Exhibit 99.1-CameleonAuditedFinancials-2013

EX-99.1 3 exhibit991-cameleonaudited.htm EXHIBIT Exhibit 99.1-CameleonAuditedFinancials-2013

Independent Auditors’ Report

The Board of Directors

Cameleon Software SA:

We have audited the accompanying consolidated statements of financial position of Cameleon Software SA and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of comprehensive income, cash flows and changes in equity for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Cameleon Software SA and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for the years then ended in conformity with International Financial Reporting Standards as adopted by the European Union and in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

As discussed in Notes 6.3 and 8.2, the Company has changed its method of accounting for employee benefits due to the adoption of the new standard Revised IAS 19 “Employee benefits” effective January 1, 2013.

/s/ KPMG SA

March 12, 2014



	Consolidated financial statements, Year ended December 31, 2013

Consolidated Financial Statements

Contents

1.Consolidated statement of financial position 4

2.Consolidated statement of financial position, continued 5

3.Statement of comprehensive income 6

3.1Consolidated statement of income 6

3.2Consolidated statement of other comprehensive income 7

4.Consolidated statement of cash flows 8

5.Consolidated statement of changes in equity 9

6.Introduction and accounting policies 11

6.1Reporting entity 11

6.2Release of the consolidated financial statements 11

6.3Accounting policies 11

6.4Segment reporting 13

6.5Seasonal variation in business activity 13

6.6Accounting principles 13

6.6.1.Basis of consolidation 13

6.6.2.Transactions denominated in foreign currency - Translation differences 14

6.6.3.Transactions denominated in foreign currency - Translation of the financial statements of foreign subsidiaries 14

6.6.4.Intangible assets 14

6.6.5.Research & development expenditure 14

6.6.6.Goodwill 14

6.6.7.Property, plant and equipment 15

6.6.8.Impairment of assets 15

6.6.9.Leased assets 15

6.6.10.Financial assets and financial liabilities 15

6.6.11.Recognition and measurement of financial assets 16

6.6.12.Recognition and measurement of financial liabilities 16

6.6.13.Treasury shares 16

6.6.14.Share options and free shares 16

6.6.15.Provisions 16

6.6.16.Provision for retirement obligations 16

6.6.17.Revenue 17

6.6.18.Deferred taxes 17

6.6.19.Research and Competitiveness tax credits 18

6.6.20.Result from ordinary activities 18

7.Highlights of the year 19

7.1Public tender offer by PROS Holdings, Inc. on the shares in Cameleon Software 19

7.2Share capital increase 19

8.Disclosures relating to the comparability of the 2013 and 2012 consolidated financial statements 20

8.1Change in consolidation scope 20

8.2Change in accounting principles 20

9.Principal asset line items 21

9.1Intangible assets 21



	Consolidated financial statements, Year ended December 31, 2013

9.2Goodwill 22

9.3Property, plant and equipment 23

9.4Other current and non-current financial assets 25

9.4.1.Schedule of investments 25

9.4.2.Current and non-current financial assets by measurement category 26

9.5Accounts receivable - trade 27

9.5.1.Schedule of Accounts receivable - trade 27

9.5.2.Change in provisions for trade receivables 27

9.5.3.Accounts receivable - trade by due date 27

9.6Other current assets 28

9.7Cash and cash equivalents 28

10.Principal equity and liabilities line items 29

10.1Equity 29

10.1.1.Share capital 29

10.1.2.Treasury shares 29

10.1.3.Potential shares 29

10.2Provisions (including for retirement obligations) 30

10.3Deferred taxes 31

10.4Other current and non-current financial liabilities 31

10.5Schedule of loans and other financial debt 32

10.5.1.Change in net financial debt 32

10.5.2.Schedule of gross financial debt 32

10.6Other current liabilities 32

11.Principal comprehensive income line items 33

11.1Revenue 33

11.1.1.Revenue by geographical region 33

11.1.2.Revenue by category 33

11.2Personnel 33

11.3Other operating income 34

11.4Other operating expenses 34

11.5Non-recurring expenses 34

11.6Net finance income 34

11.7Income tax 35

11.7.1.Income tax disclosures 35

11.7.2.Unrecognized tax losses 35

12.Other disclosures 36

12.1Key figures from the parent company French GAAP financial statements of Cameleon Software SA 36

12.2Employees 36

12.3R&D expenditure 36

12.4Earnings per share 36

12.5Statutory auditors' fees 37

13.Commitments 38

13.1Commitments received or given 38

14.Market risk management objectives and policies 39

14.1Foreign exchange risk 39

14.2Interest rate risk and risks related to medium-and long-term borrowings 39



	Consolidated financial statements, Year ended December 31, 2013

14.3Equity risk 39

14.4Liquidity risk 40

14.5Capital management 40

15.Related party disclosures 41

15.1Remuneration of principal executive officers 41

15.2Remuneration of executive officers 42

15.3Arrangements for the termination of service of executive officers 42

15.4Other disclosures 44

16.Events after the reporting date 45



	Consolidated financial statements, Year ended December 31, 2013


1.	Consolidated statement of financial position



Assets, in €	Notes	12/31/2013	12/31/2012
Goodwill	9.2	2 795 727	2 795 727
Intangible assets	9.1	376 035	476 209
Property, plant and equipment	9.3	165 415	154 959
Other financial assets	9.4	186 339	103 030
Total non-current assets		3 523 516	3 529 925
Accounts receivable -trade	9.5	5 875 386	5 045 016
Other assets	9.6	518 156	474 436
Cash and cash equivalents	9.7	5 348 146	4 867 392
Total current assets		11 741 688	10 386 844
Total assets		15 265 204	13 916 769



	Consolidated financial statements, Year ended December 31, 2013


2.	Consolidated statement of financial position, continued



Equity and liabilities in €	Notes	12/31/2013	12/31/2012
Share capital	10.1	2 802 564	2 655 517
Share premium, reserves and retained earnings		2 411 431	1 868 192
Net income for the year		483 873	600 235
Translation reserve
Total equity	5	5 657 726	5 087 660
Provisions for retirement obligations	10.2	204 157	158 103
Long-term loans and other financial debt	10.5	713 775	869 275
Total non-current liabilities		917 932	1 027 378
Provisions	10.2	348 803	136 603
Accounts payable	10.4	2 009 191	876 598
Current tax payables	10.7	16 678
Other liabilities	10.6	6 127 307	6 787 530
Loans and other financial debt	10.5	187 567	1 000
Total current liabilities		8 689 546	7 801 731
Total equity and liabilities		15 265 204	13 916 769


3.	Statement of comprehensive income


3.1	Consolidated statement of income



	Consolidated financial statements, Year ended December 31, 2013



In €	Notes	2013	2012
In €	Notes	12 months	12 months
Revenue	11.1	13 187 737	10 433 456
Purchases consumed
Personnel	11.2
External expenses
Taxes and duties
Depreciation and amortization
Increase in provisions
Other operating income	11.3	14 483	93 845
Other operating expenses	11.4
Results from operating activities, before non-recurring items		1 657 706	579 443
Non-recurring expenses	11.5	-1 219 218
Results from operating activities		438 488	543 716
Income from cash and cash equivalents	11.6	82 957	62 767
Cost of financial debt	11.6
Net finance income		71 158	56 519
Income tax	11.7
Net income for the year		483 873	600 235

Basic earnings per share		0.04	0.06
Diluted earnings per share		0.04	0.05



	Consolidated financial statements, Year ended December 31, 2013


3.2	Consolidated statement of other comprehensive income



In €	Notes	2013	2012
In €	Notes	12 months	12 months
Net income for the year		483 873	600 235
Items that are not subsequently reclassified to profit or loss
Remeasurement of defined benefit plan obligations (IAS 19R), net of tax
Items that may subsequently be reclassified to profit or loss
Foreign currency translation differences			14 723
Total comprehensive income		463 106	614 958



	Consolidated financial statements, Year ended December 31, 2013


4.	Consolidated statement of cash flows



In €		2013	2012
In €	Notes	12 months	12 months
Net income for the year		483 873	600 235
Depreciation, amortization and provisions	9.1-3-4 / 10.2	497 596
Income tax expense		25 773
Loss (gain) on disposal of non-current assets	11.5 / 11.7		17 033
Share-based payments expense	10.1.3.3	71 176	151 457
Internally generated funds from operations		1 075 577	746 875
Change in operating and other receivables			561 528
Change in operating and other liabilities		471 434	1 045 442
Change in working capital			1 606 970
Net cash from operating activities		553 650	2 353 845
Acquisitions of non-current assets	9.1-3
Disposals of non-current assets	9.4 / 11.4-7	92 141	26 903
Net cash used in investing activities
Proceeds from new loans	10.5	32 000	810 275
Loan repayments	10.5
Share capital increase	7.2	27 497	156
Increase in treasury shares
Net cash from (used in) financing activities			588 979
Effect of changes in exchange rates on cash held			15 689
Net increase in cash and cash equivalents		480 754	2 850 403
Cash and cash equivalents at beginning of year		4 867 392	2 016 989
Cash and cash equivalents at end of year	9.7	5 348 146	4 867 392



	Consolidated financial statements, Year ended December 31, 2013


5.	Consolidated statement of changes in equity



In €	Share capital	Share premium	Treasury shares	Other reserves and retained earnings	Other comprehensive income		Total equity
	Share capital	Share premium	Treasury shares	Other reserves and retained earnings	Translation reserve	Remeasure-ment of defined benefit plan obligations	Total equity
At January 1, 2012	2 655 463	3 717 482					4 313 417
Comprehensive income for the year
- net income for the year				600 235			600 235
- other comprehensive income					14 723		14 723
Total comprehensive income				600 235	14 723		614 958
Transactions with owners recognized directly in equity
Increase in share capital	54	102					156
Share-based payments				151 457			151 457
Acquisitions and disposals of treasury shares, net			7 672				7 672
Total of transactions with owners recognized directly in equity	54	102	7 672	151 457	0		159 285

At December 31, 2012	2 655 517	3 717 583					5 087 660



	Consolidated financial statements, Year ended December 31, 2013



In €	Share capital	Share premium	Treasury shares	Other reserves and retained earnings	Other comprehensive income		Total equity
	Share capital	Share premium	Treasury shares	Other reserves and retained earnings	Translation reserve	Remeasure-ment of defined benefit plan obligations	Total equity
At January 1, 2013	2 655 517	3 717 583					5 087 660
Comprehensive income for the year
- net income for the year				483 873			483 873
- other comprehensive income
Total comprehensive income				483 873			463 106
Transactions with owners recognized directly in equity
Increase in share capital	147 048						27 497
Share-based payments				71 176			71 176
Acquisitions and disposals of treasury shares, net			8 288				8 288
Total of transactions with owners recognized directly in equity	147 048		8 288	71 176	0	0	106 961

At December 31, 2013	2 802 564	3 598 032					5 657 726

Share premium comprises the following:

•On share issues 3 474 098 €

• On share warrants 41 250 €

• On redeemable share warrants 82 689 €


6.	Introduction and accounting policies


6.1	Reporting entity

Cameleon Software (Euronext: CAM) is the market leader in multichannel and multi-platform product configuration, pricing and quote generation.

Our solutions enable sales teams to reduce the time between the quotation and the order and increase their sales across all channels. They also enable product marketing teams to define new products and bring them to market more quickly. Cameleon Software can be integrated with the principal CRM and ERP systems, such as Salesforce.com, SAP, Oracle and Microsoft, is available on license or in SaaS mode. The Company is listed and has a number of prestigious clients in sectors such as insurance, financial services, telecoms, high-tech and industry, including Cable ONE, Sage, SFR, Technip, ThyssenKrupp and Tyco.



	Consolidated financial statements, Year ended December 31, 2013

Further information is available at http://www.cameleon-software.com.


6.2	Release of the consolidated financial statements

The consolidated financial statements as at and for the year ended December 31, 2013 were authorized for issue by the Board of Directors on March 12, 2014 and are subject to the approval of Shareholders at the General Meeting.

The consolidated financial statements as at and for the year ended December 31, 2012 were authorized for issue by the Board of Directors on February 14, 2013 and were approved by the Shareholders in General Meeting on May 22, 2013.

In the context of the acquisition of Cameleon Software by PROS Holdings, Inc. as described in note 7.1, PROS Holdings, Inc. is required to file with the SEC, a Form 8-K/A, incorporating by reference the consolidated financial statements of Cameleon Software for the years ended December 31, 2013 and 2012 prepared in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Therefore, these consolidated financial statements covering the two years ended December 31, 2013 and 2012 have been authorized by the Board of Directors on March 12, 2014.

The consolidated financial statements of Cameleon Software as at and for the year ended December 31, 2013 and 2012 include those of the Company and its subsidiaries (together referred to as "the Group").


6.3	Accounting policies

The accounting rules and methods used for the consolidated financial statements as at and for the year ended December 31, 2013 are identical to those used for the 2012 consolidated financial statements, except for the new standards and interpretations that are mandatory with effect from January 1, 2013. The accounting methods were uniformly applied by all of the Group entities.


•	Statement of compliance

The consolidated financial statements of Cameleon Software as at and for the year ended December 31, 2013 have been prepared in conformity with International Financial Reporting Standards (IFRSs) as adopted by the European Union and in conformity with IFRSs as issued by the International Accounting Standards Board (IASB).


•	Reporting currency and basis of measurement

The financial statements are presented in euros and are prepared on the historical cost basis, except for short-term investments and share-based payments, which are measured at fair value (for the latter, as of the grant date).


•	Use of estimates

The preparation of consolidated financial statements in conformity with IFRSs requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts presented in these financial statements.

The estimates and underlying assumptions are based on past experience and other factors considered reasonable in the circumstances. They serve as a basis for determining the reported amounts of assets and liabilities that cannot be obtained directly from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any subsequent periods affected.

Significant line items for which estimates were made are the same as those described in the 2012 consolidated financial statements, i.e. asset impairment losses, retirement obligations and measurement of share-based payments, provisions and deferred taxes. Information about assumptions is included in the relevant notes


•	Financial risk management



	Consolidated financial statements, Year ended December 31, 2013

The Cameleon Software group has not identified any specific financial risks other than those disclosed in note 14.

The level of exposure to these risks remained limited during 2013.


•	New standards and interpretations

Standards applied for the first time as from January 1, 2013:

Revised IAS 19 - Employee benefits

With effect from January 1, 2013, the remeasurement of net defined benefit plan obligations in the period is recognized in "Other comprehensive income". The cost of services rendered and interest expense continue to be classified as personnel expense. As before, the provision for retirement obligations corresponds to the projected benefit obligation.

The adoption of Revised IAS 19 did not have a significant impact on the consolidated financial statements.

The amount recognized in "Other comprehensive income" for the year ended December 31, 2013 was 17 K€, net of tax.

IFRS 10 - Consolidated financial statements

IFRS 11 - Joint arrangements

IFRS 12 - Disclosures of interest in other entities

IFRS 13 - Fair value measurement

Amendments to IAS 12 - Deferred Tax: recovery of underlying assets

Amendments to IFRS 1 - Severe hyperinflation and removal of fixed dates for first-time adopters

Amendment to IAS 1 - Presentation of items of other comprehensive income

Amendments to IAS 19 - Employee benefits

Amendments resulting from IFRS 10, 11 and 12 to IAS 27 and IAS 28

Transitional amendments to IFRS 10, 11 and 12

Amendments to IFRS 7 - Disclosures - Offsetting financial assets and financial liabilities

Amendments to IAS 32 - Offsetting financial assets and financial liabilities

Annual improvements to IFRSs 2009-2011

These new standards and amendments to standards did not have a significant impact on the consolidated financial statements.

The above-mentioned standards that relate to consolidated financial statements (IFRS 10, IFRS 11 and IFRS 12) were issued in May 2011 and apply retrospectively to periods commencing on or after January 1, 2013. They were adopted by the European Union on December 29, 2012 with mandatory retrospective application no later than January 1, 2014, with early adoption permitted.

The consolidated financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union and in conformity with IFRSs issued by the IASB.

The Group has, in consequence, early adopted these new standards from January 1, 2013.


•	Standards, amendments to standards and interpretations with mandatory effect after December 21, 2013 and not applied early

Amendments to IAS 32 - Offsetting financial assets and financial liabilities

IFRIC 21 - Levies

Amendments to IAS 36 - Recoverable amount disclosures for non-financial assets

None of these standards or interpretations of standards were adopted early in these consolidated financial statements and the Group does not expect that they will have a significant impact on the 2014 consolidated financial statements.



	Consolidated financial statements, Year ended December 31, 2013


6.4	Segment reporting

The Groups active companies operate on the software market, selling the same products under similar marketing methods and cost structures. Consequently, the Group consists of a single operating segment under IFRS 8.

Revenue by geographic region is disclosed in note 11.1.1.


6.5	Seasonal variation in business activity

The following table discloses Cameleon Software’s consolidated revenue on a quarterly basis from 2011 to 2013.



In M€	Revenue
Quarter	2013		2012		2011
Quarter	Amount	%	Amount	%	Amount	%
Q1	2.56	19.4	1.93	18.5	2.15	26.2
Q2	3.57	27.1	3.24	31.1	2.29	27.9
Q3	2.85	21.6	2.07	19.8	1.45	17.6
Q4	4.21	31.9	3.19	30.6	2.33	28.3
Total	13.19	100	10.43	100	8.22	100


6.6	Accounting principles


6.6.1.	Basis of consolidation

The financial statements of the companies controlled by Cameleon Software have been consolidated. All intra-group balances and transactions and any unrealized intra-group profits and losses have been eliminated.


6.6.2.	Transactions denominated in foreign currency - Translation differences

The principles of recognition and measurement of foreign currency transactions are set out in IAS 21 “The Effects of Changes in Foreign Exchange Rates”. In accordance with this standard, foreign currency transactions are translated by the subsidiary to its functional currency using the exchange rate in effect on the transaction date. Monetary assets and liabilities denominated in a foreign currency are remeasured using the closing exchange rate at the reporting date and the corresponding foreign currency differences are recognized in profit or loss, as follows:


•	in results of operating activities for commercial transactions;


•	in cost of financial debt for financial transactions.


6.6.3.	Transactions denominated in foreign currency - Translation of the financial statements of foreign subsidiaries

The financial statements of the subsidiaries Cameleon Software Inc. and Cameleon Software UK Ltd. are translated as follows:


•	all monetary and non-monetary assets and liabilities are translated using the exchange rate at the reporting date;


•	income and expenses are translated using the average exchange rate of the period, which approximates the exchange rates at the dates of the transactions in the absence of significant exchange fluctuations (IAS 21.40);


•	translation differences are recognized directly in other comprehensive income.

In accordance with IAS 21, translation differences relating to a monetary item that is part of the Company’s net investment in a foreign subsidiary are recognized in other comprehensive income.



	Consolidated financial statements, Year ended December 31, 2013


6.6.4.	Intangible assets

Intangible assets are measured at acquisition or production cost. Amortization is calculated on a straight-line basis over the expected useful life of the asset, as follows:


•	Licenses, Patents 1 to 4 years


6.6.5.	Research & development expenditure

In accordance with IAS 38 “Intangible assets”, development expenditure is capitalized as intangible assets when a company meets all six criteria set out in the standard. Research and development expenditure consists almost entirely of the personnel costs of development engineers and of subcontractors working on various applications. Amortization is calculated on a straight-line basis over the expected useful life of the asset, as follows:


•	Capitalized development expenditure 10 years

Capitalized development expenditure is tested for impairment whenever there is an indication of a loss in value.


6.6.6.	Goodwill

Since January 1, 2010 (upon adoption of IFRS 3R), the Group has measured goodwill as:

- the fair value of the consideration transferred, plus

- the recognized amount for any non-controlling interest in the acquiree, plus

- if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree, less

- the net recognized amount (generally fair value) in respect of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is immediately recognized in profit or loss.

Fair value of the consideration transferred is measured as follows:

- the consideration transferred excludes amounts relating to the settlement of pre-existing relationships and the remuneration for staff or former owners for future services;

- transaction costs borne by the Group, other than those associated with the issue of debt or equity securities, are expensed as incurred;

- any contingent consideration payable is measured at fair value at the date of acquisition. If the contingent consideration is classified as equity, then it is not revalued and its settlement is accounted for within equity. Subsequent changes in the fair value of contingent consideration classified as a liability are recognized in profit or loss.

For acquisitions prior to January 1, 2010, goodwill is measured as the excess of the consideration paid for a consolidated company over the Group’s share in its net assets at the dates on which the interests were acquired, other than goodwill that is allocated to assets or liabilities.

Goodwill is not amortized. It is tested for impairment whenever there is an indication of a loss in value, and at least annually. For the purpose of impairment testing, goodwill is allocated to cash-generating units (CGU), defined as homogeneous groups of assets that act together to generate identifiable cash flows. The procedure for performing CGU impairment tests is described in note 9.2. An impairment loss is classified in “Other operating expenses”.

In accordance with IAS 36, the recoverable amount of a CGU to which goodwill has been allocated is measured as the greater of:


•	its value in use, determined by the present value of its estimated future cash flows; and


•	its fair value, less costs to sell, which is determined using a multi-criteria approach which includes the Company’s market capitalization and market data of comparable enterprises.



	Consolidated financial statements, Year ended December 31, 2013


6.6.7.	Property, plant and equipment

In accordance with IAS 16 "Property, Plant, and Equipment", these assets are initially recognized at acquisition or production cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of each component, as follows:


•	Building improvements and fittings 10 years


•	Office and I.T. equipment 1 to 10 years


6.6.8.	Impairment of assets

In accordance with IAS 36 "Impairment of Assets", the recoverable amount of an intangible asset or an item of property, plant, or equipment other than goodwill (which is set out in note 6.6.6) is tested for impairment whenever there is an indication of a loss in value, which is reviewed at each reporting date.


6.6.9.	Leased assets

In accordance with IAS 17 "Leases", an asset acquired through a finance lease is initially recognized at the lower of its fair value or the present value of future lease payments. The corresponding liability is recorded as a financial debt. Depreciation is calculated on a straight-line basis over the asset’s estimated useful life (see note 6.6.7).


6.6.10.	Financial assets and financial liabilities

Financial assets include long-term investments, current assets such as accounts receivable, debt securities, short-term investments (including derivatives), and cash and bank balances. Financial liabilities include loans and other borrowings, bank overdrafts, derivatives and accounts payable. Financial assets and financial liabilities are recognized and measured in accordance with IAS 39 "Financial Instruments: recognition and measurement".


6.6.11.	Recognition and measurement of financial assets


6.6.11.1.	Held-to-maturity financial assets

Held-to-maturity financial assets are acquired with the intention of being held until maturity, and consist mostly of guarantee deposits and other long-term receivables. They are measured at acquisition cost less impairment losses. Impairment is recognized in profit or loss whenever a permanent loss in value is identified.


6.6.11.2.	Loans and receivables

Loans and receivables include those related to equity holdings, as well as other loans and accounts receivable. These financial instruments are measured at amortized cost. The carrying amount includes the outstanding principle and the unamortized portion of transaction costs. Impairment losses are recognized in profit or loss.


6.6.12.	Recognition and measurement of financial liabilities

Loans and other financial liabilities are measured at amortized cost, with the exception of derivatives.


6.6.13.	Treasury shares

The Company held 51,873 of its own shares at December 31, 2012 under the authorization granted at the shareholders’ general meeting on June 16, 2010. During 2013, the Company acquired a further 462,835 shares, while selling 463,893. Thus, at December 31, 2013, there were 51,873 treasury shares, classified under IAS 32 as a deduction from equity. Movements in the Company’s treasury shares during 2013 are summarized in note 10.1.2.



	Consolidated financial statements, Year ended December 31, 2013


6.6.14.	Share options and free shares

Company officers and certain employees may be granted share options and free shares. In accordance with IFRS 2 "Share-Based Payment", the options and free shares are measured at fair value on the grant date and expensed over the vesting period. Changes in fair value subsequent to the grant date have no impact on the initial measurement.


6.6.15.	Provisions

In accordance with IAS 37 "Provisions, Contingent Liabilities, and Contingent Assets", a provision is recognized when the Group has an obligation towards a third party and it is probable or certain that an outflow of economic benefits to the third party will be required to settle the obligation. In the case of a restructuring, the obligation is incurred as soon as the restructuring has been announced and there exists either a detailed plan or the restructuring as commenced.


6.6.16.	Provision for retirement obligations

Under French law, the Group’s French companies are required to pay contributions into pension funds for their employees in France. These contributions are calculated based on the employees’ salaries and paid to the organizations managing the pension funds. The companies have no further liability in respect of these pensions. French law may also require the payment of lump-sum amounts on retirement, based on the employee’s seniority and final salary. The obligation is calculated, as a defined benefit plan under IAS 19 "Employee Benefits", using the projected unit credit method and recognized as a liability. The remeasurement of net defined benefit plan obligations in the period is recognized in "Other comprehensive income". The calculation methods are described in note 10.2.


6.6.17.	Revenue

Revenue is recognized as follows:


•	Revenue from license sales is recognized on shipment of the support material (FOB terms), providing that the five criteria required for the recognition of revenue from the sale of goods under IAS 18 "Revenue Recognition" are met.


•	SaaS subscriptions are invoiced to customers in advance of the service being rendered, usually for a 12-month period. The revenue is recognized ratably over the period, and adjusted at each reporting date through deferred income.


•	Services are generally invoiced at the end of each month, based on the work performed, and recognized in revenue immediately. Revenue from implementation services that are concluded for a fixed fee is recognized on a percentage of completion basis determined by reference to the costs incurred.


•	Maintenance contracts are entered into on an annual basis, renewable, in general, for 12-month terms. The contracts are invoiced quarterly, semi-annually, or annually, payable in advance. At each reporting date, revenue is recognized ratably over the period through deferred income.


6.6.18.	Deferred taxes

In accordance with IAS 12 "Income Taxes", deferred taxes are recognized in respect of temporary differences between the carrying amounts of assets or liabilities for financial reporting purposes and their tax bases, and on tax losses, using the liability method. Deferred tax assets are recognized to the extent that it is more likely than not that they will be recovered in subsequent years. As required under the accounting standard, deferred tax assets and liabilities are offset within the same tax entity. Deferred taxes are measured using each company’s tax rate; the parent company applies the standard French tax rate of 33 1/3%.

Deferred tax is not recognized on:



	Consolidated financial statements, Year ended December 31, 2013


•	the initial recognition of an asset or liability in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;


•	investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not be reversed in the foreseeable future; and


•	taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets and liabilities are measured at the tax rate expected to be applied when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes on profits levied by the same tax authority, either on the same taxable entity or on different tax entities that intend to settle current tax liabilities and assets on a net basis or to realize tax assets and settle tax liabilities simultaneously.

A deferred tax asset is recognized for deductible temporary differences, unused tax losses and tax credits to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that sufficient taxable income will be available.


6.6.19.	Research and Competitiveness tax credits

In accordance with IAS 20 "Accounting for Government Grants and Disclosure of Government Assistance"


•	The portion of the French research tax credit relating to personnel is recognized as a deduction from personnel expenses, while that relating to subcontracted R&D is recognized as a deduction from external expenses.


•	The competitiveness tax credit is recognized as a deduction from personnel expenses.


6.6.20.	Result from ordinary activities

The Group uses the result from ordinary activities as its principal measure of performance. This represents the Group’s net income or loss before tax, net finance income and non-recurring income and expenses that include:


•	restructuring costs;


•	Income and expenses and changes in provisions relating to non-recurring events, which are events that occur rarely or are unusual in their amount or impact;


•	non-recurring impairment losses on goodwill and other assets.


7.	Introduction and accounting policies


7.1	Reporting entity

Cameleon Software (Euronext: CAM) is the market leader in multichannel and multi-platform product configuration, pricing and quote generation.

Further information is available at http://www.cameleon-software.com.


7.2	Release of the consolidated financial statements



	Consolidated financial statements, Year ended December 31, 2013


7.3	Accounting policies


•	Statement of compliance


•	Reporting currency and basis of measurement


•	Use of estimates



	Consolidated financial statements, Year ended December 31, 2013


•	Financial risk management

The Cameleon Software group has not identified any specific financial risks other than those disclosed in note 14.

The level of exposure to these risks remained limited during 2013.


•	New standards and interpretations

Standards applied for the first time as from January 1, 2013:

Revised IAS 19 - Employee benefits

The adoption of Revised IAS 19 did not have a significant impact on the consolidated financial statements.

The amount recognized in "Other comprehensive income" for the year ended December 31, 2013 was 17 K€, net of tax.

IFRS 10 - Consolidated financial statements

IFRS 11 – Joint arrangements

IFRS 12 – Disclosures of interest in other entities

IFRS 13 - Fair value measurement

Amendments to IAS 12 – Deferred Tax: recovery of underlying assets

Amendments to IFRS 1 – Severe hyperinflation and removal of fixed dates for first-time adopters

Amendment to IAS 1 – Presentation of items of other comprehensive income

Amendments to IAS 19 – Employee benefits

Amendments resulting from IFRS 10, 11 and 12 to IAS 27 and IAS 28

Transitional amendments to IFRS 10, 11 and 12

Amendments to IFRS 7 – Disclosures - Offsetting financial assets and financial liabilities

Amendments to IAS 32 – Offsetting financial assets and financial liabilities

Annual improvements to IFRSs 2009-2011

These new standards and amendments to standards did not have a significant impact on the consolidated financial statements.

The consolidated financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union and in conformity with IFRSs issued by the IASB.

The Group has, in consequence, early adopted these new standards from January 1, 2013.


•	Standards, amendments to standards and interpretations with mandatory effect after December 21, 2013 and not applied early

Amendments to IAS 32 - Offsetting financial assets and financial liabilities



	Consolidated financial statements, Year ended December 31, 2013

IFRIC 21 - Levies

Amendments to IAS 36 - Recoverable amount disclosures for non-financial assets


7.4	Segment reporting

Revenue by geographic region is disclosed in note 11.1.1.


7.5	Seasonal variation in business activity

The following table discloses Cameleon Software’s consolidated revenue on a quarterly basis from 2011 to 2013.



In M€	Revenue
Quarter	2013		2012		2011
Quarter	Amount	%	Amount	%	Amount	%
Q1	2.56	19.4	1.93	18.5	2.15	26.2
Q2	3.57	27.1	3.24	31.1	2.29	27.9
Q3	2.85	21.6	2.07	19.8	1.45	17.6
Q4	4.21	31.9	3.19	30.6	2.33	28.3
Total	13.19	100	10.43	100	8.22	100


7.6	Accounting principles


7.6.1.	Basis of consolidation



	Consolidated financial statements, Year ended December 31, 2013


7.6.2.	Transactions denominated in foreign currency - Translation differences


•	in results of operating activities for commercial transactions;


•	in cost of financial debt for financial transactions.


7.6.3.	Transactions denominated in foreign currency - Translation of the financial statements of foreign subsidiaries

The financial statements of the subsidiaries Cameleon Software Inc. and Cameleon Software UK Ltd. are translated as follows:


•	all monetary and non-monetary assets and liabilities are translated using the exchange rate at the reporting date;


•	income and expenses are translated using the average exchange rate of the period, which approximates the exchange rates at the dates of the transactions in the absence of significant exchange fluctuations (IAS 21.40);


•	translation differences are recognized directly in other comprehensive income.

In accordance with IAS 21, translation differences relating to a monetary item that is part of the Company’s net investment in a foreign subsidiary are recognized in other comprehensive income.


7.6.4.	Intangible assets

Intangible assets are measured at acquisition or production cost. Amortization is calculated on a straight-line basis over the expected useful life of the asset, as follows:


•	Licenses, Patents 1 to 4 years


7.6.5.	Research & development expenditure


•	Capitalized development expenditure 10 years

Capitalized development expenditure is tested for impairment whenever there is an indication of a loss in value.


7.6.6.	Goodwill

Since January 1, 2010 (upon adoption of IFRS 3R), the Group has measured goodwill as:

- the fair value of the consideration transferred, plus



	Consolidated financial statements, Year ended December 31, 2013