaluation of the derivative is recognised in the accounts as follows:

- fair value hedge: revaluation of the derivative is recognised in profit or loss symmetrically to the revaluation of the hedged item up to the limit of the hedged risk and only any ineffectiveness of hedging appears as net value through profit or loss,

- cash flow hedge: revaluation of the derivative is carried over to the balance sheet as counterpart to a specific recyclable equity account and the inefficient part of the hedging is recognised through profit or loss, as appropriate. Accrued interest from the derivative is recognised through profit or loss symmetrically to the hedged transactions.


4.2 Impairment tests and Cash Generating UnitsIn accordance with revised IFRS 3 "Business combinations", goodwill is no longer subject to systematic annual depreciation: the net value of intangible items is subject to periodic analysis based on discounting future financial flows corresponding to the most probable assumptions made by Management. This impairment test is based on assumptions in terms of growth rate, discount rate and tax rate. The selected assumptions are based on business plans for future years. This valuation is carried out on an annual basis, every fourth quarter, or when a significant event requires it. Depreciation is recognised when the valuation reveals undervaluing of the intangible items assessed.To perform this impairment test, goodwill must be allocated to each of the Cash-Generating Units, forming a unified group jointly generating identifiable cash flows and which are largely independent from the cash inflows generated by other asset groups. The value in use of these units is determined by reference to discounted net future cash flows. When the carrying amount of the CGU is greater than the value in use, an impairment loss is recognised for the difference and charged in the first instance to goodwill.

As part of its transition to IFRS, the Group considered that the legal entities constituted CGUs.

5 – ProvisionsThe Cofidis Participations Group has identified all its obligations (legal or implicit), resulting from a past event, for which it is likely that settlement is expected to result in an outflow of resources, for which the timing or amount are uncertain but for which the estimate can be determined reliably.In respect of these obligations, the Cofidis Participations Group has constituted provisions that in particular cover:

- company commitments,- legal risks.

These provisions are estimated according to their nature, taking account of the most likely assumptions. The amount of the obligation, whether it is legal, regulatory or contractual, is discounted to determine the amount of the provision, once such discounting represents a significant feature.

6 – Employee benefits6.1 – Employee benefitsEmployee benefits, according to IAS 19, are grouped into four categories:

- short-term employee benefits,- post-employment benefits - long-term benefits- termination benefits.

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

- salaries, remuneration and social security contributions,

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

- profit sharing and bonuses,- non-monetary benefits (medical

aid, housing, company cars, etc.) granted to staff in active employment.

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

6.1.2 Post-employment benefitsPost-employment benefits essentially relate to retirement and are governed by arrangements classified into two categories:

- defined contribution plans: those under which the Group's commitment is limited only to the payment of a contribution, but includes no commitment by the Group as to the level of benefits provided. The contributions paid are recognised as costs in the accounting period.

- defined benefit plans: these are schemes for which the Group is committed formally or by implicit obligation to an amount or a level of benefits and therefore assumes the medium or long-term risk.

Deferred tax assets and liabilities are offset if and only if:

- the entity has a legally enforceable right to offset due tax assets and liabilities, and

- the deferred tax assets and liabilities relate to taxes on profits levied by the same tax authority, either on the same taxable entity, or on different taxable entities that have the intention, either to settle the due tax assets and liabilities based on their net amount, or to realise the assets and settle the liabilities simultaneously, during each future accounting period in the course of which it is expected that significant amounts of deferred tax assets or liabilities will be settled or recovered.

Calculations of deferred taxes are not discounted.

3 – Fixed assetsIn compliance with IAS 16, when a fixed asset is structured through components with different useful lives, these are recognised and depreciated as distinct items. The depreciable base takes account of any residual value of fixed assets. When it appears from the terms of a lease contract in which the Cofidis Participations Group is lessee that practically all the risks and benefits inherent in ownership are transferred by the lessor to the lessee, the corresponding assets are recorded at

the time of first recognition as tangible assets on the Cofidis Participations Group's balance sheet, in an amount equal to the fair value of the leased asset or the discounted value of the minimum payments made in respect of the lease, if this is lower. This sum is then reduced by depreciation and impairment losses recognised. The financial commitments arising from it are entered in financial debts.Fixed assets are depreciated by the linear method over the foreseeable useful life of the assets. Principal useful lives selected:

- Land, landscaping, utility services: 15-30 years;

- Constructions – carcass structure: 20-80 years (depending on the type of building concerned)

- Constructions – equipment: 10-40 years;

– Fixtures and fittings: 5-15 years;- Furniture and office equipment:

5-10 years;- Safety equipment: 3-10 years;- Movable equipment: 3-5 years;- Computer equipment: 3-5 years;- Software acquired or created

internally: 1-10 years;- Acquired client base: 9-10 years

(if acquiring customer contract portfolio)

In accordance with IAS 36 "Impairment of assets", when events or changes in the market environment indicate a risk of impairment of intangible

and tangible assets, they must be reviewed in detail to determine if their carrying amount is lower than their recoverable value, this being defined as the higher of the fair value (reduced by the disposal cost) and the value in use. The value in use is determined by discounting the future cash flows expected from the use of the asset and its disposal.Where the recoverable amount would be less than the carrying amount, an impairment loss is recognised for the difference between these two amounts. Impairment losses relating to intangible assets can be reversed subsequently if the recoverable value becomes greater than the carrying amount (up to the limit of the initially recognised depreciation).Based on the information on fixed asset values available to it, the Cofidis Participations Group can conclude that impairment testing would not result in modifying the values recorded on the balance sheet at 31 December 2011.

4 – Goodwill4.1 Initial recognitionAssets and liabilities acquired as part of a business combination are recognised according to the acquisition method: assets and liabilities are then recorded at fair value. The residual difference between the acquisition price and the re-valued assets and liabilities is recognised under "Goodwill", if necessary.


7 – Equity instruments: deeply subordinated notes7.1 Characteristics of deeply subordinated notesThe French Financial Security Law (Loi de Sécurité financière) of 2003 introduced the possibility of issuing securities qualified as "deeply subordinated". These securities are perpetual and are therefore issued for a unlimited period, no repayment date being contractually established. In the event of the issuer going into official receivership, the eligibility of holders of such securities ranks lower than that of all other categories of bonds. Usually, the issuer has a repayment option starting from a given maturity date and is bound to pay interest to bearers of the securities when it proceeded to pay dividends during the accounting period.

7.2 Accounting treatment: nominal and interest chargesIAS 32 and IAS 39, relating to the presentation and recognition of financial instruments, distinguish between debt instruments and equity instruments, in particular based on the substance of the contractual characteristics of the instruments.According to IAS 32, a financial instrument for which repayment is not provided in own shares is an equity instrument if there is no contractual obligation to settle in cash or another financial asset under potentially

unfavourable conditions for the issuer. When repayment of the capital is at the sole discretion of the issuer, the classification of issued securities as debt instruments or as equity instruments is determined on the basis of other rights attached to them. When repayment of the securities is at the discretion of the issuer, the securities are equity instruments.Non-redeemable deeply subordinated notes, except at the issuer's initiative, and for which the payment of a coupon is not obligatory, constitute consolidated equity and are therefore recognised for the cash amount received.The coupons attaching to them are entered as financial expenses for the accounting period in the individual financial statements of the issuer and, in the consolidated financial statements, are carried over to reduce equity by the amount paid net of tax.

8 – Interest income and expensesInterest income and expenses are recognised in the income statement for all financial instruments valued at amortised cost using the effective interest rate method.The effective interest rate is the rate used to discount future cash inflows or outflows over the estimated lifetime of the financial instrument so as to obtain the carrying amount of the financial asset or liability. To determine the effective interest rate, the Group estimates the

cash flows taking contractual procedures into consideration. This calculation includes the commissions paid or received between the parties to the contract or intermediaries once they are linked to the yield from the financial instrument, as well as the transaction costs and losses.Once a financial asset or a group of similar financial assets has been depreciated following an impairment loss, subsequent interest income is recognised in the income statement under "Interest and similar income" based on the original effective interest rate.

9 – Net commission incomeThe Group recognises commission income and expenses on services through profit or loss based on the nature of the services to which they are related. Commissions remunerating continuous services are spread through profit or loss over the duration of the service rendered. Commissions remunerating occasional services, such as penalties on payment incidents, are fully recognised through profit or loss, under "Commission income", when the service is delivered.

10 – Judgements and estimatesused in the preparationof the financial statementsIn preparing the financial statements as at December 31, 2011, management is required to make valuations, which by their nature, require making assumptions and include risks and

The principle is that the cost of the post-employment benefits must be recognised as costs during the employee's period of employment and not at the time they effectively receive these benefits:

- in a defined contributions scheme, the company is discharged from any obligation once it has paid its contributions to the funds. The cost of post-employment benefits therefore corresponds quite simply to the contributions over the period,

- in a defined benefits scheme, the cost of post-employment benefits depends partly on the variation in the amount of the company's commitments during the accounting period and partly on the change in the value of the fund's assets.

A provision is recognised in the balance sheet liabilities to cover all retirement commitments. The valuation performed on a minimum annual basis incorporates demographic assumptions, early retirements, increases in salaries and discount and inflation rates.When these schemes are financed by external funds meeting the assets definition of the scheme, the provision intended to cover the relevant commitments is reduced by the amount of the fair value of these funds.

Differences associated with changes in calculation assumptions (early retirements, discount rates, etc.) or observed between the actuarial assumptions and reality (yield of hedging assets, etc.) constitute actuarial differences (gains or losses). These gains or losses are subject to depreciation through profit or loss over the average residual working life expected for members of staff benefiting from the relevant schemes as soon as they exceed the greater of the following two values (so-called Corridor method):

- 10% of the discounted value of the commitment in respect of the defined benefits,

- 10% of the fair value of the assets at the end of the previous accounting period.

If a new scheme is established, the cost of past services is spread over the residual acquisition period of the rights.The annual charge recognised under the "Payroll" entry in respect to defined benefit schemes comprises:

– supplementary rights acquired by each employee (cost of services rendered),

– the financial cost corresponding to the effect of accretion,

- the income expected from investments in hedge funds (gross yield),

– depreciation of actuarial differences and costs of past services,

– the effect of reductions and liquidations of schemes.

6.1.3 Termination benefitsThese benefits are recognised if and only if the company is "demonstrably committed" to terminate the employment of one or more members of staff before the normal retirement age, or to provide these benefits following an offer made to encourage voluntary redundancy.IAS 19 states that the company is "demonstrably committed" to a termination when, and only when it has a detailed formal plan for the termination and is without realistic possibility of withdrawal. It adds that such a plan must, as a minimum, indicate:

– the benefits provided for each function or professional grade,

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

– the date on which the plan will be implemented.

These benefits are subject to a provision at the end of the accounting period.


uncertainties regarding their future actual occurrence.These can be influenced by many factors, particularly:

- activities in national and international markets,

- fluctuations in interest and exchange rates,

– the economic and political situation in some business segments or countries,

– changes in regulations or in legislation.

This list is not exhaustive.Accounting estimates that require assumptions to be made are used principally for the following valuations:

10.1 Financial instruments measured at fair valueThe fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.The fair value selected to measure a financial instrument is firstly the quoted market price for the financial instrument when it is listed on an active market. If a market for a financial instrument is not active, fair value is then determined using valuation techniques. A financial instrument is considered as listed on an active market if prices are easily and regularly available from a stock exchange, broker, trader or regulatory agency, and these

prices represent actual transactions and take place regularly in arm's length transactions on the market.When a financial instrument is handled on different markets and the Group has immediate access to these markets, the fair value of the financial instrument is represented by the market price.When there are no listings for a given financial instrument but the components of this financial instrument are listed, the fair value is equal to the sum of the prices listed for the different components of the financial instrument including the purchase and sale price of the net position. If a market for a financial instrument is not active, its fair value is determined using valuation techniques. Depending on the financial instrument, these include using data from recent transactions, fair values of comparable financial instruments and valuation models based on discounting future cash flows.

10.2 Retirement schemes and other future financial benefitsCalculations relating to expenses associated with pensions and future financial benefits are based on assumptions for discount rates, staff turnover or rates of growth for salary and social security contributions, made by management. If the actual figures differ from the assumptions used, the expense associated with pensions can increase or decrease during future accounting periods. Management also

estimates the predicted yield rate for assets in these schemes. Estimated yields are based on the predicted yield from fixed payment securities, particularly the yield from bonds.

10.3 Depreciation of customer advancesThe value of the "Loans and advances" entry is adjusted using a provision relating to depreciated advances when there is a proven risk of non-recovery for these debts. The value of this provision is estimated on a discounted basis depending on a certain number of factors. It is possible that future credit risk evaluations may differ significantly from current evaluations, which could necessitate an increase or reduction in the amount of the provision.

10.4 – ProvisionsThe measurement of other provisions may also be the subject of estimates, particularly provisions for legal risks that result from Management's best assessment, given the information in its possession at 31 December 2011.

10.5 Depreciation of goodwillGoodwill is subject to depreciation tests at least once a year. Selected assumptions in terms of business growth and discount rates for future financial flows may influence the amount of any impairment losses to be recognised. A description of the method applied is detailed in the section "Consolidation principles and methods".

IV – Notes to the consolidated balance sheet1 – Cash on hand, balances at central banks (in thousands of €)

31/12/2011 31/12/2010

Accounts open at central banks 0 54,791Cash and cash equivalents 3,909 4,601

Total 3,909 59,392

2 – Financial assets and liabilities recognised at fair value through profit or lossAt 31 December 2011, financial assets recognised at fair value through the income statement stood at €35,753 k. The Group does not hold financial liabilities at fair value through the income statement. Financial assets at fair value through the income statement exclusively comprise debt securities with a 100% capital guarantee at maturity.

3 – Derivative instruments3.1 - Derivative hedging instrumentsAt 31 December 2011, financial instrument interest rate swaps amounted to €17,645 k in assets and €66,747 k in liabilities. The portfolio is broken down as follows:

- swaps paying a fixed rate used to hedge the risks associated with financing fixed rate outstanding debts,

– swaps receiving a fixed rate used to hedge the risks associated with loans granted at variable rates,

– interest rate options (particularly CAP guaranteeing a ceiling rate) used to guard against a rise in the financing cost for variable rate loans arising from a large increase in rates.

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

2011

Total in market value 31/12/2010< 1 year > 1 year and < 5

years > 5 years

Interest rate swaps 1,307 5,165 11,171 17,643 65,575Options 2 0 0 2 1,157

Total 1,309 5,165 11,171 17,645 66,732


31/12/2011 31/12/2010

Derivative cash flow hedging instruments 16,905 66,356Derivative fair value hedging instruments (1) 739 377

Total 17,645 66,732

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

2011

Total in market value 31/12/2010

< 1 year > 1 year and < 5 years > 5 years

Interest rate swaps 16,194 32,079 14,105 62,377 100,448Options 0 1,253 3,117 4,370 5,053

Total 16,194 33,332 17,221 66,747 105,501

31/12/2011 31/12/2010

Derivative cash flow hedging instruments 19,324 77,115Derivative fair value hedging instruments (1) 47,423 28,386

Total 66,747 105,501

The strategy for using hedging instruments is explained in detail in Note Ix "Risk exposure and hedging policy".(1) For fair value hedging, refer to § III.1.4.

3.2 Fair value hierarchy for financial instrumentsThere are three levels of fair value for financial instruments, according to the definitions in IFRS 7:

– Level 1: prices quoted on active markets for identical assets or liabilities;

– Level 2: data other than Level 1 quoted prices for the relevant asset or liability, observable either

directly (i.e. prices) or indirectly (i.e. price-derived data);

– Level 3: data not based on observable market data (unobservable data).

Level 1 Level 2 Level 3 TotalTransfers TransfersL1 => L2 L2 => L1

Financial assets

Available-for-sale assets 65 65 0 0Assets recognised at fair value through profit or loss 35,750 35,750 0 0

Derivative hedging instruments 0 17,645 0 17,645 0 0

Total 0 53,459 0 53,459 0 0

Financial liabilities

Derivative hedging instruments 0 66,747 0 66,747 0 0

Total 0 66,747 0 66,747 0 0

3.3 Revaluation surplus for rate hedging portfolios

Fair value2011

Fair value2010

Variation in fair value

Fair value of interest rate risk by portfolios– of financial assets 36,225 6,190 30,035– of financial liabilities 0 0 0

4 – Available-for-sale financial assets

31/12/2011 31/12/2010

Negotiable debt instrumentsGross value 0 265,000Impairment lossNet value of negotiable loans 0 265,000Accrued interest FCT Cofititrisation 95Certificates of membership of deposit guarantee funds 65 69

Total of available-for-sale securities 65 265,164


In 2010, negotiable debt instruments corresponded to the securitisation transaction (FCT Cofititrisation) intended to hedge the risks related to securitised advances to which bearers of the securities were exposed. The hedging mechanism provides:

- €225m of negotiable debt instruments corresponding to the upward adjustment of credit financed by Cofidis SA issuing negotiable debt instruments fully subscribed by the Banque Fédérative du Crédit Mutuel;

- €40m of commingling reserve associated with the rating assigned by the Fitch rating agency to the manager of loans represented by Cofidis SA.

The FCT Cofititrisation Securitisation Mutual Fund was liquidated on 30 June 2011.

2011 Fair Value of non- depreciated assets

Fair Value of depreciated assets

Carrying amount

Central administration – – –Credit institutions 65 0 65Institutions not credit institutions – – –Large companies – – –Retail customers – – –

Total 65 0 65

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

31/12/2011 31/12/2010

Accounts and loans 1,613,263 770,003Associated advances 903 675

Total of loans and advances to credit institutions 1,614,166 770,678

The "Loans and advances to credit institutions" entry does not include depreciation.

6 – Loans and advances to customers (in thousands of €)6.1 Changes in Loans and advances to customers

In thousands of € 31/12/2011 31/12/2010

Advances to customers 9,194,245 9,080,393Depreciation 1,555,997 1,504,293

Total of loans and advances to customers 7,638,248 7,576,100

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

2011

Less than one year More than one year Total

Loans and advances to customers 2,445,133 5,193,115 7,638,248

2010

Less than one year More than one year Total

Loans and advances to customers 2,800,432 4,775,669 7,576,100

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

2011

Sound Depreciated assets Gross value Depreciation Total

Loans and advances to customers 6,742,975 2,451,270 1,555,997 7,638,248

For information, restructured outstanding loans amounted to €519,098 k (before discount). They are presented with the sound loans for an amount net of discount (discounted differential of cash inflows).

2010

Sound Depreciated assetsGross value Depreciation Total

Loans and advances to customers 6,614,133 2,466,260 1,504,293 7,576,100

For information, restructured outstanding loans amounted to €460,535 k.


6.2 Securitisation transactions6.2.1 FCT CofititrisationThe FCT Cofititrisation Securitisation Mutual Fund was constituted to refinance Cofidis SA through the European Central Bank. The fund was liquidated in June 2011.

FL 2008

Advances securitised at 31/12/2010 961,515Exit 961,515Advances securitised at 31/12/2011 0

7 – Settlement accounts and miscellaneous assets

31/12/2011 31/12/2010

Miscellaneous debtors 31,789 29,083Others 4,842 4,591

Total miscellaneous assets 36,631 33,673

Income receivable 4,737 11,408Prepaid expenses 9,736 13,101Others 16,921 15,111

Total Settlement accounts 31,394 39,619

Total miscellaneous assets and settlement accounts 68,025 73,293

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

31/12/2010 Increases Decreases Others 31/12/2011

Land 3,931 0 0 0 3,931Computer equipment 30,169 2,307 – 1,147 – 40 31,289Office equipment 9,685 456 – 34 – 39 10,069Improvements to buildings 16,456 687 – 102 2 17,043Other tangible assets 6,309 691 – 573 – 34 6,392

Gross value of tangible assets 66,550 4,142 – 1,856 – 111 68,725

Land 1,342 99 0 – 0 1,441Computer equipment 20,699 2,964 – 1,099 – 47 22,516Office equipment 6,773 580 – 15 – 17 7,322Improvements to buildings 9,308 1,262 – 56 – 2 10,512Other tangible assets 2,793 712 – 317 – 7 3,181

Depreciation of tangible assets 40,914 5,618 – 1,487 – 73 44,972

Net value of tangible assets 25,636 – 1,476 – 369 – 38 23,753

"Other movements" correspond essentially to reallocations in kind of assets and foreign exchange gains or losses.


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

31/12/2010 Increases Decreases Others 31/12/2011

Lease premium 199 30 0 – 3 226Trademarks acquired as part of grouping 11,449 10 – 120 0 11,338Set up costs 53 0 – 39 38 52Franchises, patents and other licences 0 0 0 0 0Software purchased 51,652 5,509 – 7,603 134 49,692Software produced internally 13,304 1,384 – 524 0 14,164Advances and deposits 1,723 1,387 – 2,044 – 148 917Other intangible assets 0 23 – 6 121 138

Gross value of intangible assets 78,379 8,342 – 10,336 143 76,528

Lease premium 17 4 0 – 2 18Trademarks acquired as part of grouping 0 0 0 0 0Set-up costs 53 0 – 39 38 52Franchises, patents and other licences 0 0 0 0 0Software purchased 31,352 7,583 – 5 566 – 9 33,360Software produced internally 5,335 1,687 0 0 7,021Advances and deposits 0 0 0 0 0Other intangible assets 0 13 – 6 122 129

Depreciation and provisions for intangible assets 36,756 9,286 – 5,612 149 40,580

Net value of intangible assets 41,623 – 944 – 4,725 – 6 35,948

10 – Goodwill (in thousands of €)

Changes in goodwill are presented as follows:

2010 Increases Impairment losses 2011

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

Impairment tests carried out in 2011, in accordance with the procedures described in Note III 4.2, did not result in impairment of goodwill recognised on the balance sheet.

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

31/12/2011 31/12/2010

Ordinary demand accounts 18,422 32,330Ordinary term accounts 4,025,249 3,598,325Other debts 6,444 3,683

Total debts to credit institutions 4,050,116 3,634,338

12 – Debts to customers (in thousands of €)

31/12/2011 31/12/2010

Ordinary accounts 45,057 46,361Special savings accounts 434,876 328,168Term creditor accounts 6,260 3,634Other sums due 11,436 13,090

Total debts to customers 497,630 391,254

31/12/2011

Less than one year

More than one year Total

Debts to customers 496,420 1,210 497,630


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

31/12/2011 31/12/2010

Negotiable debt instruments 2,829,200 2,851,800Bond issues 950,000 950,000Deposit receipts and savings bonds 25 120Accrued interest 11,390 6,731

Total debts represented by a security 3,790,615 3,808,651

Issuing bank Issue date

Due date

Rate type Interest rate Nominal

Société Générale-Natixis 27/02/2007 27/02/2012 Variable Euribor 3M + 0.175% 550,000Calyon-Natixis 11/07/2007 11/07/2014 Variable Euribor 3M + 0.220% 400,000

Negotiable debt instrumentsNegotiable debt instruments are securities representing a lien for a fixed period and are negotiable on a regulated or private market. Group financing for this category of debt is made up of:

- negotiable medium-term notes, where the term is greater than one year,

- short-term securities, where the term is less than one year, such as certificates of deposit.

Bond issues:The various bond issues carried by the Cofidis Participations Group were all issued by Cofidis SA. The main features of these borrowings are as follows (in thousands of €):

14 – Current and deferred tax assets and liabilities (in thousands of €)14.1 - Changes in current and deferred tax assets and liabilitiesCurrent tax assets and liabilities

31/12/2010 Net variation 31/12/2011

Current tax assets 29,181 1,682 30,863Current tax liabilities 24,805 (1,377) 23,428

Net current tax assets 4,376 3,059 7,435

Current tax assets are principally tax credits. The liabilities correspond to the balance of corporation tax to be paid at the end of the accounting period as well as miscellaneous taxes.

14.2 Origin of deferred taxes

2011 2010 2011 2010

Assets Liabilities Assets Liabilities Net Net

Temporary differences 116,157 20,990 104,793 12,832 95,167 91,961Non-deductible provisions 87,230 293 83,776 5,756 86,937 78,020Organic, Employee contributions 1,432 0 1,587 0 1,432 1,587Assets and depreciation 2 1,748 2 1,431 – 1,746 – 1,429Employee benefits 756 0 834 756 834Regulated provisions 0 2,403 0 2,151 – 2,403 – 2,151IAS 39 reclassifications 9,430 5,793 9,066 0 3,637 9,066Others 17,308 10,753 9,528 3,494 6,555 6,034Tax deficits carried forward 0 0 2,843 0 0 2,843Offsetting assets/liabilities 42 42 603 603 0 0

Total deferred taxation 116,199 21,032 108,239 13,435 95,167 94,804

Deferred taxes in France are calculated at a rate of 36.10%. For foreign subsidiaries, tax was calculated at the local rate. Offsetting of assets and liabilities was performed for each entity.


15 – Settlement accounts and miscellaneous liabilities

31/12/2011 31/12/2010

Miscellaneous creditors 85,781 74,882Miscellaneous company debts 40,699 37,911

Total miscellaneous assets 126,481 112,794

Expenses to be paid 32,081 29,310Deferred income 725 516Others 13,233 10,684

Total settlement accounts 46,039 40,510

Total settlement accounts and miscellaneous liabilities 172,519 153,304

16 – Provisions

31/12/2010 Provisions Write-back used

Write-back not used Others 31/12/2011

Company commitments: pensions 2,176 1,482 – 732 – 609 – 27 2,290

Company commitments: long-service awards 800 216 – 2 – 62 62 1,014

Legal and tax risk 300 0 0 0 0 300Provision for restructuring 89 4,534 0 – 91 2 4,534Provisions for subsidiary risks 2,318 0 0 0 0 2,318Provision for costs and procedural risk 18 11 – 2,272 – 29 4,722 2,450

Miscellaneous risks and expenses 17,560 4,882 – 2,410 – 937 – 6,423 12,671

Total provisions 23,261 11,125 – 5,416 – 1,728 – 1,665 25,577

17 – Shareholders' equity17.1 Composition of share capitalThe share capital of Cofidis Participations SA comprises 196,259,990 fully paid-up ordinary shares, of the same rank, at a par value of €0.15 per share, for a total of €29,438,998.50.

17.2 Management of share capitalFor information only, Cofidis Participations SA declared a European solvency ratio greater than 8% in 2011.

17.3 Perpetual deeply subordinated capital securitiesConsolidated reserves include a €100-million perpetual deeply subordinated capital security issued in October 2006 by Cofidis SA. Interest paid is carried forward as a deduction from consolidated reserves.

Note: The data shown in this table are gross of deferred taxes.The effect of deferred tax on changes during FY 2011 is – €3,616 k.

The cash flow hedge reserve relating to derivative instruments designated as fair value hedge at 1 January 2009 stood at (€12,310 k) at beginning of period and at (€7,554 k) at the close.

Depreciation for the period, recognised through profit or loss, was €4,756 k.

17.4 Change in the cash flow hedge reserve- at 31 December 2011 (in thousands of €)

in thousands of € Balance at 31/12/2010

Change in fair value of derivatives Recycling Balance at

31/12/2011

Cash flow hedge reserve – 25,056 10,117 – 4,470 – 10,476


Note: The data shown in this table are gross of deferred taxes.The effect of deferred tax on changes during FY 2010 is – €3,454 k.

The cash flow hedge reserve relating to derivative instruments designated as fair value hedge at 1 January 2009 stood at (€20,392 k) at beginning of period and at (€12,310 k) at the close.

Depreciation for the period, recognised through profit or loss, was €8,082 k.

- at 31 December 2010 (in thousands of €)

in thousands of € Balance at 31/12/2009

Change in fair value of derivatives Recycling Balance at

31/12/2010

Cash flow hedge reserve – 34,026 – 2,345 11,315 – 25,056

18 – Summary of financial instrument classes by accounting categories- at 31 December 2011 (in thousands of €)

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Debt instruments 35,750 65 35,814Loans and advances to credit institutions 1,614,166 1,614,166

Loans to customers 7,638,248 7,638,248Hedging derivatives 17,645 17,645Derivatives 0Other advances 0

Financial assets 35,750 65 0 9,252,414 17,645 0 9,305,873

Negotiable debt instruments 2,829,200 2,829,200Bond issues 950,000 950,000Securitisation 0Accrued interest 11,390 11,390Ordinary and demand accounts 0Debts to credit institutions 4,050,116 4,050,116Other debts to credit institutions 0Debts to customers 497,630 497,630Other debts to customers 0Subordinated liabilities 0Hedging derivatives 66,747 66,747Derivatives 0

Borrowings and financial debts 0 0 0 0 66,747 8,338,335 8,405,082


- at 31 December 2010 (in thousands of €)

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Debt instruments 35,753 265,164 300,916Loans and advances to credit institutions 770,678 770,678

Loans to customers 7,576,100 7,576,100Hedging derivatives 66,732 66,732Derivatives 0Other advances 0

Financial assets 35,753 265,164 0 8,346,778 66,732 0 8,714,427

Negotiable debt instruments 2,851,800 2,851,800Bond issues 950,000 950,000Securitisation 0Accrued interest 6,731 6,731Ordinary and demand accounts 0Debts to credit institutions 3,634,338 3,634,338Other debts to credit institutions 0Debts to customers 391,254 391,254Other debts to customers 0Subordinated liabilities 0Hedging derivatives 105,501 105,501Derivatives 0

Borrowings and financial debts 0 0 0 0 105,501 7,834,122 7,939,624

V – Notes to off-consolidated-balance sheet items1 – Finance and guarantee commitmentsThe lending that the company has irrevocably undertaken to grant to its customers, on their request (in the context of opening revolving credit facilities) amounted to €3.532 billion at 31 December 2011.

In thousands of € 31/12/2011 31/12/2010

FINANCE COMMITMENTS

Commitments made to credit institutionsCommitments received from credit institutions 16,119 855Commitments made to customers 3,532,044 4,701,925

GUARANTEE COMMITMENTS

Guarantees, sureties, and other guarantees on the request of credit institutions (1) 650 799,100Guarantees, sureties and other guarantees received from credit institutions 4,494 5,124Guarantees on request from customers 51,316 9,275Guarantees received from customers 52,047 72,053

(1) For 2010: Including €798.45 M representing in 2010 the amount of securitised advances guaranteed to allow issuing of bonds rated triple-A by the FITCH agency.

2 – Term financial instrumentsIn accounting terms, all transactions are considered from their conclusion, even if the period covered is deferred.


VI – Notes to the consolidated income statement1 – Net banking income (in thousands of €)

2011 2010

Income from interest on advances to credit institutions 14,734 3,355Income from interest on advances to customers 1,058,206 1,118,824Income from interest on available-for-sale assets 1,091 1,597Income from interest on hedging derivatives 81,811 32,126Interest and similar income 1,155,841 1,155,902Interest expenses paid on liabilities to credit institutions 59,061 43,059Interest expenses paid to customers 10,380 8,867Interest expenses on debts represented by a security and subordinable debts 68,309 48,801Interest expenses on hedging derivatives 107,430 84,685Interest and similar expenses 245,181 185,412Commissions (Income) 233,368 250,841Commissions (Expenses) 21,574 21,946Net gains or losses on Commissions 211,794 228,895Net gains or losses from portfolios at fair value through profit or loss 3,158 – 1,315Net gains or losses on available-for-sale financial assets 175 0Income from other activities 2,568 3,882Costs for other activities 785 803Net gains or losses on Other activities 1,783 3,079

Net banking income 1,127,572 1,201,149

2 – General operating costs (in thousands of €)

31/12/2011 31/12/2010

Payroll (1) 218,128 207,205Taxes and levies 11,043 8,922Other operating costs 277,985 253,872

Total general operating costs 507,156 469,999

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

3 – Amortisation expense and depreciation of tangible and intangible assets (in thousands of €)

31/12/2011 31/12/2010

Provision for depreciation of intangible assets 9,286 8,876Provision for depreciation of tangible assets 5,618 5,870

Total amortisation expense and depreciation of assets 14,904 14,746

4 – Cost of risk (in thousands of €)

31/12/2011 31/12/2010

Net provisions for depreciation 5,743 132,006Recovery of depreciated advances – 24,218 – 18,673Transfer to losses 429,978 387,820

Cost of customer risk 411,502 501,153

5 – Net gains or losses on other assets (in thousands of €)

31/12/2011 31/12/2010

Income from asset disposals – 75 – 608Capital loss on asset disposals 2,429 879

Gains or losses on other assets – 2,354 – 271


6 – Taxes (in thousands of €)6.1 Tax expense

31/12/2011 31/12/2010

Current tax expense 64,462 58,249Deferred tax expense – 3,681 15,798

Tax expense for the period 60,781 74,047

6.2 Tax analysisReconciliation between the theoretical tax expense and the tax expense entered in the income statement for the Group is detailed as follows (in millions of euro):

31/12/2011 31/12/2010

Consolidated profit or loss before taxes 191.7 213.1

Current tax rate in France 36.10% 34.43%Theoretical tax at current French tax rate 69.2 73.4Effect of permanent differences – 2.0 – 3.5Differences in foreign tax rates – 7.2 – 5.9Effect of unrecognised tax assets (1) 5.6 10.3Temporary increase in corporation tax – 3.7Others – 1.0 – 0.3

Group tax charge 60.8 74.0

Effective tax rate 31.71% 34.74%

Unrecognised tax assets notably concern the non-activation of deficits, and for Cofidis Italy, the non-recognition of deferred tax assets on customer depreciation.

7 – Auditors' fees

In thousands of € before VAT 2011

Total fees KPMG Mazars Acéa Others

Certification 1,036 830 42 138 26Ancillary missions

TOTAL 1,036 830 42 138 26

In thousands of € before VAT 2010

Total fees KPMG Mazars Acéa Others

Certification 1,057 863 36 142 16Ancillary missions

TOTAL 1,057 863 36 142 16


VII – Segment information1 – Definition of activity sectorsThe entities in the Cofidis Participations Group conduct business in a single sector of activity, namely consumer credit to private individuals. Accordingly, in application of IFRS 8 relating to operating segments, we are required to disclose information on the geographical breakdown of the areas in

which we operate, which is the only sector information provided by the Group.In the geographical breakdown, "France" and "Southern Europe" appear as separate areas. A third area, "Other", encompasses data for transactions that cannot be related to the two other regions and accounts for less than 10% of profit/loss or balance sheet items.

2 – Segment information by geographical area: data from the income statement (in thousands of €)Transactions between business centres are concluded under market conditions and segment assets are determined based on the accounting items making up the balance sheet for each business centre.

31/12/2011

France Southern Europe

Belgium and Eastern Europe Total

Income statement items

Interest income 774,079 285,144 96,620 1,155,843Interest expenses 222,458 9,107 13,616 245,181

Net banking income 699,860 311,877 115,836 1,127,573

OPERATING PROFIT 88,246 87,268 18,497 194,012

Tax on profits 31,491 26,431 2,859 60,781

31/12/2010



Income statement items

Interest income 743,022 321,629 91,252 1,155,903Interest expenses 161,229 9,758 14,425 185,412

Net banking income 747,397 350,347 103,406 1,201,149

OPERATING PROFIT 119,615 74,117 21,520 215,252

Tax on profits 40,439 31,233 2,376 74,047

3 – Segment information by geographical area: data from balance sheet

31/12/2011



Balance sheet items

Loans and advances to customers 5,382,989 1,471,243 784,016 7,638,248Loans and advances to banking institutions: 1,567,829 23,566 22,771 1,614,166

Total 6,950,817 1,494,809 806,788 9,252,414

31/12/2010



Balance sheet items

Loans and advances to customers 5,332,531 1,527,451 716,119 7,576,100Loans and advances to banking institutions 728,831 13,459 28,389 770,678

Total 6,061,362 1,540,909 744,508 8,346,778


VIII – Employee benefits1 – Payroll

31/12/2011 31/12/2010

Salaries 138,114 130,899Social security contributions 58,905 54,801Profit sharing 10,065 11,326Others 11,043 10,178

Total payroll 218,128 207,205

2 – Workforce for the periodThe average workforce and the workforce on the reporting date are as follows:

Workforce at end of period at 31 December 2011

31/12/2011 31/12/2010

Managers Agents employees Total Total

Administrative – Women 424 213 820 1,457 1,374Administrative – Men 454 83 360 897 849

Total 878 296 1,180 2,354 2,222

Operations – Women 147 92 1,248 1,486 1,408Operations – Men 108 57 397 562 567

Total 255 149 1,645 2,048 1,975

Total workforce at end of period 1,133 445 2,825 4,402 4,197

Average workforce at 31 December 2011

31/12/2011 31/12/2010

Managers Agents employees Total Total

Administrative – Women 435 160 796 1,391 1,336Administrative – Men 450 76 379 906 867

Total 885 236 1,175 2,297 2,203

Operations – Women 131 150 1,182 1,463 1,496Operations – Men 105 66 378 549 566

Total 236 216 1,560 2012 2,062

Total average workforce 1,121 452 2,735 4,308 4,265

3 – Post-employment benefits - defined benefit schemesAll French and Belgian entities are concerned by the defined benefits scheme. For the main schemes, an actuarial valuation is performed every year. These defined benefit schemes relate to end-of-career benefits.

4 – Other long-term benefitsEmployee benefits that do not fall due and are not paid in full within twelve months after the end of the accounting period. These benefits concern long-service awards.

5 – Actuarial assumptionsThe main actuarial assumptions have been determined for each country.The rates used to estimate the obligations are as follows:

31/12/2011 31/12/2010

Discount rate at beginning of period 4.00% 5.00%Yield rate expected from hedging assets 3.55% 3.77%Rate of salary increase 3.22% 4.07%Inflation 2.00% 2.00%


6 – Component of the expense for the periodThe expense recognised in respect of pensions and similar defined benefit commitments over the accounting period are broken down as follows (in thousands of €):

31/12/2011 31/12/2010

Cost of services rendered over the accounting period 482 428Depreciation actuarial gains/losses during the accounting period 25 3Cost of past services 3 3

Expenses associated with pensions (I) 511 434

Financial cost of the accounting period 203 214Yield expected from hedging assets – 101 – 85

Interest and similar costs (II) 102 129

Pension costs for the accounting period (III = I + II) 613 563

7 – Reconciliation of balance sheet provisionsThe following balance sheet variations in pension provisions and similar commitments were recognised (in thousands of €):

Internal commitment

Outsourced commitment Total commitment

Balance of provision at 31 December 2009 1,411 513 1,924

Cost of services rendered and financial cost 294 352 646Yield expected from investments – 22 – 63 – 85Contributions paid to funds – 309 – 309Benefits paid – 30 – 30Actuarial gains and losses 0 3 3Other movements 0


Cost of services rendered and financial cost 274 414 689Yield expected from investments – 23 – 78 – 101Contributions paid to funds – 365 – 365Benefits paid – 107 – 107Actuarial gains and losses – 12 38 25Other movements


Note that outsourced commitments relate essentially to Cofidis Belgium.

8 – Financial hedging of the schemeFinancial hedging of the scheme can be analysed as follows:

31/12/2011 31/12/2010

Obligation not hedged by assets at end of period 1,178 889Obligation hedged by assets at end of period 4,920 4,202Market value of hedging assets at end of period – 2,940 – 2,496

Financial hedging of the scheme 3,158 2,595

Actuarial gains/losses not recognised at end of period – 862 – 436Cost of past services not recognised at end of period – 7 – 10

Pension provision 2,290 2,148


Ix – Risk exposure and hedging policyThe risks incurred by the Cofidis Participations Group are those of a credit institution offering revolving, redeemable and credit card type consumer credit, in its own name or through its network of partners.Operations are conducted directly through telephone call centres or Internet sites, as well as through partners. Bank and private cards are provided to customers. The internal control mechanisms in place have been gradually adapted to deliver satisfactory solutions to the challenges of controlling new risks incurred.

1 – Credit risk1.1 - General remarks on credit risksA credit risk occurs when a counterparty is unable to meet its obligations and these obligations have a positive inventory value in the company's ledgers. For the Cofidis Participations Group, the bulk of credit risk relates to loans granted to individuals, and this risk is spread over a large number of customers with limited individual commitment.

1.2 - Credit risk management proceduresIn particular, the methods used to control credit risk are based on resources dedicated to:

- risk studies and applying scores and acceptance rules,

- operational teams responsible for the outstanding payment chain,

- risk management audit to ensure it is monitored and applied, and to support it with adequate provision.

The system for controlling this risk uses a number of tools to implement preventive, corrective and strategic actions.The forecasting system is based on:

– a system of scores and acceptance rules that enable us to anticipate customer behaviour and safeguard the future profitability of transactions,

- the three-year budget plan, prepared at the end of the third quarter, establishing strategic objectives. Two budget extrapolations are performed annually.

The monthly credit risk monitoring dashboard is used to to monitor changes in customer risk according to multiple criteria: product, history of outstanding payments, account opening generation or recruitment channel. Information collected in this dashboard is used to monitor and analyse the cost of risk, and to implement a customer risk provisioning policy. In addition, the Cofidis Participations information system has the capability to provide information on outstanding loans

under management and to compile inventories by risk level categories.Cofidis Participations has also set up a curative management system to back its credit risk preventive management system and has thus developed collection sequences that the organisation varies according to maturity and market practices. These sequences can include the following phases and features: pre-collection, amicable collection, pre-litigation, over-indebtedness and legal recovery. After these internal collection procedures, disputed outstanding debts can be outsourced to an external management contractor, or sold.A monthly "Credit Dashboard" report provides information on the cost of risk as well as its proportion of total outstanding debt from month to month. It is produced by the Management Audit department and is circulated to members of the executive committee, managing directors and managers and heads of the relevant departments.The provisioning system is generally based on the definition and statistical use of average rates of movement from one category of unpaid outstanding debt to another from one month to another. The calculation for each category is based on statistical observation of the change in unpaid outstanding debt and actual or probable losses, for each of the products.

The maximum credit risk exposure accepted by the Group at 31 December 2011 is detailed as follows (in thousands of €):

31/12/2011 31/12/2010

Financial assets recognised at fair value through profit or loss 35,750 35,753Held-to-maturity assets – –Active financial derivative hedging instruments 17,645 66,732Available-for-sale financial assets 65 265,164Loans and advances to credit institutions 1,614,166 770,678Loans and advances to customers 7,638,248 7,576,100Other advances 215,086 210,712Firm loan commitments 3,532,044 4,701,925

Total 13,053,003 13,627,064

Scoring systems, acceptance and collection rules, as well as provisioning systems must be open-ended and are reviewed as required from time to time. In this way, the organisation

ensures that all outstanding debt categories, process developments, behavioural or regulatory changes are taken into account by the system. Similarly, the provisioning method is

reviewed by adjusting the provisioning rates by category of outstanding debt to environmental needs (markets, customers, regulators).

Analysis of outstanding assets:A financial asset is considered as outstanding when a counterparty has not made a payment at the contractual

due date. The provisioning policy applied by the Group is to make individual provision on the statistical basis of outstanding loans from the first

default event; thus the Group does not recognise any outstanding assets on its balance sheet.

2 – Counterparty risk for financial transactionsCofidis Participations SA is exposed to a counterparty risk in the context of implementing loan and hedging transactions (rates in the main). This counterparty risk is managed using a procedure that, besides the internal

rules for managing this risk, defines limits by counterparty to be applied over the accounting period.Note that loan and rate hedging transactions are mainly carried out with the Groupe Crédit Mutuel Centre Est Europe.

The rules are as follows:- Limits are determined according

to the assessment made of the institutions, related to analysing annual reports and/or rating by an approved agency. They are endorsed by the manager with


authority over Treasury and sent to Senior Management.

- When granting new lending or commitments to an approved counterparty, the Deputy Treasurer ensures that the limits set are complied with.

During the accounting period, exceptional granting of a loan or commitment to a counterparty for which no limit had been fixed is subject to approval by the manager with authority over Treasury (the rule being: institutions having a minimum long-term rating of A3 from Moody’s, A- from Standard & Poor’s and A- from Fitch). Except for the Crédit Mutuel Centre Est Europe Group and its subsidiaries for which there are obviously no limits given the shareholder links, limits set per banking group referenced, are expressed as an amount and as a maximum period, either less than or equal to 2 years or greater than 2 years. The maximum permitted amount for a banking group may not exceed a quarter of its consolidated equity.These fixed overall limits are used as maximum thresholds for transactions as consolidated by banking group and valued using the following rules:

– loans are valued at 100% flat,– for transactions relating to rate risk,

off-balance sheet commitments are valued at 2% flat.

Short-term transactions (once-off loans, generally intra-month from 1 to 31 days) are carried out with the Crédit Mutuel Centre Est Europe Group.

3 – Overall interest rate and liquidity risk3.1 Overall interest rate risk3.1.1 Intervention strategyThe Treasury Management department of Cofidis Participations Group manages the refinancing and rate risk for the whole scope of Cofidis Participations.Rate risk relates to:

- fixed-rate customer credit for which the Central Treasury provides a strict hedge for outstanding loans by following changes in new credits,

- revisable rate credits (renewable credits) for which the short-term aim of the hedging policy is to limit the exposure of Cofidis Participations Group entities to possible rate rises and their over-repetitive

repercussions for customers in the event of market tension.

3.1.2 – Instruments and practicesPrivate instruments used, traded on markets, are firm or optional: rate swaps, caps, floors and collars.The bulk of our refinancing is variable rate, based mainly on Euribor, and variable rate based on Eonia.

3.2 - Liquidity riskAs a credit institution, Cofidis Participations is structurally a borrower. It is present in the financial markets for negotiable loan securities in order to optimise the cost of its resources. BFCM, which is the sole company involved in capital markets for the CM-CIC group, handles the operating financing requirements for companies in the Cofidis Participations Group, ensuring the Group has the liquidity required for its business.Besides daily management of liquidity needs, Group Central Treasury approves future needs based on forecast outstanding loans for renewable and redeemable products and the refinancing needs expressed by entities in the Group.

The details of the repayment schedule for debts at 31 December 2011 are as follows (in millions of €):

31/12/2011 Less than one year 1 to 2 years 2 to 5 years More than 5

years 31/12/2010

Bond issues 950 550 289 111 – 950Securitisation 0 – – – – 0TCN 2,838 2,798 20 20 – 2,857Short- medium term lines 4,032 3,138 362 532 – 3,602

Ordinary demand accounts 18 18 – – – 32

Total debts 7,838 6,505 671 663 0 7,441

3.3 – Control of transactionsEvery month end, a monitoring dashboard is prepared covering rate and liquidity risks.It is used to formally check the compliance of transactions handled during the past month relative to objectives.During its monthly meeting, based on events in the previous month and the needs expressed by entities in the Cofidis Participations Group, the Treasury Committee defines hedging

requirements (margin for manoeuvre in terms of volume and duration, according to market conditions and developments), as well as new market intervention strategies. This committee comprises the team in charge of monitoring liquidity and rate risks, its Director and the Group's Chief Financial Officer.

4 – Foreign exchange riskGroup policy consists of managing its foreign exchange risk. Loans are made in local currencies or by

purchasing local currency with regular monitoring of the position. This position is managed actively with derivative instruments in order to minimise foreign exchange risk (forward purchase or sale, or borrowing and lending currencies). Commercial transactions (investments, structural costs, etc.) are preferably denominated in national currencies thereby limiting residual foreign exchange positions.


Contacts

COFIDIS France Parc de la Haute Borne61 avenue Halley59 667 VILLENEUVE D’ASCQ cedexTel: +33 3 28 09 20 00www.cofidis.fr

monabanq Parc de la Haute Borne61 avenue Halley59 667 VILLENEUVE D’ASCQ cedexTel: +33 3 20 28 34 34www.monabanq.com

Créatis: Parc de la Haute Borne61 avenue Halley59 667 VILLENEUVE D’ASCQ cedexTel: +33 3 28 09 20 00www.creatis.fr

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

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

Cofidis BelgiumRue du Glategnies, no.4BP 7500 TOURNAI, BelgiumTel: +32 69 25 12 70www.cofidis.be

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

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

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

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

COFIDIS PARTICIPATIONS GROUPParc de la Haute Borne - 61 avenue Halley - 59 667 VILLENEUVE D’ASCQ Cedex, France

Tel: +33 3 28 09 20 00 - www.groupecofidis.com


Annual Report - Groupe Cofidis Participations · 2015-01-22 · Retail fashion, home, office and...

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