2007 - April

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3.0 Information on the company’s activities Furthermore, APRIL GROUP’s portfolios do not include any CDO or other securitization vehicles. APRIL GROUP is also subject to a credit risk through reinsurers, to which companies transfer part of the risks on their insurance policies. The Group only works with a restricted number of reinsurers whose solvency is recognized: over 75% of reinsurance transfers are carried out with reinsurers that are rated at least A by Standard & Poor’s. At December 31 st , 2007, the breakdown of reinsured premiums by reinsurer rating was as follows: 3.6.2.3. Follow-up procedures and resources in place With a view to improving performance and building up a clearer picture of market risks, the asset management activities of insurance companies are delegated to a specialized management company, accredited by the French securities regulator (Autorité des Marchés Financiers, AMF). BREAKDOWN OF PREMIUMS CEDED BY REINSURER RATING (%) N.D. AAA AA A+ to A- BBB+ to BBB- % of premiums ceded 22.7% 1.3% 52.6% 23.0% 0.4% 100.0% < BBB Total Under this delegation, limits are set in terms of the percentage of the portfolio that may be invested on various bond and equity resources (dispersion ratios, influence ratios, restrictions in terms of issuer ratings, etc.). Sensivity of the securities portfolio Fixed-income markets: On a regular basis, i.e. every quarter, a report presenting the sensitivity of the portfolio and liabilities to changes in interest rates is submitted to the supervisory authorities. At December 31 st , 2007, the average sensitivity of APRIL GROUP’s bond portfolio to changes in interest rates came out at 2.79 (2.40 at December 31 st , 2006) and if we factor in the entire portfolio (including equities and other assets), this drops to 1.61 (1.56 at December 31 st , 2006). This means that if interest rates go up by 1% in absolute value (e.g. if they rise from 4% to 5%), the bond portfolio’s value will decrease by 1.61%. Equity markets: The equity portfolio is sensitive to an upturn or downturn on the financial markets for shares. In this respect, and in light of the portfolio’s makeup, the risk on the equity portfolio can be assimilated with the risk on the main financial market indexes such as the EUROSTOXX 50. In this way, a 10% reduction in the EUROSTOXX 50 index would result in a 5,251 thousand euro reduction for the entire portfolio. In addition, the French Insurance Code, which governs insurance companies, also sets investment caps. Thanks to comprehensive reports provided by the authorized manager, notably including accounting elements (inventory, book income, unrealized capital gains or losses, etc.) and a summary of performances and various levels of exposure to the markets, the financial portfolio is monitored on a monthly basis. The members of the Finance Committee, the APRIL GROUP’s governance body, includes the heads of the various companies as well as representatives from the authorized manager. This Committee meets every quarter and plays an essential role in the monitoring and management of market risks. During its meetings, it is responsible for analyzing the various markets as well as the economic and financial environment, taking stock of management over the past period, and setting the general financial management strategies, as well as future management restrictions. 29 Return to the contents section
3.0 Information on the company’s activities 3.6.3. Legal risks The legal policy, notably in terms of corporate law, stock markets, tax optimization and monitoring, is overseen by the APRIL GROUP Legal Affairs and Risk Division. The legal developments impacting our business are specifically tracked by companies’ operational legal departments. In accordance with regulations, the operational activities of Group companies are covered by a broker civil liability policy, extended to include banking and financial prospecting activities. In addition, a specific civil liability policy has been taken out on franchiser activities. The legal departments in the various Group companies are responsible for constantly checking the suitability of coverage in view of changes in their companies’ activities. As far as intellectual property-related risks are concerned, and further to the inventory of brands and internet domain names drawn up in 2005, further work has been carried out on registrations and filings both in France and at international level. BREAKDOWN OF PROVISIONS (In thousand euros) Dec 31st, 2006 Most filings are centralized with service providers that have been referenced by APRIL GROUP in order to ensure the most effective protection possible. Administrative follow-up is centralized by the Group Legal Affairs and Risks Division. Legal disputes Provisions have been booked for any significant disputes based on the best possible estimates in view of the elements available at the close of accounts. To the best of the issuer’s knowledge, there are no other legal disputes that could have a significant impact on the Group’s financial position, assets, business or results. Provisions for contingencies and losses Changes in scope Increase Decrease Dec 31st, 2007 Provisions for disputes 3,021 -5 696 -621 3,091 Provisions for pensions 3,996 1,138 518 -125 5,527 Other provisions for contingencies and losses 8,430 255 2,252 -5,278 5,659 The main actuarial assumptions retained as Group standards for determining provisions for retirement benefits are as follows: Discount rate: 4 % Rate of increase in salaries: 2% Rate of inflation: 2% The reduction in other provisions for contingencies and losses reflects the relocation processes carried out for several Group companies. Provisions for disputes primarily correspond to disputes linked to the operational activities of APRIL GROUP companies, none of which represent a significant amount on their own. 3.6.4. Industrial and environmental risks On account of the nature of its activity (insurance services), the Group is not concerned by such risks. 3.6.5. Insurance and risk coverage Specific insurance programs have been put in place for the needs of APRIL GROUP companies. The types of policies concerned are as follows: Civil liability for executives Broker professional liability, Franchiser professional liability Financial guarantee, Universal IT risks, Universal office risks Supplementary health and personal protection. TOTAL PROVISIONS FOR CONTINGENCIES AND LOSSES 15,447 1,388 3,466 -6,024 14,277 30 Return to the contents section
Page 1 and 2: T 2007 he Reference document
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Page 7 and 8: 2.0 General information on the comp
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4.0 Statutory Auditors’ report St
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03 P. financial statements financia
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04 P. financial statements financia
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2.0 Highlights Highlights Creation
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5.0 Special 5.0 Auditors’ report
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6.0 Combined 6.0 General Shareholde
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6.0 Combined General Shareholders
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7.0 Index 7.0 of headings of headin
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7.0 Index of headings INFORMATIONS
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2007 - April

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