REFERENCE DOCUMENT This Reference Document Was Filed With

A Corporation with a capital of 4,426,999.50 Euros Registered office: 15-17 rue Vivienne – 75002 Paris Paris Trade and Companies register 418 093 761

REFERENCE DOCUMENT

This reference document was filed with the Financial Markets Authority on 20 April 2010, pursuant to article 212-13 of the AMF's General Rules and Regulations.

It may be used in support of a financial operation if it is supplemented by an operation note validated by the Financial Markets Authority. The present document has been established by the issuer and its signatories are liable for its content.

In application of article 28 of (EC) rule no. 809/2004 of the European Commission, the following information is included by reference in the present reference document: The consolidated financial statements for the financial year ending on 31 December 2008 and the corresponding auditors' report, which are included in the company's reference document filed with the Financial Markets Authority on 14 April 2009 under no. D.09-0236, respectively, on pages 126 through 168 and 124-125; The consolidated financial statements for the financial year ending on 31 December 2007 and the corresponding auditors' report, which are included in the company's reference document filed with the Financial Markets Authority on 8 April 2008 under no. D.08- 0213, respectively, on pages 112 through 147 and 110- 111; The annual financial statements for the financial year ending on 31 December 2008 and the corresponding auditors' report, included in the company's reference document field with the Financial Market's Authority on 14 April 2009 under no. D.09-0236, respectively, on pages 101 through 123 and 94 - 95; The annual financial statements for the financial year ending on 31 December 2007 and the corresponding auditors' report, included in the company's reference document field with the Financial Market's Authority on 8 April 2008 under no. D.08-0213, respectively, on pages 91 though 109 and 85 - 86; The management reports concerning the financial years ending on 31 December 2008 and on 31 December 2007, which are included in the Company's reference documents filed with the Financial Markets Authority, respectively, on 14 April 2009 under no. D.09-0236 on pages 198 through 209 and on 8 April 2008 under no. D.08-0213 on pages 165 though 176; The auditors' reports concerning the regulated conventions for the financial years ending on 31 December 2008 and 31 December 2007, which are included in the company's reference documents filed with the Financial Markets Authority, respectively, on 14 April 2009 under no. D.09-0236 on pages 96 though 100 and on 8 April 2008 under no. D.08-0213 on pages 86 through 90. The other information appearing in the two reference documents mentioned above has been, if appropriate, replaced and/or updated by information supplied in the present reference document, and is not incorporated by reference into the present reference document.

Copies of the reference document are available at no expense from Hi-media, 15-17 rue Vivienne, 75002 Paris. The reference document may be consulted on the Internet sites of Hi-media (www.hi-media.com) and of the Financial Markets Authority (www.amf-france.org).

CHAPTER 1 – PERSONS RESPONSIBLE FOR THE REFERENCE DOCUMENT ...... 9 1.1. PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT ...... 5 1.2. DECLARATION BY THE PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT...... 5 CHAPTER 2 – LEGAL AUDITORS ...... 5 2.1. TITULAR AUDITORS ...... 5 2.2. DEPUTY AUDITORS ...... 6 CHAPTER 3 – SELECTED FINANCIAL INFORMATION ...... 7 3.1. KEY FIGURES ...... 7 3.2. MARKET FOR THE COMPANY'S SHARES ...... 7 CHAPTER 4 – RISK FACTORS ...... 9 CHAPTER 5 – INFORMATION CONCERNING THE ISSUER ...... 10 5.1. HISTORY AND DEVELOPMENT OF THE COMPANY ...... 10 5.2. INVESTMENTS ...... 13 CHAPTER 6 – OVERVIEW OF ACTIVITIES ...... 14 6.1. HI-MEDIA'S TRADES ...... 14 6.2. HI-MEDIA ACTIVITIES ...... 21 6.3. HI-MEDIA'S INTERVENTION MARKETS ...... 36 6.4. RULES AND REGULATIONS ...... 69 CHAPTER 7 – ORGANISATION CHART ...... 77 7.1. GROUP ORGANISATION ...... 77 7.2. GROUP LEGAL STRUCTURE ...... 77 7.3 SIGNIFICANT SUBSIDIARIES...... 78 CHAPTER 8 – REAL PROPERTIES, FACTORIES AND EQUIPMENT ...... 79 8.1. IMPORTANT TANGIBLE FIXED ASSETS...... 79 8.2. TANGIBLE FIXED ASSETS AND ENVIRONMENTAL ISSUES ...... 79 CHAPTER 9 – EXAMINATION OF THE FINANCIAL SITUATION AND OF THE EARNINGS ...... 80 9.1. FINANCIAL SITUATION ...... 80 9.2. OPERATING PROFIT ...... 82 CHAPTER 10 – CASH POSITION AND CAPITAL ...... 85 CHAPTER 11 – RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES ...... 86 CHAPTER 12 - INFORMATION CONCERNING TRENDS ...... 87 CHAPTER 13 – PROFIT ESTIMATES ...... 88 13.1. MEDIUM-TERM FINANCIAL OBJECTIVES ...... 88 13.2. SALES OBJECTIVES ...... 88

CHAPTER 14 – ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY ORGANS AND GENERAL MANAGEMENT 89 14.1. THE BOARD OF DIRECTORS ...... 89 14.2. CONFLICTS OF INTEREST ...... 93 CHAPTER 15 – REMUNERATION (COMPENSATION) AND BENEFITS PAID TO THE SENIOR MANAGERS 95 CHAPTER 16 – OPERATION OF THE ADMINISTRATIVE AND MANAGERIAL ORGANS ...... 98 16.1. ROLE AND OPERATION OF THE BOARD OF DIRECTORS ...... 98 16.2. BOARD OF DIRECTORS’ INTERNAL RULES ...... 98 16.3. EVALUATION OF THE BOARD OF DIRECTORS ...... 98 16.4. DECLARATION CONCERNING CORPORATE GOVERNANCE ...... 98 16.5. INFORMATION CONCERNING THE OPERATIONS CONCLUDED WITH THE MEMBERS OF THE ADMINISTRATIVE ORGANS 99 16.6. INFORMATION CONCERNING THE SERVICE CONTRACTS BETWEEN THE MEMBERS OF THE ADMINISTRATIVE, MANAGERIAL OR SUPERVISORY ORGANS AND THE COMPANY ...... 99 16.7. LOANS AND GUARANTEES GRANTED OR CONSTITUTED IN FAVOUR OF THE ADMINISTRATIVE ORGANS ………………………………………………………………………………………………………115

CHAPTER 17 - STAFF ...... 100 17.1. STAFF TREND ...... 100 17.2. HOLDINGS AND STOCK OPTIONS ...... 100 17.3. EMPLOYEES’ OPTIONAL PROFIT-SHARING AND LEGAL PROFIT-SHARING AGREEMENTS ...... 102 CHAPTER 18 – PRINCIPAL SHAREHOLDERS ...... 103 18.1. DISTRIBUTION OF THE CAPITAL AND OF THE VOTING RIGHTS ...... 103 18.2. DIFFERENT VOTING RIGHTS ...... 103 18.3. CONTROL ...... 104 18.4. AGREEMENT CONCERNING A CHANGE OF CONTROL ...... 104 CHAPTER 19 - OPERATIONS WITH AFFILIATED PARTIES ...... 105 CHAPTER 20 – FINANCIAL INFORMATION CONCERNING THE ISSUER’S ASSETS, FINANCIAL SITUATION AND EARNINGS ...... 106 20.1. HISTORICAL FINANCIAL INFORMATION AND FINANCIAL REPORTS...... 106 20.1.1. Annual financial statements of the company hi-media s.a...... 106 20.1.2. Consolidated financial statements of hi-media group ...... 137 CHAPTER 21 – ADDITIONAL INFORMATION...... 235 21.1. SHARE CAPITAL ...... 235 21.2. ACT OF CONSTITUTION AND ARTICLES OF INCORPORATION ...... 236 CHAPTER 22 –IMPORTANT CONTRACTS ...... 240 CHAPTER 23 – INFORMATION COMING FROM THIRD PARTIES – EXPERTS’ DECLARATIONS AND DECLARATIONS OF INTERESTS ...... 241 CHAPTER 24 – DOCUMENTS ACCESSIBLE TO THE PUBLIC ...... 242 CHAPTER 25 - INFORMATION CONCERNING HOLDINGS ...... 243 ADDITIONAL DOCUMENTS ...... 244 A1 – REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS CONCERNING THE CONDITIONS REGARDING PREPARATION AND ORGANISATION OF THE WORK DONE BY THE BOARD OF DIRECTORS AND CONCERNING THE INTERNAL CONTROL PROCEDURES 244 A2 – AUDITORS’ REPORT ESTABLISHED IN APPLICATION OF ARTICLE L. 225-235 OF THE CODE OF COMMERCE, ON THE BASIS OF THE REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS AS CONCERNS THE INTERNAL CONTROL PROCEDURES RELATIVE TO DEVELOPMENT AND PROCEDURES OF THE ACCOUNTING AND FINANCIAL INFORMATION ...... 259 A3 – AUDITORS’ FEES AND MEMBERS OF THEIR NETWORK PAID BY THE GROUP ...... 261 A4 – MANAGEMENT REPORT ...... 262 A5 – SPECIAL REPORT BY THE BOARD OF DIRECTORS CONCERNING THE OPERATIONS CARRIED OUT BY VIRTUE OF THE PROVISIONS OF ARTICLES L. 225-177 TO L. 225-186 OF THE CODE OF COMMERCE ...... 274 A6 – SPECIAL REPORT BY THE BOARD OF DIRECTORS CONCERNING THE OPERATIONS CARRIED OUT BY VIRTUE OF THE PROVISIONS OF ARTICLES L. 225-197-1 TO L. 225-197-3 OF THE CODE OF COMMERCE ...... 275

Information required by the financial report CHAPTER Page Attestation by the person responsible for the CHAPTER 1 6 document Management report A4 221 Analysis of the earnings, of the financial situation of the 221 risks, and list of the delegations in connection with a capital increase of the Parent Company and of the consolidated unit (articles L 225-100 and L 225-100-2 of the Code of Commerce) 231 Information required under article L 225-100-3 of the Code of Commerce concerning the elements that could have an effect in case of a public offer 224 Information concerning repurchases of shares (article 225- 211, paragraph 2, of the Code of Commerce) Financial reports CHAPTER 20 Annual financial statements 116

Auditors' report concerning the annual financial statements 113 Consolidated financial statements 144 Auditor's report concerning the consolidated financial CHAPTER 20 142 statements

CHAPTER 1 – PERSONS RESPONSIBLE FOR THE REFERENCE DOCUMENT

1.1. PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT

Mr. Cyril Zimmermann, Chairman of the Board of Directors and Managing Director of Hi-media.

1.2. DECLARATION BY THE PERSON RESPONSIBLE FOR THE REFERENCE DOCUMENT «I hereby attest, after having taken all reasonable steps in this connection, that the information contained in the present reference document, to my best knowledge, reflects reality and is not marked by any omissions of such nature as to alter the scope thereof.

I hereby attest that to my best knowledge, the accounts are established in accordance with the applicable accounting standards and provide a fair representation of the assets, of the financial situation, and of the earnings of the company and of the set of businesses included in the consolidation, and that the management report appearing on page 224 offers a fair picture of the trend of the company's business, earnings and financial situation and of those of the set of businesses included in the consolidation, as well as a description of the principal risks and uncertainties that they face.

I have obtained a letter from the Legal Auditors concerning workcompetion by which they indicate that they verified the information bearing on the financial situation and the accounts provided in the present reference document, as well as having read the entire reference document.

The consolidated financial statements and the corporate financial statements presented in the reference document have been the object of reports by the Legal Auditors appearing, respectively, on pages 145 and 116 of the present document.

The historical financial information concerning financial years 2007 and 2008 is incorporated by reference into the present reference document, and appears, respectively, on pages 85 to 147 of the 2007 reference documents and on pages 94 to 168 of the 2008 reference document . The said information was the object of reports by the Legal Auditors appearing, respectively, on pages 85 and 110 of the 2007 reference document and on pages 94 and 124 of the 2008 reference document. The report concerning the consolidated financial statements for the financial year ending on 31 December 2008 contain a remark concerning a change of method.»

The Chairman of the Board of Directors and Managing Director of Hi-media. Cyril Zimmermann

CHAPTER 2 – LEGAL AUDITORS

2.1. TITULAR AUDITORS

Européenne de Révision et d’Expertise Comptable (EREC) – Associés 86 rue du Dôme 92100 Boulogne Billancourt

Date of initial appointment: 22 July 1998 Date of renewal: 16 April 2004 Duration: six years Date of end-of-mandate: mandate expiring at the end of the ordinary shareholders' meeting called to rule on the financial statements for the financial year ending on 31 December 2009.

KPMG Audit Represented by Mrs. Stéphanie Ortega Immeuble KPMG 1, cours Valmy 92923 La Défense cedex

Date of first appointment: 24 January 2000 Date of renewal: 20 April 2006 Duration: six years Date of end-of-mandate: mandate expiring at the end of the ordinary shareholders' meeting called to rule on the financial statements for the financial year ending on 31 December 2011.

2.2. DEPUTY AUDITORS

Benoît Berthou 45, boulevard de Verdun 92400 Courbevoie

Date of first appointment: 30 April 2009 (replacing Figestor, which resigned) Date of renewal: Duration: six years Date of end-of-mandate: mandate expiring at the end of the ordinary shareholders' meeting called to rule on the financial statements for the financial year ending on 31 December 2009.

Bertrand Desbarrières 1, cours Valmy 92923 La Défense Cedex

CHAPTER 3 – SELECTED FINANCIAL INFORMATION

3.1. KEY FIGURES

The selected financial information presented, concerning the financial years ending on 31 December 2007, 2008 and 2009 and appearing below, is taken from the consolidated financial statements.

K€ 31/12/2007 31/12/2008 31/12/2009

Number of companies 21 23 28 Staff 339 390 506 Consolidated Sales 104 319 135 671 172 323 Current operating profit (before valuation of stock options and of 15 096 15 157 16 516 free shares) Operating profit 11 111 9 368 11 780 Financial net income - 563 - 2 268 - 1 968 Corporation tax 614 728 3 265 Net income of the consolidated companies 6 423 6 920 9 999

Equity 120 751 129 305 155 612 Indebtedness 25 917 41 996 51 216 * See not 19 of the appendix to the consolidated financial statements

3.2. MARKET FOR THE COMPANY'S SHARES

The Hi-media shares have been listed for trading on the Euronext Paris principal segment (Compartment B) since 7 June 2000 (initially on the new market) and are not traded on any other French or foreign financial market.

Market capitalisation trend:

Exchange volume and market prices of the Hi-media share Market prices in EUR Month Number of securities exchanged High Low Average closing prices July-08 1,854,019 4.48 3.76 4.18

Aug.-08 998,993 4.28 3.65 4.08 Sept.-08 2,246,367 3.80 2.53 3.32

Oct.-08 3,041,517 2.93 1.75 2.18

Nov.-08 3,468,257 2.69 1.67 2.03

Dec.-08 2,674,537 2.14 1.61 1.82

Jan.-09 3,067,546 2.27 1.65 1.98

Feb.-09 1,744,934 2.50 1.91 2.12

March-09 1,869,162 2.43 1.81 2.09

April-09 1,989,054 3.12 2.19 2.57

May-09 3,066,005 3.75 3.05 3.38

June-09 2,243,494 4.08 3.39 3.71

July-09 2,868,795 4.15 3.54 3.79

Aug.-09 2,196,739 4.47 3.73 3.95

Sept.-09 3,061,100 4.84 3.93 4.37

Oct.-09 3,525,635 5.44 4.33 5.05

Nov.-09 3,015,757 5.45 4.46 5.06

Dec.-09 1,552,630 5.14 4.70 4.88

The market data appearing in this table are from Euronext.

CHAPTER 4 – RISK FACTORS

The risk factors are dealt with in the President's report in part 6 on page 208 of the present reference document.

The company reviewed the risks that might have a significant adverse effect on its activity, its financial situation or its earnings, and considers that there are no significant risks other than the ones presented in the President's report.

CHAPTER 5 – INFORMATION CONCERNING THE ISSUER

5.1. HISTORY AND DEVELOPMENT OF THE COMPANY

5.1.1. CORPORATE NAME AND COMMERCIAL NAME Hi-media

5.1.2. PLACE AND NUMBER OF REGISTRATION Hi-media is registered in the Trade and Companies Register of Paris under number 418 093 761.

APE Code: 744 B

5.1.3. DATE OF CONSTITUTION AND DURATION Hi-media was constituted on 17 March 1998 in the form of a limited liability company initially called Hi-media Multimédia and registered in the Trade and Companies register of Paris under number B 418 093 761 for a duration of 99 years expiring on 17 March 2097.

The company Hi-media Multimédia was transformed into a « société anonyme » (corporation) on 21 December 1998, and took the corporate name of Hi-media on 10 March 2000.

5.1.4. REGISTERED OFFICE, LEGAL FORM AND APPLICABLE LEGISLATION Registered office: 15-17 rue Vivienne – 75002 Paris

Telephone: 01 73 03 89 00

Hi-media is a corporation with a Board of Directors, subject to the provisions of French law as well as to the provisions of the Code of Commerce and of Decree no. 67-236 of 23 March 1967 concerning commercial companies

5.1.5. IMPORTANT EVENTS IN THE DEVELOPMENT OF THE COMPANY'S ACTIVITIES

The multi-media advertising network activity was developed as of January 1996 by Cyril Zimmermann and two partners, and it acquired a positioning as of 1997 as a significant Internet player in France. In March 1998, Cyril Zimmermann made the strategic decision to devote himself solely to the Internet advertising network business by creating Hi-Media Multimédia, which became Hi-media in February 2000 after acquisition of the trademark. The company quickly widened its product offering, the scope of its network and its customer base by developing, as of 2000, a brokerage and direct marketing advisory activity, and then by offering audience monetisation services by merging with Mobiquid company at the beginning of 2003.

David Bernard joined the Group in 2000 as Chief Administrative and Financial Officer, and then as assistant General Manager, and was appointed a Director on 21 April 2000.

On 7 June 2000, the company's shares were listed for trading on the New Market of the Paris Bourse.

In September 2000, Hi-media signed an acquisition contract with the Company Net-On IT Scandinavia bearing on 100 % of the capital of Swedish Company Net-On Advertising AB. The conveyance of the Net-On Advertising AB securities was approved by a Hi-media Extraordinary Shareholders' Meeting on 11 December 2000.

In December 2000, Hi-media signed an acquisition contract concerning the company Advenda Media AG. The Shareholders' Meeting held on 30 April 2001 approved the first tranche of the project bearing on the conveyance of 51% of the securities of the company Advenda Media AG. The latter took the name of Hi-media Deutschland AG. On 8 May 2002, Hi-media then acquired the remaining 49% of the German Company for 275,000 Euros paid in cash.

In December 2002, Hi-media signed an acquisition contract bearing on 100% of the capital of Mobiquid company, a specialist in publishing audiotel services and mobile multi-media services in the field of music. The Shareholders’ Meeting held on 25 April 2003 approved the project for a conveyance of 100% of Mobiquid company's securities.

On 22 April 2005, a Hi-media Extraordinary Shareholders' Meeting decided to issue BS-ABSA warrants. As of 30 June 2005, exercise of those BS-ABSA made it possible to create 1,874,366 new shares issued at a price of € 2.55. That capital increase enabled Hi-media to acquire Numeriland on 30 June 2005 and to obtain a 25 % interest in the capital of a Brazilian advertising network.

On 29 September 2005, the Hi-media Belgium subsidiary acquired the company « Search Marketing » Publicityweb for 900 k€ in cash.

On the basis of an authorisation by its Shareholders' Meeting held on 2 November 2005, Hi-media put through a capital increase without any preferential application right of 3,999,999 shares at a price of € 5.36. The same meeting appointed two new directors, Messieurs Jocelyn Robiot and Jean-Charles Simon.

On 8 February 2006, Hi-media acquired the companies Eurovox and Frog Planète, publishers of the Allopass platform, for K€ 18,500 (excluding acquisition expenses).

On 24 February 2006, Hi-media acquired the Company Actustar, publisher of the site having the same name, for K€. 290 (excluding acquisition expenses).

On 12 June 2006, Hi-media acquired 88% of the capital of the Company Odyssée Interactive, publisher of the site jeuxvideo.com, for K€. 22 880 (excluding acquisition expenses).

On 1 September 2006, Mr. David Bernard was appointed Assistant Managing Director. He has been a director of the Company since 2000 and had already served as Chief Administrative and Financial Officer and then as Assistant Managing Director from 2000 to 2003.

On 4 September 2006, Hi-media acquired Swedish company Medianet, an advertising network based in Sweden, for K€ 4 900 (excluding acquisition expenses). The acquisition contract calls for an additional price that depends on the 2006 and 2007 net earnings. The additional price for 2006 came to K€ 5 081.

On 8 December 2006, Hi-media acquired Milena company, publisher of the site Psychonet.fr., for K€. 200. The acquisition contract calls for an additional price that depends on the site's advertising income for 2007 and 2008 (200 K€).

On 29 December 2006, Hi-media merged two of its subsidiaries, Mobiquid and Frog Planète. The merged entity has changed its corporate name since then to Allopass.

On 27 November 2007, Hi-media acquired Fotolog company, publisher of the site with the same name. The net price for all shares of Fotolog Inc., including expenses, came to 92.7 million USD. The part of the acquisition cost remunerated in shares, 69 923 kUSD, was valued on the basis of a Hi-media share price of 6.34 € (the closing price on 7 November 2007). The balance of the acquisition price, 22 732 kUSD, was paid in cash.

On 13 June 2008, Hi-media Group acquired 100 % of Mobile Trend Group, which specialises in the mobile Internet and in micropayments by SMS.

With its acquisition of the company Bonne Nouvelle Editions, the Group now operates the site Magicrpm.com, as well as the magazine of the same, the French reference for independent information concerning rock and electronic music for more than 10 years now.

The Group Hi-media now holds 44% of the site Vivat.be, a Belgian information site focusing on well-being and the quality of life.

Hi-media Group now has a 9.40% interest in the Company that publishes the information site rue89.com.

On 31 July 2008, the group acquired the site mujeractual.com for 40 000 Euros This is a pioneering site dealing with the woman's world in Spain.

On 1 July 2008, IDI joined the company's board of directors, replacing Erik-Marie Bion.

During the second half of the year, Hi-media also carried out some operations aimed at simplifying the Group's legal structure, namely the merger between the companies Eurovox and Allopass and the « TUP » (universal transmission of assets) of Comclick by Hi-media.

On 30 January 2009, a new independent director (Mr Michael Kleindl) joined the Board of Directors, replacing Mr. Dominique Belier, who remains Secretary-General.

On 31 August 2009, Hi-media acquired AdLink Media, AdLink group's on-line advertising network activity, by issue of 3,940,000 Hi-media shares, delivery of 795,000 internally held Hi-media shares, and deferred payment in the form of a vendor's credit amounting to 12.2 million Euros

During financial year 2009, Allopass continued its international development, and is now present in France, Spain, Belgium, the United States, Scandinavia, Germany and the United Kingdom.

During financial year 2009, Hi-media Group also launched its Hipay electronic wallet, so that it can now carry on that activity from Belgium in the European Union's 27 member countries.

On 26 February, 2010, Hi-media increased its holding in the capital of Rue89 Company from 7.5% to 9.40% by subscribing to a capital increase in an amount of 150,120 Euros

On 9 March 2010, Hi-media Belgium Sprl increased its holding in the capital of Vivat Company from 34.3% to 44% by acquiring 13 additional partnership shares from other partners for 1 euro.

Key dates marking Hi-media's development

1996: Foundation of Hi-media, a multimedia advertising network (interactive and press media) 1997: Issue of the Hi-media offer on the Internet 1998: Creation of Hi-media Multimédia, dedicated to the Internet Transformation of Hi-media Multimédia into a corporation 2000: Change of name from Hi-media Multimédia to Hi-media Listing on the new market of the Paris Bourse Creation of seven subsidiaries abroad Acquisition of Net-On Advertising AB Launch of the direct marketing advisory and brokerage activity 2001: Closing of three subsidiaries Acquisition of 51% of Advenda Media AG 2002: Closing of 4 subsidiaries made dormant (Spain, Italy, Czech Republic and Slovakia Republic) 2003: Acquisition of Mobiquid and launch of the micropayment activity Dissolution of the Canadian subsidiary Publicité Internet Hi-media Inc. 2004: Dissolutions of the subsidiaries Hi-media UK and Hi-Media Technology Sweden Acquisition of 50% of the capital of Europermission Sl 2005: Dissolution of the Hi-media Poland subsidiary Acquisition of the Numeriland advertising network (which became Comclick) Acquisition of a 25% interest in the capital of a Brazilian advertising network Development of Blogorama Acquisition by Hi-media Belgium of the Company Publicityweb 2006: Acquisition of Eurovox Group publisher of Allopass Acquisition of the companies publishing the sites: actustar.com; jeuxvideo.com, feminup.com and psychonet.fr Acquisition of Swedish Company Medianet Appointment of David Bernard as Assistant Managing Director Merger of the companies Mobiquid and Frog Planète, the merged entity being called Allopass 2007: Opening of offices in Frankfurt and Hamburg, and of a subsidiary in Spain Acquisition of Fotolog 2008: Acquisition of Mobile Trend Group Acquisition of Bonne Nouvelle Editions, publisher of the site magicrpm.com Acquisition of interests in the companies Vivat.be and Rue89.com Acquisition of the site mujeractual.com in Spain 12

2009: Acquisition of the AdLink Group entities International development of Allopass Launch of the Hipay electronic wallet

5.2. INVESTMENTS

5.2.1. THE MAIN INVESTMENTS The Group investment policy is aimed at improving the proprietary software items, as activity support, so that they always provide optimal service in keeping with the changes in activities, as well as developing the proprietary audience of the Group sites on various subjects.

The investments in intangible assets came to 3 966 K€ in 2009, corresponding to the continuation of in-house developments of technological tools, mainly including software for monitoring advertising network activities and micropayments, an advertising server, as well as the development costs of new functionalities on the sites in production.

The investments in tangible fixed assets amounted to 1 655 K€ for 2009, corresponding mainly to the acquisition of the computer hardware needed for proper operation of the business (servers and computer stations).

For comparison purposes, the investments in tangible and intangible fixed assets made in financial years 2008 and 2007 came, respectively, to 6 517 K€ and 1 957 K€.

5.2.2. THE MAIN INVESTMENTS IN PROGRESS The fixed assets in progress on 31 December 2009, amounting 817 K€, mainly concern the cost of time spent by the technical teams and the investments in computer hardware in connection with development of new tools intended for web masters and for development of the advertising server.

5.2.3. THE MAIN FUTURE INVESTMENTS In 2010, Hi-media Group is going to continue its internal technical developments (Allopass platform and Comtrack adserver).

CHAPTER 6 – OVERVIEW OF ACTIVITIES

6.1. HI-MEDIA'S TRADES

Following acquisition of the AdLink Media advertising network, Hi-media widened its coverage and now carries on its activities in 12 countries: France, Germany, United Kingdom, Italy, Spain, Portugal, Sweden, Belgium, Netherlands, United States, Mexico and Brazil.

Countries with a Hi-media Group presence

Hi-media, an on-line media group, develops its activities with two major focuses:

- publishing Internet sites with Hi-media Publishing, - audience monetisation for its own sites and for third party sites via Hi-media Services, an entity including its two revenue-generating trades: on-line advertising (advertising network, direct marketing service provider) and electronic payments (Allopass micropayment platform and Hipay electronic wallet)

6.1.1. PUBLISHING INTERNET SITES: HI-MEDIA PUBLISHING Hi-media is now among the world's main publishers of Internet sites, with an audience of 52 million unique users, including 29 million in Europe (Source: Google Analytics, December 2009).

Hi-media now publishes Internet sites positioned in the « Entertainment » universe. Here are the main ones: - Fotolog.com (version available in 17 languages) - Jeuxvideo.com (French version only) - Blogorama.fr (variants for France, Sweden, Germany, Belgium, Portugal and Brazil) - Toutlecine.com (French version only) - Programme-tv.com (French, German and Belgian variants) - Actustar.com (French and Belgian version only) - MagicRPM.com (French version only) - GameOnly.com (variants for France, Germany, Belgium, Spain and Portugal) - Vousair.com (Portuguese version only) - Hi-Gamers.com (Portuguese version only) - Mon-shopping.be (available in two languages on the Belgian market) - Mujeractual.com (Spanish version only)

6.1.1.1. Fotolog.com Hi-media acquired Fotolog.com in November 2007. Fotolog.com is a world photo blogging social network grouping 28 million members in the world from more than 200 countries (Source: Fotolog, January 2010), namely with growth of 500% during the last 4 years. Its members' enthusiasm increases constantly, since the number of photos downloaded reached 889 million at the end of 2009, up 29% from 2008.

Trend of the number of members on Fotolog.com

Source Fotolog : January 2010

Trene of the number of photos downloaded on Fotolog.com

Source Fotolog : January 2010

With a worldwide monthly audience of 28.4 million unique users (Source: Google Analytics, December 2009), Fotolog is among Latin America's leading social networks. Fotolog, borrowing from blog technologies and practices, from a photo sharing site and from a social network, has been constructed on the basis of a simple idea: facilitate meetings of and conversation among surfers based on the universal language of photography. Fotolog makes a dedicated page, «their Fotolog», available to its members, enabling them to publish their photos and comments. Membership is obtained with just a few clicks. The Fotolog members post their « photo of the day » - only one per day – on their page, with or without commentary. On that personal page, only the holder can insert photos. All of the photographs are freely accessible, but publication of comments is reserved for the registered members. Each member then uses his « favourite Fotologs » depending on his main interests and his personal artistic sensitivities. The day's photos of his favourites are displayed in thumbnails on the member's own page. Fotolog was designed in 2002 as a contact and exchange facilitator. The site creators wanted to promote, in a natural and viral way, the content generated by its users with three major focuses: the quality and continuous updating of the photographic content, simple access that can be shared by all, and finally a recommendation function that quickly expands each member's network. It is the successful combination of those various factors that accounts for Fotolog's worldwide success. Fotolog recently added some new functionalities facilitating content sharing by Fotolog users on Facebook, and enabling the users of Facebook, MSN Live and Twitter to leave comments on Fotolog. Fotolog.com is available in 17 languages (French, English, Spanish, Portuguese, German, Swedish, Dutch, Basque, Catalan, Polish, Hungarian, Czech, Turkish, Danish, Rumanian, and Slovak). Monetisation of the Fotolog.com site is assured thanks to two revenue-generating trades of Hi-media Group: advertising (42% for display and 33% via Google) and electronic payments (25%).

Surfers may be targeted for advertising purposes thanks to their socio-demographic profiles and their established centres of interest. Numerous advertising scenarios and approaches are implemented, thus creating a proximity relationship between the trademarks and the surfers. The latter become players in the advertising campaigns. Thus those « consumers », who create « buzz » and « viral » become the trademark's best ambassadors.

Electronic payments are made by the Fotolog members for buying a subscription to « Gold Camera », « Fotolog Star », « gifts » (virtual gifts) or else « vote ». The fact is that the Fotolog.com site, accessible without charge, offers paying premium services for its « Gold Camera » members. By becoming a « Gold Camera » member, the surfer can publish up to 10 photographs per day (against only 1 for a traditional member), leave up to 200 comments per photo (instead of 20 for a traditional member), personalise the header banner on his Fotolog page, personalise his page, put a thumbnail on his commentary page, obtain statistics concerning his account, appear on the homepage, be registered in the « Gold Camera » yearbook, have a mosaic of his favourites, and benefit from priority customer service. The « Gold Camera » service costs only a few euros (or is payable in another currency, depending on the local one) and is payable by micropayment.

Fotolog launched its own virtual currency in February 2009: the FlodoTM. The the Fotolog members can buy virtual gifts to personalise their messages and their photo comments, or else may vote for their favourite Fotologs. The FlodosTM are reloadable on the basis of various packages via a secure payment system using the Allopass solution.

6.1.1.2. Jeuxvideo.com Hi-media acquired the company Odyssée Interactive, a company publishing the site Jeuxvideo.com, in May 2006. With 4.1 million unique users (Source: Nielsen NetRatings, December 2009), Jeuxvideo.com is the leading video game site in France, and has been since its creation 13 years ago. The site owes its position as unquestioned leader to the exhaustive nature of its headings, to the wealth of its content, to reportages concerning all international events in the industry, and to test and trials of all video games appearing on- the-market.. The site also offers a community space (discussion forum, chat, blog) that is recognised, with 140 000 new messages posted every day, on which people with a passionate interest in the universe of video games meet to exchange, comment, criticize, and share their experiences and their passion for games. To exploit this high community potential, the site video.com constantly innovates, for instance with creation in May 2009 of its heading called «Boite à idées» (ideas box), on which surfers are invited to take part in writing up the content. The fact is that on that heading, surfers post their ideas for tests, dossiers, game solutions, videos, or on any other subject that they want to have handled on the site. A ranking of the proposed ideas is made, and at the end of each month the jeuxvideo.com editorial staff undertakes to produce a dossier on the subject ranking first.

Furthermore, for its on-line sales activity, Jeuxvideo.com has a downloading catalogue of almost 2000 titles via its Nexway partner. Surfers will find there the latest new items, MMORPG videogames (multi-player on-line games) and a broad choice of « casual » games, for occasional players as well as for the « hardcore gamers».

6.1.1.3. Blogorama The platform of Blogorama blogs, created in 2005, now groups one of the largest European communities of bloggers with 7.6 million unique users (Source : Google Analytics, December 2009), and 170 000 active blogs (Source: Blogorama, February 2010). The platform was differentiated for Belgium (in a French version: Blogorama.be, and a Dutch version: Moaventtoch.be), Germany (Bloggorilla.de), Sweden (Bloggorama.se), Portugal (Bloguerama.com) and Brazil (Blogorama.com.br).

Blogorama federates its audience on the basis of 17 major themes: - Art with artblog.fr, - Music with musicblog.fr - Travel with travelblog.fr - Cooking with cuisineblog.fr - Cinema with blog.toutlecine.com - People with blog.actustar.com - Do-it-your-self with bricoblog.fr - Sports with sportblog.fr - (European) Football with footblog.fr - Babies with monbebeblog.com - Humour with blogourt.fr - Design with designblog.fr - Games with gamingblog.fr - Automobile with auto-blog.fr - Photographs with blogzoom.fr - Clubbing with blogparty.fr 16

- Multimedia blogs with blogspace.fr

Blogorama enables any surfer to create his own multimedia blog, free, with just a few clicks, in just a few minutes and without any technical knowledge. Texts, images, sounds and videos of thousands of bloggers are hosted to an unlimited extent. Blogorama wins its bloggers’ loyalty thanks to a multitude of functionalities and services: - multimedia functionalities with free and unlimited hosting; - simplified blog management: immediate or deferred publication of an article, a broad choice of skin, size and type face colours, inclusion of tables, choice between two publishers, possibility of using HTML or Javascript; - access to the statistics concerning the person’s blog: number of visitors per month, number of articles, number of comments; - simplified surfing of the person's blog: classification of the articles into various categories, access to the latest published articles; - accompaniment to enable others to learn about the person's blog: system of rating by other bloggers, listing, distribution of the person's own news letter to his readers; - a personalisable moderation system with protection of the multimedia content, moderation of the content and comments.

6.1.1.4. Toutlecine.com Launched in October 2007, toutlecine.com is an interactive and community magazine for real-time developments, devoted to the cinema and to television series. The site's monthly audience comes to almost 1 million unique users (Source : Google Analytics, December 2009).

Content and images are produced by the site's editorial teams. More than 30 articles, interviews and reportages are put on line daily. Toutlecine.com also has an impressive databank. The fact is that Toutlecine.com has emphasized accessibility to the data concerning the cinema with: - all of the works in the « L’annuel du Cinéma », surveying all films that have come out in France since 1944, - 260 000 photos on line, - 14 000 videos to be seen, - 10 000 trailers available, - 14 000 biographies of the people who make the cinema and the series, - 200 000 important figures, - 3 500 carefully selected series: credits, synopsis; - the cinema trades detailed with the casting offers.

The cinema reviews to be tracked as films appear come from surfers and from a panel of journalists from the traditional media. Toutlecine.com also makes it possible to check on show times everywhere in France, to reserve tickets, and to buy DVDs on-line.

In addition to this content, their are some interactive and community functionalities with: - the blogs; - interactive filmography, making a selective search possible, by trades, to discover, sort and classify in the careers of the cinema's biggest names; - the tagged photos to surf in the phototeque by using key words; - the on-line purchases. Some commercial partnerships have been established with the sites Fnac.com and Fnacmusic.com so that surfers can buy the products connected with the cinema universe (books, DVD, CD of film and series music, etc.) and can download the original soundtracks of films and of series.

6.1.1.5. Programme-tv.com Programme-tv.com launched in July 2007, offers all of the program schedules for more than 110 Hertzian television networks, TNT, cable and satellite. The site's monthly audience comes to 0.6 million unique users (Source : Google Analytics, December 2009). Programme-tv.com was varied for Germany (Das-Tv-programm.de) and Belgium (in a French version: Mon- programme-TV.be, and a Dutch version: Mijn-TV-gids.be). The site enables the user to personalise his program by selecting the network he receives, accessing the description of each program, viewing with just a click the evening programs in progress and the day's films and series. Programme- tv.com offers surfers a practical and easy-to-use interface to satisfy the need for rapid and efficient reading and searches. 17

In the face of the growth of catch-up television programs available on catch-up TV, Programme-tv.com created a new heading in 2009 listing those kinds of programs, called « Replay TV ». In this way the surfer can enjoy access to all television programs already shown on television, but which can be viewed free on the Internet

6.1.1.6. Actustar.com Hi-media acquired the site Actustar.com in February 2006. The site content is dedicated to day-by-day news concerning stars and celebrities. Actustar.com's monthly audience comes to almost 1 million unique users (Source: Google Analytics, December 2009). Actustar.com offers rich content to surfers thanks to: - relays with the press attachés from the musical universes (labels, organisation of concerts and festivals…), cinema (production house, distributors …) and TV (networks and production companies), - articles concerning the stars, published in real time and classified by category: music, cinema, television, - galleries of events-related photographs (Cannes Festival, NRJ Music Awards, Victoires de la musique…), - slips concerning the stars presenting their biographies, romances, quotations, addresses, - slips concerning the programs with the way of participating in them and the associated articles, - exclusive interviews. Actustar.com also makes itself available to surfers and lets them express themselves by putting proposals to them to write biographies of their favourite stars. Actustar.com also offers surfers some entertaining headings with quizzes (quotations, romances and photographs) and the Actustar top of the week, enabling them to vote for their favourite stars by way of micropayments. Actustar also has a variant in Belgium.

6.1.1.7. Magicrpm.com Hi-media acquired the MagicRPM.com site in June 2008, MagicRPM.com is the site of the magazine Indie Pop Moderne, Magic. A reference on the web for music lover, with an encyclopedic content concerning the performers constituting the modern pop world, MagicRPM.com groups a monthly audience of 0.2 million unique users (Source : Google Analytics, December 2009). The site offers: - the latest news on the pop front, - access to exclusive editorial and multimedia content: video sagas, unpublished interviews, sound of the day, - dense content for learning everything about the preferred performers and groups, - emphasis on slips making it possible to check on a performers career based on his biography, discography, videos, interviews, - emphasis on the 2.0 tools: creation of the Magic account making comments and reception of the Magic newsletter possible and allowing creation of a free Magic personal blog. - A web radio including all of the day's sounds.

6.1.1.8. Gameonly.com Launched in October 2008, GameOnly.com is an on-line game portal. The site groups a monthly audience of 0.2 million unique users (Source : Google Analytics, December 2009). GameOnly.com offers a collection of 3200 flash games. By selecting their favourite kind of game (race games, sports games, children's games, adventure games) or by typing in a key word via the search engine, surfers can access all flash games corresponding to their taste. All games available on GameOnly.com are available free. Surfers may also contact the site to suggest new games. It has variants in the form of German, Dutch, Spanish and Portuguese versions. An English version is planned by the end of 2010.

6.1.1.9. Vousair.com

Vousair.com is a site published by Hi-media and launched in Portugal in April 2009. It specialises in the cinema, while also covering all cultural news. The site offers a useful and complete guide to the most important cultural events, particularly in connection with the cinema, theatre, entertainment, the arts, exhibitions and music The site has daily offerings of news, interviews, special articles, film reviews and box office statistics..

6.1.1.10. Hi-gamers.com The site Hi-Gamers.com is dedicated to the video games sector, launched in Portugal in December 2009 Published in partnership with Smash Magazine, Hi-Gamers.com is designed on the basis of the winning model of Jeuxvideo.com, the reference French-speaking site. Hi-Gamers offers: - rich and complete information on new developments and the tendencies in the sector, interviews and reports on events; - the video game solutions to enable surfers to easily move forward in their games or resolve a stalemate; - complete information concerning all sector platforms: (PC, PlayStation, Xbox, Wii, PSP, DS) or cellular telephony; - items for players: videos, contests, competitions, games- or theme-based forum.

6.1.1.11. Mon-shopping.be Mon-shopping.be was launched in Belgium in December 2009. MonShopping.be is the first interactive guide to Belgian e-commerce sites listing more than 350 addresses of e-commerce sites by way of more than 150 categories: food, image and, sound, fashion, health and beauty...). Each e-commerce site is identified by a detailed slip including its description, the delivery procedures and the types of payment. Various headings make it possible to facilitate the surfer’s search with a classification of the best e-commerce sites, a search engine making it possible to look for e- commerce sites by key word, and a heading surveying all of the new sites. The surfer may assign a rating to the e-commerce site, leave commentary, share an address on the social networks or create a list of his favourite e-commerce sites. Thanks to the interactivity with content, the users have a possibility of verifying, on Monshopping.be, the reliability of e-commerce site before putting in an order. MonShopping.be is an initiative supported by BeCommerce, the association of Belgian e-commerce professionals. In particular, BeCommerce has installed a label guaranteeing the reliability of the e-commerce sites belonging to the association. The site has a Dutch variant accessible on the URL Mijn-Shopping.be.

6.1.1.12. Other sites Hi-media also publishes the sites Psychonet.com and MujerActual.com, and has acquired a holding in the sites Rue89.com and Vivacity.

Hi-media acquired the French site Psychonet.com in December 2006. Psychonet.com offers content developed around the themes of «Psychological tests », « Sexuality », « Knowing oneself » « Well-being», « Family », and « 12-25 years ». Some community and interactive functionalities are also available: « Psy en ligne », « Forum » and « Chat ». Psychonet.com’s monthly audience is 0.1 million unique users (Source : Google Analytics, December 2009). A new version of the site is planned for 2010 with a positioning focusing on Health.

In July 2008, Hi-media acquired MujerActual.com, a Spanish site devoted to the universe of women in their daily lives.

Hi-media acquired an interest in the capital of French site Rue89.com amounting to 7.5% in June 2008, and increased its holdings to 9.40% in February 2010. Rue89.com groups a monthly audience of 3.2 million unique users (Source : Google Analytics, December 2009). Rue89.com is a participative information site combining professional journalism and Internet culture on subjects, taken all field together, giving rise to debate.

In January 2008, Hi-media acquired a holding in the capital of Vivat.be amounting to 1%, then increased to 34% in April 2008 and finally to 44% in March 2010. Vivat.be is a Belgian portal for daily information and services. Daily life, culture, family, finance, automobile, travel, technology, well-being and health are headings offered to accompany the surfer in his daily life. Vivat.be offers a version of its content in French and in Dutch.

The monetisation of the Hi-media Publishing sites is assured thanks to Hi-media Group's two revenu-generating trades – advertising and electronic payments – and via commercial partnerships with third parties (key words, e- commerce, content sales).

6.1.2. DEVELOPMENT OF INTERNET SITES' AUDIENCE: HI-MEDIA SERVICES Hi-media develops the audiences of the Hi-media Publishing sites as well as the ones of third party sites thanks to its trades: - Advertising network, represented by the commercial name Hi-media Advertising (formerly Hi-media Network), - Supplier of electronic payment solutions, represented under its commercial name, Hi-media Payments, which includes the trademarks Allopass (electronic micropayments of the audiotel type, SMS+), Eurovox (interactive voice servers), Hipay (electronic wallet) and Mobile Trend (SMS centre).

6.1.2.1. Advertising network (Hi-media Advertising) The advertising network activities (Hi-media Network) and direct marketing activities (Hi-media Direct) were merged in July 2007 and were regrouped in 2009 in Hi-media Advertising in order to: - provide the market with a global and coherent offering - optimise the effectiveness of the sales and marketing teams, - cover all ranges of e-marketing services in the form of one and the same offering - serve customers more effectively.

Hence the Hi-media Advertising entity now includes the following trades: - on-line advertising network: marketing of the advertising spaces of the Internet sites and of the Mobile sites on the basis of a CPM (cost per thousand) sale procedure, CPC (cost per click) or CPL (cost per lead), upon acquisition - opt’in e-mail address broker and opt’in cell telephone numbers: establishment of contacts between the file offering present on the market and the customer request - customer relations advice: describe, understand, explain and predict actual or potential consumer behaviour so as to install the most effective approaches to acquisition of customers and winning their loyalty - service provider for on-line advertising and communication creations with its Hi-media Création studio

6.1.2.2. Supplier of electronic payment solutions (Hi-media Paiements) The electronic payment solutions represented under the Hi-media Paiements commercial name are based on the following trademarks: - Allopass (micropayment platform) - Eurovox (interactive voice servers) - Hipay (electronic wallet) - Mobile Trend (SMS Centre)

6.1.2.2.1. Micropayment platform: Allopass In 2003 Hi-media launched its Mediapass micropayment platform. In February 2006, the acquisition of Eurovox Group, publisher of the Allopass micropayment platform, Mediapass's main competitor and a leader on the European market, made it possible to strengthen Hi-media's positions in this sector. The common platform created in this way incorporates solutions using surcharged telephone calls (audiotel), surcharged SMS messages (SMS premium), and payments by bankcard, prepaid card, Internet+ technology and by way of an electronic wallet. This means that publishers wanting to obtain payment for their content or their services may call on Allopass, and in a few minutes integrate – after checking and site acceptance – a technical platform that will allow surfers to buy access codes, in amounts most often ranging from a few cents to a few Euros. Those codes sold by Allopass may then be used for one month on any site that has incorporated the Allopass platform. Allopass then remunerates the Internet sites in proportion to the number of codes used by the surfers on those sites. Allopass has customer service available 6 days a week in 8 languages (French, German, English, Spanish, Italian, Polish, Dutch and Swedish) so as to accompany users more effectively in their transactions and to optimise the revenue of the commercial customers. Allopass, present in France, Belgium and Spain, has actively continued its international development with the successive opening of offices in June 2009 in the United States, in New York, and Scandinavia, in December 2009 in Germany and in England, and in February 2010 in the United States (in San Francisco). That international deployment has been accompanied by the launch of a new version of the Allopass Internet site, www.allopass.com, which is more ergonomic, simpler and more practical. With this new version, Allopass wants to further facilitate integration of

the Allopass solution on the Internet sites, thus enabling customers to favour micropayments and daily management of transactions.

6.1.2.2.2. Interactive voice servers: Eurovox Hi-media acquired Eurovox in February 2006. Eurovox offers hosting solutions for interactive voice servers (SVI) and for supplying voice content and SMS.

6.1.2.2.3. Electronic wallet: Hipay During the summer of 206, Hi-media launched development of its electronic wallet, and on 15 December 2008 obtained approval from the Belgian banking authority for its launch. Hipay makes it possible to carry out all on-line transactions (transfers or purchases). The on-line tradesmen can implement this solution to manage their sales. As to the end-user, the cyber purchaser credits his Hipay electronic wallet by using a bank card or by bank transfer to carry out his transactions, and he may make serve a withdrawal request at any time and recover his balance.

6.1.1.1.4. Sms center: Mobile Trend In June 2008, Hi-media acquired the company Mobile Trend, a French specialist in the Mobile Internet and in micropayments by SMS. Mobile Trend's mobile marketing activity, on its part, was incorporated into the Hi-media Advertising activity in 2009.

6.2. HI-MEDIA ACTIVITIES On the basis of its two activity sectors, publishing Internet sites and audience develpment, Hi-media Company has developed a whole range of products and services intended for various kinds of customers, orchestrated by a controlled sales and marketing policy, and distributed by way of high-performance production means and technologies.

6.2.1. CUSTOMERS Hi-media company offers products and services intended for various kinds of customers: - Internet site publishes - Media agencies - Advertisers - Surfers

6.2.1.1. Customers, Internet site publishers Hi-media offers Internet site publishers an over-all approach making it possible to create audience, win its loyalty and monetise it. In this way publishers can use Hi-media with respect to all or part of its services depending on their particular problems. The on-line advertising services (advertising network activities on the Internet and Mobile Internet, brokerage for their e-mail files and opt’in SMS, advertising creation of their campaigns) and the payment solutions (electronic payments and micropayments and interactive voice servers) enable publishers to get the most out of their medium's audience.

6.2.1.2. Customers, media agencies The media agencies (advertising agencies and purchasing offices) advise advertisers on the media strategy to be implemented in the light of the targets and desired objectives, negotiate and buy advertising space, track and optimise the campaign thanks to their statistical and performance analytical tools, and provide assessments of campaigns. Hi- media offers media agencies a very complete range of audience aggregation and segmentation of Internet sites and of direct marketing services

6.2.1.3. Customers, advertisers Hi-media prospects advertisers to brief them on the entire range of the company's products and services. This means that advertisers having no media agency can work directly with Hi-media. Otherwise, Hi-media then works in collaboration with that agency.

6.2.1.4. Customers, surfers Thanks to its micropayment solutions, Hi-media addresses itself not only to the publishers of commercial sites, but also to the end-user, namely the surfer. With the Hipay portfolio, the surfer can carry out all on-line transactions 21

(transfer or purchase) with perfect safety, including for physical goods and in amounts exceeding the micropayment levels.

6.2.2. PRODUCTS AND PROVISION OF SERVICES Hi-media deploys a broad range of services relating to these two activity sectors, Hi-media Publishing and Hi-media Services. Hi-media Publishing's services focus on production, coordination and syndication of content as well as implementation of participative and community tools, while Hi-media Services focuses on installation of on-line advertising solutions and electronic payments

6.2.2.1. Hi-media Publishing: products and services Hi-media Publishing is primarily a production and content coordination platform intended for surfers. Thus it groups all Internet sites published by Hi-media. That content, depending on the case, may be made available to the surfer free, or else for payment. The content made available free will be remunerated by advertising, while access to paid content takes place with the help of the Hi-media micropayment platform, Allopass. This means that Hi-media Publishing and Hi-media Services are strongly complementary.

In addition, Hi-media Publishing has an offering for publishers of content syndication and implementation of participative and community tools. Thus Hi-media Publishing markets its own content produced by its editorial teams to other Internet site or portal publishers. This offering of syndication of Hi-media Publishing content comes in particular from these sites: Jeuxvideo.com, Toutlecine.com, Actustar.com, Psychonet.com and Programme-tv.com. The content is broken down by heading and by heading product, and is marketed to third party publishers wanting to add specific content to their sites or portals but lacking an in-house team to supply it.

Hi-media Publishing also markets its Bologorama blog platform in “white trademark” to publishers wanting to include community tools on their sites. Hi-media Publishing offers complete services with installation of the blog platform in the site's colours, hosting and maintenance of the service, management of the bloggers' loyalty newsletters, and coordination of the blog and its moderation.

6.2.2.2. Hi-media Services: products and services

6.2.2.2.1. Hi-media Advertising: products and communication services on-line Representing a merger of the activities relating to on-line advertising activities, direct marketing service provider and mobile marketing service provider within one and the same entity, Hi-media Advertising enables the company to cover a very complete range of on-line advertising services. In addition to the on-line advertising dimension there is an another dimension relating to customer relations consulting, focusing on direct marketing and mobile marketing, thus creating the most complete offering on the market (management of data bases, recruitment, loyalty, etc...).

Thus Hi-media offers a global and coherent response to the various problems faced by publishers, media agencies and advertisers.

6.2.2.2.1.1. Hi-media Advertising: On-line advertising network activities The advertising network trade consists in aggregating, highlighting and marketing advertising spaces of Internet sites with computer or mobile accessibility, and creating and distributing the advertiser’s graphic elements there. The trade of providing advisory services on customer relations with a direct marketing orientation consists in accompanying the advertiser, from reflection to implementation of the solutions for settling its acquisition and loyalty problems. Since 1996, Hi-media has been aggregating, highlighting and marketing the Internet sites' audience. Now present in 12 countries, the Company is deploying its experience and know-how around an on-line advertising offering combining power and segmentation. With the purchase of the AdLink Media network, Hi-media is now positioned as the leading independent network in Europe. With a 56% penetration rate, the company enables advertisers to target 138 million unique users in Europe (Source : Comscore, January 2010).

Hi-media Advertising Taux de penetration et nombre de Visiteurs Uniques par pays (Source: Comscore, janvier 2010)

Nombre de Visiteurs Uniques (en milliers) Taux de penetration 60 000 82% 90% 75% 80% 69% 70% 58% 59% 61% 40 000 33 715 60% 45% 44% 50% 23 570 40% 27% 20 000 30% 12 741 11 393 9 369 8 185 20% 3 447 3 385 3 137 10% 0 0% France Germany Spain United Italy Netherlands Sweden Belgium Portugal Kingdom

(Penetration rate and number of unique users by country) Source Comscore January 2010) (Number of unique users (in thousands) Penetration rate)

Hi-media has a total monthly advertising inventory of 22.4 billion printings, including 15 billion in Europe (Source: Adtech et Google Analytics December 2009) coming from more than 19 000 publishers (Source: Comclick and Adtech, January 2010). Hi-media has a potential of 35 million opt'in e-mail addresses and 2.5 million opt’in cell telephone numbers in brokerage.

On the French market, Hi-media's historic market containing the company's registered office, Hi-media was the 3rd- ranking on-line advertising network in 2009 in terms of gross data, with a market share of 8.5% (Source: TNS Media Intelligence, 2009).

Source: TNS Media Intelligence 2009 (Hi-media, 3rd-ranking advertising network in terms of market share) (top15 reporting networks in terms of market share (year 2009))

In terms of number of advertisers, Hi-media was the leading on-line advertising network in France in 2009 (Source, TNS Media Intelligence, 2009).

Source TNS Media Intelligence (Hi-media, leading advertising network in terms of number of advertisers) (top 15 reporting networks in terms of numbers of advertisers (year 2009))

With the integration of the AdLink Media network sites, the Hi-media offering was harmonised at European level and is segmented on the basis of 5 vertical themes grouping similar editorial content and socio-demographic profiles: - Entertainment - Automobile - Women - News & Sports - E-commerce/Travel

In addition to this theme-based segmentation, there is an offering called AdSelect, consisting in each country of about 15 premium publishers corresponding to strong trademarks in terms of reputation and/or of power. They include, for instance, such sites as ViaMichelin or eBay in Belgium.

Hi-media also offers customers an opportunity to target their advertising campaigns at local level either vis the IP address, or by way of the surfer's profile when he is logged in (connected with an Internet site on which he is recognised thanks to his login and his password following his registration in advance), or else via sites having strong affinities in certain regions.

In addition to these targeting possibilities based on themes, profiles and geographical areas, there is behavioural targeting. In its network Hi-media has implemented Wunderloop company's technology to offer behavioural advertising to advertisers. The Wunderloop technology provides a real-time targeting system making it possible to adapt the advertising and editorial content and the commercial offers as a function of the users and of their current main interest. By placing cookies, the system analyses the surf of an impersonal profile, behaviour patterns and main interests to propose suitable advertising, a product or a service. The kind of data used are: the pages consulted, transactions carried out, and behaviour vis-a-vis the kinds of advertising displayed (clicks by advertiser category...). Once an impersonal profile carries out a score of actions corresponding to a defined main interest, its attraction is validated as relevant. The centres of interest are then classified into categories and sub-categories.

Hi-media also has a Hi-media Performance performance-based offering aimed at acquisition by advertisers. This sales approach solves the problem of advertisers wanting to buy campaigns remunerated in the light of the surfer's action (click, purchase, etc.). The advertiser pays only for the « lead » (contact) generated. For instance, an advertiser may choose to pay for the advertising space on the basis of the number of subscription forms filled out. Hence the advertiser does not select or control the sites on which its advertising is to be disseminated. This kind of campaign is often marketed on a CPL basis (cost per lead, upon acquisition). The advertising network must then have optimisation technology making it possible to run advertisements where they are the most effective in order to guarantee better results. The effectiveness of such technology optimisation makes it possible to guarantee a better return on investment for the advertiser, and optimal revenue to the publisher. Hi-media has developed and improved its Comtrack technology to make this new marketing approach possible, based on the principle of arbitrage. 24

On its network sites, Hi-media distributes various advertising formats as a function of market demand. From traditional formats to rich media and video formats, Hi-media implements and disseminates all advertising format possibilities now in existence: banner, rectangle, square, skyscraper, mega-banner, button, « billboard-interstitial », transparent flash, expand banner, site packaging, video format. With an estimated 34% increase in advertising investments in 2010 in the video format and a market share of 12% of the on-line advertising investments (Source: Forrester Research Internet Advertising Model, Q4 2008), this format is ever more popular among advertisers. Thus Hi-media has decided to develop its own technology for distribution of this kind of format, which will be installed on all network sites at the end of the first half of 2010.

Hi-media has a sales department specially dedicated to advertisers' « special operations » so as to accompany them and advise them on all approaches that are available or could be developed specially for them in the light of their problems and their objectives. These approaches are implemented on the network sites (site packaging, transparent flash, games, contests, editorial integration) thus enabling the advertiser to focus its Internet communication on events.

6.2.2.2.1.2. Hi-media Advertising: solutions to on-line communication problems On the strength of 14 years of expertise on the on-line advertising market, Hi-media provides an advisory dimension for all of its customers, whether they be publishers and/or advertisers or media agencies. Hi-media accompanies its customers in solving their on-line advertising problems via a broad range of services.

Hi-media offers customers turnkey and personalised solutions to deal with problems relating to: - Branding/visibility - Affinity - Audience and traffic creation - Recruitment of qualified prospects - Performance-based acquisition - Clientèle coordination and loyalty - Audience monetisation

Solutions to branding / visibility problems To guarantee customers of very strong visibility, mainly to enhance their reputation, Hi-media has a very powerful advertising network making it possible to disseminate, to millions of surfers, formats having the most impact (billboard, transparent flash, video rectangle). In addition to those formats, there are some advertising arrangements developed by Hi-media, for instance: - the « Spotlive », an approach incorporating an advertiser's video into a site entrance billboard - the « Exclu@Home », an approach guaranteeing advertising exclusivity on all homepage formats of the Hi-media network's main sites from 1 to 3 days

Solutions to affinity problems Advertisers wanting to communicate with a highly targeted population benefit from an offering making extremely detailed and extremely accurate targeting possible. Hi-media offers not only targeting based on themes, profile, IP address and behavioural advertising, but also targeting on the basis of more than 50 socio-demographic and behavioural criteria by way of its opt'in marketing e-mail offering.

Solutions to the problems of creating audience and traffic To generate audience and traffic on a site, Hi-media has some very broad advertising inventories, databases, mastery of «viral marketing » and « buzz marketing » techniques and a natural and paid listing offering on the search engines, by way of its Publicityweb subsidiary, which was renamed Hi-media Search in November 2009 (Press release in Belgium distributed on 30 November 2009).

Solutions to the problems of recruiting qualified prospects Advertisers having the main goal of recruiting, collecting and controlling their return on investment (ROI) find, in Hi- media, an offering combining personalised advice, control of the transformation rates of the various on-line communication channels, and ROI-oriented turnkey products. Hi-media knows how to accompany customers in connection with proven recruitment approaches and mechanisms. Using its pooled collection products or co-registration approaches, or else « competition », Hi-media offers services to its customers with a commitment to results.

Solutions to acquisition and performance problems Hi-media offers its customers its Hi-media Performance program for advertisers wanting to control their return on investment (ROI) by paying for advertising campaigns on a performance basis, that is, conversion. That conversion may be a purchase, a filled-out form, downloading, a call-back request, or any other action depending on the site's field of activity. The Hi-media Performance offering is based on its Comtrack technology, numerous upgrades of which have been incorporated to make this kind of sale possible. The fact is that in the performance-based purchasing model, the technology must incorporate numerous algorithms making it possible to identify the most effective implementation indicators, thus being able to value them in order to obtain the best possible result.

Solutions to the problems relating to clientèle coordination and loyalty Better knowledge of customers and prospects, enriching the existing database, creation of a close relationship with the clientèle, installation of cross-and up-selling scenarios, product tests and satisfaction surveys, and getting former customers to come back are all objectives laid down by the Hi-media customers and for which the company provides appropriate solutions. Here are the tools offered for use in loyalty and customer relations management programs: - research, ad hoc inquiry, segmentation, sales analysis in the interest of better knowledge of customer profiles and expectations so as to install the appropriate marketing guidelines, - competitions to emphasize the trademark in an entertaining and effective way, - e-mailings, newsletter and SMS to keep the customer informed about new developments in connection with the trademark and to send customers special offers, - a relationship program aimed at converting suspects into prospects, then into customers, and then into faithful customers recommending the trademark. This also involves monitoring changes in surfers' behaviour thus making it possible to adapt the kinds of offers and approaches as effectively as possible, reward loyalty, and encourage consumption, - viral marketing making it possible to get the customer to act and hence to involve him.

Solutions to the audience monetisation problems An Internet site publisher is also an advertiser. As such, it may face problems relating to branding, affinity, traffic generation, data collection and loyalty. In addition to those problems there is the one of monetising the audience. Thus Hi-media can accompany and advise publishers in installation of audience development solutions. They may be: - of an advertising type: integration of the advertising formats most demanded by the market, study and analysis of the audience so as to commercialise it more effectively - direct marketing: commercial exploitation of the opt’in database and installation of collection systems for third parties, - selling content: installation of micropayment solutions to require payment for certain content or certain applications.

Hi-media's publishing customers benefit from accompaniment to optimise development of their audiences. They are marketed at national and local level, also with a « Special Operations » orientation, and benefit from the company's power and strike force on the on-line marketing market. The media agencies and advertisers can not only target their communication as effectively as possible and benefit from a consulting dimension and from accompaniment, but can also enjoy a guarantee of maximum coverage thanks to the power of the offering.

6.2.2.2.1.3. Hi-media Advertising: a service provider of advertising creations via its Hi-media Création studio Hi-media offers services to customers for producing advertising creations to offer all digital services that could be made available on the market in order to facilitate management of its customers' campaigns. Hi-media can then act as their sole contact for management of an advertiser's on-line communication strategy. Hi-media's own studio, Hi-media Création, offers complete creative services covering both the Internet medium and the Mobile sector and ranging from creation of traditional advertising formats on the Internet to creation of an Internet or mobile microsite.

Examples of the Hi-mediaCréation studio's advertising creations

(traditional formats (banners, skyscraper, rectangle...) packaging / HTML e-mailing / HTML newsletter / video advertising formats / Our exclusive formats «... » / Microsite with database collection)

The team of the Hi-media creative studio also works proactively on creation of new advertising products that can be marketed by the network. The « Spot Live », for instance, was created by Hi-media. This format is something like a billboard that appears as a full page on the computer screen, resulting in maximum advertising impact for reputation campaigns. The format is displayed before the site's homepage in the interest of maximum coverage. It appears on the screen for a maximum of 30 seconds, and the surfer can close it if he prefers to access the site directly. Hi-media Création also has an Internet site in French and English versions to let surfers discover its range of clientèle services. The site is accessible at the following address: http://www.hi-media.com/studio. The creations relative to the Mobile domain will be incorporated there in the near future.

Examples de Spot Live

6.2.2.2.2. Hi-media Payments: Products and services for providing electronic payment solutions Hi-media Services develops sites' audiences by implementing its payment solutions, under the trade name Hi-media Payments, grouping the trademarks Allopass (on-line payment), Eurovox (interactive voice servers), Hipay (electronic wallet) and Mobile Trend (SMS Centre).

Allopass Allopass is the European leader in micropayment solutions in terms of number of transactions made per month, number of sign-ups, number of countries covered and diversity of micropayment approaches on the market. Allopass enables publishers to charge surfers, simply and perfectly safely, for access to content or web services.

Allopass now represents: - an average of 8 million transactions per month, - 280 000 registered sites, - 55 countries covered, - the greatest diversity of micropayment procedures on the market: Audiotel, SMS+ (SMS premium), prepaid cards (Neosurf in France, for instance), Internet plus (invoicing on the FAI invoices), bank card (local or international), and electronic wallet. Since February 2010, Allopass has been offering a new micropayment: MPME (Micro Paiement Mobile & Enablers) of which it is the official distributor for France. This solution, mainly intended for intermediaries, provides all publishers with simple and quick access to an effective micropayment solution for the mobile sector. The fact is that this solution makes it possible to invoice in two clicks on the operators' Mobile invoices (SFR, Bouygues Telecom, Orange) for the services and multimedia content of the mobile and landline Internet sites, and applications for amounts ranging up to 8 €.

How the MPME solution works for the user (entry of the mobile number and selection of the operator for purchase of the content Clickable SMS: link to the payment page Operator payment Confirmation page (Orange, Bouygues and SFR) Transaction made. Access to the content on the Internet site)

Allopass's worldwide coverage

(Allopass in the Americas: Argentina, Brazil, Canada, Chile, Colombia, Ecuador, Mexico, Peru, USA, Uruguay, Venezuela / Allopass in Europe: Albania, Germany, England, Austria, Belgium, Bulgaria, Croatia, Denmark, Overseas Departments and Territories, Spain, Finland, France, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Macedonia, Montenegro, Norway, The Netherlands, Poland, Portugal, Czech Republic, Romania, Russia, Serbia, Slovakia, Sweden, Switzerland, Turkey, Ukraine / New countries in 2009: Taiwan, Thailand, Hong Kong, Indonesia, Philippines, Bolivia, Tunisia / Other countries: Australia, Algeria, South Africa, Israel, Kazakhstan, Malaysia, Morocco, Singapore)

Allopass now enjoys unique positioning thanks to its complete control of the market's micropayment procedures: - For the Audiotel payments, Eurovox is the Server Centre, holding an L33 operator's license, - For the SMS+ payments, Mobile Trend is the SMS Centre, - For the bankcard payments, Hipay holds status as electronic money issuer in Europe.

The publishers of Internet sites can sign up directly on the Internet with the Allopass site and download a contract enabling them, after checking and approval by the Allopass teams, to incorporate the Allopass payment script into their site. Publishers incorporating Allopass enjoy access to an activity-monitoring extranet enabling them to check on the trend of the number of Allopass codes used on their site and hence on their remuneration. Needless to say, that depends on the value of the code paid by the surfer and on the amount of remuneration by code determined by Allopass. Surfers are charged as a function of the number of codes purchased. Those codes may then be used on all sites that have incorporated the Allopass platform. The publishers can then invoice Allopass, which will have collected the amounts paid by the users to the telephone operators or the companies publishing payment solutions.

Allopass offers all publishers the following collaboration approach: - no installation expenses, - no monthly subscription, - no duration commitment, - availability of payment script and voice messages translated into the languages of each country having an Allopass Audiotel access, - presence of legal information in each payment script, - a choice of available formats, - a capacity of 3 500 simultaneous calls, - a processing capacity of 3 SMS per second, - an SSL security protocol, the best performing and most widely used protocol.

As to the end user, Allopass offers complete service making for greater loyalty - no account to be created, - no software to be downloaded, - clear information concerning the payment amount, - multi-lingual customer service.

Example of transaction by SMS with Allopass on the user side

In the above example, the user makes his payment directly from his cellphone by sending an SMS to the number mentioned, here 233333, with the AP code as message. He then receives an SMS from Allopass with the code to be inserted on the web site. The transaction then takes less than a minute.

Process for integrating Allopass on an Internet site

. (Allopass form / Generation of the Allopass script / Allopass script / Integration of the Allopass script / Making the content secure / Access to your site's paid content)

Allopass offers its users a complete platform. The fact is that Allopass has an interface endowed with real-time statistics accompanied by charts, reporting and all codes inserted in the script (whether valid or not) making precise and detailed monitoring possible of all operations carried out in the account, particularly including details concerning revenue and the number of transactions by country, by product, by payment method or else by date (day, week, year).

Allopass customer interface – Statistical report

Allopass constantly offers new functionalities. In March 2010, Allopass launched some new payment scripts in the interest of better emphasis on the various payment solutions, and more intuitiveness. At the start go 2010, Allopass also developed some new API to favour implementation of the scripts on the Facebook applications.

Eurovox For 16 years, Eurovox has been offering hosting solutions for interactive voice servers and SMS, as well as voice content or SMS. The company holds status as an L-33 operator and is a partner of the Cegetel, Colt and Completel operators. Eurovox hosts more than 1 500 numbers, has a voice server capacity of 3 500 simultaneous calls, and possesses two dedicated data centres. Eurovox offers companies wanting to optimise their customer relations its interactive voice solution, which is personalisable, modulable and adaptive. In this way Eurovox accompanies companies in implementation of their call centre, « 08 » numbers, supplying them with auditing and advisory services and with technical installations.

« 08 » call routing managed by Eurovox for its customers

(The caller dials one of the « 08 » numbers. It is answered (the welcome message is automatically triggered). The caller is then redirected to a tele-advisor or to to an answering machine Outside business hours, the caller may leave a message, converted into MP3 format and sent by e-mail, so as to be recontacted by an advisor. 100% of the calls are handled)

Eurovox provides its customers with a management interface accessible every day around the clock. This means they can access their call statistics and the retransfers that might be associated with them.

Eurovox Management interface

Eurovox provides voice, mobile and digital applications in 14 countries: France, France DOM-TOM, Belgium, Switzerland, Luxembourg, Germany, United Kingdom, Canada, The Netherlands, Austria, Italy, United States and Sweden.

Thanks to these interactive voice server and SMS solutions, Eurovox also targets the advertisers wanting to crate voice content or SMS and generate income thanks to exploitation of such content (the weather, financial services...). Eurovox supplies them with services relating to hotline, dedication by SMS, Chat by SMS, Push SMS, and downloading of rings and logotypes. With these solutions regarding the supply of voice content and SMS, Eurovox also targets the publishers looking for content to attract an audience and win its loyalty, and to increase their revenue by monetising that audience. Hipay In December 2008, via its HPME subsidiary, the company publishing the Hipay electronic wallet, Hi-media obtained approval from the Banking, Finance and Insurance Commission (CBFA). This meant that HPME became the first electronic money establishment in Belgium. The approval enabled HPME to benefit from a European passport to offer the Hipay solution to all world tradesmen and European purchasers, this applying in the 27 countries of the European Union.

Example of a purchase transaction with Hipay

(Feeding – CP transfer – CP payment cards -Visa – Mastercard – Domestic cards Purchasers / User space HIPAY account – Hipay / payment by account – Direct payment / tradesmen / User space Hipay account – Bank account – Withdrawal by transfer)

With Hipay, the buyer pays for his purchases with perfect safety, without providing the site with his banking particulars or his payment card number. He also benefits from a solution for transferring money to a third party and managing his on-line expenditures. For the purchaser, the Hipay electronic wallet functions in the following way: after reloading by bankcard, the account displays a credit in the amount of the sum credited. The money can be used to carry out transactions (transfers or purchases) with any Hipay partners. No use period or use-by date is imposed. The holder of a Hipay account may submit a request at any time to withdraw and recover his available balance. During the commercial transaction, Hipay acts as a security interface between the cyber-purchaser and the on-line tradesmen. We mean that following the customer’s order, the tradesmen send a payment requests to Hipay, which validates the payment order, carries out the securities, and provides the tradesman with confirmation of the payment.

Hipay has very numerous advantages for the surfer in terms of simplicity, flexibility and easy use.

On the tradesman side, Hipay is a complete payment solution, a veritable e-commerce tool. Hipay manages the negotiations with the bank and the main payment card networks, provides access to a complete back office for management and marketing, and provides after-sale service for the tradesman and the cyber-purchasers.

Hipay offers tradesman advantages in terms of security, accessibility to payment cards and payment procedures, reimbursements, and backoffice services. Whether for the buyers or the tradesman, Hipay offers several exclusive innovations: - multi-account management gives individuals the possibility of opening secondary accounts for their children and makes them autonomous to a certain extent in managing their pocket money. The amounts spent and the purchases of content inappropriate to their age range can be blocked by a parental filter system. This principle is also spelled out for tradesmen - The anti-phishing key, a sentence or word predefined by the user at the time of signing up, is incorporated into the heading of each e-mail that the person receives, to guarantee an additional level of security, particularly in connection with the struggle against phishing. Phishing is a technique used by fraudsters to obtain personal information to take over an identity. The technique consists in persuading the victim that it is dealing with a trusted third party (bank, administration, etc.) to obtain personal information: password, credit card number, date of birth, etc. - Multi-currency management without any expenses on exchange transactions for the buyer, only a commission covering the risks being charged. The advantage to a tradesmen is being able to offer its products in the customer's currency without any forex expenses and, on the buyer's side, being able to pay for the product in the buyer's local currency. Altogether seven currencies are covered: the Euro, Swiss Franc, Sterling, Canadian Dollar, Australian Dollar, US Dollar and the Swedish Crown - A listing of all European payment means: Hipay negotiates with the banks directly in order to list all payments means used by buyers or sellers in Europe. For instance, in Belgium Hipay offers the Home Banking solutions of ING, Dexia online or else KBC/CBC. - Payment by e-mail enables any tradesman, even if it has no site, to include a clickable link in a marketing e-mail campaign redirecting the user to the Hipay site for settling purchases - Automatic affiliation is proposed to tradesmen to enable them to automatically remunerate their affiliated partners, thus facilitating their management

Mobile Trend Hi-media acquired Mobile Trend in June 2008. Founded in 2003, Mobile Trend is among the French specialists in the mobile Internet and in micropayment by SMS. This means that Mobile Trend is strengthening the Allopass leadership in SMS. That positioning firms up Allopasse's 32

commercial basis and generates some economies of scale. Moreover the acquisition of Mobile Trend made it possible to install new payment solutions for available content on the mobile Internet. With Mobile Trend, Hi-media took up a position on the emerging market for mobile advertising, benefiting from unique know-how in connection with the mobile Internet. Thus Hi-media, vis its Hi-media Advertising entity, offers advertisers special operations, competitions and direct marketing operations combining a presence on the Internet and on mobile multimedia sites.

6.2.3. SALES AND MARKETING POLICY

6.2.3.1. Sales and marketing Organisation Hi-media is an on-line media group carrying on activity as a content publisher, equipped with its own audience monetisation solutions (Hi-media Publishing).

Hi-media Publishing develops Internet sites in connection with « entertainment », and Hi-media Services then monetises the audience created as well as the audiences of partner sites by relying on its advertising network activities (Hi-media Advertising) and as a supplier of electronic payment solutions (Hi-media Payments).

Organisation and synergies for meeting publishers' needs: a diversified and integrated model

(280 000 partner sites Monetisation with)

Hi-media's marketing and sales organisation

(Sales and Distribution / Marketing and Production / Acquisition and Development)

The Acquisition & Development sector recruits the publishers of Internet sites of any size so as to deploy all audience monetisation services offered by Hi-media (advertising network, direct marketing services, and electronic payment solutions).

The Sale & Distribution sector markets all services developed by Hi-media to agencies, advertisers and publishers (sales of advertising space and of e-mail and SMS files, and of direct marketing solutions).

The Marketing & Production sector designs, develops and implements the various offerings, in collaboration with the other two sectors, so that the sales teams can market them. This sector is involved both transversely and vertically with all group trades in order to make internal communication more fluid and optimise it, develop links and synergies, and thus upgrade effectiveness. 33

To develop the audience of its sites as effectively as possible and to provide the most precise and most complete marketing arguments possible for marketing its advertising spaces, Hi-media has concluded partnerships with various local and European research institutes. Hi-media works with the European partner Insites and such local partners as Harris Interactive in France to determine the profiling of its sites' audience. Hi-media acquires various types of studies in the interest of the best possible characterisation of its market, particularly by subscription to: 2 tools relating to monitoring advertising investments and advertising comparisons in the interest of analyses of the Internet advertising market by use of such tools as Kantar Medisa's Medial Micro (formerly TNS media intelligence) in France, or the Nielsen AdRelevance in Italy, Spain, England and Germany, 3 audience analyses and audience certification tools with access to the data of the NetView Nielsen panel in France, England, Germany, Italy, The Netherlands and Spain, access to the CIM data in Belgium and to the AGOF data in Germany, or else to the STIR data in the Netherlands, 4 market surveys such as eMarketer and Forrester to obtain information and enrich the marketing arguments on the company's intervention markets.

As a primary player on the e-marketing and payments market, Hi-media is a member of several professional associations: 3 at European level: IAB, EIAA, Iash. 4 at local level: In France (EBG, SRI, Acsel, Geste, AFMM), in Germany (OVK, AGOF), in Spain (Fecemd, Ampe Medios), and in Belgium (DMA).

6.2.3.2. Pricing policy Hi-Media Publishing's pricing policy The Blogorama blog platform is marketed on a « white trademark » basis with a price grid including installation expenses and monthly variable costs indexed on the traffic recorded by the blog. Hi-media Publishing markets the audience of its sites via Hi-media Services. For the Fotolog site, in countries in which the company has no presence but in which the audience is sufficiently significant, such as Chile or Argentina, Hi-media Publishing then calls on outside networks for the advertising spaces.

Hi-Media Services pricing policy Hi-Media Advertising Depending on the services provided, Hi-media uses various procedures for invoicing the advertisers or the agencies. For buying advertising space, the invoicing procedure used is either CPM (cost per thousand advertising printings) or CPC (cost per click), or else CPL (cost per lead). The gross CPM range from 10 to 100€ depending on the distribution sites, the selected advertising formats, and the kinds of targeting done. For the advertising campaigns sold on a performance basis pursuant to the CPC and CPL, the rate depends on case by case negotiations with the advertiser in the light of its objectives and of the lead that is to be generated. The Hi-media rates for advertisers are expressed in terms of gross data and are modulated as a function of the type of medium and of the message targeting. Pursuant to practices in the business, Hi-media offers declining rates as a function of the volume of the campaigns, of the coupling of campaigns on several sites, and of the number of media used. Discounts are also granted to new advertisers, to brand names that are faithful to the network, as well as to professionals (agencies, purchasing offices). On certain network sites, Hi-media offers some possibilities for refining the campaigns by targeting the population in question. For rental of opt’in e-mail address files or of SMS files, the invoicing procedure is the CPM (cost per thousand e- mails or SMS rented). The gross CPM range from €.0.23 to €.0.5, depending on the kind of file rented and on the targeting criteria adopted. For advisory services on costumer relations and creation of advertising projects, the invoicing procedure is the man / day. One man/day costs €.600 to €.1 400, depending on the persons involved in the project.

Allopass Hi-media offers publishers a grid of retransfers on the amount of codes used on their site. This may change depending on the cost negotiated by Hi-media with the upstream payment operators, and as a function of the monthly average volume of codes used on each site. The retransfer procedures are based on cheques starting with €.5 for individuals, 1€ for professionals, and by transfer starting with €.150. The retransfer may also be made automatically. 34

A payment monetoring interface makes it possible to check on the status of the request. Depending on the country and on the payment procedure used, the retransfers fluctuate. The Allopass pricing conditions are accessible on the site Allopass.com.

Eurovox As a server center, hosting voice services ad SMS applications on surcharged numbers and SMS +, Eurovox receives an operator retransfer. Eurovox then charges the customer for its technical services and retransfers part of the operator retransfer to it. That retransfer ranges from 75 to 95 %, depending on the kind of service provided.

Hipay The Hipay pricing conditions are accessible on the site Hipay.com.

Mobile Trend The procedures regarding invoicing by SMS routing range from €.0.15 to €.0.6 per SMS, depending on the volume.

6.2.4. PRODUCTION MEANS AND TECHNOLOGIES The Hi-media Publishing and Hi-media Services entities use the same production means and technologies: - a commercial reporting tool: Mediareporting, developed in-house, - an advertising tool (advertising server): Hélios, published by Ad Tech company, - a Comtrack affiliation pletform developed in-house, - an e-mail routing tool: Edatis, published by the company of the same name, - a platform for Allopass secure electronic payment solutions, developed in-house, - a Hipay electronic wallet, developed in-house.

Hi-media uses Helios, an administration tool for sending advertising messages. That software makes it possible to define targeting and to determine the results of advertising campaigns, namely the advertisers' return on investment, by giving them access to campaign reports detailed by day, by hour, by country, by access supplier, etc. That use of a subcontractor, Ad Tech company in this case, was justified for cost reasons. In addition, the Comtrack internal tool for addressing advertising messages proved suitable for bearing a significant increase in workload. The growth of the Hi-media network as a whole has so far entailed some significant increases in the cost of sending advertising messages . The good performance levels of the Comtrack internal software led group management to decide to launch a development plan for that software to that it could bear an increasing workload that would correspond to management of all advertising objects distributed in the group network, but also to include the functionalities that are now lacking in it. Hence in 2009, the Comtrack solution continued to be developed to manage the Hi-media performance affiliation platform. Deployment and development of that platform should continue throughout the year 2010.

For routing its e-mail marketing campaigns, Hi-media has used Edatis company for 6 years now.

Hi-media has developed, in-house, a commercial management tool call Mediareporting. It enables the Hi-media sales force to enter its proposals made to advertisers under an Internet interface. That information feeds a database containing all commercial proposals. The proposals are then transformed by the same tool into order forms sent directly to the customer by e-mail or by fax. This system, the company's commercial memory, is a tool for helping with sales and for monitoring activity day-by-day, from which the Hi-media customer sites also benefit. The fact is that it offers them direct access to information concerning the receipts generated on their medium. An interface between Helios and Mediareporting has been developed to optimise commercial management The interfacing between these two pieces of software on one hand enables publishers to enjoy real-time monitoring (on day J+1) of changes in sales made on their site, and on the other hand lets Hi-media directly connect, by coding the sales campaigns filed in under Mediareporting, with their programming (under Helios). This system also facilitates management of invoicing, since it relies on a distribution-based invoicing procedure. With the acquisition of AdLink Media company, the Mediareporting tool was deployed in the nine European countries in 2009.

Allopass, Eurovox, Hipay, Mediareporting and Comtrack are proprietary tools resulting from Hi-media company's own technical developments. The company has a technical team and a substantial computer infrastructure for managing interactive voice servers, Internet servers, and servers hosting the other applications connected with electronic payments

6.3. HI-MEDIA'S INTERVENTION MARKETS

Hi-media uses the all possibilities offered by the Internet: as an advertising medium support, a direct marketing tool and a sales channel. Thus the company operates on several markets: - publishing on-line content, - on-line advertising, - electronic payment solutions. Hi-media is positioned as one of the major international players on the Internet market. Thus the Group operates in a market correlated with consumption of the Internet medium, the development of advertising tendencies, and with uses of electronic payments. Even if Hi-media has to deal with a particularly dynamic competitive universe, the Company has some real competitive advantages that are veritable key factors making for success.

6.3.1. CONSUMPTION ON THE INTERNET MARKET In the face of technological innovations such as the generalisation of broadband or the arrival of smartphones, combined with the explosion of the social networks, consumption of the Internet medium has changed a lot in the last few years. Surfers have become « consumers ». They are no longer mere passive consumers, but rather have become content producers and consumers making their own editorial choices. They are decision-makers when it comes to their way of consuming the media. They are the ones who choose to consume the content that they want, when they want, as Ipsos mentioned in a recent report called « The media offer, but individuals decide ».

So several key factors must be taken into account in connection with this change in consumption of the Internet medium, such as the Internet penetration rate in the world, the development of broadband intimately linked with the growth of e-commerce, the take-off of social networks, the explosion of digital content, or else the emergence of use of the mobile Internet.

13. Internet penetration rate: According to the Forrester forecasts (Global Online Population Forecast 2008 to 2013, July 2009), the world population of surfers should continue to increase strongly, with double-digit growth amounting to 46% expected by 2013, so as to reach 2.2 billion surfers compared with 1.3 billion at end-2008. A quarter of the world's population is now connected with the Internet (Source: International Telecommunication Union (ITU), "World Telecommunication Indicators Database" June 2009).

Connected world population by continents in 2008 and 2013

In terms of geographical breakdown, the Asian region holds first place with a 43% market share, followed by Europe (24%), North America (15%) and Latin America (10%). Africa, the Middle East, Oceania and Australia remain marginal, each with a market share of less than 5%.

Breakdown of the world's surfing population by regions

(North America – Latin America, Africa, Middle Source : Internet World Stats, septembre 2009 East, Oceania / Australia – Asia Europe ) (September 2009)

Even if Asia contains the largest number of surfers, that region is by far the one least connected with the Internet. The fact is that in terms of penetration rates, the most developed countries are the most heavily connected. North America is the region with the highest penetration rate, 74% of its population being connected. Europe arrives in third place with more than half of its population connected (52%). Latin America displays a weaker penetration rate, but one that is relatively substantial with almost a third of its population connected with the Internet (31%). That region is characterised by a very high concentration of its surfing population in two countries, since 59% of Latin American surfers live in Brazil or Mexico (Source: Forrester,Global Online Population Forecast 2008 to 2013, July 2009). Moreover that region should display one of the strongest growth tendencies with a rate estimated at 52% as against 46% growth predicted for the world population between 2008 and 2013, according to Forrester. Moreover there is no need to prove that region’s high potential, since Brazil already ranks 7th in the world with 44 million surfers, just behind Germany (the leading European country with a surfing population of 48 million at end- 2009). (Source: eMarketer, December 2009).

Internet penetration rate by region (Source : Internet World Stats, September 2009)

(North America – Oceania/ Australia – Europe – Latin America – Middle East – Asia - Africa)

Trend of the surfing population in Brazil and in Mexico from 2008 to 2013

Hi-media company is present in geographical areas in which the Internet penetration rate is highest, namely North America, Europe and Latin America (in the two leading connected countries, Brazil and Mexico).

So in Europe, where Hi-media company has a strong presence, the Internet penetration rate is already high and should continue to advance in the next few years, with a 27% increase anticipated by 2013 so as to reach a total of 482.1 million surfers (Source : Forrester, Global Online Population Forecast 2008 to 2013, July 2009).

Of the countries in which Hi-media is established, 4 appear in the Top 5 of European countries in terms of number of surfers, namely, Germany, England, France and Italy.

Top 5 European countries in terms of number of surfers in 2009 (Source : Internet World Stats, September 2009)

(Germany – UK – Russia – France – Italy)

With an average penetration rate of 56% in Europe (number of users of the Internet represented by comparison with the entire Internet population), Hi-media is present in the European countries characterised by the highest penetration rates (except for Portugal), with an Internet penetration rate of: - 89% in Sweden - 86% in The Netherlands - 76% in England - 72% in Spain - 70% in Belgium - 69% in France - 66% in Germany - 52% in Italy - 42% in Portugal (Source : Internet World Stats December 2008).

Internet Population in Europe broken down by countries Population Internet Users, % Population User Growth % Users Europe ( 2009 Est. ) Latest Data (Penetration) (2000-2009) Europe Suede 9,059,651 8,085,500 89% 99.7 % 1 .9 % Pays-Bas 1 6,7 1 5,999 1 4,304,600 86% 266.8 % 3.4 % UK 61 ,1 1 3,205 46,683,900 76% 203.1 % 1 1 .2 % Espagne 40,525,002 29,093,984 72% 440.0 % 7 .0 % Belgique 1 0,41 4,336 7 ,292,300 70% 264.6 % 1 .7 % France 62,1 50,7 7 5 43,1 00,1 34 69% 407 .1 % 1 0.3 % Allemagne 82,329,7 58 54,229,325 66% 1 26.0 % 1 3.0 % Italie 58,1 26,21 2 30,026,400 52% 1 27 .5 % 7 .2 % Portugal 1 0,7 07 ,924 4,47 5,7 00 42% 7 9.0 % 1 .1 % Albania 3,639,453 7 50 21 % 29,900.0 % 0.2 % Andorra 83,888 59,1 7 1 % 1 ,082.0 % 0.0 % Austria 8,21 0,281 5,936,7 00 7 2% 1 82.7 % 1 .4 % Belarus 9,648,533 3,1 06,900 32% 1 ,626.1 % 0.7 % Bosnia-Herzegovina 4,61 3,41 4 1 ,441 ,000 31 % 20,485.7 % 0.3 % Bulgaria 7 ,204,687 2,647 ,1 00 37 % 51 5.6 % 0.6 % Croatia 4,489,409 2,244,400 50% 1 ,022.2 % 0.5 % Cyprus 1 ,084,7 48 335 31 % 1 7 9.2 % 0.1 % Czech Republic 1 0,21 1 ,904 6,027 ,7 00 59% 502.8 % 1 .4 % Denmark 5,500,51 0 4,629,600 84% 1 37 .4 % 1 .1 % Estonia 1 ,299,37 1 888,1 68% 1 42.3 % 0.2 % Faroe Islands 48,856 37 ,5 77% 1 ,1 50.0 % 0.0 % Finland 5,250,27 5 4,382,7 00 84% 1 27 .4 % 1 .0 % Gibraltar 28,7 96 9,853 34% 51 5.8 % 0.0 % Greece 1 0,7 37 ,428 4,932,495 46% 393.2 % 1 .2 % Guernsey & Alderney 65,484 46,1 7 0% 1 30.5 % 0.0 % Hungary 9,905,596 5,87 3,1 00 59% 7 21 .4 % 1 .4 % Iceland 306,694 285,7 93% 7 0.1 % 0.1 % Ireland 4,203,200 2,830,1 00 67 % 261 .0 % 0.7 % Jersey 91 ,626 28,5 31 % 256.3 % 0.0 % Kosovo 1 ,804,838 37 7 21 % 0.0 % 0.1 % Latvia 2,231 ,503 1 ,369,600 61 % 81 3.1 % 0.3 % Liechtenstein 34,7 61 23 66% 1 55.6 % 0.0 % Lithuania 3,555,1 7 9 2,1 03,47 1 59% 834.9 % 0.5 % Luxembourg 491 ,7 7 5 387 7 9% 287 .0 % 0.1 % Macedonia 2,066,7 1 8 906,97 9 44% 2,923.3 % 0.2 % Malta 405,1 65 200,2 49% 400.5 % 0.0 % Man, Isle of 7 6,51 2 ------0.0 % Moldova 4,320,7 48 850 20% 3,300.0 % 0.2 % Monaco 32,965 22 67 % 21 4.3 % 0.0 % Montenegro 67 2,1 8 294 44% 0.0 % 0.0 % Norway 4,660,539 4,235,800 91 % 92.5 % 1 .0 % Poland 38,482,91 9 20,020,362 52% 61 5.0 % 4.8 % Romania 22,21 5,421 7 ,430,000 33% 828.8 % 1 .8 % Russia 140,041,247 45,250,000 32% 1 ,359.7 % 1 0.8 % San Marino 30,1 67 17 56% 580.0 % 0.0 % Serbia 7 ,37 9,339 3,300,000 45% 7 25.0 % 0.8 % Slovakia 5,463,046 3,566,500 65% 448.7 % 0.9 % Slovenia 2,005,692 1 ,300,000 65% 333.3 % 0.3 % Svalbard & Jan Mayen 2,1 98 ------0.0 % Switzerland 7 ,604,467 5,7 39,300 7 6% 1 68.9 % 1 .4 % Turkey 7 6,805,524 26,500,000 35% 1 ,225.0 % 6.3 % Ukraine 45,7 00,395 1 0,354,000 23% 5,07 7 .0 % 2.5 % Vatican City State 545 93 1 7 % 0.0 % 0.0 % TOTAL Europe 803,850,858 418,029,796 52% 297 .8 % 1 00.0 % NOTES: (1) The European Internet Stats were updated for September 30, 2009. (2) Detailed data for indiv idual countries can be found by clicking on each country name. (3) The population numbers are based on data contained in U.S. Census Bureau. (4) The usage numbers come from various sources, mainly from statistics published by Nielsen Online , ITU , GfK, and other trustworthy sources. (5) Data may be cited, giv ing due credit and establishing an activ e link back to InternetWorld Stats . (6) For definitions and help, see the site surfing guide. © Copy right 2009, Miniwatts Marketing Group. All rights reserved worldwide.

(Sweden, Netherlands, UK, Spain, Belgium, France, Germany, Italy, Portugal)

With more than half of the European population connected in 2009, the Internet is now a mass medium that has become more democratic, particularly with the development of broadband Internet connections.

- The broadband take-off It was during the year 2005 that the number of European households with a broadband connection came to exceed the 50% mark. At the end of 2005, 60% of European households had a broadband connection (ADSL, cable). During the following years, Broadband coverage continued to grow, reaching 90% in 2009.

Trend of the penetration rate of households with a broadband connection in Western Europe (out of the total of Internet households) (Source : Forrester Research)

97% 92% 93% 95% 86% 90% 78% 71% 60% 44% 30% 19% 11% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

In the United States, one notes the same kind of uptrend as in Europe, but two years ahead. At end-2009, 96% of the surfing households already had a broadband connection

Trend of the penetration rate of households with a broadband connection in the United states (out of the total of Internet households) (Source : MAGNA, « MAGNA On-Demand Quarterly » with US Census Bureau, Federal Communications Commission (FCC) and company reports, January 2010)

97% 98% 98% 99% 92% 96% 88% 79% 65% 54% 42%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

In Brazil, where Hi-media is also established, the great majority of surfers have a broadband connection, with an estimated penetration rate of 87% for the end of 2009 according to the IAB.

Trend of the broadband penetration rate in Brazil (out of the total surfing population)

Thus the generalisation of broadband first of all enabled the Internet population to connect more easily thanks to conditions making for faster access to the network. Thus use of the Internet medium gradually intensified, giving rise to a change in behaviour patterns regarding consumption of that medium. The Internet medium has become vital in surfers' daily lives.

- A broadband generalisation promoting more intensive use of the Internet medium.

According to the EIAA Mediascope Europe report dated January 2010, more than half (54%) of European surfers connect with the Internet daily on a computer or a cellphone, this applying to both sexes and all ages, with a larger consumption of the medium by people under the age of 35. Unsurprisingly, the Nordic countries, the most mature markets, are the biggest consumers of the medium with a percentage of surfers connecting daily reaching 84% in The Netherlands, 81% in Sweden and 73% in England.

% of surfers making daily connection in 2010

Source: EIAA Mediascope Europe Study, January 2010

According to that same study, as indicated in the chart below, the Internet is the leading medium in terms of time spent during the day: 74% of surfers connect with the Internet every week between 10 a.m. and 5.30 p.m., against 66% that listen to the radio or 43% that watch television.

Use of the Media by time intervals in 2010

Source : EIAA Mediascope Europe Study January 2010

The Internet is also the medium considered most important, ranking equally with television. 33% of surfers feel that without the Internet or without television, themMedia world would not exist.

What is the medium, in your opinion, that would best correspond to this quotation: « The world of the media would no longer exist without… »

- More intensive use giving rise to different consumption approaches

The e-commerce take-off With the intensification of use of the Internet medium, surfers changed their consumption habits. They gradually turned more to e-commerce, which has registered double-digit growth for several years now to reach 447.6 billion dollars in 2009 at world level. That strong growth should continue in the next few years, and a 13.8 % increase is forecast for 2010.

Trend of e-commerce revenue in the World 2008-2012 (in millions of $)

Even if the e-commerce share of total retail sales remains low (2.9% in 2009), it should continue to increase in the next few years to reach 4% in 2015.

E-commerce share of total retail sales 2009-2015

In Europe, e-commerce recorded 22% growth in 2009 to reach 145.7 billion according to the CRR (Centre for Retail Research, in a report commission by Kelkoo). The strong advance of this market should continue in 2010, with a growth rate estimated at 22%.

Trend of e-commerce revenue in Europe 2008-2012 (in millions of $) (Source: Centre for Retail Research, January 2010)

Montant depense sur internet dans le Ventes en ligne (en milliards d'euros) commerce en ligne par internaute en 2009

Angleterre € 42,7 € 1 240 Allemagne € 33,4 € 765 France € 24,7 € 995 Italie € 8,3 € 935 Benelux € 8,2 € 709 Espagne € 6,3 € 779 Danemark € 3,9 € 1 213 Suisse € 3,8 € 868 Suede € 3,8 € 802 Norvege € 3,3 € 1 102 Finlande € 2,6 € 976 Pologne € 2,5 € 362 TOTAL € 143,7 € 871

(On-line sales (in billions of euros) – Amount of Internet expenditure on on-line trade per surfer in 2009 / England – Germany, France, Italy , Benelux, Spain, Denmark, Switzerland, Sweden, Norway, Finland, Poland, Total)

According to Forrester, the number of cyber-purchasers in Europe is increasing constantly. At end-2009, 137 million European surfers were reported as already having bought something on-line. There should be 187 million by the end of 2014, a 36% increase from 2009.

Trend of the number of cyber-purchasers in western Europe

Source: Forrester Research, March 2009 “Western European Online Retail And Travel Forecast, 2008 To 2014 “; online buyers are Net users who have ordered goods or services online at least once in the past three months

In terms of penetration rates, 40% of the European surfers made an on-line purchase in 2009. Half of the European surfing population should be cyber-purchasers in 2012.

Trend of the e-commerce penetration rate in western Europe (% of total surfers)

Moreover, the penetration rate of on-line commerce is much higher in the European countries that are most mature in terms of Internet use. For instance, it reaches 71% in France (Source: Mediametrie/Fevad, December 2009), 66% In England, 63% in Sweden and 56% in Germany (Source: Eurostat, « Internet Usage in 2009 »).

The social networks' take-off

In the last few years, the Internet has been marked by the social networking phenomenon, as those networks won acceptance among the main Internet activities. At the end of 2008, the use of social networks exceeded e-mail use, with a world penetration rate of 66.8%, against 65% for e-mail.

Top 5 Internet activities ranked by penetration rate in the world

This phenomenon has continued to increase, since in September 2009, as is indicated in the table below, more than 70% of surfers in Europe visited the social networks monthly: 72% in Spain, 77% in Belgium and 85% in England.

Number of unique users and penetration rates of the social networks in Europe for selected countries (September 2009)

As with the penetration rate, the time spent on the social networks also increases, recording an 82% rise in 2009 (Source : Nielsen, December 2009). With a world average per surfer of 5 hours and 35 minutes per month on the social networks, surfers spend 2 and a half hour more on this kind of site than a year ago.

World: Time spent per surfer on the social networks

Source : Nielsen, December 2009

The time spent on the social networks is even greater than the world average in certain European countries, such as Spain or England, in which the average is 6 hours per month.

Number of surfers and time spent per month on the social networks (December 2009)

Source : Nielsen, December 2009

By way of this new kind of site, surfers have modified their consumption pattern for the Internet medium. They have appropriated it, and have gradually shifted from being consumers to being « consumers-players » by becoming, themselves, content producers - by integrating videos, photographs, or comments and articles.

A the same time, thanks to the technological innovations and to the broadband increase, the offering of digital content is developing strongly, implying different consumption of the media as a whole. So ever more numerous surfers are listening to the radio on-line, looking at videos, or watching TV, sports or musical programs on-line. A new phenomenon is appearing, marking the beginning of consumption of the media chosen by the consumer, and no longer imposed on him. It is the beginning of individualisation of consumption and of the convergence of the media aimed at consuming a medium on a base other than the original one. Surfers now want to consume « what they want, and when they want it ». The strong growth of consumption of digital content reflects this new consumption phenomenon. There are ever more numerous consumers who consume digital content to be able to do so where they want: on their cellphone, on their computer, on their MP3 reader, on their games console... In 2009, 45% of European surfers watched videos on the Internet and 35% listened to music on-line.

Percentage of surfers in Western Europe accessing content on the Internet

With the democratisation of the Internet, surfers have anchored the use of the Internet in their consumption habits, and in addition it has become a full-fledged medium. 70% of the world's surfers even feel that the Internet is the medium without which they could no longer live, thus putting the Internet ahead of television.

% of persons feeling that they could not live without one of the following media...

The Internet should take on even more importance in the near future. The arrival on the market of smartphones, electronic books, PC tablets, Netbooks and other mini-PCs is reshaping use of the Internet by variations in the form of « several webs » that each person will use and appropriate depending on his own situation and needs, thus giving rise to greater use of the Internet.

An ever higher Internet penetration rate, broadband development, more time spent on the web, increased surfer confidence in on-line purchasing and the anchoring of the net in mecdia consumption habits are all factors that promote the growth of the on-line advertising market and of the electronic payments market.

. 6.3.2. TENDENCIES AFFECTING THE INTERNET ADVERTISING MARKET AND THE ELECTRONIC PAYMENT MARKET

6.3.2.1 Tendencies on the advertising market via the Internet In an economic crisis context, the advertising market has recorded a definite slowdown. The world pluri-media market dropped by 10.2% in 2009. According to the main experts, the return to growth will occur gradually and should not really manifest itself until 2011. For 2010, GroupM forecasts growth of 0.8% for the world pluri-media market, while Zenith Optimedia anticipates 0.9% growth and Magna, the most optimistic one, predicts a 6% increase.

Growth rate of media advertising expenditures in the world and in Europe 2009-2012

Monde Europe

4,8% 3,9% 2,8% 3,3% 0,9%

-0,5%

-10,2% -11,8%

2009 2010 2011 2012

Source ZenithOptimedia, December 2009

On its part, the European pluri-media market recorded a sharper fall than the world as a whole in 2009, with an 11.8% decline compared with 10.2% for the world average (Source : Zenith Optimedia, December 2009). The increase in European pluri- media advertising investments in the coming years should also be below the world average level, as indicated in the following table.

Growth rate of pluri-media advertising expenditures by regions 2008-2012

However, due to its effectiveness, its speed and its excellent return on investment, the Internet medium has benefited from a reallocation of advertising budgets from the other media. Trend in % of advertising expenditures by media in the world 2009-2012

2009 2010 2011 2012 Internet 9% 12% 13% 13% Television -8% 2% 5% 5% Cinema -8% 2% 6% 6% Affichage -9% 2% 5% 5% Radio -11% -2% 2% 5% Newspapers -17% -4% -1% -1% Magazines -20% -4% -1% 0%

croissance positive (display (affichage) – positive gross)wth Source: Zenith Optimedia, December 2009,Internet including the display, search and classified advertisement investments

Trend of market share by medium in the world 2008-2012

Source:Zenith Optimedia, December 2009

Reallocation of advertising budgets to the benefit of the Internet medium should continue in the coming years. Moreover Optimedia estimates that the Internet market share will exceed the daily press share in 2015, thus becoming the 2nd-biggest medium.

However, this positive growth of the Internet medium at world level results from an increase of that medium in the emerging countries as well as in Latin America The fact is that at local level, in the United States and in the European countries, the Internet suffered a decline in 2009, although less marked than for the other media, to be sure.

On the US market, the world's leading one for advertising, Internet advertising declined by 3% in 2009 according to Magna. That dip should not continue in the coming years, since average growth on the order of 9.5% is anticipated for the next few years.

US: Revenue (in billions of $) and growth rates of advertising investments on the Internet

Many research firms have confirmed this tendency. According to Barclays, the American Internet advertising market also fell by 3% in 2009 but should increase by 8.9% in 2010.

US: Growth rates of advertising investments by media 2008-2011

At European level, the share of advertising expenditures devoted to the Internet will continue to rise and should account for 14% of total pluri-media net expenditures in 2013 (Source: Forrester, Display and Search Advertising Forecast, February 2010).

Trend of the Internet market share in the pluri-media in Europe

14%

12%

10%

0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Forrester, Display and Search Advertising Forecast, February 2010

However, even though the Internet market share should advance, in terms of investments, the on-line advertising market recorded a 3.5% decline in 2009 (Source: Magna, December 2009, "2010 Advertising Forecast").

Trend of advertising investments by media in the EMEA zone (Europe, Middle East , Africa)

Source: Magna, December 2009, "2010 Advertising Forecast" ; *Internet including Display, search and classified advertisements

On the European markets on which Hi-media is present, the most important ones are as follows, in decreasing order: United Kingdom, Germany, France, Italy, Sweden, The Netherlands, Spain, Belgium and Portugal. The first three alone account for 66% of the Display market (Source: Forrester, Display Advertising Forecast, February 2010).

In the United Kingdom, the leading European market in terms of Internet advertising investments, 2009 was the year of on-line communication. The fact is that for the first time, advertising investments on the Internet (Display, Search, Classifieds) exceeded Television's. Generating 1.75 billion £ in net advertising receipts for the 1st half of 2009, up 4.6% by comparison with the first half of 2008, on-line communication holds a 23.5% share of the global advertising market, ahead of Television.

UK: Growth rates of advertising investments by media: 1st half 2009 vs 1st half 2008

However, among the Internet advertising investments, the Display market, on which Hi-media is positioned, experienced a tough 2009. The IAB has not yet released figure for the year 2009, but in the first half the Display advertising market was down by 5.2%.

UK: Revenue (in millions of £) and growth rates of Internet advertising investments

The Display decline in the second half of 2009 should be attenuated, because, according to the research institutes, the year 2009 wound up with stability or even a slight increase. According to Forrester, the Display increase in 2009 would have been only 0.6%. The move back up toward a double-digit growth rate is not anticipated before 2014, and the growth rates for the next three years should be, respectively, 3%, 5% and 7% (Source: Forrester, Display Advertising Forecast, February 2010).

In France, according to the SRI (Syndicat des Régies Internet), Internet advertising increased by 6% in 2009 to a total of 2.11 billion euros net. That increase, due mainly to the higher investments in search and affiliation, has to be put in proper perspective from the viewpoint of the negative developments in the traditional media: -10.3% for Television, - 19.1% for the magazine press, -8% for the daily press. Moreover Display, as also happened on the American and English markets, suffered from the advertising crisis, and recorded a 6% decline in 2009 with a total of 480 million euros in net revenue against 510 million in 2008.

France: Trend of on-line net advertising investments (in millions of euros) 2008-2009

The significant slowdown noted in the first half stabilised at the end of the year. The Display market should be stimulated in 2010 by the increase of advertising investments connected with the performance and Branding problems via the video format, inter alia, thus bringing a return to positive growth in 2010.

France: Trend of on-line net advertising investments (in millions of euros)

Source: SRI, Capgemini Consulting, « Observatoire de l’e-pub, 3éme édition », January 2010

On the other European markets on which Hi-media is established, one also notes a slowdown in display advertising investments in 2009, with growth rates of 1% to 2% in that year. As in France or in England, the recovery will occur gradually in each European country. It is in the Southern countries (Spain, Italy and Portugal) that growth should be highest, since the growth levels of 2008 (before the crisis) will be reached again as of 2010.

Display advertising growth rates

30% 2007 2008 2009 2010 2011 2012 2013 2014 26% 25% 24% 23%

19% 20% 19% 19%

15% 15% 13%

11% 11% 11% 10% 10% 10% 9% 8% 8% 6% 5% 5% 3% 3% 2,5% 2,0% 2% 2,0% 1,7% 1,7% 2,1% 1,0%

0% Germany Sweden Netherlands Belgium Italy Spain Portugal

Source : Forrester, Display Advertising Forecast, February 2010

Trend of net revenue from Display advertising (in millions of euros)

€ 1 200 € 1 083 2007 2008 2009 2010 2011 2012 2013 2014

€ 1 000

€ 800 € 724

€ 600

€ 400 € 290

€ 179 € 200 € 176 € 175 € 162 € 129 € 117 € 106 € 53 € 37 € 26 € 42 € 0 Germany Sweden Netherlands Belgium Italy Spain Portugal

Source: Forrester, Display Advertising Forecast, February 2010

To conclude, in spite of the economic conditions and the tense advertising context, the on-line European display advertising market should post gradual growth in the coming years, with a return to double-digit growth anticipated starting in 2013. According to Forrester, the Display growth rate should exceed 4% in 2010, 6% in 2011, and 8% in 2012, reaching 10% in 2013.

Growth rate forecast for Display advertising in Western Europe 2010-2014

12% 11% 10% 10% 8% 8% 6% 6% 4% 4%

0% 2010 2011 2012 2013 2014

Source: Forrester, Display Advertising Forecast, February 2010

The European Display market should generate 3.1 billion Euros in 2010.

Forecasts of on-line net advertising investments in Europe by categories

Source: Forrester, Display and Search Advertising Forecast, February 2010

In Brazil, unlike such mature markets as Europe and the US, the Internet market is growing strongly and offers high potential because of the size of the population on that market. With a mere 32.6% penetration rate, the Internet already counts 64.8 million surfers, almost twice the French web population (Source: emarketer,February 2010). Moreover Brazil is Latin America's leading country in terms of Internet use, of number of surfers, and also of advertising investments. Numerous research funds have estimated growth of the Internet advertising market at double digits for 2009. According to IAB Brazil, the recorded rise came to 30% in 2009. According to Magna, the 2009 increase in Display advertising was 33.6%, to reach 340 million euros. A double-digit increase is anticipated for the next few years: 13.8% in 2010 and 12.6% in 2011.

6.3.2.2 Electronic payment market tendencies Via its Allopass and Hipay entities, Hi-media holds a position on the electronic payments and micropayments market. The term « micropayments » designates all of the resources and technologies made available to the digital media to enable them to obtain payment for access to a service or to content in an amount of less than 15€ (and even, most often, less than 5€). The recent trend of the Internet sites' economic model shows that those sites are coming closer to the economic models of « minitel » service publishers that obtain payment for access to their service by means of a telephone surcharge, or of the television networks that have viewers participate in games or in votes paid by SMS or Audiotel. This trend dates back for about 9 years, when the major dailies (Le Monde, les Echos in France, Wall Street Journal in the United States) begin charging for access to certain types of Internet content (archives, reports). That tendency accelerated in 2001 and 2002 with the slowdown and the sudden decline of the on-line advertising market that provided the majority of the digital content publishers' receipts. Thus access to the electronic additions of the dailies was put on a paying basis for each act or was by subscription for many of them in the United States, as well as in Europe. Certain services that were previously offered free to surfers and were financed by advertising income gradually became paying services, and numerous others are now being launched every month: - on-line video games, particularly with a number of players, - an increase in the storage capacity of the e-mail letter boxes on webmails, 55

- dispatch of interactive postcards by e-mail, - access to information not available in free offers (market prices live, commercial and financial data from the clerk's offices of the Commercial Courts, newspaper archives, etc.), - access to personalised advice (stock market, horoscopes, on-line prices, etc...), - services connected with classified ads (handing in an ad or obtaining particulars of the person running it, depending on the economic model adopted), - access to certain video programs of television networks.

The main payment procedures used for micropayments are Audiotel, bank cards, SMS+, the Internet+, prepaid cards and the electronic wallet.

Audiotel The increasing use of ADSL by households and in broadband Internet use in the workplace makes Audiotel very attractive to users: use is simple, and the charges appear in the usual operator’s telephone invoice. France retains this specific feature of still having a very important Audiotel economy, with publishers offering rather varied content, whereas the majority of other countries are familiar with surcharged landline numbers only for erotic services. The number of calls made by using surcharged numbers is considerable in France and has displayed a tendency to increase in the last few years because of the demand for this kind of solution connected with the Internet.

SMS+ The surcharged SMS has become possible from cellphones by sending an SMS, the authorised surcharge levels of which make it possible to modulate the prices of the services to be paid for. The very strong increase in the mobile telephone equipment rate and the progress made by terminals offered to the public have contributed to an explosion of the number of SMS sent and received by subscribers. Among them, the surcharged SMS are used ever more widely. On the other hand, payment by SMS is more developed elsewhere in Europe than in France, which is one of the last countries to have authorized SMS surcharges. In addition, in France for a long time, only the surcharges on SMS sent by subscribers (Mobile Originated) were authorised, and not, as occurs in the majority of other European counties, a surcharge on SMS sent or received by the subscribers (Mobile Terminated). The fact that payment can be made in both directions makes it possible to develop game applications or information reception that are simpler to present and to promote. That also makes it possible to establish higher unit prices for services by asking the user to send and receive a surcharged message to obtain access to the servers.

Internet+ Seven years ago, France Télécom launched an important technological innovation in micropayments by offering an Internet electronic payment system base with just a few clicks called the WHA. A surfer wanting to buy a product or a service on the site using the WHA technology can do so in a few seconds, without any base other than his computer, and he will be debited directly for his purchases vis the invoice of his access supplier. That initiative wound up with creation of the Internet + kiosk, which took over the operation of the WHA but has widened it to 5 access suppliers (Wanadoo, Alice, AOL, Club Internet, NeufCegetel). Hi-media obtained the Internet+ label and offers purchase of the Allopass codes by this payment system. Intent + is specific to France, since there is no solution common to the main access suppliers in the other countries. The main European access suppliers are likely to gradually offer micropayment technologies that function via procedures close to Internet +.

Prepaid cards The access codes for paid services may also be obtained by buying prepaid cards in tobacco shops, like the ones marketed by Neosurf company (purchase of several codes for amounts ranging from 10 to 50€).

Bank cards Payment by bank card developed very strongly in 2002-2003 with the increased amount of e-commerce, which, for substantial purchases, emphasizes or even requires that solution. The majority of banks have developed interfacing solutions for electronic shopping centres with the carte bancaire Economic Interest Grouping. The solutions of the CM-CIC (CM-CIC P@iement) and of BNP Paribas (Mercanet) are among the most widely distributed in France. They favour sales of products or services in unit amounts at least equal to a few euros since each transaction gives rise to charging a fixed commission in addition to the variable commission. Bank card payments represent the majority of e- commerce transactions, whether in France or in Europe generally. However, these are not micropayments in the proper sense, since the amounts in question are relatively high and average more than 100 euros.

The electronic wallet The electronic wallet was developed recently following the democratisation of on-line commerce and the emergence of paid digital content. In the face of questions about Internet security and of a pubic that does not always have a bank, some new payment solutions were contemplated to enable surfers to pay without a bank card. Those new solutions are micropayments in small amounts (less than 15 euros) and electronic wallets for larger amounts. The user must create an account with a technology supplier, and must then credit it by cheque, bank transfer, bank card, prepaid card or by using some other local payment means via a secure network on the site hosting it. He may then use it to make his purchases on any Internet site whatsoever that has incorporated the said technology as a payment solution. One of the main advantages of payment by electronic wallet is the fact that the surfer does not have to supply his banking particulars to the on-line sale sites. As to players on that market, no major one has really emerged in Europe to the extent of being recognised as an unquestionable standard, with the exception, perhaps, on the English market of Paypal, a subsidiary of Ebay, the American on-line commerce and auction giant. Since the market is therefore still an open one, Hi-media has decided to launch its own electronic wallet, Hipay, offered inter alia to the site using the Allopass platform.

As previously mentioned, the market for paid content is growing rapidly. In Europe, that market on the Internet is said to have amounted to 1.5 billion euros in 2009 and should increase by 24% in 2010 to reach 1.9 billion euros. The 2-billion-mark should be reached in 2011. Music, games, sports, news and video are the main types of paid content identified by the Forrester research institute.

Trend of sales of paid digital content by category in Western Europe, in millions of Euros, 2007-2014

Even if only 27% of European surfers paid for digital content in 2009, some 42 % are thought to be intending to do so in the future (Source: Forrester, European Paid Content and Activity Forecasts, 2009 to 2014, October 2009).

Proportion of European surfers buying digital content or intending to do so

According to Forrester, as is indicated by the above chart, there are many European surfers intending to buy digital content relative to the entertainment sector (music, games, video, virtual universes) and information (books, news).

Furthermore in a crisis economic situation, the advertising market contracted, implying a search by publishers for new sources of revenue. In such a case, paid or premium content is then regarded by the publishers as an additional revenue source.

In the on-line press sector, numerous publishers have gotten into paid content to cope, in particular, with the precarious nature of press advertising receipts. The fact is that according to Zenith Optimedia, press advertising

investments at world level dropped by 20% in 2009. Hence numerous newspapers have announced a desire to launch offers regarding paid access to their on-line publication: - In the United States, the Journalism Online project provides for launching a shared platform of paid news. It is said to have already grouped more than 500 American and European newspapers. - In France, le Monde newspaper is already offering a paid subscription zone on its site totalling 100 000 subscribers (Source: le Monde press release dated 10 February 2010). On their part, l’Express and Le Figaro have announced that they would initiate a paid content formula during 2010. - In Germany, on 9 December Axel Springer announced that it was going to require payment for certain on-line articles, as well as for access by iPhone to the content of two of its leading newspapers, Bild (1.59 euros per month without a printing option) and Welt (2.99 euros for the non-printable version). Since then, on 5 February 2010, the «regional» content and the «archives» of the Hamburger Abendblatt (Hamburg) and of the Berliner Morgenpost (Berlin) were put on a paying basis on the Internet, respectively, in amounts of 3.99 euros and 4.99 euros per month.

In the field of on-line music, the success scored by the iTunes micropayment system is stirring up numerous players, wanting in turn to take advantage or this buoyant sector. Numerous initiatives have been launched recently, and here are some examples:

- In November 2009 Sony announced that it was getting ready to launch an on-line platform called « Sony Online Service » on which surfers will be able to buy multimedia content, whether in connection with music, video games, books or films.

- In February 2010 Hewlett-Packard launched an on-line music server accessible in Europe and based on a subscription approach called MusicStation. For 9.99 euros per month, the users of 16 HP computer models will be able to enjoy unlimited access to a richh musical catalogue of 6.5 million titles gleaned from four record majors and from independent record companies.

In the face of the explosion of use of on-line video, numerous players have gotten into this market, with integration of paid content offerings. Youtube, Google's video platform, also began is first test of on-line film rentals in the United States in January 2010.

Because of the explosion of the social networks, and particularly of the Social Games*, the publishers, ever looking for a more profitable business model, have tried to monetise this audience manna. So they integrated a new « virtual » business model based on creation of virtual currency that can be acquired via micropayment solutions. The fact is that one of the major phenomena of the year 2009 will have been the creation of virtual currency. Hence the biggest players now have their own virtual currency:

- Facebook, with its Facebook Credits,

- Second Life, with its Linden Dollars,

- Blizzard, publisher of the World of Warcraft game, with Or, its main virtual currency,

- Dofus, the French leader of the MOPRG (videogames, mainly for numerous players), with its Kamas.

Hence the virtual currency market is a fast-growing emerging one, which generated 2.2 billion dollars in revenue in 2009 worldwide, up 67% from 2008. The enthusiasm for virtual currencies should increase, since double-digit growth is anticipated for at least the next four years.

(*Social Games: on-line games integrated into the social networks. They are generally simple games, which anybody can use without needing to absorb complicated game rules).

Trend of revenue generated by virtual objects in the World 2008-2013

If you look at players in the press, television, video, music, games, social networks... they are all looking for new revenue sources in the interest of higher profitability, and are launching out into integration of paid content based on the micropayment model, thus creating some strong growth opportunities for the micropayments market and for electronic payments

In addition, the impending authorisation in France of betting sites for sports, horse racing, and on-line poker will contribute to development of the volumes of on-line payment transactions.

In addition to the paid content that can be purchased on the Internet sites, there is mobile paid content, which constitutes a very great opportunity for the micropayment market. The fact is that because of mobile's closeness to the consumer and its roving aspect, itl is a medium favourable to impulse buying of products or services for small amounts. The mobile subscriber can consult and buy the content in the same medium. Mobile will be both his browsing tool on the web and his payment means. The mobile content market should explode in the coming years to reach 10 billion euros in 2013, mainly in connection with music (32%) and games (21%) (Source: Screen Digest, December 2009).

Trend of revenue generated by mobile content in the world 2005-2013

(Revenue generated by mobile content (in billions of euros) – Mobile music – Mobile games – Mobile TV – Video on Mobile – Apple App store / Europe, North America, China, India, Japan and South Korea included)

Breakdown of revenue generated by mobile content in the world in 2013

Source: Screen Digest, December 2009

This explosion of mobile paid content is connected with the accelerated adoption of the mobile technology as an Internet consultation terminal. The proliferation of smartphones combined with the generalisation of unlimited Internet browsing offers should make a large contribution to generalisation of use of the Mobile Internet. Forrester anticipates that in 2010, one mobile subscriber out of five will consult the Internet on his Mobile.

Trend of the rate of penetration of the Mobile Internet in Europe 2007-2014

Source: Forrester Research, Mobile Adoption and Sales Forecast, July 2009; penetration rate on the basis of mobile subscribers

With respect to the kinds of payment used by Surfers, the credit card remains by far the most popular payment means. More than 60% of European on-line buyers use a debit or credit card to make their purchases. However, a growing number of European purchasers use alternative payment solutions. In 2009, more than a third of on-line purchasers used electronic payments (Source: Forrester, European consumers need multiple online payment methods, August 2009). 61

There are also some specific features for individual countries. For instance, in England, the credit card and the electronic wallet dominate the on-line payments market. In Germany, bank cards are much less popular, having given ground to the bank transfer, used by 46% of buyers (against an average of less than 20% in Europe for that payment method). The Italians on their part consume a large number of prepaid cards, while the Swedes seem, according to Forrester, to be the buyers using the greatest variety of payment means.

Payment means used by European on-line buyers in 2009

Source: European Consumers Need Multiple Online Payment Methods, August 2009

Electronic wallets of the PayPal, Bill Me Later or ClickandBuy type are becoming more popular among surfers thanks to the secure transactions and the ease of use (Source: Forrester, Global Online Payments, July 2008). The fact is that 37 % of consumers now using electronic payments do so for security reasons, while 25% of them do it because of easy use (Source: Forrester, Alternative Payments Update, May 2008).

The other alternative payment means, such as payment by SMS, telephone or else by prepaid card, should also become more widely used by consumers because of an increasing digital content offering, small amounts (less than 15 euros), and the great majority being intended for publics without banks or technophile publics not hesitating to use their cell phones to make their on-line purchases

6.3.3. MARKET PLAYERS AND COMPETITIVE ENVIRONMENT

6.3.3.1. On-line advertising market

6.3.3.1.1 Market players and on-line advertising Even though certain advertisers choose to buy their advertising spaces directly from the on-line advertising networks, the advertising market is mainly structured on the basis of the three types of intermediaries acting between the advertiser and the advertising support medium: the advertising agencies, the space buying offices and the space administration agencies.

The advertising agencies The advertisers use the advertising agencies to implement their communication strategy. They delegate to them the task of creating advertising messages and the broad outlines of the media plan (choice of the media: TV, radio, press, Internet, cinema, outside advertising). Since 1999, the majority of agencies have had a multimedia department that manages creations and space buying recommendations for the Internet. In addition to the main existing communication groups (Omnicom, WPP, Interpublic, Publicis, Aegis Media, Havas, etc.), some new players have been added, the « web agencies », which have emerged with the birth of the Internet market without having any activity in connection with the traditional media.

Whether they come from pluri-media communication groups or are autonomous, the agencies call on separate entities, within the same group or completely independent ones, for the purpose, on one hand, of making the space purchases, and on the other, of designing advertising campaigns. The fact is that since passage of the Sapin law in 1993, advertisers have been allocating a design / execution budget to the agencies and have been isolating an advertising space purchasing budget, which has to be managed by a company that is separate from the agency, with different accounting, making greater transparency possible. This fact has made a large contribution to the emergence of the purchasing offices. The main agencies on the European markets are the ones belonging to the groups WPP, Publicis, Interpublic, Havas, Aegis and Omnicom.

The space buying offices (or media agencies) The space buying offices have the task of managing the space buying budgets in the most effective possible way and with full transparency vis-a-vis the advertiser with which they have a direct relationship. Strengthened by the fact of managing several budgets, the purchasing offices enjoy purchasing power enabling them to win advantageous terms. They obtain their remuneration both from the savings that they create for the customer following purchasing negotiations and from the advice that they supply to optimise the media plan. This means that, on one hand, they must have complete knowledge of the various media offerings and, on the other hand, must remain transparent in the recommendations they make to advertisers. The European purchasing office market is dominated by ten main players: Carat, OMD, MédiaCom, Mediaedge:cia, ZenithOptimedia, Mindshare, MPG, Universal McCann, Starcom SMG and Initiative.

Space administration agencies The space administration agencies are responsible for marketing the advertising space of the media under contract to advertisers, advertising agencies and purchasing offices. The purchasing offices emphasize relationships with the space administration agencies representing several media or the broadest possible offering. The fact is that the space administration agencies constitute a sole interlocutor, simplifying the buyers' task by providing them with summary and appropriate information concerning the multiple media represented. In addition, they can offer more advantageous rates to the purchasers contacting them in connection with larger volumes. In France, the Sapin law of 1993 requires space administration agencies to publish their rates and their commercial conditions and to mention any transaction not falling within the framework of the general sales conditions. This makes it possible to have all market players benefit from equal terms.

6.3.3.1.2. Competitive environment of the on-line advertising market The company has to deal with the following: - integrated agencies concentrating on their own media or widening their initial role to include external media, - the “Blind” networks, - the affiliation networks, - the companies selling sponsored links. These players may be local, European or American.

The integrated space administration operations Several publishers have opted for integrating the space administration functions. However, for several years now the integrated space administration operations of certain European portals have wanted to benefit more extensively from market growth and have tried to strengthen their positions, which were sometimes threatened by the increasing rôle played by independent agencies. Certain ones among them have launched space administration operations, such as Orange, Skynet-Belgacom, Microsoft or Yahoo.

Hence there are still few integrated space administration agencies marketing only their sites' advertising space, and they are located locally. They have no European offering, and the majority of them came out of media groups wanting to market cross-media offerings. In this category one finds the following, for instance: 14. In France : TF1, Les Echos media, M6; 15. In Germany : SevenOne Media, Tomorrow Focus, IP Deutschland (RTG group); 16. In Spain: Vocento ; 17. In Italy: La Republicca.

The majority of the integrated space administration agencies that have deployed their activities on sites outside their own publications have a European offering competing with Hi-media’s, the main ones being Microsoft, Yahoo and Orange. 63

In addition, the majority of those operations wanted to merge their activities in 2009 to provide a global offering for advertisers dealing with various problems, consisting, on one hand, of a Premium offering (integrating their portal and branded publishers) meeting the objective of visibility and reputation, and on the other hand of a performance-based offering pursuing an acquisition objective, to which a behavioural targeting offering is added making it possible to maximise the return on investment for both offerings. The performance-based advertising model is used to monetise the inventories of advertising site leftovers or the inventories of advertising sites that have volumes too small for selling by the unit, or in a Premium offering.

Thus at the start of 2009, Microsoft announced the integration of its DRIVEpm performance network with its Premium advertising offering, under the name Microsoft Advertising.

On its part, with the acquisition of Unanimis in August 2009 in the United Kingdom, Orange confirmed its desire to position its advertising network globally. In France, the Orange network sites, including, inter alia, ViaMichelin, Pixmania and Argus, attract almost 20 million unique users per month, and hold positions in the Top 20 space administration agencies. In England, with the Unanimis network, Orange company communicates with 73% of the English surfers (Source: Comscore, November 2009).

Yahoo, like Microsoft and Orange, has also widened its network to take in outside sites. In France, for instance, Yahoo markets the advertising spaces of the Kelkoo, ParuVendu, CarriereOnline… sites. Like the majority of integrated space administration agencies that are market leaders, Yahoo offers a range of digital marketing solutions to satisfy all of the brand names’ communication objectives, particularly with a mobile advertising offering or else another offering specially designed to meet advertisers’ performance objectives, called Yahoo! Direct Response.

Finally, in July 2009, AOL announced the integration of its performance platform Advertising.com into its global advertising offering called AOL Advertising. However, with the December 2009 announcement of the cessation of its activities in the majority of European countries, AOL remains a Hi-media competitor only on the English market.

The Blind networks

The Blind networks are advertising networks grouping a large number of Internet sites sold as a group (by target, by category of sites) without the advertiser’s being able to obtain the list of sites on which its advertising has been disseminated. The selling procedure for these kinds of operations is based mainly on a performance model, even if sale on a CPM basis can also be contemplated, but at very low rates. For that reason the sites integrating this kind of networks are not Premium sites of branded publishers, except for the unsold part of their inventories.

On the European market, the main companies are Google (via its offering called Google Content Network Display ads), Adconion, Specific Media, Oridian and Value Click.

Adconion Media Group is the most important network with an independent international audience, having 16 offices in 9 countries, including 5 countries in Europe (England, Germany, France, Spain, and Switzerland). Since its creation in 2005, the business has focused on carrying out performance campaigns optimised by its proprietary technology. Adconion attracts almost 300 million unique users in the world, 126 million of them in Europe (Source: ComScore, December 2009).

Specific Media, created in the United States in 1999, has gradually established itself in Europe and now has offices mainly in Northern Europe: in England, Denmark, Sweden, Norway and France. Ranking among the top 5 American advertising networks, Specific Media attracts 225 million consumers in the world per month (Source: Nielsen, August 2009).

Oridian, created in the United States in 1998, is the world’s 3rd-ranking independent advertising network, focusing on a performance-based selling model. Oridian has a monthly audience of 180 million unique users, including 87 million in Europe (Source: Oridian). The company has a presence in 40 countries, including 8 in Europe (France, England, Germany, Spain, The Netherlands, Belgium, Italy, and Scandinavia).

Value Click, established in 1997 in the United States, gradually extended its activity to Europe starting in 2000 with offices in France, Germany, Sweden and Spain. Its advertising network activity is based on a Blind network model, with a performance-based selling approach. However, even if Value Click offers a broad range of products (affiliation with Commission Junction, price comparator with PriceRunner, sponsored links with Search123), which goes well

beyond advertising network activities, its positioning as an agency remains modest. It appears among the top 10 advertising networks only on the French, English and German markets.

Google, unlike other networks in this category, has a Display offering enabling advertisers to choose the sites of its network on which they want to appear. However, the “Blind” side is of concern to publishers. The reason is that, unlike such integrated networks as Hi-media or Microsoft, the publishers working with Google have no visibility over sales of advertising spaces on their sites. They have access only to their sales figures, to the CPM and to the CPC. They cannot in any case determine which budget has been spent by which advertiser, in what format, at what cost and for what duration. Criteo, created in 2005, is a French company now employing 70 people. Criteo has positioned itself solely on performance-based sales on a CPC (cost per click) basis, using a personalised advertising re-targeting technology. This technology enables advertisers to select the target public on the basis of certain criteria. For instance, one can disseminate banners that are targeted in the light of the products consulted during the latest visits by a surfer to a Criteo customer’s commercial site. Criteo covers the United States and five European countries (France, England, Germany, Italy, and The Netherlands). In the light of the ever-increasing use of such Blind networks and of the campaign purchased on a performance basis by advertisers, some new methods for measuring the advertising market have been adopted. The fact is that that in France, the IAB, in partnership with Kantar Media (formerly TNS Media), has implemented a new measure for calculating advertising investments on the Internet, which became effective as of January 2010. This new methodology now takes account of the Display advertising campaigns purchased on a performance basis. Until now, only the CPM-based campaigns were taken into account, which excluded purchases of Display on a performance basis on the Blind networks.

The affiliation networks The affiliation networks are companies that orchestrate affiliation programs on behalf of advertisers. They implement all contractual relationships between the advertiser and a set of various kinds of partner sites that act as traffic and business finders. Within the framework of that contract, the partner sites, or affiliates, display visual elements or text links pointing to the “affilieur” site, thus creating a reputation and traffic for it. In exchange, the commercial site retransfers a commission on the sales made thanks to such links or a fixed amount based on visitors or commercial contacts generated. Hence the affiliation program is a technique of the kind generally called performance marketing on the Internet.

We will mainly mention the companies Trade Doubler, Zanox, Affilinet and Commission Junction.

Trade Doubler, a Swedish firm, has been listed on the Stockholm market since November 2005. Having adopted an affiliation network model and hence having obtained remuneration on the basis of the performance of the delivered advertising, Trade Doubler was popular among advertisers and publishers during the years of the advertising market crisis on the Internet and it developed rapidly in 15 European countries, to the point of now being the European leader in spite of a sales decline in 2009 (-12%), to a total of 3 014 million crowns in 2009 (Source: TradeDoubler press release).

Zanox is a German company that employs more than 350 persons in the world. Zanox operates on the performance- based multi-channel commerce market and offers a global solution for marketing products and services via the Internet. In addition to affiliation marketing and marketing by search engine, Zanox’s online services include marketing by email, online purchases, as well as the clientele’s loyalty programs. Zanox was founded in 2000, and in 2005 purchased France’s First Coffee. Since 2007, Zanox has been part of Axel Springer and of PubliGroupe. Axel Springer is Germany’s largest newspaper publisher and ranks third in the press. PubliGroupe AG is a Swiss marketing group that is active internationally and provides services for cross-media commercial communication.

Commission Junction, established in the United States in 1998 is a company that belongs to ValueClick. With subsidiaries in San Francisco, Boston, New York, London, Madrid, Munich and Paris, Commission Junction provides billions of printouts every month, which makes it one of the world’s most important affiliation networks.

Affilinet is among the European market leaders in affiliation platforms thanks to its presence in 7 countries (Germany, Great Britain, France, Spain, The Netherlands, Austria and Switzerland). The power of its networks (1600 affiliation programs and 450 000 affiliated sites) and its diversified offering supply advertisers with a vast online distribution network consisting of publishing sites that are remunerated on a performance basis.

The companies specialising in sale of sponsored links We will mainly mention the companies Google, Yahoo Search Marketing and MSN.

After the emergence of sales of sponsored links in 2003, this market, with its performance-based model for selling advertising spaces, advanced strongly in the last several years. Operating on the basis of a logic close to the affiliation networks’ logic, the specialised players in the field of sponsored links provide advertisers with optimised targeting of their messages by placing them alongside search responses launched by surfers in directories or search engines in connection with subjects close to those advertisers’ activities.

American company Google has speeded up its development by using this approach to advertising space sales, on the site of its search engine, but also within the framework of a services offering intended for Internet sites not belonging to it within the framework of Google Ad Sense. Google now incorporates video into its advertising messages disseminated on its advertising network. Overture company, initially the publisher of the search engine Goto.com, also enjoyed strong growth, and it was acquired in July 2003 by Yahoo, which was one of its main customers (Source: Yahoo ! press release dated 14 July 2003) and which since then has renamed this offering Yahoo Search Marketing.

6.3.3.2. The market for secure electronic payment solutions

6.3.3.2.1. Players on the market for secure electronic payment solutions The electronic payments market involves several players: - the landline telephone operators, - the mobile telephony operators, - the Internet access planning schedule, - the publishers: individuals registered in the trade register or the listing of trades, a legal entity or a public entity providing users with a service, - the facilitators: technical service providers making a technical connection with the mobile operator networks available to the publisher, - the hosts, technical service providers making a services platform available to the publisher, - the banks, which offer bank card payment solutions, - the SSII (computer services and engineering companies) offering platforms integrating interfaces with the banking institutions to manage electronic payments and to avoid any need for the e-commerce sites to establish direct contact with a bank, - the micropayment platforms, which aggregate several payment solutions, - the companies offering virtual portfolios connected with bank accounts.

6.3.3.2.2. Competitive environment of the secure electronic payment solutions Hi-media’s competitors in terms of micropayment solutions are the micropayment platforms and the companies offering virtual portfolios connected with bank accounts.

The micropayment platforms (offering extensive payment means: bank cards, SMS, prepaid cards, bank transfers, electronic wallets, …)

In the face of the emergence of the virtual currency during the year 2009, the micropayment market has become more competitive with the appearance of new aggregators, specialising solely in monetisation of virtual currencies, as well as in monetisation of all kinds of Internet sites.

The players, responsible solely for monetisation of the virtual universes, are mainly based in the United States, where a concentration trend has already got underway. The main companies are Jambool, Live Gamer and PlaySpan. - Jambool, created in 2006 and based in the United States, publishes the Social Gold micropayment platform specialising in monetisation of virtual currency and of virtual goods. This solution is used on the applications of the main social networks, such as Facebook or MySpace. This solution is present in more than 100 countries in the world and aggregates more than 100 micropayment solutions including credit cards, electronic wallets (Paypal, Google…) or else micropayments by mobile. - Live Gamer bills itself as the leading monetisation platform in the sectors of online games, social networks and virtual universes. Created in 2001, Live Gamer successively acquired, in 2009, the N-cash micropayment solution, the leader in Korea, and the company Two Fish, one of the main micropayment platforms specialising in monetisation of virtual currency. As of now, Live Gamer claims that its micropayment solution, 66

covering more than 100 countries and aggregating more than 200 micropayment solutions, is integrated into more than 250 games sites. Its 56 million registered accounts are said to generate on average more than 3 million transactions per month. - PlaySpan is an American company specialising in monetisation of games sites, social networks and virtual universes. In 2009, it acquired in succession PayByCash, a world aggregator of payment methods, and Spare Change, a company specialising in monetisation of the social networks. Following acquisition of those two companies PlaySpan now offers more than 85 online payment methods in more than 180 countries.

With respect to monetisation of Internet sites, taking all sectors together, Hi-media’s main European competitors are French companies also operating on the other European markets, to which one must add such companies as 123ticket and GlobalCollect: - Rentabiliweb: this French platform is close to Allopass in terms of its functionalities and the proposed payment operators. In addition, Rentabiliweb is a publisher of Internet sites following acquisition of Montorgueil Group (Carpe Diem). Rentabiliweb generated 2009 sales of 65.2 million euros, including 24.5 million for their btob activity, consisting mainly of micropayments (Source: Rentabiliweb, press release dated 23 February 2010). Adverline: this company, listed on the Alternext market of Euronext, based in France and positioned as an advertising network, has also launched an Optelo micropayment platform covering 12 countries and offering five payment procedures (Audiotel, SMS, Internet+/W-HA, credit card, Paypal). Adverline generated 2008 sales of 24.5 million euros, including 9.9 million in micropayments. (Source: Adverline press release dated 31 March 2009). At the end of the first half of 2009, the group’s consolidated sales came to 9.5 million euros, down 38% from the first half of 2008 (Source: Adverline press release dated 20 October 2009). - 123Ticket, a subsidiary of Electronic Group Espagne, created in 2004, offers 6 payment means (Audiotel, SMS, bank card, virtual bank card, e-passport and prepaid card) in about fifty countries. - Globalcollecta was established in The Netherlands in 1994. The company has offices in North America, the Asia-Pacific region, in Europe and since January 2010 in Latin America with the opening of an office in Buenos Aires. Globalcollect offers more than one hundred local and international payment methods (SMS, local and international bank card, cheque, bank transfer, telephone, prepaid cards, cash payment, invoices, electronic wallets such as Paypal…). Its payment solution is available in 28 languages and 170 currencies in 200 of the world’s countries. Insofar as GlobalCollect aggregates local payment solutions, it also competes directly with Hipay.

The other Hi-media competitors are online payment players, but which are not aggregators of micropayment solutions such as Allopass.

The telephone micropayment service providers (SMS and land line and mobile surcharged telephony)

Generally speaking, this concerns all suppliers of SMS solutions and of landline or mobile surcharged telephony. By definition, they offer only a single payment means, the telephone, and most often the SMS, contrary to the solutions of the aggregators such as Allopass. The telephone micropayment market is more fragmented, some local players without any dominant position being present.

In the United Kingdom: - Daopay is a London company created in 2001 that offers a payment solution by SMS and telephone in more than 200 countries. - TxtNation, established in 2002, offers a mobile payment solution by SMS, telephone a Wap Billing. The company has offices in France, Germany, Ireland and the United States.

In Spain: - Micropagos is an SMS payment platform present only in Spain. - Sepomo, created in 2002 in the United Kingdom and in Spain, is also present in 21 countries, including in Europe, 8 in Latin America, and in Australia. The SMS is their only payment solution.

In Germany: - Mindmatics, created in 2000 in Germany, employs 100 people and also has offices in England, Austria and the United States. Mopay, its micropayment solution by SMS, covers 60 countries in the world (including 30 in Europe) by way of agreements concluded with 300 mobile operators. 67

- Micropayment, founded in 2005, employs a score of persons in Germany and offers a payment solution by SMS and telephone.

In Sweden: - CellSynt, created in 2003, is based in Sweden and carries on its activities in Spain and in England as well. CellSynt, a partner of 700 mobile operators, offers its payment solution by SMS in 23 countries, all but one in Europe, and its telephone payment solution in 5 European countries.

In the United States: - Zong, a subsidiary of Echovox, based in Red Wood City (California), is also established in Paris and in Geneva, Switzerland. The company offers SMS payments by way of 120 telecommunications operators and in 26 counties. In October 2009, Zong widened its offering and launched Zong+, making bank card payment possible Zong’s main customers are the social networks Facebook and Myspace, or online gaming sites such as Blizzard. - Boku was officially launched in June 2009 after raising 13 million dollars in funds enabling it to acquire the Paymo and Mobillcash companies. The company is based in San Francisco and is also established in England. Boku concluded agreements with more than 190 mobile operators in the world, thus offering its clientele the possibility of paying by SMS in more than 60 counties. Boku counts the social networks such as Myspace and Facebook or else Hi5 among its customers. In January 2010, the company announced a new fund-raising effort amounting to 25 million dollars coming from DAG Ventures, with the participation of Benchmark Capital, Khosla Ventures, and Index Ventures. - Surfpin is a London company established in 2002 that also has a headquarters in the United States. The company covers about forty countries and offers SMS and the telephone as payment solutions.

The virtual wallets connected with a bank account In addition to the solutions developed by the various banking institutions, the most active company in Europe in this connection is ClickandBuy company, which acquired 10 years of experience on this market by launching its electronic payment solution in Germany in 1999. The company is now registered in England, and its head office is located in London. Present in 50 countries, the ClickandBuy electronic wallet is integrated into more than 14,000 commercial sites and generated sales that, for the first time, exceeded a billion euros in December 2009. (Source: ClickandBuy Press release dated 21/12/2009). The company recorded sales of 922 million euros in 2008, up 50% from the previous year.

Paypal, an Ebay subsidiary, is among the most powerful players positioned on the online payment segment by way of an electronic wallet. The fact is that the success scored by the distribution of this kind of technology is based on the possibility of multiplying – as fast as possible – the number of commercial sites or of publishers of paid content using that technology so that surfers have a real incentive to use this solution as an almost universal payment solution on the Internet. Ebay’s power and the size of its user base enable it to count, on every market, on a non-negligible portion of its customers’ opting for its electronic payment solution. Paypal’s power also resides from its status as a European bank, since the company is listed as a bank in Luxembourg. With a daily consumer base of 75 million people in the world (including 30 million in Europe), Paypal generates the equivalent of 2,000 dollars in transactions per second, and in 2009 it should generate a total of 63.1 billion dollars in transactions (Source: communiqué issued by journaldunet.com on 24 November 2009).

Google company, on its part, has launched its Gpay solution, a payment system by mobile by SMS, trying to rely on the strong reputation of its search engine. That solution was modified and relaunched in June 2006 in the form of an electronic wallet (of the Paypal type) under the name Google Checkout.

Neteller is a wholly-owned subsidiary of NEOVIA Financial Plc. Launched in 1999, the Neteller electronic payment solution, present in more than 160 countries, is mainly used by online casinos. As of the end of June 2009, Neteller had 1.5 million user accounts. In 2008, Neteller generated sales of 52.2 million dollars, up 21% from the previous year, 80% of revenue being generated in Europe (Source: Neovia Financial Plc press release dated 30/04/2009). However, Neovia was hurt in 2009 by the crisis economic situation. As of the end of the 1st half of 2009, Neteller generated sales of 22.3 million $, down 9% from the previous year. The revenue drop resulted mainly from the European market, which was off 21%, generating a total of 17.4 million dollars. (Source: Neovia Financial Plc press release dated 17/09/2009).

Moneybookers, registered in the Companies Register of England and of Wales, offers customers access to payment options that can be used in more than 200 counties. With more than 10 million account holders, Moneybookers is 68

among the most important online payment systems in Europe and is among the main electronic wallet suppliers. More than 60,000 commercial sites in the world use its payment services, including such international partners as Skype or Thomas Cook. (Source: Moneybookers press release dated 26/01/2010). Like Neteller, Moneybookers has strong listings on the games sites. Moreover, it is strongly oriented toward fund transfers, charging the buyer and the seller a commission. In 2008, Moneybookers generated sales of 34.5 million euros, up 88% from 2007.

6.3.4. COMPETITIVE ADVANTAGES AND KEY FACTORS MAKING FOR SUCCESS

Hi-media combines one of the world’s biggest audiences with an advertising network and a micropayment platform that are leaders in Europe. The fact is that that in 2007 Hi-media became an important media group on the Internet, and at the end of 2009 it totalled more than 50 million unique users on the sites it itself publishes, including more than half of them in Europe (Source: Google Analytics December 2009). Hi-media is also the leading advertising network and the leading micropayment platform in Europe.

Hi-media provides publishers of Internet sites with one-stop service for exploiting their audiences. The company offers them solutions for monetising their audiences via online advertising, direct marketing and micropayments, as well as solutions for creating more audience in winning its loyalty. Hi-media has a network of 300,000 Internet sites on which its various solutions are deployed. 5 The Hi-media advertising network, 19,000 Internet sites represented, is both powerful and segmented. It makes it possible to integrate publishers by highlighting them as effectively as possible on the online advertising market. 6 With its network of more than 280,000 publishers, the Allopass platform generates more than 8 million transactions a month. Hence having the largest community of sites accepting the Allopass codes as a method for obtaining access to content or services, Hi-media has the largest user base on the French market, and therefore a substantial stimulating effect. The fact is that the company is able to offer an already considerable stock of consumers to any site looking for a micropayment platform.

For advertisers, Hi-media provides an extremely complete offering making it possible to deal with all online advertising problems, and more globally with communication on the Internet. On the strength of fourteen years of experience and expertise on the online marketing market, Hi-media deploys a broad range of services. When it comes to problems involving branding, recruitment, performance or loyalty, Hi-media provides advertisers with appropriate market solutions, both in the Internet medium and in the mobile field, this applying to all kinds of targeting (theme- based, socio-demographic, behavioural, …) and for any sales approach (CPM, CPC or CPL). Having its own creative studio, Hi-media Création, Hi-media can also provide a response for advertisers when it comes to their online communication creative services.

Hi-media has the advantage of an international presence in 12 countries, in key countries in which the Internet either posts its highest penetration rates (France, England, Italy, Germany, Belgium, Sweden, The Netherlands, Spain, United States and Portugal), or displays very strong growth (Brazil, Mexico);

Hi-media offers a complete solution with Hi-media Payments, meeting various needs with its micropayment offering via Allopass and its electronic wallet offering with Hipay, making it possible to cover both small transactions and large amounts with customers who do not have banks, who have banks or who are eager to use their bank cards on third party sites.

Hi-media has an integrated and diversified economic model (publisher, advertising network activity, payments) enabling it to generate substantial revenue synergies. Hi-media company has managed to create a unique value chain for the publishers of Internet sites and for advertisers on the online advertising market.

6.4. RULES AND REGULATIONS The company’s activities are particularly concerned by the rules and regulations concerning: - protection of personal information - electronic communications and telecommunications - the status and supervision of credit institutions - payments - freedom of the press - the right to one’s image and to respect for private life 69

- copyright - advertising - protection of minors - provisions applicable to money games and online betting - the digital environment, both internationally and nationality.

6.4.1. THE INTERNATIONAL REGULATORY ENVIRONMENT Internationally speaking, the Group is concerned by two kinds of environment:

6.4.1.1. America regulatory environment Protection of personal data and security In the United States, the Federal Trade Commission Act as amended by the U.S. Safe Web Act specifies the regulatory environment applicable to the struggle against use of personal data for unapproved purposes, particularly in the advertising field. Those acts constitute the framework for collection and use of personal information by the various service providers on the Internet.

The protection of financial information on digital networks and security of transactions, on their part, are covered by the Gramm-Leach Bliley Act.

The Federal Trade Commission develops the rules and regulations applicable to behavioural and advertising targeting, as well as in connection with social networks (“Self-Regulatory Principles For Online Behavioural Advertising”, FTC STAFF REPORT, FTC February 2009).

Protection of minors American legislation provides guidelines for protection of minors by way of the Children's Online Privacy Protection Act, and in particular requires publishers and service providers on the Internet to have their sites define a policy for protection of personal information making it possible to offer a choice of collection or non-collection of information concerning minors. It also lays down the limits on use of the data supplied by minors.

The Federal Trade Commission has published a set of recommendations aimed at protecting minors in the report called “Beyond Voice, Mapping the Mobile Marketplace” (FTC STAFF REPORT, FTC April 2009). Those recommendations are particularly aimed at regulating the advertising and the content intended for minors in the mobile media.

Rules and regulations applicable to advertising The Federal Trade Commission supervises rules and regulations governing advertising, and more particularly advertising practices and content. It focuses in particular on sanctioning fraudulent advertising as well as misleading advertising. The regulatory powers are divided between the Federal Trade Commission Act, which constitutes the basic text, joined by the case law of each State known as “Little FTC Acts”.

This approach was supplemented by the implementation, as of 1 December 2009, of the recommendations made by the Federal Trade Commission concerning advertising endorsements, “Guides Concerning the Use of Endorsements and Testimonials in Advertising” (FTC, December 2009). In particular those recommendations require anybody attesting to the reliability or the quality of a product to state whether he has any connection with the producer or the distributor of the product.

Rules and regulations applicable to copyright a) The text of the Convention of Bern of 1886 as incorporated into the TRIPS agreements (“Agreement on Trade- Related Aspects of Intellectual Property Rights”) of 1995 incorporates intellectual property rights into the World Trade Organization. It enshrines the principle of an “international copyright”. That document is supplemented by the Treaty of the World Intellectual Property Organization, concluded in 2002, which specifies the scope of recognition of copyright and lays down the principles of struggling against infringement.

Since 2007, an international agreement concerning the struggle against counterfeits and protection of commercial interests, known as the Anti-Counterfeiting Trade Agreement (ACTA), has been under discussion by the United States, the European Union, Australia, South Korea, New Zealand, Mexico, Jordan, Morocco, Singapore, the United Arab Emirates, Canada, Japan and Switzerland. 70

b) American legislation lays down the principle of respect for copyright by way of an approach consisting of six documents: the Copyright Act of 1976 and the Digital Millennium Copyright Act of 1998, the Copyright Royalty and Distribution Reform Act of 2004, the Satellite Home Viewer Extension and Reauthorization Act, also of 2004, the Intellectual Property Protection and Courts Amendments Act of 2004 and the Prioritising Resources and Organisation for Intellectual Property Act of 2008. The U.S. Copyright Office guarantees observance of the rules and regulations applicable to copyrights.

Rules and regulations applicable to private life In the United States, the Privacy Act of 1974 lays down the principle of respect for the right to private life.

Rules and regulations applicable to telecommunications a) The International Telecommunications Union (ITU) it the United Nations organ responsible for laying down the standards, rules and regulations applicable to the telecommunications sector internationally. b) The Federal Communications Commission (FCC) is the American government agency responsible for implementing regulation of telecommunications in the United States.

6.4.1.2. The Mexican regulatory environment Protection of personal information In Mexico, protection of personal information is enshrined in 6 and 16 of the Constitution of 5 February 1917, “CONSTITUCIÓN POLÍTICA DE LOS ESTADOS UNIDOS MEXICANOS”. In particular, those articles lay down the principles of protection, right of access, correction, cancellation and protest.

Mexico does not yet have any specific rules making it possible to apply these principles.

Protection of minors Mexican legislation provides for protection of content and publications (including advertising) intended for minors, by way of a set of texts, the main ones being: article 76 bis of the Federal law concerning protection of the consumer, “LEY FEDERAL DE PROTECCIÓN AL CONSUMIDOR”, articles 60 et seq. of the Federal law on radio and television, “LEY FEDERAL DE RADIO Y TELEVISIÓN”, articles 308 et seq. of the Federal Health Law, “LEY GENERAL DE SALUD”, as well as the various codes of conduct issued by the Communication Board (Cf.: CODIGO DE ÉTICA), the Mexican Association of Advertising Agencies (Cf.: CÓDIGO DE ÉTICA PUBLICITARIA) and the Confederation of Industry, Marketing and Communication (Cf.:CODIGO DE ÉTICA PLANTEAMIENTO).

Rules and regulations applicable to copyright Mexico provides for protection of copyright by way of the Federal Regulation for protection of copyright, “REGLAMENTO DE LA LEY FEDERAL DEL DERECHO DE AUTOR”. Even though this document has been updated several times recently, the level of protection provided needs to be supplemented by one or several international conventions. Thus Mexico has been one of the parties to negotiation of the ACTA “Anti-Counterfeiting Trade Agreement”, since 2007.

Rules and regulations applicable to payments and telecommunications The legislative rules applicable to the operation of telecommunications are laid down in the general law concerning communication on the territory of Mexico “LEY DE VIAS GENERALES DE COMUNICACION”. Mexican payments legislation is based on the texts of the Mexican federal law concerning currency, “LEY DE LA CASA DE MONEDA DE MÉXICO”, and the Mexican federal law concerning value added tax, “LEY DEL IMPUESTO AL VALOR AGREGADO”.

6.4.1.3. European regulatory environment Protection of private life and security The European Union adopted Directive 95/46/EC of 24 October 1995 called "Directive concerning protection of individuals in connection with processing of personal information and free circulation of data”. That directive, governing collection, processing and use of personal information, was transposed into French law by Law No. 2004- 801 of 6 August 2004, modifying Law No. 78-71 of 6 January 1978.

The issue of respect for private life in connection with unsolicited commercial communications is covered by Directive 2002/58/EC of 12 July 2002 concerning “private life and electronic communications”, which governs 71

processing of personal information within the framework of supplying electronic communications services accessible to the public on the public communication networks in the European Union. That directive introduced a European prohibition on sending unsolicited commercial messages by email, except with the advance consent of the addressee of such messages. Hence it is the opt-in (advance consent) approach that was chosen. Furthermore, that directive was strengthened by Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009, which in particular requires the entity holding the data to report any attack on the information for which it provides security.

The European Controller of Data Protection is responsible for seeing to application of the principles set forth in “EC) Rule No 45/2001 of the European Parliament and of the Council dated 18 December 2000 relative to “Protection of individuals with respect to processing of personal information by community institutions and organs and free circulation of such data”.

In the strict sense, the concept of private life is protected by article 8 of the European Convention on Human Rights.

Rules and regulations applicable to copyright With respect to copyright, Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 concerning “harmonisation of certain aspects of copyright and of neighbouring rights in the information society” specifies the applicable legislative framework. It is supplemented by Directive 2004/48/EC of the European Parliament and of the Council dated 29 April 2004 relative to “respect for intellectual property rights”.

Rules and regulations applicable to electronic communications The European Parliament and the Council adopted Directive 2002/21/EC dated 7 March 2002 concerning a “common regulatory framework for electronic communication networks and services”, known as the “electronic communications framework directive”. The purpose of that directive is to lay down a harmonised framework for regulating electronic communication networks and services (EC) Rule No. 717/2007 supplements this directive, particularly as regards mobile telephony, and it specifies the conditions for transposition in the various member States.

The adoption of the “telecoms package”, taking the material form of directives 2009/136/EC and 2009/140/EC dated 25 November 2009, as well as EC Rule No. 1211/2009 dated 25 November 2009, profoundly modified the rules and regulations applicable to electronic communications and telecommunications.

Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 modifying Directive 2002/22/EC concerning universal service and user rights with respect to electronic communication networks and services, Directive 2002/58/EC concerning the handling of personal information and protection of private life in the electronic communications sector, and (EC) Rule No. 2006/2004 relative to co-operation between national authorities responsible for seeing to application of legislation concerning consumer protection create a set of common rules aimed at guaranteeing access for the consumer to all available services, whoever the operator/supplier of network access may be. It also institutes new rules regarding transparency, common services and service quality.

Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 modifying Directives 2002/21/EC concerning a common regulatory framework for electronic communication networks and services, 2002/19/EC concerning access to the electronic communication networks and to the associated resources, as well as their interconnection, and 2002/20/EC concerning authorisation of the electronic communication networks and services strengthen the bases needed for creation of a global European network of electronic communication. That directive also lays down the rules applicable to the internal electronic communications and telecommunications market.

(EC) Rule No. 1211/2009 of the European Parliament and of the Council of 25 November 2009, instituting the Organ of the European Regulators of Electronic Communications (ORECE) as well as the Office, creates a European regulatory institution.

E-commerce The “Electronic Commerce” Directive 2000/31/EC of 8 June 2000 governs e-commerce and is aimed at guaranteeing the free circulation of services and at harmonising the national provisions applicable, in particular, to the services of the “information societies”.

Protection of minors

With respect to protection of minors, the European Parliament and of the Council have developed a decision proposal dated 27 February 2008, instituting a multi-year community program aimed at protecting children in connection with use of the Internet and of other communication technologies. This program is in the direct line of the “Safer Internet plus” program launched in 2005 at the initiative of the European Parliament and of the Council.

Rules and regulations applicable to the status and to supervision of credit institutions Directive 2000/12/EC of the European Parliament and of the Council dated 20 March 2000 concerning “access to the activity of credit institutions and exercise thereof” laid down the basis of the European legislative framework applicable to credit institutions. That directive was replaced by directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 concerning “access to the activity of credit institutions and its exercise”, in its modified version, as well as by Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 concerning “adequacy of shareholders’ funds of investment companies and of credit institutions”, also in its modified version.

These two new directives constitute the basis for harmonised European regulation applicable to credit institutions and promoting freedom of establishment, unrestricted provision of services, as well as development of a common framework for monitoring the risks to which such establishments are exposed.

Rules and regulations applicable to payments The European Parliament adopted directive 2007/64/EC of 13 November 2007, "concerning payment services on the interior market [.]”. This directive, which enshrines the principle of payment establishments, initiated the revamp of the payment system on a European scale. In particular, it implies installation of strict rules with respect to auditing and management of transactions as well as in connection with deposits, credit and tapping of financial flows.

Rules and regulations applicable to money games and online betting Articles 43 and 49 of the treaty instituting the European Community laid down the principles of “freedom of establishment” and of “unrestricted provision of services” within the European Community. There is no European text, in the proper sense, regulating practices concerning money games and online betting. The member States of the European Union are free to authorise or to prohibit such gains and bets on their territories. However, the European Commission lays down three postulates, by virtue of articles 43 and 49 of the EC treaty:

5 Once money games and online betting are authorised in a member State, all of the authorised European service providers of money games and of online betting may carry on their activities there. Hence there is a prohibition on monopolies and on limited competition. 6 Once a service provider of money games and online betting is authorised to carry on its activity within a member State, that authorisation allows it to do business in all member States that authorise money games and online betting. 7 The States may depart from the principles laid down in articles 43 and 49 for reasons of public policy, public safety, public health, or when restrictions are based on objectives involving consumer protection or else fraud prevention. The Court of Justice of the European Communities issued a decision along those lines on 8 September 2009 concerning the online betting operator Bwin: “Article 49 EC does not oppose a regulation of a member State, such as the one in question on the main issue, prohibiting such operators as Bwin International Ltd, established in other member States in which they legally provide analogous services, from offering games of chance via the Internet on the territory of the said member State.”

6.4.2. LEGAL ENVIRONMENT AND FRENCH RULES AND REGULATIONS Rules and regulations applicable to advertising content The rules and regulations applicable to advertising content require respect for the applicable provisions in connection with: 6. deceptive and misleading advertising; 7. comparative advertising; 8. advertising for certain services and products characterised by a financial or health risk (such as financial services, tobacco, alcoholic beverages, drugs); 9. use of the French language; 10. rights of third parties (such as copyrights, trademarks, performers’ rights, rights of models, rights to tone’s image and to private life); 11. unfair competition/parasitism; 12. attacks on decency, human dignity, public order and good morals; 73

13. slander.

The provisions relative to the content of the advertising are codified in the Code of Consumption in articles L.121-1 to L.121-15-3, in the Code of Public Health in articles L.2133-1, L.3323-2 et seq., L.3511-3 et seq., as well as in article L.5124-17. They are also codified in articles L.471-1 et seq. of the Code of Education, as well as in article L.362-4 of the Environmental Code.

Rules and regulations applicable to sales of advertising space (Sapin Law) Law No. 93-122 of 29 January 1993 concerning prevention of corruption and transparency of economic life and of public procedures regulates purchases of advertising spaces that may be made through an intermediary on behalf of an advertiser. That law applies only indirectly to advertising networks, which are treated as space sellers. Hence the obligations incumbent on sellers under the terms of the said law also apply to the advertising space administration agencies.

In substance, that requires the seller of space, as medium or network, to report directly to the advertiser on the conditions under which the space-buying services have been performed. In addition, the space seller must provide the advertiser directly with the invoice, which must contain the rebates and pricing advantages of all kinds whatsoever granted by the seller.

Rules and regulations applicable to protection of personal information Law No. 2006-64 of 23 January 2006 concerning protection of individuals with respect to processing personal information and modifying Law No. 78-17 of 6 January 1978 concerning data processing, files and freedoms supplements the transposition of Directive 95/46/EC. That law strengthens the rights of persons to their data, contributes to the simplification of reporting formalities in connection with processing of data relating to risks, and grants more substantial intervention powers to the CNIL.

Law No. 2004-669 of 9 July 2004 specifies the rules applicable to protection of personal information, and also provides for transformation of Directive 2002/58/EC concerning protection of data in the field of electronic communications.

Rules and regulations applicable to the digital environment Law No. 2004-575 of 21 June 2004 concerning confidence in the digital economy (LCEN) adapts French law to the requirements of the development of the digital economy and transposes Directive 2000/31/EC of 8 June 2000 relative to certain legal aspects of the services of the information society, and in particular of e-commerce. That law specifies the rules regarding the liability Internet access suppliers and of hosts, and deals in particular with e-commerce and cryptology.

Rules and regulations applicable to freedom of the press, to the right to one’s image, to respect for private life and to copyright The activities relating to publishing content of Hi-media company depend on the laws concerning freedom of the press, the right to one’s image, respect for private life and the Code of Intellectual Property: - The law of 29 July 1881 concerning freedom of the press (in the latest version in effect). This is the law that governs all publishing activities as well as problems connected with the publications, editorial responsibility, and the various infractions such as insult, slander, etc. That law is used to supervise the sites of which we are the publisher, as well as the content developed in-house. - All problems relating to the right to one’s image and the right to respect for private life are codified in Article 9 of the Civil Code as well as in articles 226-1 et seq. of the Penal Code. - All problems connected with copyright (Transfer, Reproduction, Distribution, Representation, Translation, Adaptation, Exploitation, Authorisation), with databases, with patents, with designs and models, with actions for infringement are to be found in the Code of Intellectual Property.

Rules and regulations applicable to telecommunications and electronic communications The Postal and Electronic Communications Code (in the version in effect) transposes, into French law, all of the European Directives. Article L.32 of the CPCE more particularly deals with the conditions required for obtaining status as “operator”.

The Regulatory Authority for Electronic Communications and the Post (ARCEP) is responsible for seeing to respect for application of the principles laid down in connection with electronic communications and it makes regular verifications. It also intervenes in connection with the right to keep numbers.

The SMS+ Association publishes a set of rules and recommendations concerning reservation of a short number as well as the obligations of publishers of services vis-à-vis users.

The “Ethical Recommendations concerning Telematic Services” specify the exercise framework applicable to the supply of telematic services.

Rules and regulations applicable to surcharged numbers Articles L.121-19 and L.121-84-5 et seq. of the Code of Consumption regulate the problems relating to rating time and the use of surcharged numbers for certain services offered to non-professionals.

The Regulatory Authority for Electronic Communications and the Post (ARCEP), intervenes to lay down the framework for the prices of communications and of value added services.

Protection of minors Law No. 2004-575 of 21 June 2004 concerning confidence in the digital economy (LCEN) lays down a set of principles applicable, in particular, to protection of minors. The Penal Code on its part contains all sanctions relative to violations against minors.

The ICRA (Association for classification of Internet content) publishes provisions making it possible to label Internet sites in the light of their content.

Payment times Article L441-6 of the Code of Commerce as modified by Law No. 2008-776 of 4 August 2008 lays down a payment period of forty-five days end of month or of sixty days starting with the date of invoice issue.

Rules and regulations applicable to the status and supervision of credit institutions The supply in France of the Hipay solution requires acceptance of the set of rules concerning the status and supervision of credit institutions. They are codified in the Monetary and Financial Code (in the version in effect). We will particularly mention the following among these provisions:

18. Articles L.511-21 et seq. of the Monetary and Financial Code, which lay down the rules and regulations applicable to credit institutions within the framework of free establishment and unrestricted provision of service on the territory of States belonging to the European Economic Space;

19. Articles L.341-1 et seq. of that code, which lay down the rules applicable to bank or financial canvassing.

Rules and regulations applicable to payments Directive 2007/64/EC of 13 November 2007 "concerning payment services on the interior market [.]” was transposed into French law by Ordinance No. 2009-866 dated 15 July 2009 concerning conditions governing the supply of payment services and creating payment establishments.

The Group has initiated steps to obtain approval for its activities as a payment services provider.

6.4.3. THE BELGIAN LEGAL AND REGULATORY ENVIRONMENT Rules and regulations applicable to the status and supervision of credit institutions HPME company, publisher of the Hipay solution, is based in Belgium. In application of article 10 of the Law of 22 March 1993 concerning the status and supervision of credit institutions, HPME company was approved as an “Electronic currency establishment” by the Banking, Financial and Insurance Commission (CBFA).

Hence HPME company is subject to a strict regulatory framework laid down by the CBFA and based in particular on: 20. The Law of 22 March 1993 concerning the status and supervision of credit institutions (in the version in effect); 21. The Law of 11 January 1993 concerning prevention of use of the financial system for money laundering and for financing of terrorism (in the version in effect); 22. The Royal Decree of 23 September 1992 concerning the annual financial statements of credit institutions; 75

23. The Royal Decree of 23 September 1992 concerning consolidated financial statements of credit institutions, of investment companies and of mutual fund management companies; 24. The Royal Decree of 12 August 1994 concerning supervision on a consolidated basis of credit institutions, of investment companies and of mutual fund management companies; 25. The Royal Decree of 27 April 2007 aimed at transposing the European directive concerning the financial instruments markets; 26. The Royal Decree of 3 June 2007 containing rules and procedures aimed at transposing the directive concerning the financial instruments market; 27. The decision issued by the Banking, Financial and Insurance Commission on 5 December 1995 concerning the regulation relative to shareholders’ funds of credit institutions, approved by a ministerial decision of 31 December 1995; 28. The decision by Banking, Financial and Insurance Commission of 17 October 2006 concerning the regulation of to shareholders’ funds of credit institutions and of investment companies, approved by the ministerial decision of 27 December 2006; 29. The regulation of 27 July 2004 issued by the Banking, Financial and Insurance Commission relative to prevention of money laundering and of financing of terrorism, approved by a Royal Decree of 8 October 2004 (in its version in effect).

Rules and regulations applicable to advertising, e-commerce and the digital environment The Law of 11 March 2003 “concerning certain legal aspects of the services of the information society”, as modified by the laws of 9 July 2004 and of 20 July 2005, specifies the legislative framework applicable to electronic distance services, to e-commerce, to emails as well as to advertising.

Rules and regulations applicable to personal information In Belgium the “Commission for Protection of Private Life” (CPVP) is responsible for supervising application of the rules and regulations concerning personal information.

The Law of 8 December 1992 concerning protection of private life with respect to processing personal information (private life law) contains all legislative provisions serving as an intervention framework for the CPVP. This law is supplemented by the Royal Decree of 13 February 2001 adopted in execution of the Law of 8 December 1992 relative to protection of private life in connection with processing personal information.

6.4.4. OTHER APPLICABLE LEGAL AND REGULATORY ENVIRONMENTS The national laws of all countries having establishments and subsidiaries apply to the activities carried on in them in connection with advertising, e-commerce, publishing Internet sites and the digital environment.

The laws concerning protection of personal data and the following European supervisory authorities are more particularly involved:

23. In Germany, the “Virtuelles Datenschutzbüro” and the federal law concerning data protection (“Bundesdatenschutzgesetz”) of 20 December 1990, as modified, as well as all laws applicable to the 16 federal States (Baden-Württemberg, Bayern, Berlin, Brandenburg, Bremen, Hamburg, Hessen, Mecklenburg- Vorpommern, Niedersachsen, Nordrhein-Westfalen, Rheinland-Pfalz, Saarland, Sachsen, Sachsen-Anhalt, Schleswig-Holstein, and Thüringen); 24. In Sweden, the “Datainspektionen” and the law concerning personal information (Personuppgiftslagen) of 29 April 1998 in its version as modified and as supplemented by the ordinance of 3 September 1998; 25. In Spain, the “Agencia Española de Proteccion de Datos” (AGPD) and Law No. 15 of 13 December 1999 as supplemented by Royal Decree No. 1720 of 21 December 2007; 26. In Portugal, the “Commissão Nacional de Protecção de Dados” (CNPD) and Law No. 67/98 of 26 October 1998 (in its version in effect) as supplemented by article 35 of the Constitution of the Portuguese Republic; 27. In The Netherlands, the “College bescherming persoonsgegevens” and the law called “Wet bescherming persoonsgegevens”, which went into effect on one September 2001; 28. In the United Kingdom, the “Information Commissioner’s Office” and the “Data Protection Act” of 1998; 29. In Italy, the “Garante per la protezione dei dati personali” and the “Codice in materia di protezione dei dati personali” as resulting from decree No. 196 of 30 June 2003.

CHAPTER 7 – ORGANISATION CHART

7.1. GROUP ORGANISATION In addition to its advertising activity, Hi-media S.A. manages the Group and certain centralised functions: - definition of the Group’s strategy and new product launches; - management control; - legal advice to the subsidiaries; - management of relationships and of the contracts concluded with the service provider handling the management of advertising spaces; - relationships with the shareholders and the market authorities; - development and maintenance of the technical platforms used for Group activities.

The relationships between the parent company and its subsidiaries are described in the auditors’ special report concerning regulated conventions appearing on page 96 of the present document.

7.2. GROUP LEGAL STRUCTURE The following diagram presents the Hi-media subsidiaries and affiliates as of 31 December 2009:

The detailed list of the holdings included within the Group consolidation perimeter appears in note 3 to the appendix to the consolidated financial statements, on page 163.

7.3 SIGNIFICANT SUBSIDIARIES

The key figures (corporate data in euros) for these subsidiaries for financial year 2009 are as follows:

Hm Hm Hm Advertising Hm Hm Hm Hm Hm AdLink Hm Deutschland Belgium Web Sl Sales Portugal Ltd Network Italia Media Nederland AG Sprl AB Lda Internet Srl Deutschland BV (merger Espana GmbH of Hi- Sl Belgium + AdLink Internet Media NV) Activity Advertising Adv. Micropayments Adv. Adv. Adv. Adv. Adv. Advertising Adv. Sales 5 054 10 794 5 300 6 544 6 220 12 142 7 264 11 117 5 712 Mark-up 41.5% 31.9% 20.6% 94% 32.4% 21.7% 33.8% 33.5% 26.1% 40.3% Operating profit - 251 169 111 2 576 707 -1 823 366 353 - 231 - 285 Net profit - 191 122 - 66 1 897 523 -1 888 324 234 - 211 - 274

Allopass SNC Mobile Trend Mobile Works Groupe Hm L’Odyssée SAS SAS USA Inc. Interactive SAS Activity Micropayments Micropayments Micropayments Publishing Publishing Sales 86 834 8 743 2 843 3 623 5 034 Mark-up 20.3% 33.3% 69.2% 93.3% 96.9% Operating profit 8 256 1 697 1 315 -1 147 2 343 Net profit 7 809 1 116 931 -1 347 1 622

The subsidiaries having strategic economic assets are L’Odyssée Interactive, which holds the trademark Jeuxvideo.com, Allopass, holding the Allopass trademark and its technical platform, Fotolog, which holds the Fotolog trademark and the Internet site Fotolog.com, and Mobile Trend, with its technical platform.

Recently acquired significant subsidiaries: On 31 August 2009, Hi-media acquired AdLink Media, AdLink Group’s online advertising network activity, by issue of 3,940,000 Hi-media shares, delivery of 795,000 Hi-media shares held internally, and deferred payment in the form of a vendor’s credit amounting to 12.2 million euros.

CHAPTER 8 – REAL PROPERTIES, FACTORIES AND EQUIPMENT

8.1. IMPORTANT TANGIBLE FIXED ASSETS

See note 4 in the appendix to the annual financial statements and note 12 in the appendix to the consolidated financial statements.

The Company does not own the premises it has at 15-17 rue Vivienne in Paris 2ème. Those premises are rented from the company CEREP Vivienne Sarl. The premises are rented at the market price. There are no links between the company renting the premises to Hi-media and the latter’s senior managers.

8.2. TANGIBLE FIXED ASSETS AND ENVIRONMENTAL ISSUES

N/A (Inapplicable)

CHAPTER 9 – EXAMINATION OF THE FINANCIAL SITUATION AND OF THE EARNINGS

In application of article 28 of (EC) Rule No. 809/2004, the following information is included by reference in the present reference document:

- The management report concerning the financial year ending on 31 December 2008 appears on pages 198 et seq. of the Company’s reference document filed with the Financial Markets Authority on 14 April 2009 under number D.09-0236.

- The management report concerning the financial year ending on 31 December 2007 appears on pages 165 et seq. of the Company’s reference document filed with the Financial Markets Authority on 8 April 2008 under number D.08-0213.

9.1. FINANCIAL SITUATION

9.1.1. CHANGES IN THE FINANCIAL SITUATION During financial year 2002, the Company sharply reduced its activity, which fell to 9.5 million euros against 18.7 million euros the previous year, and then to 8.8 million euros in 2003. This reduction in the volume of activity was due both to stagnation or recession of the advertising market, depending on the country, but also to the closing of certain Hi-media offices abroad and to the refocusing of the activity on the most profitable contracts.

The year 2004 was marked by a strong recovery of business, which returned to levels comparable to the year 2000. Thus consolidated sales came to 14.4 million euros in 2004, up 63% from the previous financial year.

In addition, Hi-media’s margin structure improved considerably in 2002 and 2003. That increase of the mark-up during the market crisis enabled Hi-media in an initial phase to reduce its losses in spite of an 8% decline in consolidated sales in 2003. Then, with the strong activity increase experienced in 2004, the consolidated gross profit stabilised at between 37 and 40%, enabling Hi-media to reach the level of operating profitability in 2004.

In 2005, Hi-media confirmed the recovery of its accounts and the transition to profitability that had taken shape in 2004. The group was able to post positive consolidated operating income of 1.1 million euros, after taking account of the impact of a compromise settlement of 0.2 million euros during the first half to settle a dispute with Abacho company dating back to 2001, and the impact in IFRS terms of the stock options allocated to the employees (0.2 million euros). Thus the group’s net income came to 2.3 million euros.

2006 Financial year 2006 marked an important stage in development of the group’s profitability structure, the impact of the acquisitions and the increase of profits resulting from the group’s historic activities having made a five-fold increase of the current operating result possible (before taking account, on an IFRS basis, of the valuation of the cost of the free shares and of the stock options). That increase was obtained in particular thanks to the higher sales figures and to a better mark-up rising from 35% in 2005 to 38% in 2006 because of more advantageous commercial conditions and of the integration of high-margin-rate activities such as publishing Internet sites and selling advertising at local level. The strong margin advance led to better amortisation of overhead, in spite of the higher payroll expenses resulting from the group’s desire to structure its teams so as to properly get through a significant growth stage. The valuation of the cost of free shares and of stock options came to 2.5 million euros, the financial net income was almost zero, and the pre-tax earnings came to 4.8 million euros. The tax proceeds of 1.9 million euros corresponded to a current tax of 722 thousand euros, offset by capitalisation of the group’s carryover losses in an amount of 2.6 million euros. Net income came to 6.7 million euros, up 190% from 2005.

2007 2007 brought confirmation of the strong growth displayed by the company’s various activities. Sales rose by 45% from 2006. The advertising network activity increased by 47% (34% pro forma), and the micropayment activity by 44% (31% pro forma). 2007 resulted in a real impact of the diversification strategy in publishing, 5.7% of total 2007 sales being made on the group’s sites. The global increase of the group’s services and publishing activities resulted in a sharp improvement of Hi-media’s profitability. In spite of relative pressure on margins because of the competition, the group was able to maintain high margin levels at 44% for the advertising network activity and 28% for the micropayment business. The current 80

operating income (before valuation of the stock option plans and of the free shares) came to 15.1 million euros, up 109% from 2006, thus constituting 14.5% of sales. This improvement was mainly due to the operational leverage from which the group benefits as well as to development in publishing, which is a higher-margin activity. The valuation of the cost of free shares and of stock options came to 4 million euros. The installation of a bank loan in connection with acquisition of Fotolog resulted in higher financial charges than in 2006 and in negative financial income of 0.6 million euros. The tax burden on its part resulted from a current tax of 2.3 million euros, offset by a variation of 1.7 million euros in deferred tax. Hence the net result was 10 million euros, up 49.7% from 2006. 2006.

2008 The market environment changed with the slowdown of world growth. That crisis affected the online advertising activity. Despite the circumstances, the growth of the group’s activities remained considerable, with a 2008 sales increase of 30%. That growth proves the effectiveness of the integration and diversity of the Hi-media model with ever more marked interaction between the online advertising, micropayment and publishing activities. Because of the impact of the crisis on advertising generally, the group’s growth is rather different between one activity and another. The advertising activity increased by 9%, and the micropayment business by 55%. The publishing activity launched two years previously put on a very fine performance. Hi-media Publishing henceforth represented 11% of group consolidated sales (including advertising network commission and micropayments), and it found its sales jumping by 166% from the 2007 level. In spite of relative pressure on margins because of the competition, the group was able to maintain high margin levels of 56% for the advertising business and 28% for the micropayment activity. The current operating net income (before valuation of stock option plans and of free shares) came to 15.2 million euros, stable by comparison with 2007, thus coming to 11.2% of sales. This lower profitability was mainly due to the decline of growth of online advertising, which has a higher gross margin than micropayments, as well as the increase in operating costs connected with the launches of several Internet sites developed in-house. The valuation of the cost of the free shares and of the stock options came to 3.4 million euros. Installation of a bank borrowing in connection with the acquisition of Fotolog resulted in more substantial financial charges than in 2007 and in negative financial net income amounting to 2.3 million euros. The tax charge on its part resulted from a current tax of 2.3 million euros offset by a variation of 1.6 million euros in deferred tax. Hence net income came to 6 million euros.

2009 The year 2009 was a key one in Hi-media Group’s development. The unfavourable environment connected with the economic crisis affecting the world impacted all industry segments, and particularly advertising and online advertising. Under those difficult conditions, the Group was able to maintain its activity with a global increase of 27% in sales. That growth was essentially due to the strong advance posted by micropayments, with a 30% increase, and the 24% rise of advertising activity mainly due to the acquisition of AdLINK Media, a subsidiary of AdLINK AG Group, integrated on 1 September 2009. Excluding the acquisition of AdLINK Media, the Group’s advertising activity resisted, posting a 6% decline. Finally, the Group’s publishing activity rose by 2%, with a decline of advertising revenue but a strong increase in micropayment-connected income (+29%).1 The Group maintained a high gross profit at 37%, down slightly from 2008 because of (i) the integration of AdLINK Media, which historically had a lower gross profit that Hi-media, and (ii) an activity mix favouring micropayments, which is characterised by a lower gross profit than the online advertising activity. The current operating profit (before valuation of stock option plans and of free shares) came to 16.5 million euros, up 9% from the 2008 level. The valuation of the cost of free shares and of stock options came to 2.2 million euros. Installation of a bank borrowing in connection with the various acquisitions resulted in stable financial charges by comparison with 2008 and in financial net income negative by 2.0 million euros. The tax burden on its part resulted from a current tax of 3.5 million euros offset by a variation of 0.3 million euros in deferred tax. Net income, Group share, came to 6.5 million euros.

9.1.2. RESULTS OF FINANCIAL YEAR 2009 IN THE LIGHT OF THE OBJECTIVES On 20 January 2009, at the time of publication of annual sales for 2008, Hi-media indicated a growth objective for financial year 2009 in the double digits for sales, and a higher current* operating profit.

1 We should point out that the sales and the gross profit indicated in the consolidated financial statements do not correspond to the addition of the three activities – publishing, online advertising and micropayments. The reason is that the sales and gross profit of the publishing activity are found again to a great extent in the sales and the margin generated by the micropayment and online advertising activities.

On 18 March 2009, when announcing annual results for financial year 2008, Hi-media confirmed its goal of a double digit sales increase and of an improved current* operating profit. On 5 May 2009, when publishing information about the first quarter of financial year 2009, Hi-media confirmed those same targets.

On 31 August 2009, in connection with its release of semi-annual results for financial year 2009, Hi-media announced a sales forecast of 158 million euros and an operating* profit of 16 million euros (those objectives excluding AdLink).

With annual sales amounting to 154.2 million euros excluding the AdLINK Media acquisition (172.3 million including AdLINK Media as of 1 September 2009), the prediction of 158 million euros was reached to an extent of 98%. In addition, for 2009 the company posted a current operating profit (before valuation of the stock option plans and of free shares), excluding the acquisition of AdLINK Media, of 16.548 million euros (16.516 million including ADLink Media as of 1 September 2009), more than meeting the objective of 16 million euros.

*before the cost of stock options and of free shares

9.2. OPERATING PROFIT

9.2.1. COMPANY’S SALES AND EARNINGS FOR FINANCIAL YEAR 2009 Hi-Media S.A posted corporate sales of 37.9 million euros against 36.5 million for the previous year.

The profit comes to 13 486 K€, broken down in particular into:

- an operating profit of 3 063 K€; - financial net income of 13 414 K€; - extraordinary net income of – 3 760 K€; - tax proceeds of 769 K€

9.2.2. GROUP’S SALES AND CONSOLIDATED NET INCOME FOR FINANCIAL YEAR 2009 Financial year 2009 resulted in consolidated sales excluding taxes of 172.3 million euros, compared with 135.7 million for the previous financial year, a 27% increase.

The breakdown by activities reflects the balance between the group’s two main revenue sources, with 44.3% (+24%) for advertising and 55.7% (+30%) for micropayments.

The share of activity recorded by the subsidiaries represents 78% of sales for the year 2009. The share attributable to the foreign subsidiaries represents 26% of year 2009 sales.

Consolidated net income for the financial year comes to 6 920 K€, broken down in particular into:

- an operating profit of 11 780 K€; - negative financial income of 1 968 K€; - a share for companies treated on an equity basis of 372 K€; - a tax charge of 3 265 K€.

The company’s operating profit came to 11,780 K€ on 31 December 2009, compared with 9 368 K€ one year earlier. The main variations were as follows:

- a 27% increase in sales by comparison with 2008;

- a relatively stable gross margin of 37% (40% in 2008);

- a payroll increase of 8% following the acquisition of the online advertising network activity of AdLink Internet Media AG Group;

- a 37% rise in other operating costs (excluding the costs of stock options and of free shares) mainly due, as was true of the salaries, to the acquisition of the online advertising network activity of the group AdLink Internet Media AG;

- the non-current charges mainly reflect costs connected with restructuring programs or the termination of services contracts (premises, sites, marketing reports), particularly in connection with the merger with AdLINK. 82

The company’s indebtedness excluding taxes receivables transferred to the factoring company came to 45,587 K€ on 31 December 2009, against 34 940 K€ on 31 December 2008.

. SALES, OPERATING PROFIT AND NET PROFIT OF THE GROUP’S HOLDINGS FOR FINANCIAL YEAR 2009

Net income Dividends Sales excluding (profit or loss collected by the Average taxes for the last Date of creation Corporate name for the last company during exchange rate complete or of acquisition complete the financial 1€ = financial year1 financial year)1 year2 Hi-Media Belgium SPRL 5 475 -24 - - 09.03.00 Hi-Media Portugal Lda 6 544 523 135 - 31.10.00 Hi-Media Deutschland AG 5 054 -191 - - 30.04.01 Hi-Pi SARL 785 -1 423 - - 13.05.02 Europermission SL - - - - 25.03.04 Hi-Midia Brasil 13 454 4 121 - 2.77 18.07.05 Hi-Media China - - - 10.81 01.05.06 Allopass SNC 86 834 7 809 8 000 - 08.02.06 L’Odyssée Interactive SAS 5 034 1 622 2 024 - 31.05.06 Hi-Media Sales AB 70 871 20 144 1 706 10.62 04.09.06 Hi-Media Advertising Web SL 5 300 -66 - - 29.12.06 Groupe Hi-media USA 3 434 -1 879 - 1.39 27.11.07 Sport.fr - - - - 26.12.07 HPME SA 55 -455 - - 08.05.08 Bonne Nouvelle Editions SARL 326 -41 - - 06.06.08 Mobile Trend SAS 30 046 1 116 - - 13.06.08 HPMP - -65 - - 01.10.08 Hi-media Nederland BV (ex. AdLink 2 003 77 - - 31.08.09 Internet Media BV) AdLink Media Deutschland GmbH 4 261 -126 - - 31.08.09 Hi-media Ltd (ex. AdLink Internet 2 327 -573 - 0.90 31.08.09 Media Ltd.) Hi-media Network Internet España SL (ex. AdLink Internet Media 4 402 223 - - 31.08.09 S.L.U.) Hi-media Italia Srl (ex. AdLink 2 803 322 - - 31.08.09 Internet Media Srl) Allopass Scandinavia 8 -1 552 - 10.62 30.09.09 Allopass Mexico SRLCV - -221 - 19.12 17.07.09 1 in thousands of functional monetary units 2 in thousands of euros

For the entities publishing Internet sites (Hi-Pi, L’Odyssée Interactive, Groupe Hi-media USA, Sport.fr, and Bonne Nouvelle Editions), the sales and net profit take account of the commission received by the advertising network or by Allopass for the micropayment.

9.2.4. SIGNIFICANT EVENTS DURING FINANCIAL YEAR 2009 On 30 January 2009, an independent new director (Mr. Michael Kleindl) joined the Board of Directors, replacing Mr. Dominique Bezier, who remains General Secretary.

On 31 August 2009, Hi-media acquired AdLink Media, AdLink Group’s online advertising network activity, by issue of 3,940,000 Hi-media shares, delivery of 795,000 internally held Hi-media shares, and deferred payment in the form of a vendor’s credit of 12.2 million euros. (cf. notes 3.2 and 23 in the appendix to the consolidated financial statements).

During financial year 2009, Allopass continued its international development, and it is now present in France, Spain, Belgium, the United States, Scandinavia, Germany and the United Kingdom.

During financial year 2009, Hi-media Group also launched its Hipay electronic wallet, so that it can carry on that activity from Belgium in the 27 member countries of the European Union.

9.2.5. SIGNIFICANT EVENTS SINCE THE FINANCIAL YEAR END On 26 February 2010, Hi-media increased its holding in the capital of Rue89 company from 7.5% to 9.40% by subscribing to a capital increase in an amount of 150,120 euros.

On 9 March 2010, Hi-media Belgium Sprl increased its stake from 34.3% to 44% in the capital of Vivat company by acquiring 13 additional partnership shares from other partners for an amount of 1 euro.

CHAPTER 10 – CASH POSITION AND CAPITAL

See notes 8 in the appendix to the corporate financial statements on page 129 and 17 in the appendix to the consolidated financial statements on page 179. The cash flow statement is to be found on page 148 of the present document.

CHAPTER 11 – RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

The investments in tangible fixed assets come to 1 655 K€ for 2009, mainly reflecting the acquisition of computer hardware needed for proper operation of the activity (servers and computer stations).

The investments for the year 2009 in intangible fixed assets come to 3 966 K€, reflecting continuation of the in-house development of technological tools, mainly software for monitoring the advertising and micropayment activities, an advertising server, as well as the development costs for new functionalities on the sites in production.

All of the trademarks used by Hi-media or by its subsidiaries belong to it or them, and there are no trademarks or patents belonging to the senior managers.

CHAPTER 12 - INFORMATION CONCERNING TRENDS

12.1. MAIN TENDENCIES SINCE THE END OF THE FINANCIAL YEAR OR WHICH COULD AFFECT THE CURRENT FINANCIAL YEAR

12.1.1. ADVERTISING NETWORK With respect to the online advertising network activity, following a severe crisis in 2009, the display advertising market in 2010 should experience a gradual return to growth during the year, resulting in a rather weak increase for the financial year, if one accepts the latest Publicis forecasts. Moreover, the online advertising market should again post more significant growth rates in the following years. Hi-media’s activity should be in keeping with those broad outlines, but the company may nevertheless gain market shares because of its leading position.

The French activities resisted more effectively than occurred in other countries because of the high market share held in France by the advertising network activity. Moreover, the sales figures recorded on the smallest markets, such as Portugal and Belgium, increased thanks to the dynamic commercial relationship with MSN in Portugal and to a substantial gain of market share in Belgium. On the other hand, activity declined in Sweden, Germany and Spain. The acquisition of Adlink Internet Media on 31 August 2009 then enabled advertising network activity to consolidate its market shares in France, Spain, Germany and Belgium, and to establish a foothold in The Netherlands, the United Kingdom and Italy. So the company got back to rapid growth in the last four months of the year because of this acquisition.

12.1.2. MICROPAYMENTS Growth remained strong all year for the micropayment business, even if an unfavourable basic effect (the integration of Mobiletrend had been carried out in June 2008) caused a weakening of the rate of increase during the second part of the year. The activity should continue to develop strongly in 2010 thanks to the international deployment of Allopass and conclusion of some new contracts in France. For the longer term, the HyPay electronic wallet should constitute a new growth source.

CHAPTER 13 – PROFIT ESTIMATES

13.1. MEDIUM-TERM FINANCIAL OBJECTIVES

Because of the uncertainties weighing on the general economic climate and the still marked lack of maturity of the Internet market in Europe, visibility on the advertising and micropayment markets remains reduced. Hi-media is not indicating any 2010 objective in view of the very uncertain market environment and of the limited visibility of activity. Nevertheless, anticipating a continuation of its excellent 2009 and of the recent Group developments, Hi-media is confident about financial year 2010, and therefore thinks that growth of activity and of the Group’s earnings should materialise.

13.2. SALES OBJECTIVES

13.2.1. ACTUAL PERFORMANCE COMPARED WITH OBJECTIVES In its 2005 reference document, Hi-media had indicated, for the year 2006, an objective of more than 70 million euros (included in the press releases dated 13 June 2006 and 18 October 2006), and finally posted sales amounting to 71.8 million euros for the financial year.

In its 2006 reference document, for the year 2007 Hi-media anticipated 100 million euros, and then more than 100 million euros in sales in the following press releases, and it finally recorded sales of 104.3 million euros for the financial year.

In its 2007 reference document, for the year 2008 Hi-media indicated an objective of 140 million euros, and then 133 to 135 million euros in sales, in the press release concerning sales for the third quarter, because of the economic environment, and finally booked sales of 135.7 million euros for the financial year. In its reference document for 2008, for the year 2009 Hi-media reported a double-digit growth objective for 2009 sales. Then in its press release concerning the earnings for the first half of financial year 2009, it announced a sales objective of 158 million euros excluding the acquisition of AdLINK Media. Hi-media finally posted sales of 172.3 million euros, up 27%, and of 154.2 million euros excluding AdLINK Media, up 14% and reaching 98% of the 158-million-euro objective.

13.2.2. SALES TARGET FOR 2010 The company insists on the fact that visibility with respect to its activity and the markets on which it operates is very limited because of the uncertainties characterising the present general economic climate. Under those circumstances, Hi-media is not stating any objective for 2010. Nevertheless, anticipating a continuation of its excellent 2009 and of the recent Group developments, Hi-media is confident about financial year 2010, and therefore thinks that growth of activity and of the Group’s earnings should materialise.

These elements may be updated during the year depending on the visibility that the company acquires concerning its activity, possible changes in tendencies characterising the Internet communication market, and possible new acquisitions.

Certain such data, hypotheses and estimates emanate from or are based, totally or partly, on judgements or decisions made by the senior managers of Hi-media and of its subsidiaries, and those factors may evolve or be modified in the future. The objectives, declarations and prospective information summed up above are based, in particular, on the data, assumptions and estimates indicated above and considered as reasonable by Hi-media.

The reader is warned that these expectations depend on anticpated circumstances or facts. They are not historical data, and may not be construed as guarantees that the facts and data indicated will occur and/or that the objectives will be reached. By their very nature, such data, assumptions and estimates as well as all of the elements taken into account for determination for the said objectives may not come about, and may evolve or be modified because of uncertainties connected, in particular, with the company’s economic, financial and competitive environment.

Moreover, the realisation of certain risks described in section 3.2 – Risk factors of the Hi-media reference document could have an impact on the Group’s activities and on reaching the objectives mentioned above.

CHAPTER 14 – ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY ORGANS AND GENERAL MANAGEMENT

14.1. THE BOARD OF DIRECTORS

14.1.1. COMPOSITION OF THE BOARD OF DIRECTORS The company is administered by a board consisting of at least three members and of eighteen at most. The directors are appointed by an Ordinary Shareholders' Meeting, which may remove them at any time.

The Chairman of the Board of Directors is currently Mr. Cyril Zimmermann, born on 11 December 1971 in Annemasse (74). His term will end at the conclusion of the Ordinary Shareholders' Meeting to be held in the year 2010 to rule on the financial statements for the financial year ending on 31 December 2009. Mr. Cyril Zimmermann is also the company’s Managing Director.

Mr. David Bernard is the company’s Assistant Managing Director. His mandate as director will end at the conclusion of the Ordinary Shareholders' Meeting to be held in the year 2012 to rule on the financial statements for the financial year ending on 31 December 2011.

The Shareholders’ Meeting held on 2 November 2005 appointed two new directors, Messrs. Jocelyn Robiot and Jean- Charles Simon, for six-year terms, expiring at the end of the annual Ordinary Shareholders' Meeting to be held in the year 2011 and which is to rule on the financial statements for the financial year ending on 31 December 2010.

The meeting of the Board of Directors held on 1 July 2008 co-opted IDI company to replace Mr. Eric-Marie Bion, who resigned. That co-optation was ratified by the Shareholders’ Meeting held on 30 April 2009.

On the occasion of acquisition of Fotolog company, a proposal was put to the Shareholders’ Meeting held on 22 November 2007 to appoint Mr. Mathias Schilling, Managing Director of BV Capital Management LLC, as a director. He was appointed for a term of six years, to end at the conclusion of the Ordinary Shareholders' Meeting to be held in the year 2013 to rule on the financial statements for the financial year ending on 31 December 2012. Mr. Mathias Schilling resigned from his duties on 30 April 2009, and BV Capital Fund II LP was co-opted to replace him. That co- optation will be submitted to the next Shareholders’ Meeting for ratification.

The meeting of the Board of Directors held on 30 January 2009 co-opted Mr. Michael Kleindl to replace Mr. Dominique Bezier, who resigned. That co-optation was ratified by the Shareholders’ Meeting held on 30 April 2009. At that same meeting, Mr. Michael Kleindl’s term was renewed for a duration of four years.

The information concerning the directors and their mandate appears in section A1 called “Report by the Chairman of the Board of Directors concerning the conditions regarding preparation and organisation of the Board of Directors’ work and concerning the internal control procedures”, on pages 202 et seq. of the present reference document.

To the company’s best knowledge and as of the date of the present reference document, during at least the last five years none of the sitting directors: - has been sentenced for fraud; - has been associated with any bankruptcy whatsoever, placement in administration or liquidation; - has been indicted and/or has been the object of an official public sanction pronounced by the statutory or regulatory authorities; - has been prevented by a court from acting as a member of an administrative, managerial or supervisory organ of an issuer, or from intervening in management or conduct of the business of an issuer.

The members of the Board of Directors are unrelated to each other.

14.1.2. COMPANY MANAGEMENT At its meeting held 26 June 2002, the Board of Directors decided to opt for combining the functions of Chairman of the Board of Directors and of Managing Director.

The Managing Director is invested with the most extensive powers for acting in the company’s name under any circumstances. He exercises the said powers within the limits of the business purpose and subject to the powers explicitly assigned by law to the Shareholders’ Meetings and to the Board of Directors.

The company’s Managing Director (CEO) is now Mr. Cyril Zimmermann, who is also Chairman of the Board of Directors.

The Hi-media management team groups the skills of professionals in the Internet marketing area as well as of experts on payment means and telecommunications required for becoming a leader in interactive marketing and in solutions for digital media. During the last few months, Hi-media has demonstrated its ability to attract new talents, guaranteeing the quality of its development. That team consists of the following members:

Registered office - France Cyril Zimmermann: Managing Director Born in 1971, Cyril Zimmermann has been Hi-media’s President (Chairman) since the company’s foundation. He is a graduate of the ESCP, and of the Institute of Political Studies of Paris, and holds a bachelor’s degree in history.

David Bernard: Assistant Managing Director David Bernard, born in 1973, was an assignment manager for the Mazars firm, and then Director of Consolidation and of Internet auditing of the Entreprise Industrielle Group. He joined Hi-media for the first time in February 2000, but left it while remaining a director at the beginning of 2003. He then became Assistant Managing Director and a member of the Executive Board of André Trigano Group. He rejoined Hi-media in September 2006 as Assistant Managing Director. He is a graduate of the Edhec school.

Dominique Bezier: General Secretary Dominique Bezier is the company’s General Secretary. He was its Chief Administrative and Financial Officer until 2008. And he worked in the Financial Department of Entreprise Industrielle from 1989 to 2000.

Grégoire Bourdin: Chief Administrative and Financial Officer Grégoire Bourdin is a graduate of ESC Toulouse. Before joining Hi-media in July 2007, he was an Assignment Manager at KPMG, specialising in the sector of New Technologies and Media. He was previously a financial controller for Omnicom Group.

Gabriel de Montessus: Corporate Finance Manager A graduate of the University of Paris-IX Dauphine and of EM Lyon. Before joining Hi-media in 2007, he was merchant banker at Citigroup in Paris in the field of mergers and acquisitions, where he mainly worked on Tech/Media subjects. He had previously been “chargé d’affaires” at VPSA (ex Viventures) venture capital fund dedicated to the new technologies and to the Internet, where he was responsible for North American investments. Based in Palo Alto, California, he took part in that context in many investments and disposals.

Marianne Bellamy: Group Marketing Manager Marianne Bellamy is a graduate holding DESS diploma in Marketing-and Sales (CNAM Paris) and joined Hi-media in 1999.

Eric Giordano: Director of the Group’s Micropayment Activities A graduate of a business school (IDRAC Lyon), Eric GIORDANO was with JET MULTIMEDIA before joining Hi- media in 1999.

Eric Favre: Assistant Director of Group Micropayment Activities Eric Favre, a graduate of EDHEC Lille, began his career in 1995 in Caracas (Venezuela) as Assistant to the Manager of the Elf Aquitaine subsidiary. Upon returning to France, after some experience as an auditor at Ernst&Young Audit, he became the financial officer of an SME in the trade press field. In 2000, he co-founded Active Telecom (a publisher of telephony platforms) and was its managing partner until 2007 (when the company was resold to a telecommunications operator). He then became a telecommunications consultant and carried out several assignments on behalf of Hi-media, which he finally joined as Assistant Managing Director for payment activities.

Bruno Gloaguen: HIPAY Managing Director A graduate of an EPITA group computer school (ESTI), Bruno GLOAGUEN joined EUROVOX group in 1994 as Manager of Development Support & Application. Co-founder of the ALLOPASS platform in 2001, he came to Hi-media in 2006 and managed the obtaining of the banking approval of HIPAY, the entity that he has managed since then.

Olivier Gonzalez: Director of the Group’s advertising activities Olivier GONZALEZ joined Hi-media in 2003 after beginning his career in the regional and daily press and five years spent at Adlink France.

Franck Méchineau: Technical Manager Franck Méchineau holds a diploma in computer engineering and applied mathematics from the ENSEEIHT. After one year of experience at Thomson-CSF as a design and development engineer and 3 years as Project Manager for Mobiquid company, he joined Hi-media group in 2003.

Geneviève Narquin: Chief Legal Officer Geneviève Narquin holds a master’s degree in commercial law and a DESS diploma in business law from the University of Paris IX Dauphine. She has been Hi-media group’s Chief Legal Officer since 1999.

Yannick Touchard: Director of the Group’s Publishing Activities Yannick Touchard holds a DESS diploma in technological innovation and an ISTIA engineer’s diploma. He is responsible for Hi-media Publishing’s editorial activities.

Sébastien Pissavy: Founder and President of L’Odyssée Interactive Sébastien Pissavy is the President and Founder of jeuxvideo.com, a leader among French-speaking video game Internet sites, launched in 1997. His company joined Hi-media Group in June 2006. He holds a master’s degree in data processing.

David Cohen: Director for France of Hi-media Payments David Cohen joined Eurovox Group in 2000 and took part in launching Allopass. He came to Hi-media in 2006 and became Allopass Sales Manager and then Allopass France Manager in 2008. He has more than ten years of experience in monetisation.

Gilles Tannugi-Cohen: International Head of Sales Gilles TANNUGI holds a master’s degree in Computer Methods Applied to Business Management (MIAGE – Paris XII). After some initial commercial experience for 2 years at Eurovox – a company that then published Allopass – he then took part in construction of an alternative telecommunications operator specialising in Voip: Annatel Networks. He joined Hi-media Group at the end of 2006, and then became Allopass France’s Sales Manager. He is now in charge of organising and co-ordinating sales forces at International Hi-media Payments.

Franck Zerbib: Director for France of the Hi-media Payments activity After university training in Finance and a DESS diploma in Marketing, Franck Zerbib established and directed the company COFRA GABON (imports and exports of ordinary consumer goods in Gabon) between 1995 and 2001. In 2001, he joined Eurovox group as Sales Engineer for the Allopass micropayment platform. In 2006, after the group was acquired by Hi-media, Franck Zerbib took up a position as Manager of Eurovox, a telephone operator and server centre. In January 2010, he became Manager for France of the Hi-media Payments activity, a European leader in electronic payments.

Belgium Vincent Delmotte: Co-manager of Hi-media Belgium After secondary school graduation in communication, in 1997 he launched one of the first Internet advertising networks in Belgium: RMB Online. At the beginning of the millennium’s first decade, he also served as COO for one of the country’s most important interactive agencies: ZB22. In 2003, he joined PublicityWeb as Sales Director. Following the agency’s acquisition by Hi-media Group, beginning in 2008 he served as Managing Director of Hi- media Belgium and of PublicityWeb.

Patrick Steinfort: Co-manager of Hi-media Belgium After artistic training (La Cambre – Brussels), Patrick Steinfort began a career of more than 10 years for an advertising agency before discovering the Internet in 1994. He was Program Director for Infosources group for more than 6 years, seeing to management and development of the group’s sites (Infonie, Lokace) for the French, Swiss and Belgian markets. Back in Belgium, he managed the Interactive Advertising Bureau (IAB) Belgium for 4 years before joining Hi-media Group’s Belgian subsidiary.

Netherlands René Zeedijk: A Director of Hi-media Nederland In 1995 René Zeedijk began as a Radioplanner at Mediaedge (CIA), and in 1997 he became Account Manager at Radio 538, and then Account Manager Senior. In the year 2000, he became Sales Manager and a member of the managerial team. In 2005 he joined Talpa Radio International as Sales Manager, before also becoming a member of the Board of Directors. Since February 2008, René Zeedijk has been Managing Director of AdLINK in The Netherlands (acquired by Hi-media in August 2009).

Germany Andreas Stietzel: Manager of Hi-media Deutschland AG After experience in the banking sector, Andreas Stietzel was in sales for 7 years in the automobile sector. He first joined Abacho AG, before becoming the manager of its Hi-media Deutschland subsidiary.

Nils Winkler: Allopass Allemagne Nils has 15 years of experience in the media, the bulk of it in the online field. He was responsible for the development of ADTECH throughout Europe and in Asia and North America. He joined Hi-media Payments in December 2009 to carry out Allopass’ expansion on the German-speaking markets.

United Kingdom Neil Scoble: Co-manager of Hi-media Ltd Born in 1970, Neil is a BSc graduate (Hons) of the University of Coventry. He began his career in one of the most important direct marketing companies in the United Kingdom, and became International Development Director for Axciom before joining AdLink to manage the pan-European Division of Direct Marketing.

Ben Humphry: Allopass UK Ben Humphry, born in 1971, joined Hi-media in 2009. He worked in the English media for 12 years, and is a graduate of the University of Kingston.

Sweden Ola Bengtsson: Medianet Director Ola Bengtsson joined MediaNet company in 1997. Hired on the sales side, and then Sales Manager in 2000, he became Medianet manager in 2004. In 2007, he was appointed manager of Hi-media Sweden.

Dan Hörning: Allopass Scandinavia AB Dan is a graduate of the IHM Business School and holds a master’s degree in science from the Royal Academy of Technology of Stockholm. With some experience in Internet advertising since 1997 in such companies as Telia, Atlas and Microsoft, Dan moved into the field of Internet payments in 2009 when he became Manager of Allopass Scandinavia.

Spain Mikel Lekaros: Manager of Hi-media Espana Holding a master’s degree in business from the University of Deusto and a master’s degree in marketing from the University of Strathclyde, Mikel Lekaros began his career with PriceWaterhouseCoopers as auditing consultant for 4 years. After having founded Facilnet, one of the first Internet services suppliers in Spain, he was put in charge of the European development of FAI Easynet. In 2005, he took responsibility for development of Allopass in Spain. Following the acquisition of Allopass by Hi-media, he was appointed Managing Director of the Group’s Spanish subsidiary. Enrique Lara: A director of Hi-media Network Internet Espana SL Holding a master’s degree in law, Enrique Lara is Hi-media’s Managing Director in Spain. For 3 years he was Sales Manager for AdLINK, following its merger with Doubleclick (within which he held the same functions). Enrique Lara had joined Doubleclick after 11 years at PubliEspaña. 92

Portugal Benedita Simas: Manager of Hi-media Portugal Lda Holding an MBA from the City University Business School of London, Benedita Simas worked in various capacities for an advertising purchasing office in England and in Portugal, before becoming Director of Research and Development of Initiatives Media. She joined Hi-media in the summer of 2000 as Managing Director of Hi-media Portugal.

Italy Carlo Poss: Manager of Hi-media Italia After a 10-year career with Publitalia’80 (Mediaset Group), Carlo Poss became Managing Director of the DoubleClick agency in Italy. In 2001, he managed the merger between doubleClick and AdLINK Media AG. In 2002, he directed the acquisition of the Publikompass Internet activities, and then in 2004 the acquisition of all Internet media activities of Lycos Europe in Italy. In 2005 he monitored the launch of the AOL Italy (AOL Europe) external advertising network.

United States Arne Jokela: Co-manager of Fotolog Arne Jokela joined Fotolog as Technical Manager and supervised the site’s technological platform and the technical team. Before joining Fotolog, Arne was Technical Manager for American Express Publishing and Product Manager at AOL Local for Digital City, Moviefone and Mapquest. Arne is a graduate of the University of Berkeley, California.

Yossi Langer: Co-manager of Fotolog Before joining Fotolog, Yossi worked for various Internet companies, particularly America Online, AOL Europe and American Express Publishing. Yossi was Product Manager at Fotolog. He is a graduate of Penn State University.

Pooj Preena: CEO of Hi-media USA Inc. Group Pooj joined Hi-media in 2008. Before that, he was a founder of and advisor to Betaworks, one of the main Web innovators in real time. He worked for or advised some of the world’s most innovative technological companies, such as Skype (acquired by eBay), Hewlett-Packard, SEPT réseaux and Certicom (acquired by RIM). Pooj is an occasional business angel and sits on the boards of various technological start-ups in the world.

Brazil Julien Turri: Founder and President of Hi-midia Brasil An HEC graduate, Julien was President of the HEC Junior Entreprise, a junior consultant at Boston Consulting Group, and Market Manager for Danone in Rio de Janeiro. In 1999 he established an auction site between individuals in Brazil, and became associated with French group iBazar, which was acquired by eBay in 2001. He took part in several innovative Internet projects, and founded Hi-midia Brasil in May 2005, in partnership with Hi-media S.A.

14.2. CONFLICTS OF INTEREST

14.2.1. THE INDEPENDENT DIRECTORS

Following the successive resignations of Dassault Multimédia, Spef e-Fund and Rivaud Innovation from their director’s positions during financial year 2005, the Combined Shareholders’ Meeting held on 2 November 2005 appointed two directors (Messrs. Jean-Charles Simon and Jocelyn Robiot) complying with all independence criteria as defined in the Medef/AFEP report of 23 October 2003 concerning corporate governance of listed companies.

Mr. Michael Kleindl, co-opted by the Board of Directors during its meeting held on 30 January 2009, also satisfies the independence criteria.

No directors are elected by the employees.

No “censeur” auditor has been appointed.

14.2.2. CONFLICTS OF INTEREST AT THE LEVEL OF THE ADMINISTRATIVE AND MANAGERIAL ORGANS To the company’s best knowledge, there are no potential conflicts of interest between the duties to the company of one of the members of an administrative and management organ and their private interests and/or duties, if any. 93

There are no arrangements or agreements concluded with the main shareholders, customers, suppliers or other such by virtue of which the above-mentioned persons have been chosen as members of the Board of Directors.

There are no restrictions accepted by such persons on the transfer, within a certain period, of their holding in the company’s capital with the exception of the rules concerning prevention of insider trading and the provisions regarding tax unavailability of the stock options and free shares.

Pursuant to the applicable legal provisions and to the articles of incorporation, each director appointed by a Shareholders’ Meeting must own at least one company share.

CHAPTER 15 – REMUNERATION (COMPENSATION) AND BENEFITS PAID TO THE SENIOR MANAGERS

The company applies the Afep-Medef recommendations concerning the remuneration of senior managers who are authorised agents of the listed companies.

The figures for the total gross annual remuneration paid, for the year 2009, for the senior managers acting as authorised agents are as follows:

Summary table concerning remuneration and options and shares allocated to each senior manager acting as authorised agent 2009 2008 Cyril Zimmermann, President and Managing

Director Remuneration due for the financial year 370 861 286 781 Valuation of the options granted during the financial - year - Valuation of the performance shares allocated - 76 032 during the financial year Total 370 861 362 813 David Bernard, Assistant Managing Director Remuneration due for the financial year 238 832 212 158 Valuation of the options granted during the financial - - year Valuation of the performance shares allocated - 50 688 during the financial year Total 238 832 262 846 Erik-Marie Bion, Assistant Managing Director * Remuneration due for the financial year - 80 291 Valuation of the options granted during the financial - - year Valuation of the performance shares allocated - - during the financial year Total - 80 291 *Erik-Marie Bion gave up his position on 18 April 2008

Cyril Zimmermann, 2009 2008 President and Managing Amounts due Amounts paid Amounts due Amounts paid Director Fixed compensation 317 303 (1) 317 303 (1) 222 434 (1) 222 4 34 (1) Variable compensation 37 500 50 000 50 000 50 000 Extraordinary compensation - - 68 000 (6) Attendance fees - - - Benefit in kind 16 058 (4) 16 058 (4) 14 346 (4) 14 346 (3) Total 370 861 383 361 286 781 354 780 David Bernard, Assistant Managing Director Fixed compensation 162 000 162 000 162 000 162 000 Variable compensation 64 800 48 600 38 475 51 075 Extraordinary compensation - - - Attendance fees - - - Benefit in kind 12 032 (3) 12 032 (3) 11 683 (3) 11 683 (3) Total 238 832 222 632 212 158 224 758 Erik-Marie Bion, Assistant Managing Director (5) Fixed compensation - - 78 013 78 013 Variable compensation - - - 28 800 Extraordinary compensation - - - - Attendance fees - - - - Benefit in kind - - 2 278 (2) 2 278 (2) Total - - 80 291 109 091 (1) The fixed compensation amounts include 141,303 euros (2009) and 47,101 euros (2008) paid to SPRL Cyril Zimmermann for management of Hi-media Belgium. (2) company car (3) guarantee covering loss of employment and supplementary retirement (4) company car, guarantee concerning loss of employment and supplementary retirement (5) Erik-Marie Bion gave up his functions p, 18 April 2008 (6) Since Cyril Zimmermann waived his bonuses due for the second half of 2006 and due for financial year 2007, the Board of Directors decided in December 2007 that an extraordinary bonus could be paid to him in the first half of 2008 depending on financial year 2007 results. Payment of that bonus was decided on by the meeting of the Board of Directors held on 6 March 2008.

The remuneration figures presented are in terms of global gross annual remuneration before taxes.

The authorised agents’ variable compensation is based on reaching objectives, particularly in terms of current operating profit. That variable remuneration is paid semi-annually and is as a function of the percentage of reaching the target.

It is specified that the senior managers acting as authorised agents do not receive any remuneration in connection with other activities and/or mandates within Hi-media Group, with the exception of Cyril Zimmermann, who receives, via Sprl Cyril Zimmermann, remuneration for his mandate relating to management of Hi-media Belgium (included in the table below).

No attendance fees are paid to the authorised agents who are senior managers.

The senior managers acting as authorised agents do not receive any other conditional or deferred compensation.

The company has taken out a contract covering loss of employment and a supplementary retirement contract for its President and its Assistant Managing Director, as well as a life insurance contract for its President. The costs to the company of these commitments are limited to payment of the insurance premiums. The amounts paid by the company under the contracts covering loss of employment and supplementary retirement are handled as benefits in kind in connection with the remuneration paid to those two beneficiaries.

Senior Indemnities or benefits due or managers which might become due because Indemnities relative to a non- Employment contact Supplementary retirement regime acting as of cessation of or change of a competition clause authorised function agents YES NO YES NO YES NO YES NO Cyril Zimmermann President and Managing Director 21/12/98 X X X X Shareholders’ Meeting ruling on the 2009 financial statements David Bernard Assistant Managing Director 21/04/00 X X X X Shareholders’ Meeting ruling on the 2011 financial statements

In addition, these senior managers acting as authorised agents benefited from an allocation of stock options, details of which appear in 17.2.3.3. of the present document.

Certain other members of the Board of Directors receive attendance fees. Those fees are allocated to the directors who are individuals, and are not remunerated by the company under an employment contract or in connection with a corporate mandate, this as a function of their actual presence at the meetings of the Board of Directors.

The budget approved by the Shareholders’ Meeting held on 30 April 2009 was 56,000 euros. That amount is distributed as a function of the number of directors concerned by the payment of attendance fees, of the number of Board meetings during the financial year, and of the number of times each director attended. 56,000 / 28 = 2 000 euros per director present and per meeting.

Table concerning the attendance fees and the other types of remuneration received by the authorised agents who are not senior managers Authorised agents not senior managers 2009 2008 Jocelyn Robiot, Director Attendance fees 13 517.24 € 4 500 €* Remuneration - - Jean-Charles Simon, Director Attendance fees 15 448.28€ 6 500 €* Remuneration - - Mathias Schilling, Director** Attendance fees 7 724.14 € 7 000 €* 96

Remuneration - - IDI, Director Attendance fees - - Remuneration - - BV CAPITAL, Director Attendance fees - - Remuneration - - Michael Kleindl, Director Attendance fees 19 310.34€ - Remuneration - - *At its meeting held on 6 March 2008, the Board of Directors made an error in distribution of the attendance fees. That mistake was corrected at the meeting of the Board of Directors on 14 May 2008 so as to pay out the attendance fees as indicated in the above table. **Mathias Schilling resigned as a director on 30 April 2009

CHAPTER 16 – OPERATION OF THE ADMINISTRATIVE AND MANAGERIAL ORGANS

16.1. ROLE AND OPERATION OF THE BOARD OF DIRECTORS

The company is administered by a Board of Directors, composition of which is detailed in section 14.1.1 above, as well as in the internal control report appearing on page 202 of the present document, and which lays down the guidelines concerning the company’s activity and sees to their application. Subject to the powers explicitly assigned to the Shareholders’ Meetings and within the limits of the business purpose, it considers any question of interest to proper operation of the company, and by its decisions it settles the matters concerning it.

Each director must hold at least one share.

The Chairman of the Board of Directors represents it. He organises and directs the Board’s work, and reports thereon to the Shareholders’ Meeting.

At its meeting held on 26 June 2002, the Board of Directors opted for combining the functions of Chairman of the Board of Directors and of Managing Director.

The Managing Director is invested with the most extensive powers for acting in the company’s name under any circumstances. He exercises those powers within the limits of the business purpose and subject to the ones explicitly assigned by law to the Shareholders’ Meetings and to the Board of Directors.

16.2. BOARD OF DIRECTORS’ INTERNAL RULES

The company has established internal rules organising the operation of the Board of Directors. Those internal rules of the Board of Directors were adopted by the Board at its meeting of 9 November 2005. The said internal rules provide, in particular: - that at least 2 members of the Board of Directors must be independent directors; - that the Board is to meet at least 4 times a year; - that the Board meetings may be held by means of videoconferencing or teleconferencing, except for meetings closing out the accounts; - that the Board of Directors may establish committees.

Finally, the internal rules of the Hi-media Board of Directors remind its members of their duties regarding confidentiality, independence and diligence.

16.3. EVALUATION OF THE BOARD OF DIRECTORS

The company has not yet adopted any measures concerning evaluation of the Board of Directors. The company’s Board met twelve times during financial year 2009. The attendance rate was 83% on average for the financial year.

The company paid attendance fees to the directors. (cf. Chapter 15, page 103).

The Board of Directors’ meeting held on 23 February 2006 decided to establish a Compensation Committee, managed by Joselyn Robiot and Jean-Charles Simon, and assisted by a human resources consulting firm. Mr. Marco de Alfaro (IDI) is also part of that committee.

The Board of Directors’ meeting held on 13 March 2009 decided to meet as an Audit Committee at least twice a year. The first Audit Committee meeting was held on 25 January 2010.

16.4. DECLARATION CONCERNING CORPORATE GOVERNANCE

The company implemented internal rules of the Board of Directors in November 2005. On 19 December 2008, the Board of Directors familiarised itself with the Afep-Medef recommendations dated 6 October 2008 concerning the compensation of senior managers acting as authorised agents of listed companies, and asked the company to distribute a press release indicating that it was referring to the AFEP-MEDEF Code of Corporate Governance for development of the present report. The press release was distributed on 23 December 2008. 98

16.5. INFORMATION CONCERNING THE OPERATIONS CONCLUDED WITH THE MEMBERS OF THE ADMINISTRATIVE ORGANS

None.

16.6. INFORMATION CONCERNING THE SERVICE CONTRACTS BETWEEN THE MEMBERS OF THE ADMINISTRATIVE, MANAGERIAL OR SUPERVISORY ORGANS AND THE COMPANY

There are no service contracts linking the members of the administrative organs with the company or with any one whatsoever of its subsidiaries, and providing for the grant of benefits under such a contract.

16.7. LOANS AND GUARANTEES GRANTED OR CONSTITUTED IN FAVOUR OF THE ADMINISTRATIVE ORGANS

None.

CHAPTER 17 - STAFF

17.1. STAFF TREND

Hi-media Group’s total staff stood at 506 as of 31 December 2009, broken down as follows:

Hm France SA 119 L’Odyssée Interactive SAS 34 Hm Deutschland AG 21 AdLink Media Deutschland 20 GmbH Hm Belgium SPRL 13 Hi-pi 21 AdLink Internet media NV 14 Net:dialogs GmbH 7 Hm Advertising Web SL 4 Allopass SNC 31 Hm Sales AB 54 Groupe Hi-media USA Inc 30 Hm Portugal Lda 14 Allopass Sweden 3 Hm Network AB 6 HPME SA 5 Hm Ltd 23 Allopass Mexico 1 Hm Nederland BV 7 Bonne Nouvelle Editions 5 SARL Hm Network Internet SL 41 Mobile Trend SAS 17 AdLink Internet media Srl 15

The central functions include marketing, the technical functions and the administrative functions.

On 31 December 2009 On 31 December 2008 On 31 December 2007 France 227 220 202 Foreign 279 170 137 Total 506 390 339

17.2. HOLDINGS AND STOCK OPTIONS

17.2.1. SHARE SUBSCRIPTION OPTIONS: See note 10.3.1 in the appendix to the corporate financial statements appearing on page and note 25.1 of the appendix to the consolidated financial statements appearing on page of the present reference document.

17.2.2. INFORMATION CONCERNING THE FREE SHARES See note 10.3.2 of the appendix to the corporate financial statements appearing on page and note 25.2 of the appendix to the consolidated financial statements appearing on page of the present reference document.

17.2.3. PARTICIPATION AND DIRECTORS’ AND SENIOR MANAGERS’ OPTIONS

17.2.3.1 Participation of the directors and senior managers in the share capital

As of the date of the present document, the members of the Board of Directors hold shares representing 14.05% of the capital and 15.00% of the company’s voting rights, distributed as follows:

Member of the Board of Directors Percentage of the capital Percentage of the voting rights held held David Bernard 0.38 0.37 Jocelyn Robiot 0.00 0.00 Jean-Charles Simon 0.00 0.00 BV Capital 5.83 5.69 Mickael Kleindl 0.00 0.00 IDI 6.00 5.86 Cyril Zimmermann (via SPRL CZ) 1.82 3.06 TOTAL 14.05 15.00

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17.2.3.2 Options granted and free shares allocated to the senior managers acting as authorised agents

No share subscription or purchase options were allocated to Cyril Zimmermann, or exercised by Cyril Zimmermann, for financial year 2009. Cyril Zimmermann did not receive any allocations of performance shares for financial year 2009.

Performance shares acquired or having become available for Cyril Zimmermann for the financial year Plan No. and Date Number of shares acquired Date of availability Acquisition conditions 01 March 2007 87 750 01 March 2011 Objectives for the current operating profit

No share subscription or purchase options were allocated to David Bernard, or exercised by him, for financial year 2009. David Bernard did not benefit from any allocations of performance shares for financial year 2009.

Performance shares acquired or having become available for David Bernard for the financial year Plan No. and Date Number of shares acquired Date of availability Acquisition conditions 01 March 2007 58 500 01 March 2011 Objectives for the current operating profit

17.2.3.3 History of the allocations of subscription options and of free and performance shares for authorised agents whether they are senior managers or not

Information concerning the share subscription options and the free shares Meeting date 21 April 00 25 April 03 25 April 03 2 Nov. 05 2 Nov.05 2 Nov.05 2 Nov.05 2 Nov.05 24 Apr08 Board meeting date 27 June 00 26 May 03 10 July. 03 22 Dec. 05 20 Jan.06 13 July06 11 Sept06 01 March07 24 Sept08 Number of shares that could be subscribed to by or allocated to Cyril Zimmermann ------240 000 David Bernard ------160 000 Beginning of exercise of the options or end of the 5 May 02 26 May 05 10 July.05 22 Dec.07 20 Jan.08 13 July08 11 Sept08 01 March09 24 July11 acquisition period Expiration date 4 May 10 25 May 13 10 July. 13 22 Dec. 09 20 Jan.10 13 July10 11 Sept10 01 March11 24 July13 Subscription price/fair 8.06 0.33 0.35 6.05 7.75 7.03 7.63 6.70 2.33 value Number of shares subscribed to or acquired as of 31/12/08 by Cyril Zimmermann - - 350 000 - - - - 87 750 - David Bernard ------100 000 58 500 - Number of options ------3 750 - cancelled or lapsing Subscription options remaining at financial ------400 000 year end

17.2.3.4 History of the allocations of subscription options and of free shares for the ten leading salaried allottees Information concerning the share subscription options Meeting date 30 June 99 21 April00 25 April 03 25April 03 Board meeting date 17Nov99 13Dec00 26May03 12Jan05 Number of shares that could be subscribed to by 3 816 2 866 20 000 85 000 the 10 leading allocattees Beginning of exercise of 01 July04 14Dec02 26May05 12Jan07 the options Expiration date 30 June09 13Dec10 25May13 12Jan15 Subscription price 0.01 5.31 0.33 1.14 Number of shares subscribed to on 31/12/08 4 579 - - - by the first 10 salaried allottees Number of options - - - - cancelled or lapsing Subscription options remaining at financial 3 816 2 866 20 000 85 000 year end

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Information concerning the free shares Meeting date 2Nov05 2Nov05 2Nov05 2 Nov. 05 2 Nov.05 2 Nov.05 2 Nov.05 2 Nov.05 2Nov05 24Apr08 24Apr08 Board meeting date 20Jan06 23Feb06 13July06 2Nov06 28Dec06 01March07 08Nov07 19Dec07 22Apr08 24Sept08 19Dec08 Number of shares that could be allocated to the - - - - - 164 000 5 000 40 000 10 000 800 000 14 000 leading 10 salaried allocattees End of the 24July11 19Dec10 20Jan08 23Feb08 13July08 2Nov08 28Dec08 01March09 08Nov09 19Dec09 22Apr10 acquisition period Date of expiration 20Jan10 23Feb10 13July10 2Nov10 28Dec10 01March11 08Nov11 19Dec11 22Apr12 24July13 19Dec12 Fair value 7.75 9.99 7.03 6.36 7.33 6.70 6.94 5.45 4.28 2.33 1.38 Number of shares acquired as of 31/12/08 by the 37 500 38 000 47 500 10 000 30 000 ------leading 10 salaried allocatees Number of options - - - - - 25 334 - - - - - cancelled or lapsing Subscription options remaining at - - - - - 138 666 5 000 40 000 10 000 800 000 14 000 financial year end

17.3. EMPLOYEES’ OPTIONAL PROFIT-SHARING AND LEGAL PROFIT-SHARING AGREEMENTS

As of now, there are no contracts within the company concerning optional profit-sharing or legal profit-sharing. A special legal profit-sharing agreement is under study.

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CHAPTER 18 – PRINCIPAL SHAREHOLDERS

18.1. DISTRIBUTION OF THE CAPITAL AND OF THE VOTING RIGHTS

Shareholder Situation on 15/03/10 Situation on 01/03/09 Situation on 17/03/08 No. of shares % capital % voting No. of shares % capital % voting No. of % % voting rights rights rights shares capital C.Zimmermann 807 124 1.82 3.06 834 124 2.07 3.52 746 374 1.90 3.26 (SPRL CZ) D.Bernard 166 797 0.38 0.37 166 797 0.41 0.42 3 635 - - Hi-media 239 153 0.54 - 1 034 153 355 671 0.91 - Jocelyn Robiot 500 0.00 0.00 500 0.00 0.00 500 - - Jean-Charles 10 - - Simon 10 0.00 0.00 10 0.00 0.00 BV Capital 2 580 309 5.83 5.69 100 015 0.25 0.25 0.00 0.00 Michael Kleindl 0 0.00 0.00 - - - 0.00 0.00 IDI 2 657 127 6.00 5.86 2 657 127 6.60 6.61 United Internet 4 735 000 10.7 10.44 Employees 862 600 1.95 2.84 1 330 3.39 3.38 871 605 2.16 2.86 572

Public 32 221 375 72.78 71.75 34 709 363 88.72 89.06 36 702 93.5 93.2 651

Total 44 269 995 100.00 100.00 40 273 679 100.00 100.00 39 267 100.00 100.00 158

To the company’s best knowledge, there are no:

- agreements between shareholders (particularly between senior managers) that could entail restrictions on the transfer of shares and on exercise of the voting rights; - agreements providing for indemnities for the members of the Board of Directors or the employees, if they resign or are dismissed without any real and serious reason, or if their employment ends because of a public offer.

Crossings of thresholds reported during the last three financial years: Date Company Threshold crossed Direction Number of securities 17 August 2007 Columbia Wanger Asset 5% Upward 1 670 000 Management LP 29 November 2007 Columbia Wanger Asset 5% Downward (dilution due to a 1 670 000 Management LP capital increase) 1 December 2007 3i 5% Upward 2 860 657 11 December 2007 BV Capital 5% Upward 2 689 242 21 December 2007 Moneta 2% Upward 1 493 026 13 February 2008 IDI 2% Upward 784 356 21 April 2008 3i 6% Downward 2 042 032 23 April 2008 IDI 4% Upward 1 712 865 8 May 2008 IDI 5% Upward 1 979 043 22 May 2008 IDI 6% Upward 2 657 127 26 May 2008 3i 5% Downward 1 442 032 16 January 2009 Henderson 5% Downward 1 988 378 31 August 2009 AdLink Internet Media AG 5% and 10% Upward 4 735 000 29 September 2009 United Internet GmbH 5% and 10% Upward 4 735 000 * To the company’s best knowledge, these companies have disposed of all or almost all of their holdings.

To the company’s best knowledge, during the last three years there have not been any other substantial modifications of the company’s shareholding structure.

To the company’s best knowledge, there are no other shareholders holding, directly, indirectly or in concert, 5% or more of the capital and of the voting rights.

18.2. DIFFERENT VOTING RIGHTS

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The company’s shareholders do not hold any different voting rights. They can also benefit, pursuant to article 30.2. of the articles of incorporation, from a double voting right when they can prove a personal entry for at least two years in the name of one and the same shareholder.

18.3. CONTROL

To the company’s best knowledge, no legal entity or individual controls the company.

18.4. AGREEMENT CONCERNING A CHANGE OF CONTROL

To the company’s best knowledge, there are no agreement implementation of which could entail a change of control.

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CHAPTER 19 - OPERATIONS WITH AFFILIATED PARTIES

In application of article 28 of (EC) rule No. 809/2004, the following information is included by reference in the present reference document:

- The auditors’ report concerning the regulated conventions for the financial year ending on 31 December 2008 appears on pages 96 to 100 of the company’s reference document filed with the Financial Markets Authority on 14 April 2009 under number D.09-0236.

- The auditors’ report concerning the regulated conventions for the financial year ending on 31 December 2007 appears on pages 86 to 90 of the company’s reference document filed with the Financial Markets Authority on 8 April 2008 under number D.08-0213.

The auditors’ report concerning the regulated conventions relative to the financial year ending on 31 December 2009 appears on pages 115 et seq. of the present reference document.

The transactions between affiliated parties appear in note 28 of the appendix to the consolidated financial statements for the financial year ending on 31 December 2009.

One regulated convention has been concluded since 31 December 2009: this concerns the increase of the holding in the capital of rue 89.

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CHAPTER 20 – FINANCIAL INFORMATION CONCERNING THE ISSUER’S ASSETS, FINANCIAL SITUATION AND EARNINGS

20.1. HISTORICAL FINANCIAL INFORMATION AND FINANCIAL REPORTS

In application of article 28 of (EC) Rule No. 809/2004, the following information is included by reference in the present reference document:

The consolidated financial statements for the financial year ending on 31 December 2008 and the auditors’ report concerning the consolidated financial statements for the financial year ending on 31 December 2008, appearing on pages 124 to 168 of the company’s reference document, filed with the Financial Markets Authority on 14 April 2009 under number D.09-0236.

The consolidated financial statements for the financial year ending on 31 December 2007 and the auditors’ report concerning the consolidated financial statements for the financial year ending on 31 December 2007 appearing on pages 110 to 147 of the company’s reference document, filed with the Financial Markets Authority on 8 April 2008 under number D.08-0213.

The annual financial statements for the financial year ending on 31 December 2008 and the auditors’ report concerning the annual financial statements for the financial year ending on 31 December 2008 appearing on pages 94 to 123 of the company’s reference document, filed with the Financial Markets Authority on 14 April 2009 under number D.09-0236.

The annual financial statements for the financial year ending on 31 December 2007 and the auditors’ report concerning the annual financial statements for the financial year ending on 31 December 2007 appearing on pages 85 to 109 of the company’s reference document, filed with the Financial Markets Authority on 8 April 2008 under number D.08-0213.

20.1.1. ANNUAL FINANCIAL STATEMENTS OF THE COMPANY HI-MEDIA S.A.

20.1.1.1 Auditors’ report concerning the annual financial statements

Financial year ending on 31 December 2009

To the shareholders:

In performance of the assignment with which we were entrusted by your Shareholders' Meeting, we hereby present to you our report relative to the financial year ending on 31 December 2009, concerning:

the audit of the annual financial statements of the company Hi-media S.A., as attached to the present report; the justification for our judgments; the specific verifications and the information provided for by law.

The annual financial statements were closed out by your Board of Directors. It is up to us on the basis of our audit to express an opinion of the said financial statements. .

1. Opinion of the annual financial statements

We carried out our audit in accordance with professional standards applicable in France, which require steps making it possible to obtain a reasonable assurance that the annual financial statements do not include any significant anomalies. An audit consists of examining, by sampling or by other selection methods, the elements justifying the amounts and information appearing in the annual financial statements. It also consists in judging the accounting principles followed, the significant estimates adopted and the general presentation of the financial statements. We consider that the elements that we collected are sufficient and appropriate for constituting the basis for our opinion.

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We hereby certify that the annual financial statements are regular and accurate in the light of the French accounting rules and principles, and give a fair representation of the results of the operations of the past financial year as well as of the company's financial situation and assets at the end of that financial year.

2- Justification for the judgements

In application of the provisions of article L.823-9 of the Code of Commerce concerning the justification for our judgements, we bring the following point to your attention:

Note 2.3 in the appendix to the annual financial statements explains the accounting principles and methods relative to provisions on securities and current accounts of the company’s subsidiaries, calculated as a function of the values in use determined at closeout. Within the framework of our judgement of the accounting rules and principles observed by your company, we have verified the appropriate nature of the procedures used in calculation of the values in use as well as the general consistency of the assumptions used. However, we remind you that since the said estimates are based on forecasts that are uncertain by their very nature, the actual figures may differ, sometimes significantly, from the forecasts. Moreover, we made sure that notes 2.3 and 5 of the appendix provide appropriate information.

The judgements made in this way fall within the framework of our auditing approach to the annual financial statements, taken as a whole, and hence contributed to development of our opinion without reservations, as expressed in the first part of the present report.

3- Specific verifications and information

We also carried out, pursuant to the professional standards applicable in France, the specific verifications provided for by law.

We have no remarks to make concerning the accuracy and the agreement with the annual financial statements of the information provided in the management report by the Board of Directors and in the documents addressed to the shareholders concerning the financial situation and the annual financial statements.

With respect to the information supplied in application of the provisions of article L.225-102-1 of the Code of Commerce concerning remuneration and benefits paid to the authorised agents as well as concerning the commitments made to them, we have verified their agreement with the financial statements or with the data used in establishment of those reports, and, if appropriate, with the elements obtained by your company from companies controlling your company or controlled by it. On the basis of that work, we attest to the accuracy and the correctness of the said information.

In application of law, we assured ourselves that the various types of information concerning acquisitions of holdings and of control and the identity of the holders of the capital and of the voting rights was communicated to you in the management report.

The Auditors

Paris La Défense, 22 March 2010 Boulogne Billancourt, 22 March 2010

KPMG Audit EREC Associés A department of KPMG S.A.

Stéphanie Ortega Sophie Lechevalier Partner Partner

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20.1.1.2 Auditors’ special report

Ladies and Gentlemen:

As your company’s auditor, we hereby present to you our report concerning the regulated conventions and commitments.

Conventions and commitments authorised during the financial year

In application of article L. 225-40 of the Code of Commerce, we have been informed about the conventions and commitments that were authorised in advance by your Board of Directors.

It is not up to us to seek out the possible existence of other conventions or commitments, but rather to inform you, on the basis of the information with which we were supplied, about the characteristics and the essential procedures of the ones of which we were informed, without having to make a decision as to their usefulness and their justification. It is up to you, under the terms of article R.225-31 of the Code of Commerce, to judge the interest attached to conclusion of the said conventions and commitments with a view to their approval.

We performed our work in accordance with the professional standards applicable in France, which require steps aimed at verifying the agreement of the information we received with the basic documents from which it came.

* Convention concluded with Hi media Advertising Web:

1. Transfer of 7.5% of the Allopass capital

Person concerned: Mr. Cyril Zimmermann

Nature and object:

On 13 March 2009, your Board of Directors authorised the transfer of 7.5% of the Allopass capital held by Hi media S.A. to Hi media Advertising Web SL.

Procedures:

The said transfer was carried out at book value.

* Convention concluded with Hi media Belgium:

Person concerned: Mr. Cyril Zimmermann

Nature and object:

On 26 August 2009, your Board of Directors authorised the grant, to the benefit of its Hi Media Belgium subsidiary, of a guarantee in connection with its “search marketing” contract with Google.

Procedures:

The said guarantee had no accounting effect as of 31 December 2009.

* Convention concluded with AdLink Internet Media Gmbh:

Person concerned: Mr. Cyril Zimmermann

Nature and object:

On 20 November 2009, the Board of Directors authorised your company to acquire, on 31 December 2009, the securities of the following companies held by AdLink Internet Media Gmbh: AdLink Internet Media SAS (France),

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AdLink Internet Media SRL (Italy), AdLink Internet Media BV (Netherlands), AdLink Internet Media SLU (Spain), and AdLink Internet Media Ltd (United Kingdom).

That same meeting authorised Hi-media Belgium to acquire the securities of AdLink Internet Media NV (Belgique) also held by Adlink Internet Media Gmbh.

Procedures:

The acquisition price of the securities corresponds to their book value in the accounts of AdLink Internet Media Gmbh.

* Convention concluded with the AdLink entities:

2. Sureties with a view to guaranteeing payment of the rentals

Persons concerned: Mr. Cyril Zimmermann and Mr. David Bernard

Nature, object and procedures:

On 31 August 2009, your Board of Directors authorised a grant of sureties to the benefit of the following companies, to guarantee payment of the rentals under their leases:

AdLink Internet Media NV (Belgique) : 15 570 € AdLink Internet Media Srl (Italie) : 23 125 € Net: Dialogs Gmbh : 13 500 € Hi Media Network Internet SL : 84 360 € AdLink Internet Media Gmbh : 71 624 €

* Conventions concerning Management Fees and Trademark Fees

Person concerned: Mr. Cyril Zimmermann

Nature and object:

Following acquisition of the AdLink Media companies on 31 August 2009 by your company, the entities were invoiced for the management fees and the trademark expenses pursuant to the authorisation granted by the Board of Directors on 30 November 2009.

The trademark fee is invoiced for in an amount of 1.8% of the subsidiary’s sales (starting on 1 September 2009).

Procedures:

With the company Hi-Media Ltd (formerly AdLink Internet Media Ltd):

Your company posted proceeds of € 45,027 as management fees and of € 45,670 for the trademark fee for the financial year ending on 31 December 2009.

With the company Hi-Media Nederland NV (formerly AdLink Internet Media BV):

Your company posted proceeds of € 32,857 as management fees and of € 33,326 for the trademark fee for the financial year ending on 31 December 2009.

With the company Hi-Media Network Internet SL (formerly AdLink Internet Media SLU):

Your company posted proceeds of € 77,627 as management fees and of € 78,736 for the trademark fee for the financial year ending on 31 December 2009.

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With the company Hi-Media Italy Srl (formerly AdLink Internet Media Srl):

Your company posted proceeds of € 48,367 as management fees and of € 49,059 for the trademark fee for the financial year ending on 31 December 2009.

With the company AdLink Media Deutschland Gmbh:

Your company posted proceeds of € 36,968 as management fees and of € 37,496 for the trademark fee for the financial year ending on 31 December 2009.

With the company Net:Dialogs Gmbh:

Your company posted proceeds of € 6,253 as management fees and of € 6,342 for the trademark fee for the financial year ending on 31 December 2009.

With the company Adlink Internet Media NV:

Your company posted proceeds of € 32,987 as management fees and of € 33,458 for the trademark fee for the financial year ending on 31 December 2009.

With the company Adlink Internet Media SAS:

Your company posted proceeds of € 45,473 as management fees and of € 46,123 for the trademark fee for the financial year ending on 31 December 2009.

Conventions and commitments approved during prior financial years execution of which continued during the financial year

In addition, in application of article R.225-31, paragraph 5, of the Code of Commerce, we were informed that execution of the following conventions and commitments, approved during previous financial years, continued during the latest financial year:

* Conventions concerning Management Fees and Trademark fees

Nature and object:

Conventions dated 28 June 2005 and 15 November 2007 were signed between your company and the companies Hi- Media Belgique, Hi-Media Suède, Hi-Media Allemagne, Hi-Media Advertising Spain, Hi-Media Local, Publicityweb, and Hi-Pi and Eurovox, under which your company reinvoices for management expenses as well as, for certain subsidiaries, for a fee for use of the Hi-media trademark.

Procedures: The Management Fees represent a share of the gross salary and of the related social security charges for eight persons, increased by a share of overhead as well as by a margin. This cost is then broken down as a function of the volume of work done for each of the subsidiaries concerned.

The trademark fee charge amounts to 1.8% of the subsidiary’s sales.

With the company Hi-Media Belgique:

Your company posted proceeds of € 120,000 for Management Fees and of € 98,402 for the trademark fee for the financial year ending on 31 December 2009.

With the company Hi-Media Suède:

Your company posted proceeds of € 60,000 for Management Fees and of € 27,177 for the trademark fee for the financial year ending on 31 December 2009.

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With the company Hi-Media Allemagne:

Your company posted proceeds of € 180,000 for Management Fees and of € 89,722 for the trademark fee for the financial year ending on 31 December 2009.

With the company Hi-Media Advertising Spain:

Your company posted proceeds of € 60,000 for Management Fees and of € 88,554 for the trademark fee for the financial year ending on 31 December 2009.

With the company Hi-Media Local AB:

Your company posted proceeds of € 180,000 for Management Fees and of € 256,327 for the trademark fee for the financial year ending on 31 December 2009.

With the company Hi-Pi:

Your company posted proceeds of € 73,716 for Management Fees for the financial year ending on 31 December 2009.

With the company Allopass:

Your company posted proceeds of € 1,615,508 for Management Fees for the financial year ending on 31 December 2009.

With the company Hi-Media Portugal:

Your company posted proceeds of € 60,000 as Management Fees and of € 99,494 for the trademark fee for the financial year ending on 31 December 2009.

* Senior managers’ insurance contracts

Contract covering loss of employment

Nature and object:

Your company has taken out a contract covering loss of employment to the benefit of its President and its Assistant Managing Director. The costs of that commitment are limited to payment of the premiums by your company.

Procedures:

In this connection, your company posted a charge of € 12,428 for the financial year ending on 31 December 2009.

Supplementary retirement contract

Nature and object:

Your company has renewed a supplementary retirement contract to the benefit of its President and of its Assistant Managing Director. The costs of that commitment are limited to payment of the contributions by your company.

Procedures:

In this connection, your company posted a charge of € 15,843 for the financial year ending on 31 December 2009.

Death insurance contract

Nature and object:

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Your company has taken out a life insurance contract for Cyril Zimmermann. This insurance is concluded to the company’s benefit, and moreover the company has pledged that insurance to the benefit of the banks within the framework of the loan contract. The costs connected with this commitment are limited to payment of the premiums by your company.

Procedures:

In this connection, your company posted a charge of € 14 359 for the financial year ending on 31 December 2009.

Paris La Défense and Boulogne Billancourt, 22 March 2010

The Auditors Members of the Regional Company of Versailles

KPMG AUDIT EREC ASSOCIES A department of KPMG SA

Stéphanie ORTEGA Sophie LECHEVALIER

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Income statements for financial years 2009 and 2008

2009 2008

Services billed to advertisers 30 712 32 343 Other 7 234 4 116 Net Turnover 37 946 36 460

In-house production 681 390 Write-backs from depreciation and provisions 576 27 Other income 47 85 Operating income 39 251 36 962

Expenses invoiced by the media 19 462 23 020 Other external purchases and charges 6 284 4 636 Taxes, levies and similar payments 552 414 Salaries and allowances 5 933 5 368 Social charges 2 490 2 324 Transfers to depreciation on fixed assets 884 310 Transfers to provisions and depreciation 260 307 Other charges 322 285 Operating charges 36 187 36 665

Operating profit 3 063 297

Financial income 16 118 9 617

Interest and similar charges 2 503 2 542 Transfers to provisions and depreciation 165 3 867 Other 35 1 131 Financial charges 2 704 7 539

Financial net income 13 414 2 078

Income from asset disposals 3 512 30 On management operations - - Write-backs from provisions - - Extraordinary income 3 512 30

Book value of assets transferred 4 596 28 On management operations 1 743 355 Transfers to provisions and depreciation 933 692 Extraordinary charges 7 272 1 075

Extraordinary net income -3 760 -1 045

Net income before tax 12 717 1 330 Taxes -769 -3 048 Net income 13 486 4 377

Balance sheets on 31 December 2009 and 31 December 2008

ASSETS 31 Dec. 2009 31 Dec. 2008 Depreciation Gross Net Net and provisions

Concession, patents, software 2 355 1 269 1 086 655 Goodwill 4 674 - 4 674 - Intangible fixed assets in progress 156 - 156 555 Intangible fixed assets 7 185 1 269 5 916 1 210

Installations, fittings and improvements 420 48 372 544 Other tangible fixed assets 837 404 433 250 Tangible fixed assets 1 257 452 805 794

Holdings 207 428 - 207 428 163 377 Receivables attached to holdings 1 700 - 1 700 1 700 Deposits and sureties 186 47 139 98 Treasury shares 1 173 6 1 167 1 882 Other long-term investments 408 - 408 80 Long-term investments 210 894 53 210 841 167 137

Total fixed assets 219 337 1 774 217 563 169 141

Trade notes and accounts receivable. 18 693 1 147 17 546 15 666 Other receivables 27 762 2 865 24 897 16 871 Receivables 46 455 4 012 42 443 32 536

Short -term investment securities 743 238 505 344 Liquid assets 3 959 - 3 959 1 293 Cash and cash equivalents 4 702 238 4 464 1 637

Prepaid charges 1 058 - 1 058 611 Charges to be spread out 174 - 174 144 165 - 165 - Total current assets 52 554 4 250 48 304 34 928

Total assets 271 891 6 024 265 867 204 069

LIABILITIES 31 Dec. 2009 31 Dec. 2008

Share or individual capital 4 427 3 981 Premiums on shares, merger, conveyance 117 435 103 964 Retained earnings 16 972 12 603 Reserves 667 675 Financial year net income 13 486 4 377 Regulated provisions 1 830 1 017 Shareholders’ equity 154 817 126 617

Provisions for contingencies and charges 614 139

Borrowings from and debts to credit institutions 45 529 34 278

Trade notes and accounts payable 19 042 14 915 Taxation and social liabilities 5 404 4 772 Debts on fixed assets 6 997 11 717 Other liabilities 33 173 11 656 Operating debts 64 616 43 035 290 - Total liabilities 265 867 204 069

Notes concerning the Hi-media S.A. financial statements

Hi-media S.A. ("Hi-media" or "the Company") is an advertising network agency marketing, to advertisers, the advertising space of Internet sites ("the media"), offering them direct marketing solutions. On behalf of the media, it sees to prospecting and canvassing of the advertisers, and to recovery, distribution and targeting of advertising included in the websites, and in that connection it receives an advertising network fee.

Note 1. Important events during financial year 2009

On 30 January 2009, a new independent director (Mr. Michael Kleindl) joined the Board of Directors, replacing Mr. Dominique Bezier, who retains his position as Secretary-General.

On August 31 2009, Hi-media acquired AdLink Media, the display advertising network of AdLINK Internet Media AG by the issuing of 3,940,000 Hi-media shares, 795,000 Hi-media shares already held by Hi-media and the deferred payment in the form of a vendor loan of 12.2 million Euros.

On December 29th, Hi-media SA merged with Adlink France.

On May 26th, Hi-media France S.A gave up securities of her subsidiary Hi-media Network for 2 950 k€ to the company Hi-media Sales, herself subsidiary of Hi-media France.

Note 2. Accounting principles and methods

The annual financial statements are presented in accordance with the accounting principles generally accepted in France, and take account of CRC rule no. 99-03 of 29 April 1999 relative to the rewriting of the General Accounting Plan, and in particular of CRC rules 2004–06 and 2002–10 bearing on assets.

The following accounting principles and methods have been adopted by the Company:

2.1. Intangible fixed assets

The software and licenses acquired by the Company are posted to the balance sheet at their acquisition value and are depreciated over their estimated lifetime, from 3 to 5 years.

The trademarks acquired by the Company are posted to the balance sheet at their acquisition value. They are not amortised. They are depreciated if operating conditions make this necessary.

Pursuant to CNC notice concerning assets 2004-15, applicable since 1 January 2005, the R&D expenses must comply with six criteria in order to be capitalised:

- Technical feasibility of the project

- Intention to carry the project through to the end

- Possibility of using it or selling it

- Generation of future income

- Sufficient resources for completely developing and using or selling the product

- Possibility of making a reliable determination of the costs.

The businesses are booked in their acquisition cost and can be depreciated if the value of inventory is lower than their book value at the closing.

2.2. Tangible assets

The tangible fixed assets are presented at their acquisition cost and are amortised over the following use durations:

Fittings and improvements 6 to 8 years straight-line

Office equipment and computer hardware 3 years straight-line and accelerated

Furniture 8 years straight-line

2.3. Long-term investments and subsidiaries’ current accounts

The gross value of the subsidiaries’ securities corresponds either to their acquisition cost or to the amount of capital called up at the time of their constitution.

Pursuant to Law 2006-1666 of 21 December 2006, the expenses for acquisition of the long-term securities incurred during financial years ending on 31 December 2006 or later have been entered under assets and depreciated under overriding depreciation over a five-year period.

A provision for depreciation of the securities and of the current accounts has been set aside when their value in use as determined at the close became less than their book value.

The value in use is calculated in accordance with the method of discounted cash flows on the basis of the Group forecasts over a period of 4 years and of a terminal value discounted to infinity. The discounting of the cash flows was carried out by using an average cost of capital after taxes of 8.6% in Europe and 8.1% in the USA and a growth rate to infinity of 2.5%. An analysis has been made of the sensitivity of the calculation of the values in use to the variation of the key parameters.

The securities and the current accounts of the subsidiaries being closed are depreciated 100%.

2.4. Trade notes and accounts receivable

The receivables are valued at their nominal value, and a specific provision for depreciation is set aside when a likely loss appears.

2.5. Valeurs mobilières de placement

The short-term investment securities appear in the balance sheet at their acquisition value. When their balance sheet value is less than their cost of acquisition, a provision for depreciation is set aside for the amount of the difference. The unrealised capital gains at the close are not recorded in the income statement.

2.6. Treasury shares (internal control of shares)

A provision for depreciation of the treasury shares (internal control of shares) is set aside when the book value exceeds the balance sheet value, that provision being equal to the average market price for the last month before the end of the financial year.

2.7. Recognition of the turnover invoiced to the advertisers

The Company makes its turnover by way of contracts concerning advertising space sales, direct marketing and, to a lesser extent, under sponsorship contracts concluded with advertisers that are Hi-media customers.

2.7.1. Contracts concerning sales of advertising spaces

The contracts concerning advertising space sales provide for putting advertising banners on line and disseminating them in one or several advertising network media at Hi-media , for a given period. The value of the contracts depends on the number of pages views requested by the publisher.

For the contracts completed as of the closeout date, the sales recognised in the income statement correspond to the value of the contract, or else to the value of the number of pages seen if that is less than the number defined in the contract.

For contracts in progress on the closeout date, the turnover recognised on the closeout date corresponds:

- either to the value of the number of pages actually viewed on the closeout date, if said number of pages viewed is less than or equal to the one provided for in the contract; - or to the value pro rata temporis of the number of pages views provided for in the contract if the number of pages actually seen is greater than the one provided for in the contract.

2.7.2. Direct marketing contracts

The direct marketing contracts provide for selection, availability of addresses of surfers voluntarily listed as well as for dispatch thereof by Hi-media, for the execution of direct marketing operations. Hi-media also offers complete management of their databases to advertisers and websites. Turnover is then recognised upon dispatch of the messages or performance of the technical services.

2.7.3. Sponsorship contracts

The sponsorship contracts provide for package arrangements as remuneration for the inclusion of the logotype or any other distinctive mark of the publishers in the medium concerned, under the Hi-media advertising network. The package is recognised on a straight-line basis over the duration of the services.

2.8. Presentation of the charges for space purchases in the income statement

The charges for purchases of spaces for which Hi-media is invoiced by the media are presented under operating charges. The difference between the turnover invoiced by Hi-media to the publishers and the charges for space purchases for which Hi-media is invoiced by the media represents the advertising network fee received by Hi-media.

2.9. Corporation tax

The corporation tax is entered in the accounting on the basis of the payable tax method. The financial year net income disregards the future effects of temporary tax timing differences.

2.10. Retirement indemnities

In view of the insignificant nature of the retirement commitments as of 31 December 2008, calculated on the basis of the collective bargaining agreement in effect in the Company and the information relative to staff present in the Company at the close, no provision has been set aside in the financial statements. Nevertheless, these commitments are presented as off-balance-sheet commitments

Note 3. Intangible fixed assets

The variations of the gross values break down as follows: in thousands of euros 31 December 2008 Increases Decreases 31 December 2009

Software and licenses 1 195 1 087 - 2 281 Hi-media trademark 74 - - 74 Value of the business - 4 674 - 4 674 Fixed assets in progress 555 156 555 156 Total 1 824 5 917 555 7 185

The increase of the asset business is due to the merger with Adlink France as at 29 December 2009.

The software and licenses take into account the setting-up of the computing developments of the previous exercise as well as the current year.

The fixed assets in progress correspond to computer developments carried out in-house

The variations of the amortisation and provisions for depreciation break down as follows:

in thousands of euros 31 December 2008 Increases Decreases 31 December 2009

Software and licenses 614 655 - 1 269 Hi-media trademark - - - - Value of the business - - - - Fixed assets in progress - - - - Total 614 655 - 1 269

Note 4. Tangible fixed assets

The variations of the gross values break down as follows:

in thousands of euros 31 December 2008 Increases Decreases 31 December 2009

Installations, fittings and 548 397 525 420 improvements

Office equipment and computer 428 668 473 623 hardware

Furniture - 214 - 214

Total 976 1 279 998 1 257

The variations of depreciation are analysed as follows:

in thousands of euros 31 December 2008 Increases Decreases 31 December 2009

Installations, fittings and 1 49 2 48 improvements

Office equipment and computer 181 207 11 377 hardware

Furniture - 27 - 27

Total 182 283 13 452

Note 5. Long-terme investments

The variations of the gross values break down as follows:

in thousands of euros 31 December 2008 Increases Decreases 31 December 2009

Long-term securities 163 544 50 883 7 000 207 427

Receivables attached to holdings 1 700 - - 1 700

Deposits and sureties 181 189 183 186

Treasury shares 5 072 - 3 899 1 173 Others 62 345 - 408 Total 170 559 51 417 11 082 210 894

The increase in the value of the long-term securities corresponds mainly to the acquisition of the online advertising network activity of the AdLink Internet Media AG group.

On July 6, 2009, Hi-media signed a draft agreement with a view to acquiring 100% of the voting rights of AdLink Media Deutschland GmBH, the online advertising network activity of the AdLink Internet Media AG group. This transaction was completed on August 31, 2009.

AdLink Media Deutschland GmbH was transferred to Hi-media in accordance with the following terms of the draft agreement: - Delivery of 3,940,000 shares with a nominal value of € 0.10 and valued in the consolidated accounts at € 3,63 per share, issued by Hi-media as a capital increase measure with a premium on conveyance of € 13,5 million equal to the difference between the value of the conveyances, i.e. € 14,3 million, the nominal capital increase of € 394,000, and the related costs, net of tax effect, for € 0,4 million. - Delivery of 795,000 shares held internally by Hi-media , valued in the annual accounts at € 3,71 (net booked value at the acquisition date for 2 949 k€) - Deferred payment in the form of a seller loan worth € 12.2 million. This seller loan, whose due date has been fixed at June 30, 2011, is a bullet loan and bears annual interest of 3.7% for the first 12 months and 5% for the remaining period. - Regulation, following completion of the financial statements on August 31, 2009 of the entities acquired and of their audit, of an adjustment aiming at covering/redeeming the operating capital need of the company group acquired. This adjustment has been fixed at € 3.9 million in favor of Hi-media.

On completion of this transaction, AdLink Internet Media AG holds 10.7% of the share capital in Hi-media . On October 6, 2009, the AdLink group transferred its Hi-media shares for the benefit of the parent company, the United Internet group, one of Europe’s principal suppliers of Internet access.

Following the AdLink operation, Hi-media SA holds 239 153 treasury shares, i.e. 795 000 shares less than the 31 December 2008.

Following this operation, Hi-media has realized reorganization operations:

- Hi-media France SA bought back by current account to AdLink media Deutschland GmBH the securities of subsidiaries recently acquired in Great Britain, in Italy, in Spain, in the Netherlands and in France for an amount of 21,1 M€. - Further to this transfer, AdLink Internet Media France SAS was merged with Hi-media France, creating a business of 3,9 M€.

The securities of Hi-media Scandinavia AB hold by Hi-media SA were transferred to our other Swedish subsidiary Hi- media Local AB.

The variations in depreciation break down as follows:

in thousands of euros 31 December 2008 Increases Decreases 31 December 2009 Long-term securities 150 - 150 -

Receivables attached to holdings - - - -

Deposits and sureties 82 47 82 47 Treasury shares 3 190 6 3 190 6

Total 3 422 53 3 422 53

Note 6. Trade notes and account receivables

The trade notes and accounts receivable break down as follows: in thousands of euros 31 December 2009 31 December 2008 Account receivables 15 971 14 903 Invoices to be established 2 722 1 509 Total 18 693 16 412 Provision for depreciation of customer accounts (1 147) (746) Net receivables 17 546 15 666

The invoices to be established correspond to the services rendered to advertisers and which had not yet been invoiced for as of 31 December 2009.

The provision for depreciation corresponds mainly to receivables that are due for which recoverability presents a risk as of 31 December 2009.

Under a factoring contract signed in 2001, Hi-media remitted receivables (which no longer appear in the customer accounts) representing an amount of 5 446 k€ as of 31 December 2009, for which the Company continues to bear the non collection risk in case of non-payment by the customers.

All of the customer receivables are at less than one year.

Note 7. Other receivables

The other receivables break down as follows: in thousands of euros 31 December 2009 31 December 2008 Debtor suppliers and credit notes receivables 1 260 2 635

Various debtors 20 068 13 639 Value added tax 3 485 1 858 Claim on the factor – including guarantee fund 2 949 1 604 Total of other receivables 27 762 19 736 Provision for depreciation of current accounts (2 865) (2 865) Total of other net receivables 24 897 16 871

The heading for “various debtors” corresponds in an amount of 15 500 k€ to the subsidiaries’ current accounts and is detailed in the table of subsidiaries and affiliates. The said current accounts are depreciated in an amount of 2 831 k€.

The claims on the factor correspond mainly to the available reserve in an amount of 2 528 k€ and the guarantee fund for 266 k€ and our vendor current accounts for 155 k€.

Note 8. Short-term investments securities and cash

in thousands of euros 31 December 2009 31 December 2008 Short-term investment securities - - Treasury shares 743 1 088 Other shares - - Liquid assets 3 959 1 293 Total 4 702 2 381

Within the framework of the liquidity contract, Hi-media held 239 153 of its own shares as of 31 December 2009. As of that date, the internally held shares were depreciated to the extent of 238 k€ in order to take into account of the market value of the said asset.

Note 9. Prepaid charges

The prepaid charges stood at 1 058 k€ on 31 December 2008 and correspond mainly to the share of charges invoiced for overhead relative to the period after 31 December 2009 and to the share of website expenses for 2010.

Note 10. Shareholder’s equity

10.1. Variation of shareholders' equity The shareholders' equity was characterised by the following movements during the financial year:

Premiums on Retained Financial year Reg. in thousands of euros Share capital Reserves Total shares earnings net income provisions

31 December 2008 3 981 103 964 675 12 603 4 377 1 017 126 617 Dividendes ------Affectation du résultat - - 8 4 369 -4 377 - - Aug. de capital 52 18 -49 - - - 21 Acquisition AdLink 394 13 486 - - - - 13 880 Résultat de la période - - - - 13 486 - 13 486 Autres variations - -33 33 - - 813 813 31 December 2009 4 427 117 435 667 16 972 13 486 1 830 154 817

Le conseil d’administration du 13 mars 2009 a constaté une augmentation de capital de 1 000 euros par suite de l’attribution définitive d’actions gratuites.

The meeting of the Board of Directors held on 13 march 2009 recorded a capital increase of 1 000 euros due to definitive allocation of free shares.

The meeting of the Board of Directors held on 13 march 2009 recorded a capital increase of 457,90 euros following to stock options subscription.

The meeting of the Board of Directors held on 30 june 2009 recorded a capital increase of 800 euros due to definitive allocation of free shares.

The meeting of the Board of Directors held on 30 june 2009 recorded a capital increase of 2 181,60 euros following to stock options subscription.

The meeting of the Board of Directors held on 31 august 2009 recorded a capital increase of 1 500 euros due to definitive allocation of free shares.

The meeting of the Board of Directors held on 31 august 2009 recorded a capital increase of 394 000 euros by a contribution in kind (AdLink).

These capital increases were put through by deduction from the reserve specially established for that purpose at the time of the initial awards of free shares.

10.2. Share capital

As of 31 December 2009, the share capital consisted of 44 269 995 shares with a par value of €. 0.10 each making 4 426 999,50€.

10.3. Stock option plan and allocations of free shares

The company's capital consists as of now of 44 269 995 securities. If all options subject to subscription (including free shares) were exercised, meaning an issue of 2 059 416 shares, a shareholder holding 1% of the capital before the exercise would hold 0.96 % of the capital after exercise, a 0.04 % decrease.

10.3.1. Stock option

Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Total 1 2 3 4 5 6 7 8 9 10

30 June 21 April 21 April 21 April 21 April 21 April 25 April 25 April 25 April April 24, Meeting date 99 00 00 00 00 00 03 03 03 2008

30 June 4 May 12 Date of the Board of 99 00 14 Sept. Nov. 2, 13 Dec. 23 Oct. 26 May 10 July 19 Dec. January Directors’ meeting 17 Nov. 27 June 00 2000 00 01 03 03 08 05 99 00 Total number of shares 1 465 152 475 37 210 70 734 27 400 37 037 91 001 500 000 350 000 150 000 50 000 allocated(1) 857

Total number of shares - 2 850 - 1 700 2 866 - 70 000 - 89 000 50 000 216 416 available for subscription Including the number of shares that can be - 2 850 - - - - 50 000 - - - 52 850 subscribed to by the authorised agents Including the number of shares that can be - - - - 2 866 - 20 000 - 67 000 - 89 866 subscribed to by the leading ten employee allocatees

12 Beginning time for exercise 1 July 5 May 15 Sept. 3 Nov. 14 Dec. 23 Oct. 26 May 10 July 19 Dec. January of the options 04 02 02 02 02 03 05 05 08 07 12 30 June 4 May 14 Sept. 2 Nov. 13 Dec. 23 Oct. 25 May 10 July 14 May Date of expiration January 09 10 10 10 10 11 13 13 18 15

Subscription price (in euro) 0,01 8,06 9,93 8,20 5,31 0,59 0,33 0,35 1.14 1.81 (2)

Exercise procedures (3) A B B B B B A A A C

Number of shares 22 879 - - - - - 430 000 350 000 34 500 - 837 379 subscribed to on 31/12/09

Options cancelled during ------the period

Remaining options - 2 850 - 1 700 2 866 - 70 000 - 89 000 50 000 216 416

(1) Options allocated to the employees present in the Company to date, the employees having left the Company being unable to retain the benefit of such options.

(2) Subscription price of the options calculated on the day of allocation of the options and corresponding to the weighted average of the market prices for the last twenty trading sessions, to which a 5% reduction has been applied.

(3) Procedure A: 100 % of the options may be exercised following a period of 2 years after the Board of Directors meeting that allocated the said options. Procedure B : 1/3 of the options may be exercised at the end of a period of 2 years following the Board of Directors meeting that allocated the said options, then 1/3 the following year, and the remaining third 4 years after the allocation. Procedure C: 1/6 at the end of each quarter-year following the beginning time for exercise of the options.

The number of options and the weighted average of the exercise prices are as follows:

2009 2008

Weighted Weighted Options average Options average exercise price exercise price

Options in circulation at the opening 255 732 1,19 210 311 0,92

Options allocated during the period - - 50 000 1,81

Options exercised during the period 34 316 1,01 4 579 0,01

Options cancelled during the period - - - -

Options in circulation at the close 216 416 1,23 255 732 1,19

Options subject to exercise at the close 216 416 1,23 230 731 1,12

10.3.2. Allocations of free shares

Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no.

1 2 3 4 5 6 7 Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Meeting date 2005 2005 2005 2005 2005 2005 2005 Dec. 22, Jan. 20, Feb. 23, July 13, Sept. 11, Nov. 2, Dec. 28, Date of the Board of Directors’ meeting 2005 2006 06 2006 2006 2006 2006

Total number of shares allocated 154 000 94 000 275 600 144 500 143 000 10 000 60 000

Including the number of shares that can be - 7 500 168 000 10 000 100 000 - - subscribed to by the authorised agents Including the number of shares that can be - 37 500 38 000 47 500 - 10 000 30 000 subscribed to by the leading ten employee allocatees

Number of cancelled shares 22 000 7 000 10 800 9 000 4 000 - 1 000

Number of shares that can be definitively allocated 132 000 87 000 264 800 135 500 139 000 10 000 59 000 31 Dec. 2009

Number of shares that can be definitively allocated ------

Dec. 22, Jan. 20, Feb. 23, July 13, Sept. 11, Nov. 2, Dec. 28, End of acquisition period 2007 2008 2008 2008 2008 2008 2008 Dec. 22, Jan. 20, Feb. 23, July 13, Sept. 11, Nov. 2, Dec. 28, End of retention period 2009 2010 10 2010 2010 2010 2010

Share price on the date of the board meeting 6.05 7.75 9.99 7.03 7.63 6.36 7.33

Non-transferability discount ------

Fair value of the free share 6.05 7.75 9.99 7.03 7.63 6.36 7.33

Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no.

8 9 10 11 12 13 14 Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Meeting date 2005 2005 2005 2005 2005 2005 2005 March 1, May 14, June 14, July 23, Nov. 8, Dec. 19, April 22, Date of the Board of Directors’ meeting 2007 2007 2007 2007 2007 2007 2008

Total number of shares allocated 510 000 8 000 14 500 15 000 28 500 103 000 80 000

Including the number of shares that can be 170 626 - - - - - subscribed to by the authorised agents Including the number of shares that can be 138 666 - - - 5 000 40 000 10 000 subscribed to by the leading ten employee allocatees

Number of cancelled shares 121 358 - 3 000 - 7 000 - 30 000

Number of shares that can be definitively allocated 388 642 8 000 11 500 15 000 21 500 57 000 - 31 Dec. 2009

Number of shares that can be definitively allocated - - - - - 12 000 50 000 Dec. 19, March 1, May 14, June 14, July 23, Nov. 8, 2009 April 22, End of acquisition period 2009 2009 2009 2009 2009 Dec. 19, 2010 2011 March 1, May 14, June 14, July 23, Nov. 8, Dec. 19, April 22, End of retention period 2011 2011 2011 2011 2011 2011 2012

Share price on the date of the board meeting 6.70 7.15 7.38 7.52 6.94 5.45 5.20

Non-transferability discount ------Yes

Fair value of the free share 6.70 7.15 7.38 7.52 6.94 5.45 4.28

Plan no. Plan no. Plan no. Plan no. Plan no. Total 15 16 17 18 19 April 24, April 24, April 24, April 24, April 24, Meeting date 2008 2008 2008 2008 2008 July 22, Sept. 24, Dec. 19, Mar. 13, Nov. 30, Date of the Board of Directors’ meeting 2008 2008 2008 2009 2009 3 450 Total number of shares allocated 40 000 1 350 000 69 000 5 000 346 000 100 Including the number of shares that can be - 450 000 - - - 906 126 subscribed to by the authorised agents Including the number of shares that can be 1 170 - 800 000 14 000 - - subscribed to by the leading ten employee allocatees 666

Number of cancelled shares - 29 000 - - - 244 158

Number of shares that can be definitively allocated 1 328 - - - - - 31 Dec. 2009 942 1 843 Number of shares that can be definitively allocated 40 000 1 321 000 69 000 5 000 346 000 000 Jan. 24, 2011 Nov. 30, July 22, July 24, Dec. 19, Mar. 13, 2012 End of acquisition period 2010 2011 2010 2011 Nov. 30, Sept. 24, 2013 2012 January 24, 2013 July 22, July 24, Dec. 19, March Nov. 30, End of retention period 2012 2013 2012 23, 2013 2013 Sept. 24, 2012 Share price on the date of the board meeting 4.25 3.10 1.74 1.97 4.68

Non-transferability discount Yes Yes Yes Yes Yes

Fair value of the free share 3.52 2,33 1.38 1.58 3.58

Note 11. Povisions

in thousands of euros 31 Dec. 2008 Dotation Use Write-back 31 Dec. 2009

Provisions for disputes 15 - - 15 -

Provision for unrealized losses - 165 - - 165

Other provisions for contingencies 115 120 - - 235

Total provisions for contingencies 130 285 - 15 400

Provisions for expenses 9 214 - 9 214

Total 139 499 - 24 614

Note 12. Borrowings from and debts to credit institutions

On 7 November 2007, Hi-media obtained a syndicated credit line amounting to 41.5 M€.

That credit line breaks down into one line amounting to 14 million euros (tranche A1), for a duration of five years, and another line of 27.5 million euros (tranche A2), having a duration of six years.

As of 31 December 2008, all of the A1 and A2 tranches had been drawn.

By means of an additional clause to the contract for loans of 41 M€ dated November 7, 2007, the Group has requested that finances aimed specifically at covering the cost of acquiring the AdLink Media Deutschland shares and the restructuring costs associated with this transaction be set in place. This financing (tranche A3) comes to 6 M€.

en milliers d'euros 31 déc. 2009 Monnaie d'émission Échéance Taux effectif

Syndicated loan - Tranche A1 8 400 EUR 2012 3-month Euribor + 1,1%

Syndicated loan - Tranche A2 18 334 EUR 2013 3-month Euribor + 1,35 %

Syndicated loan - Tranche A3 6 000 EUR 2013 3-month Euribor + 1,75 %

AdLink seller loan 12 195 EUR 2011 3,7 % à 5 %

Accrued interest not due 574 EUR 2009 3-month Euribor + 1,25 %

Others 26 EUR

Total 45 529 Pursuant to the loan contract signed in October 2007, the following were concluded:

- an initial interest rate swap, fixed payer / variable recipient, 3-month Euribor, starting in February 2008 (maturing in February 2012), for a notional of 9.8 M€, - an initial interest rate swap, fixed payer / variable recipient, 3-month Euribor, starting in July 2008 (maturing in July 2013), for a notional of 13.7 M€.

Note 13. Trade notes and accounts payable

The trade notes and accounts payable break down as follows:

in thousands of euros 31 December 2009 31 December 2008 Suppliers 11 585 10 661 Invoice to be received 7 982 4 254 Total 19 567 14 915

The accounts payable consist mainly of invoices from the media to Hi-media, not yet paid at the time of the closeout. All supplier payables are at less than one year.

Note 14. Debts on fixed assets

The debts on fixed assets correspond to the additional prices of the companies acquired.

Note 15. Other liabilities

The other liabilities correspond mainly to the creditor current accounts vis-à-vis the subsidiaries, amounting to 30 905 k€ including the ex AdLink subsidiaries. This item includes the debt in current account resulting from the acquisition of the securities of subsidiaries Adlink (note 5).

Note 16. Revenue

in thousands of euros 2009 2008 Advertising 30 712 32 343 Other 7 234 4 116 Total 37 946 36 460

The line for “Other” corresponds to provision of various services, mainly intra-group.

Note 17. Financial net income

17.1. Financial charges

in thousands of euros 2009 2008 Interest charges 2 503 2 515 Transfers to depreciation of the subsidiaries' securities - - Transfers to depreciation of internally held shares 165 3 837 Transfers to depreciation of the subsidiaries' current accounts - - Other transfers to depreciation of the financial assets - 29 Other financial charges 35 1 158 Total 2 703 7 539

17.2. Financial income

in thousands of euros 2009 2008

Net income on disposals of short-term investment securities 1 50 Interest on current accounts 410 236 Write-back from provisions on securities and on current accounts 3 826 - Income from long-term securities 11 864 9 296 Other 17 35 Total 16 118 9 617

Note 18. Exceptional result

Exceptional result relates mainly to costs linked with restructuring costs, termination of service provision, and capital gains or losses, notably as part of the acquisition of AdLink.

Note 19. Income tax

Hi-media heads up consolidation for taxation purposes of a group consisting of its French subsidiaries that are more than 95% held: Mobile Trend SAS, Mobile Works SAS, Hi-pi SARL, Bonne Nouvelle Editions SARL. The taxation convention provides that the tax burden is borne by the subsidiary, as would be the case in the absence of consolidation for taxation purposes.

The tax savings connected with the subsidiaries' tax loss carryovers, retained by Hi-media France SA, is considered as an immediate gain for the financial year.

The fiscal earnings of Allopass SNC are contributed to Hi-media France SA since April 1st, 2009 for its shareholding.

The tax proceeds for the financial year amounts to 769k€ and consist of: - - 408 k€ in taxation consolidation charges, - - 211K€ of tax expenses related to costs charged on the Adlink operation share premium - 833 k€ in taxation consolidation proceeds, - 555 k€ connected with the research tax credits.

Information concerning the deferred or latent taxation situation: in thousands of euros 31 Dec. 2009 31 Dec. 2008 Timing differences Regulated provisions 1 830 1 017 Investment subsidies - - Charges that are temporarily non-deductible 66 49 Income that is temporarily non-taxable - - Charges deducted or income subject to taxation and not yet posted - - Elements to be charged Tax losses that can be carried over 18 648 21 590 Long-term capital losses 812 962

Note 20. Off balance sheet commitments

20.1. Commitments received

During the acquisition of Fotolog Inc. (which became Group Hi-media USA Inc.), of the Mobile Trend group and of the online advertising network entities of the AdLink Internet Media AG group, Hi-media benefits from a clause guaranteeing the liabilities.

October 6, 2010, the AdLink Internet Media AG group transferred its Hi-media shares, representing 10.7% of the group’s capital for the benefit of its parent company, the United Internet group). This retention commitment could end before this date, notably if a third-party were to make an offer for Hi-media or if Hi-media were to either alter the substance of its assets or merge with another entity. In addition, United Internet undertakes not to increase its holding beyond 21% for the next two years. In the event that Hi-media decide to proceed to a capital increase before the end of "vendor loan”, AdLink AG has committed to subscribe (by offsetting the debt which becomes due) to the capital increase under the following conditions: - If the share issue price is equal or lower than 3.63 €, AdLink AG has committed to acquire the shares not subscribed by the public within the limits of the principal amount of the debt. - If the capital increase is carried out with retention of preferential subscription rights and the price of the share is higher than € 3.63, AdLink AG has committed to subscribe to this capital increase up to its preferential subscription rights and within the principal amount of its debt.

20.2. Commitments given

In connection with the acquisition of Mobile Trend, Hi-media committed itself to paying an additional price in 2010 based on a multiple of the pre-tax earnings of Mobile Trend group for financial year 2009.

The lease signed May 15, 2008 concerning the premises 15/17 rue Vivienne – 75002 Paris represents a commitment of 1.6 M€ per year (not index linked) until December 15, 2017.

20.3. Staff benefits

Retirement commitments: as of 31 December 2009, the amount of the commitment is estimated at 81 k€, taking actuarial elements into account.

Individual Training Right: as of 31 December 2009, no training requests had been submitted.

20.4. Covenants

Conclusion of the syndicated credit line mentioned in note 12 above requires Hi-media to respect covenants based on the following financial ratios:

- Financial indebtedness ratio (net consolidated indebtedness / consolidated EBITDA) - Gearing ratio (net consolidated indebtedness / consolidated shareholders’ funds) - Ratio of coverage of the debt by the net cash flow (consolidated net cash flow / debt service)

As of December 31, 2009, Hi-media was in compliance with those covenants.

20.5. Pledges

Within the framework of the syndicated credit line acquired by Hi-media, Hi-media pledged, to the benefit of the participating credit institutions, the securities of its subsidiaries Allopass SNC, L’Odyssée Interactive SAS and Hi-Pi SARL as well as the Hi-media SA business.

Note 21. Disputes

By a document dated 20 July 2007, SPORT24 served a writ on HI-MEDIA on the main issue to appear before the Commercial Court of Paris on the grounds of termination of talks and of an alleged impossibility of concluding an advertising network contract with another service provider, and demanding 180 k€. Hi-Media is resisting those applications and is applying for 240 k€ in a cross-application.

the advertising space of the website ifrance.com. The Commercial Court rejected Hi-Media’s application and fined it 28k€. Hi-Media has appealed that decision.

There is a dispute between Hi-Media and the former partners of a company acquired by Hi-Media. That dispute bears on the conditions concerning payment of the additional price provided for in the acquisition contract. Hi-media was fined 43 k€ by the court of first instance and has appealed against this decision.

A commercial dispute existed between Hi-media and La Poste regarding the execution of an advertising network contract. A settlement, taken into account on the financial year, was found with La Poste in December 2009.

Some industrial tribunal customers have arisen with former employees disputing the legitimacy of their dismissals. The company has set aside the provisions it considers necessary in the light of its judgement of the justification for the plaintiffs’ demands.

Note 22. Staff

The staff stood at 106 on 31 December 2009, against 102 persons on 31 December 2008.

Note 23. Senior managers

The global annual gross compensation paid to the senior managers and authorised agents came to 624 k€ in the fiscal year. The management organs received 56 k€ as attendance fees. No advances were made. The Company does not have any commitments in connection with pensions or similar indemnities.

Note 24. Events after 31 Decembre 2009

On February 26, 2010, Hi-media increased its holding from 7.5% to 9.35% in the capital of Rue89 by subscribing to a capital increase for 150 k€.

On March 9, 2010, Hi-media Belgium Sprl increased its participation by 34,3% to 44% in the capital of Vivat by acquiring 13 supplementary shares from some other shareholders for an amount of 1 euro.

Note 25. Table of subsidiaries and affiliates

Shareholders’ Operating Share equity other % held Securities Corporate name Address currency capital1 than the directly capital1 Gross value2 Net value2 Av. des Volontaires 19 1160 Hi-media Belgium SPRL EUR 427 -860 100,00% 427 427 Bruxelles

Hi-media Portugal Lda Avenida Duque d’Avila 26 Lisboa EUR 125 492 53,90% 150 150

Gerhard Hoehme Allee 1 41466 Hi-media Deutschland AG EUR 1 125 -62 100,00% 10 092 10 092 Neuss Hi-Pi SARL 15/17 rue Vivienne 75002 Paris EUR 60 -2 111 100,00% 941 941 Marquès de Riscal 11 2A Planta Europermission SL EUR 2 -1 50,00% 2 2 Madrid Rua Oserio de Almeida 7 Rio de Hi-Midia Brasil BRL 69 793 25,00% 75 75 Janeiro Hi-media China Hong kong HKD 1 - 49,00% 0,01 0,01 Allopass SNC 15/17 rue Vivienne 75002 Paris EUR 772 597 100,00% 20 791 20 791

Village d’Entreprises de L’Odyssée Interactive SAS Tronquières. 14, av du Garric. 15 EUR 160 788 88,00% 22 880 22 880 000 Aurillac

Box 71 - Hantverkargatan, 14 827 Hi-media Sales AB SEK 100 87 100,00% 16 243 16 243 22 Ljusdal. Hi-media Advertising Web Velázquez 12, 7a-8a planta 28 001 EUR 3 -2 260 100,00% 103 103 SL Madrid 101 5th Avenue, New York, NY Groupe Hi-media USA USD 1 121 029 100,00% 64 879 64 879 10003 Sport.fr EUR 5 - 10,00% 1 1 Av. des Volontaires, 19 1160 HPME SA EUR 3 200 -117 100,00% 3 200 3 200 Bruxelles Bonne Nouvelle Editions 15/17 rue Vivienne, 75002 Paris EUR 0,3 -423 100,00% 0 0 SARL

Mobile Trend SAS 15/17 rue Vivienne, 75002 Paris EUR 37 747 100,00% 19 859 19 859

Av. des Volontaires 19 1160 HPMP EUR 100 -3 90% 90 90 Bruxelles

Hi-media Nederland BV Zijlstraat 76 - Postbus 5543, 2000 (ex. AdLink Internet Media EUR 20 -70 100,00% 900 900 GM Haarlem BV)

AdLink Media Deutschland Gerhard Hoehme Allee 1, 41466 EUR 26 27 270 100,00% 25 446 25 446 GmbH Neuss

New Penderel House, 283-288 Hi-media Ltd (ex. AdLink High Holborn, London WC1V GBP 1 -4 267 100,00% 400 400 Internet Media Ltd.) 7HP Hi-media Network Internet España SL (ex. AdLink Velázquez 12, 28 001 Madrid EUR 726 -272 100,00% 9 700 9 700 Internet Media S.L.U.)

Hi-media Italy Srl (ex. Via Cosimo del Fante 4, 20122 EUR 10 -257 100,00% 6 200 6 200 AdLink Internet Media Srl) Milano

Box 71 - Hantverkargatan, 14 827 Allopass Scandinavia SEK 100 0 100,00% 10 10 22 Ljusdal. Protasio Tagle 104, Col. San Allopass Mexico SRLCV MXN 3 0 100,00% 0,2 0,2 Miguel Chapultepec. Mexico DF 1 in thousands of operating monetary units 2 in thousands of euros

Earnings exchange rate Revenue (profit or loss received by the excluding Creation or for the last Company Dénomination sociale taxes for last acquisition complete during the complete date financial financial year2 financial year1 1€ = year)1 Hi-media Belgium SPRL 5 475 -24 - - 09.03.00 Hi-media Portugal Lda 6 544 523 135 - 31.10.00 Hi-media Deutschland AG 5 054 -191 - - 30.04.01 Hi-Pi SARL 785 -1 423 - - 13.05.02 Europermission SL - - - - 25.03.04 Hi-Midia Brasil 13 454 4 121 - 2,77 18.07.05 Hi-media China - - - 10,81 01.05.06 Allopass SNC 86 834 7 809 8 000 - 08.02.06 L’Odyssée Interactive SAS 5 034 1 622 2 024 - 31.05.06 Hi-media Sales AB 70 871 20 144 1 706 10,62 04.09.06 Hi-media Advertising Web SL 5 300 -66 - - 29.12.06 Groupe Hi-media USA 3 434 -1 879 - 1,39 27.11.07 Sport.fr - - - - 26.12.07 HPME SA 55 -455 - - 08.05.08 Bonne Nouvelle Editions SARL 326 -41 - - 06.06.08 Mobile Trend SAS 30 046 1 116 - - 13.06.08 HPMP - -65 - - 01.10.08 Hi-media Nederland BV (ex. AdLink 2 003 77 - - 31.08.09 Internet Media BV) AdLink Media Deutschland GmbH 4 261 -126 - - 31.08.09 Hi-media Ltd (ex. AdLink Internet 2 327 -573 - 0,90 31.08.09 Media Ltd.) Hi-media Network Internet España SL 4 402 223 - - 31.08.09 (ex. AdLink Internet Media S.L.U.) Hi-media Italy Srl (ex. AdLink Internet 2 803 322 - - 31.08.09 Media Srl) Allopass Scandinavia 8 -1 552 - 10,62 30.09.09 Allopass Mexico SRLCV - -221 - 19,12 17.07.09 Total 249 016 29 341 11 865 1 in thousands of operating monetary units 2 in thousands of euros

Note 26. Elements concerning the connected companies and the affiliates

26.1. Income, charges and balance sheet balances

Produits En milliers d’euros Produits financiers Charges financières Créances clients Dettes fournisseurs d’exploitation Hi-Media Belgium SPRL 5 21 - 93 - Hi-Media Portugal Lda 163 - 12 - - Hi-Media Deutschland AG 498 - 59 - - Hi-Pi SARL -170 160 - - 5 Europermission SL - - - - - Hi-Midia Brasil - 7 - - - Hi-Media China - - - - - Allopass SNC 3 896 - 325 861 7 L’Odyssée Interactive SAS -4 051 - 47 84 1 004 Hi-Media Sales AB 450 - 7 - - Hi-Media Advertising Web SL 317 7 - - - Groupe Hi-media USA -126 140 - - 27 Sport.fr - 16 - - - HPME SA 200 - 38 - - Bonne Nouvelle Editions SARL 40 21 - - - Mobile Trend SAS 140 - 35 42 - HPMP - - 4 - - Hi-media Nederland BV (ex. 68 4 - - - AdLink Internet Media BV) AdLink Media Deutschland GmbH 74 28 - 74 - Hi-media Ltd (ex. AdLink Internet 62 - - - - Media Ltd.) Hi-media Network Internet España SL (ex. AdLink Internet Media 84 - 6 157 79 S.L.U.) Hi-media Italy Srl (ex. AdLink 97 3 - 97 - Internet Media Srl) Allopass Scandinavia - - - - - Allopass Mexico SRLCV - - - - - Total 1 747 407 533 1 408 1 122

26.2. Current accounts

Montant brut Dépréciation Montant net (En euros) Hi-Media Belgium SPRL 1 021 - 1 021 Hi-Media Portugal Lda -438 - -438 Hi-Media Deutschland AG -868 - -868 Hi-Pi SARL 4 980 73 4 907 Europermission SL - - - Hi-Midia Brasil 229 - 229 Hi-Media China 478 478 - Allopass SNC -5 924 - -5 924 L’Odyssée Interactive SAS -1 553 - -1 553 Hi-Media Sales AB 1 583 - 1 974 Hi-Media Advertising Web SL 2 922 2 280 642 Groupe Hi-media USA 3 067 - 3 067 Sport.fr 410 - 410 HPME SA -576 - -576 Bonne Nouvelle Editions SARL 775 - 775 Mobile Trend SAS -1 585 - - 1585 HPMP -97 - -97 Hi-media Nederland BV (ex. AdLink Internet Media -94 - -94 BV) AdLink Media Deutschland GmbH -18 562 - -18 562 Hi-media Ltd (ex. AdLink Internet Media Ltd.) 27 - 27 Hi-media Network Internet España SL (ex. AdLink -1 156 - -1 156 Internet Media S.L.U.) Hi-media Italy Srl (ex. AdLink Internet Media Srl) -52 - -52 Allopass Scandinavia - - - Allopass Mexico SRLCV 8 - 8 Total -15 405 2 831 -17 485

26.3. Details concerning the receivables attached to holdings

In thousands of euros Gross amount Depreciation Net amount Hi-media Network 1 700 - 1 700

Total 1 700 - 1 700

20.1.2. CONSOLIDATED FINANCIAL STATEMENTS OF HI-MEDIA GROUP

20.1.2.1 Auditors’ report concerning the consolidated financial statements

To the shareholders:

In performance of the assignment with which we were entrusted by your Shareholders’ Meeting, we hereby present to you our report concerning the financial year ending on 31 December 2009 with respect to:

the audit of the consolidated financial statements of the company Hi-media S.A., as attached to the present report; the justification for our judgments; the specific verifications and the information provided for by law. The consolidated financial statements were closed out by the Board of Directors. It is up to us, on the basis of our audit, to express an opinion of the said financial statements.

Opinion of the consolidated financial statements:

We carried out our audit in accordance with professional standards applicable in France, which require steps making it possible to obtain a reasonable assurance that the consolidated financial statements do not include any significant anomalies. An audit consists of examining, by sampling or by other selection methods, the elements justifying the amounts and information appearing in the consolidated financial statements. It also consists in judging the accounting principles followed, the significant estimates adopted and the general presentation of the financial statements. We consider that the elements that we collected are sufficient and appropriate for constituting the basis for our opinion. We hereby certify that the consolidated financial statements are, in the light of the IFRS frame of reference as adopted in the European Union, regular and give a fair representation of the results of the assets, the financial situation as well as the result of the whole constituted by the persons and entities included in the consolidation.

Justification for the judgements

In application of the provisions of article L.823-9 of the Code of Commerce concerning the justification for our judgements, we bring the following points to your attention: - At the time of each closeout, the company systematically carries out a test of depreciation of the goodwill and of the assets having an indefinite lifetime, in accordance with the procedures described in notes 1.5, 1.6.1, 1.8.2, 10 and 11 of the consolidated financial statements. We examined the procedures regarding implementation of this depreciation test as well as the cash flow forecasts and the general consistency of the assumptions used. We also assured ourselves that notes 1.5, 1.6.1, 1.8.2, 10 and 11 provide appropriate information.

- Following the acquisition of the advertising network activities of Adlink Internet Media AG group on 31 August 2009, on the date of acquisition the company assigned the goodwill resulting from that acquisition to the various identified units generating cash flow, as a function of the relative value of each cash flow generating unit, as described in notes 3.2.2 and 10.4 to the consolidated financial statements. We examined the procedures for implementation of that assignment as well as the cash flow forecasts and the assumptions used, and we assured ourselves that notes 3.2.2 and 10.4 provide appropriate information. - On 31 December 2009, the company made a reassignment of the Fotolog goodwill within several cash flow generating units as a function of the relative values of those cash flow generating units on that date. The reasons for and the principles governing that reassignment are presented in notes 10.2 and 10.4 to the consolidated financial statements. We examined the procedures of that reassignment as well as the cash flow forecasts on the basis of which the relative values of the cash flow units were calculated and the assumptions used, and we made sure that notes 10.2 and 10.4 provide appropriate information. Note 27. The company recognises the deferred tax credits in accordance with the procedures described in notes 1.5, 1.17, 9 and 13 to the consolidated financial statements. We judged the general consistency of the assumptions adopted and used in evaluation of the said deferred tax credits, and we assured ourselves that notes 1.5, 1.17, 9 and 13 provide appropriate information. Note 28. The company posts, to intangible fixed assets, development expenses complying with the criteria laid down in the IFRS frame of reference as adopted in the European Union, in accordance with the procedures described in notes 1.6.2 and 11 to the consolidated financial statements. We examined the criteria adopted for posting the said development expenses to assets in the balance sheet as well as the procedures adopted for their depreciation and for verification of their recoverable value, and we assured ourselves that notes 1.6.2 and 11 provide appropriate information. All of these estimates are based on assumptions that are uncertain by their very nature, the actual figures being subject to differing, sometimes significantly, from the forecast data used.

The judgements made in this way fall within the framework of our auditing approach to the consolidated financial statements, taken as a whole, and therefore contributed to development of our opinion as expressed in the first part of this report.

Specific verification

Pursuant to the professional standards applicable in France, we also carried out the specific verification provided for by law of the information provided in the group’s management report.

We have no remarks to make concerning their accuracy and their agreement with the consolidated financial statements.

The Auditors

Paris la Défense, 22 March 2010 Boulogne Billancourt, 22 March 2010

KPMG Audit EREC Associés A department of KPMG SA

Stéphanie Ortega Sophie Lechevalier Partner Partner

Consolidated income statements for financial years 2009 and 2008

in thousands of euros Notes Dec. 31, 2009 Dec. 31, 2008 Revenue 4 172 323 135 671 Expenses invoiced by the media -109 272 -80 747

Gross margin 63 051 54 924

Purchases -19 571 -14 244 Payroll charges 5 -23 025 -21 404 Transfers to and write-backs from depreciation and -3 939 -4 120 provisions Current operating profit 16 516 15 157 (before valuation of stock options and free shares) Valuation of stock options and free shares 6 -2 216 -3 411 Other non-current income and charges 7 -2 520 -2 379

Operating profit 11 780 9 368

Cost of indebtedness 8 -2 079 -2 028 Other financial income and charges 8 111 -240

Net income of the consolidated companies 9 812 7 100

Share in the earnings of the companies treated on an equity basis 372 51

Earnings before tax of the consolidated companies 10 185 7 151

Taxes 9 -3 265 -728

Net income of the consolidated companies 6 920 6 423

Including minority interests 425 344

Including Group share 6 495 6 079

31 Dec. 2009 31 Dec. 2008 Weighted average number of ordinary shares 40 770 268 38 787 484 Base profit per share (in euros) 0,16 0,16 Weighted average number of ordinary shares (diluted) 43 045 166 41 148 747 Diluted earnings per share (in euros) 0,15 0,15

Statement of global income for financial years 2009 and 2008

in thousands of euros 31-Dec-09 31-Dec-08 Net result 6 920 6 423 Other elements of the global result: - Actuarial gains and losses related to post-employment benefits - -17 250 - Hedge accounting on financial instruments -107 -791 - Translation adjustments -2 467 3 373 - Other - - - Taxes on other elements of the global result - - Other elements of the global result, net of tax -2 590 2 832 Group share -2 566 2 850 Minority interests -24 -19 Global result 4 330 9 254

Consolidated balance sheets on 31 December 2009 and 31 December 2008

ASSETS - in thousands of euros Notes 31 Dec. 2009 31 Dec. 2008 Net Goodwill 10 170 005 134 740 Net intangible fixed assets 11 13 298 12 455 Net tangible fixed assets 12 2 803 3 135 Deferred tax credits 13 10 744 9 664 Other financial assets 14 1 608 946 Non-current assets 198 458 160 940 Customer receivables 15 69 918 46 769 Other current assets. 16 14 400 10 719 Current financial assets 19 36 Cash and cash equivalents 17 19 485 18 830 Current assets 103 822 76 354 TOTAL ASSETS 302 280 237 294

LIABILITIES - in thousands of euros Notes 31 Dec. 2009 31 Dec. 2008 Share capital 4 427 3 981 Premiums on shares and on conveyance 123 348 103 011 Reserves and retained earnings 22 441 21 581 Treasury shares -1 916 -6 160 Consolidated net income 6 495 6 079 Shareholders’ equity 154 788 128 492 Minority interests 824 813 Shareholders’ equity (after minorities) 154 612 129 305 Long-term borrowings and financial liabilities 19 36 014 27 051 Non-current provisions 20 982 776 Non-current liabilities 21 897 791 Deferred tax liabilities 13 628 687 Non-current liabilities 38 521 29 305 Short-term financial liabilities and bank overdrafts 19 15 202 14 945 Current provisions - - Trade payables and other creditors 69 058 36 203 Other current debts and liabilities 20 23 887 27 536 Current liabilities 108 147 78 684 TOTAL LIABILITIES 302 280 237 294

Tables of consolidated cash flows for financial years 2009 and 2008

in thousands of euros Notes 31 Dec. 2009 31 Dec. 2008 Net income 6 920 6 423 Adjustments for: Depreciation of fixed assets 4 374 2 773 Losses of value - 83 Investment products -46 -94 Cost of net financial indebtedness 2 079 2 028 Exceptional charge on commercial disputes - 1 717 Share in associated companies -372 -51 Net income from disposals of fixed assets 48 200 Costs of payments based on shares 6 2 216 3 411 Tax charge or proceeds 9 3 265 728 Operating profit before variation of operating capital need 18 484 17 217 Variation of the operating capital need 5 253 3 731 Cash coming from operating activities 23 731 20 948 Interest paid -1 711 -2 028 Tax on earnings paid -4 365 -2 207 NET CASH FLOW RESULTING FROM OPERATING ACTIVITIES 17 661 16 713 Income from disposals of fixed assets 815 - Valuation at fair value of the cash equivalents 89 94 Proceeds from disposals of financial assets - - Disposal of subsidiary, after deduction of cash - - transferred Acquisition of a subsidiary -8 500 -11 860 Acquisition of fixed assets -5 380 -6 556 Variation of financial assets -140 -276 Variation of suppliers of fixed assets -440 523 Effect of perimeter variations - -45 NET CASH FLOW RESULTING FROM INVESTMENT ACTIVITIES -13 557 -18 121 Proceeds from share issues 22 - Redemption of own shares - -2 948 New borrowings 6 016 23 825 Repayments of borrowings 19 -8 999 -9 789 Dividends paid -391 -274 NET CASH FLOW RESULTING FROM FINANCIAL ACTIVITIES -3 352 10 815 NET VARIATION OF CASH POSITION AND CASH EQUIVALENTS 752 9 407 Incidence of the variations of exchange rates -53 -52 Cash and cash equivalents on January 1 18 786 9 431 CASH AND CASH EQUIVALENTS AT END OF PERIOD (1) 19 485 18 786

(1) Asset cash flow reduced by bank overdrafts. Cf. note 17

Table of variations of consolidated shareholders’ equity for financial years 2009 and 2008

Income and Stock charges Earnings Shareholder's Additional options Shareholder's Total Number of Share Treasury directly and equity in thousands of euros paid-in and free equity shareholders’ shares capital stock posted to retained Minority capital shares Group share equity shareholder's earnings interests reserves equity

1 Jan. 2008 39 048 158 3 905 98 105 -3 212 6 712 -59 14 538 119 989 762 120 750

Dividend paid to minorities ------274 -274

Call exercise 758 300 76 5 071 - -5 147 - - - - -

Share redemptions (1) - - - -2 948 - - - -2 948 - -2 948

Stock options and free - - -164 - 2 675 - 10 2 522 - 2 522 shares impact (2)

Variation of perimeter ------

Other elements of global - - - - - 2 850 - 2 850 -19 2 832 income

Net income of the period ------6 079 6 079 344 6 423

Total comprehensive income - - - - - 2 850 6 079 8 929 325 9 254

31 Dec. 2008 39 806 458 3 981 103 011 -6 160 4 240 2 791 20 627 128 491 813 129 305

Dividends paid to the ------391 -391 minorities

Call exercise 523 537 52 4 435 - -4 465 - - 22 - 22

Share redemptions (1) - - - 345 - - - 345 - 345

Stock options and free - - -33 - 1 807 - - 1 774 - 1 774 shares impact (2)

AdLink's acquisition 3 940 000 394 15 935 3 899 - - - 20 228 - 20 228

Other elements of global ------2 566 - -2 566 -24 -2 590 income

Net income of the period ------6 495 6 495 425 6 920

Total comprehensive income ------2 566 6 495 3 928 401 4 330

31 December 2009 44 269 995 4 427 123 348 -1 916 1 583 225 27 122 154 788 824 155 612

(1) As of 31 December 2009, Hi-Media S.A. held 239,153 of its own shares. Moreover within the framework of the liquidity contract, Hi-Media held 103,518 of its own shares as of December 31, 2009. (2) Cf. Erreur ! Source du renvoi introuvable. in connection with the share subscription option plans and the allocations of free shares.

193 Notes concerning the Group’s consolidated financial statements

The consolidated financial statements for financial year 2009 as well as the notes relating to them have been established on the responsibility of the Hi-Media S.A. Board of Directors, and they were closed out at its meeting held on 10 March 2010 and are being submitted for approval to the Shareholders’ Meeting held on 4 May 2010.

Note 1 Accounting principles and methods

1.1. Entity presenting the financial statements

Hi-Media ("The Company") is a business domiciled in France. The Company's registered office is located at 15/17 rue Vivienne, 75002 Paris. The Company's consolidated financial statements for the financial year ending on 31 December 2009 include the Company and its subsidiaries (the whole being designated as "the Group", and each individually as "the Group entities") and the Group's share in the associated companies or in those under joint control.

1.2. Preparation base

In application of European rule n° 1606/2002 of 19 July 2002, the consolidated financial statements published for financial year 2008 were established in accordance with the international accounting standards set forth by the IASB (International Accounting Standards Board). The said international accounting standards consist of the IFRS (International Financial Reporting Standards), the IAS (International Accounting Standards), as well as of their interpretations, which were adopted by the European Union on 31 December 2009 (publication in the Official Journal of the European Union).

The consolidated financial statements are prepared on the basis of historical cost, with the exception of the following elements: - the derivative financial instruments, valued at fair value, - the financial instruments at fair value by way of the income statement, valued at fair value, - the financial assets available for sale valued at fair value, - the liabilities resulting from transactions payment of which is based on shares and which will be paid in cash, valued at fair value.

The consolidated financial statements are presented in euros, the euro being the Company’s operating (functional) currency.

All financial information presented in euros is rounded off to the nearest thousand euros.

The accounting principles and methods explained below have been applied continuously to all periods presented in the consolidated financial statements, with the exception of the accounting methods related to the new accounting standards and amendments coming into effect on 1 January 2009 and listed below.

The accounting methods are applied in uniform fashion by the Group entities.

The new standards and the following amendments must be applied starting with the financial year beginning on 1 January 2009:

- IAS 1 revised ( 2007 ) – Presentation of financial statements : the Group presents all variations in shareholder’s equity relative to the owners of the Company only in the report on variation of consolidated shareholders' equity, whereas the variations in shareholder’s equity which do not concern the owners are also presented in the report on global net income. The Group has opted for presentation of two distinct statements: an income statement and a global earnings statement. The comparative information was adjusted in accordance with the revised standard. This change of method, which affects only the presentation, has no impact on the earnings per share.

- IFRS 7 amendment “Financial instruments: information to provide“ as of November 2009: the Group organized into a hierarchy the financial instruments estimated at fair value by level.

194 - IFRS 8 – Operational Sectors: the Group applied IFRS 8 as of 31 December 2008.

The following new standards, amendments and interpretations must be applied starting with the financial year beginning on 1 January 2009, but had no effect on the group's financial statements:

- IAS 23 as revised - costs of borrowings; - Amendment IFRS 2 – conditions regarding acquisition of rights and cancellations; - Amendments IAS 32 and IAS 1 – financial instruments redeemable at bearer's option; - Amendments IFRS 1 and IAS 27 – Amended IFRS 1 and IAS 27 – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate; - Amendment IAS 39; - IFRIC 11 – Group and treasury share transactions; - IFRIC 13 – Customer loyalty programs; - IFRIC 14 – The limit on a defined benefit asset, minimum funding requirements and their interaction; - IFRIC 15 – Real property construction contracts; - IFRIC 16 – Coverage of a new investment.

The following new standards, amendments and interpretations, adopted by the IASB/IFRIC and the EU as of 31 December 2009, do not have to be applied for the financial year beginning on 1 January 2009, and were not applied early:

- IFRS 3 and IAS 27 (both as revised): regroupings of companies: the group will apply IFRS 3 and IAS 27 as revised to all regroupings carried out starting on 1 January 2010 (prospective application); - IFRIC 17 – Distribution of non-monetary assets to the shareholders, applicable for the financial years beginning on 1 July 2009 or later; - IFRIC 18 – Transfers of assets by customers, applicable for financial years beginning on 1 July 2009 or later.

1.3. Consolidation principles

A subsidiary is an entity controlled by the Group. Control exists when the Group holds the power to direct the entity’s financial and operating policies in order to obtain advantages from its activities. In judging control, the potential voting rights that can currently be exercised are taken into account. The subsidiaries' financial reports are included in the consolidated financial statements as of the date on which control is obtained and until the date on which control ceases. The subsidiaries' accounting methods are modified when necessary to bring them into line with the ones adopted by the Group.

1.3.1. Companies under exclusive control

The companies under Hi-Media S.A.'s direct or indirect exclusive control are fully consolidated.

1.3.2. Associated companies (companies treated on the basis of the equity method)

The associated companies are the entities in which the Company exercises notable influence over the financial and operating policies, but without holding control. Notable influence is assumed when the Group holds from 20% to 50% of the voting rights of an entity. The accounting is done on the associated companies on the basis of the equity method ("entreprises mises en equivalence") and the accounting is initially done at cost. The Group's participation includes the goodwill identified at the time of the acquisition, net of the cumulative value losses. The consolidated financial statements include the Group's share in the total amount of profits and losses and the changes in shareholders' equity posted by the companies treated on the basis of the equity method, after taking account of adjustments due to bringing the accounting methods into compliance with the ones used by the Group, starting on the date on which the notable influence is exercised and until the date on which it ends. If the Group's share of the losses is greater than its holding in the company treated on the basis of the equity method, the book value of the securities treated by the equity method (including any long-term investment) is reduced to zero, and the Group ceases to post its share of the future losses, unless the Group is obliged to take part in the losses or to make payments in the name of the company.

195 1.3.3. Companies under joint control

Jointly controlled companies are entities over whose activity the Group exercises joint control by virtue of a contract requiring unanimous approval of the strategic and operational decisions. They are consolidated by means of the proportional consolidation method.

1.3.4. Transactions eliminated in the consolidated financial statements

The balance sheet balances, the transactions, the income and charges resulting from the intra-group transactions are eliminated upon preparation of the consolidated financial statements. The gains resulting from transactions with the companies treated on the basis of the equity method are eliminated by the counterpart of the securities treated on the basis of the equity method to the extent of the Group's shares of interest in the business. The unrealized losses are eliminated in the same way as the profits, but only insofar as they do not represent a loss of value.

1.4. Foreign currency

1.4.1. Transactions in foreign currencies

The unrealized foreign exchange gains and losses on receivables and liabilities denominated in foreign currencies of a given entity are posted to the accounting under operating income or to financial earnings of the entity, depending on the nature of the underlying transaction. The exchange differences relating to monetary elements constituting an integral part of the net investment in foreign subsidiaries are entered in conversion reserves at their amount net of tax. The balance sheet headings expressed in foreign currencies are converted into euros at the closing rates of the financial year, with the exception of net worth, which is maintained at its historical value. The income statements and the cash flows statement expressed in foreign currencies are converted at the monthly average exchange rates for the period, without significant exchange rate fluctuations. The conversion differences resulting from the application of these various rates are not included in the period's results, but are allocated directly to conversion reserves in the consolidated financial statements.

1.4.2. Activities abroad

The assets and liabilities of a foreign activity, including the consolidated goodwill and the adjustments of fair value resulting from the acquisition, are converted into euros by using the exchange rate on the closing date. The income and charges relating to an activity abroad, except for foreign activities in a hyper-inflationary economy, are converted into euros by using the exchange rates in effect on the dates of transactions. The translation differentials resulting from the conversions are posted to the conversion reserve under the shareholders’ equity.

1.5. Use of estimates and judgments

Preparation of the financial statements in accordance with the IFRS standards requires management to take account of estimates and of assumptions for determination of the amounts to be posted with regard to certain assets, liabilities, income and charges, as well as of certain information provided in notes attached to the assets and liabilities, in particular : - The goodwill and the depreciation tests relating thereto, - The intangible assets acquired, - The deferred tax credits, - The depreciation of receivables, - The provisions for risk, - The charge for stock options and free shares, - The financial instruments.

The estimates and underlying assumptions are developed on the basis of past experience and other factors considered reasonable in light of the circumstances. They are also used as the basis for exercise of the judgment necessary for determination of the book values of assets and liabilities, which cannot be obtained directly from other sources. In view of the inherently uncertain nature of these valuation procedures, the definitive amounts may prove to be different from the ones initially estimated.

196 The estimates and the underlying assumptions are continuously reconsidered. The impact of the changes in accounting estimates is directly entered in the accounting during the period of the change if it affects only the said period, or during the period of change and in subsequent periods if they are also affected by the change.

1.6. Intangible fixed assets

1.6.1. Consolidated goodwill

The consolidated goodwill represents the difference between the acquisition price, increased by the related costs, of the securities of the consolidated companies and the group share of the fair value of their net assets on the date of acquisition of holdings. The consolidated goodwill is not depreciated, pursuant to the IFRS 3 standard concerning "Regroupings of businesses". It is the object of a value loss test as of the time of appearance of indications of losses of value, and at least once per year. The consolidated goodwill is broken down by cash flow generating units, which correspond to sets of assets giving rise jointly to independent cash flows. The procedures relating to the tests of losses of value of the Cash Flow Generating Units are detailed in note 1.8 below. In case of a loss of value, the depreciation is entered under earnings for the financial year.

The consolidated goodwill referring to the acquisition of companies treated on the basis of the equity method is included in the value of the "Securities treated on the basis of the equity method". It is tested by way of the value test performed on the securities.

If the acquisition record includes an adjustment of the acquisition price depending on future events such as the generation, at some point in the future, of a specified level of revenue, earnings, or BFR (operating capital need) of the acquired company, the value of such an adjustment is posted on the basis of the most accurate estimate which Hi-Media can make on the acquisition date or as soon as the adjustment is likely to be made and can be measured reliably. If future events do not occur or if the estimate has to be revised, the acquisition price is adjusted accordingly.

1.6.2. Other intangible fixed assets

Research and development expenses

The development expenses, including the ones relative to software and to the new sites or new versions of sites, are capitalized as intangible assets as soon as the company can demonstrate the following, in particular: - its intention and financial and technical ability to carry out the development project to completion; - its ability to use or sell the intangible asset, once it has been completed; - the availability of adequate technical and financial resources for completing the development and sale; - that future economic advantages attributable to the development expenditures are likely to go to the business; - and that the cost of the said asset can be valued reliably.

The other research and development expenses are posted to charges during the financial year in which they are incurred. The said intangible assets are depreciated over the estimated use duration as a function of the consumption of the economic advantages connected with them. They are depreciated, if appropriate, if their recoverable value becomes less than their book value.

Other intangible fixed assets acquired

To satisfy the definition of an intangible fixed asset, an element must be identifiable (separable from or resulting from contractual or legal rights), be controlled by the company, and it must be likely that the future economic advantages attributable to the said element will go to the company. An intangible fixed asset acquired is recognized in the balance sheet as soon as its cost can be reliably measured, on the basis that one assumes in such a case that the future economic advantages attributable to said fixed asset will go to the company. These intangible fixed assets consist of trademarks, licenses and software, and customer relations. The licenses, software and customers relations, which have a finite useful life, are amortized over a period of 3 to 8 years.

1.7. Tangible fixed assets

The original value of the tangible fixed assets corresponds to their acquisition cost.

197 The expenses for maintenance and repair are recorded under charges as soon as they are incurred, except for the ones incurred for increased productivity or the extension of the use duration of the asset. The fixed assets financed by means of financial rental contracts, for which the risks and advantages have been transferred to the lessee, are presented under assets in terms of the discounted value of the future payments, or the market value if that is less. The corresponding debt (liability) is entered under financial liabilities. The said fixed assets are depreciated in accordance with the procedure and for the use periods described below.

The depreciation is posted to charges over the duration of use as estimated for each tangible fixed asset.

The estimated use durations are as follows:

Fittings and improvements 5 to 10 years Office equip. and computer hardware 3 to 5 years Furniture 4 to 8 years

1.8. Depreciation of the fixed asset elements

1.8.1. Financial assets

The financial asset is examined on each closeout date to determine whether there is an objective indication of a loss of value. The Group considers that a financial asset is depreciated if there are objective indications that one or several events have had a negative effect on the estimated future cash flows from the asset. The loss of value of a financial asset valued at the amortized cost corresponds to the difference between its book value and the value of the estimated future cash flows, discounted at the original effective interest rate on financial assets. The value losses are posted to earnings. The value loss is written back if the write-back can be objectively connected with an event occurring after the accounting is done on the depreciation.

1.8.2. Non-financial assets

The book values of the Group's non-financial assets, other than the deferred tax credits, are examined on each closeout date to judge whether there is any indication whatsoever that an asset has experienced a loss of value. If there is such an indication, the recoverable value of the asset is estimated. For the goodwill and the intangible fixed assets with an indefinite use duration or that are not ready for commissioning, the recoverable value is estimated on each closeout date. The recoverable value of an asset or of a cash flow generating unit is the higher as between its value in use and its fair value reduced by the costs of sale. To judge the value in use, the estimated future cash flows are discounted at the rate, before tax, reflecting the current market judgment of the time value of money and of the risks that are specific to the asset. For the needs of the depreciation tests, the assets are regrouped into the smallest group of assets generating incoming cash flow resulting from continuous use, largely independent of the incoming cash flows resulting from other assets or groups of assets (the "cash flow generating unit"). A loss of value is entered in the accounting if the book value of an asset or of its cash flow generating unit is greater than its recoverable value. The value losses are posted to the income statement. A loss of value entered in the accounting in connection with a cash flow generating unit (a group of units) is assigned first of all to reducing the book value of any goodwill assigned to the cash flow generating unit, and then to reduction of the book value of the other assets of the unit (of the group of units) in proportion to the book value of each asset of the unit (of the group of units).

A loss of value posted in connection with consolidated goodwill cannot be written back. For the other assets, the Group judges, on each closeout date, whether there is an indication that the value losses posted to the accounting during prior periods have declined or no longer exist. A loss of value is written back if there here is a change in the estimates used in order to determine the recoverable value. The book value of an asset, increased because of the write-back of a loss of value, must be no greater than the book value that would have been determined, net of depreciation, if no value loss had been posted.

1.9. Accounts receivable

The accounts receivable are valued at their nominal value and are the object of individual examination. Depreciation is set aside when the balance sheet value (discounted value of the estimated future cash flows) is less than the book value.

198 The receivables transferred to third parties (factoring contract) are removed from the Group’s assets when the risks and advantages associated with them are substantially transferred to such third parties and if the factoring company in particular accepts the credit risk, the rate risk and the collection period. The credit risk corresponds to the risk of non-recovery of the receivable. Under the deconsolidation contracts of the entities in the group, the credit risk is borne by the factoring company. This means that the group is no longer exposed to the risks of recovery of the invoice, and, as a result, the disposal is regarded as being without recourse.

The rate and collection period risk corresponds to the transfer of the financial risk linked with extending the duration of the recovery of the receivables and to the cost of carry accruing thereto. Under the deconsolidating contracts of the entities in the group, the commission rate for a given disposal is adjusted exclusively subject to EURIBOR and the time it took to settle the previous disposal. The financing commission is paid at the start of the period and is not subsequently modified.

The risk of technical dilution is linked with non-payment of the receivable due to faults observed in services rendered or commercial disputes. For every deconsolidating contract signed by the entities in the group, the guarantee reserve does not cover the general risks or the risk of delayed payment; the basis of the guarantee is made up to cover the debits (credit notes etc.) relating to technical dilution.

1.10. Cash and cash equivalents, and current financial assets

The cash and cash equivalents consist of the elements that are immediately liquid and variations of the fair value of which are insignificant, such as liquidity in bank current accounts, the shares of treasury “OPCVM” funds, as well as the reserve account at the factor’s. The current financial assets that do not meet the definition of cash equivalents and are held with an eye on future transactions are valued at fair value, and the variations are posted to the income statement.

1.11. Capital

1.11.1. Ordinary shares (common stock)

The ordinary shares are classified as shareholders' equity instruments. The accessory costs directly attributable to issue of ordinary shares or of stock options are posted as a deduction from shareholders' equity, net of tax.

1.11.2. Repurchase of shareholders' equity instruments (own shares)

If the Group buys back its own shareholders' equity instruments, the amount of the counterpart paid including the costs directly attributable is posted to the accounting net of taxes, as a reduction of shareholders' equity. The repurchased shares are classified as internally held shares and are deducted from shareholders' equity. When the internally held shares are sold or put back into circulation, the amount received is posted as an increase of the shareholders' equity, and the positive or negative balance of the transaction is transferred to increase or decrease the undistributed results.

1.12. Borrowing

All borrowings are initially entered in the accounting at the fair value of the counterpart received, which corresponds to the cost, net of expenses directly attributable to such borrowings. After the initial accounting is done, the borrowings are valued at the amortized cost by using the effective interest rate method. The said rate corresponds to the internal rate of return making it possible to discount the series of cash flows anticipated over the duration of the borrowing. In addition, if the borrowing includes an incorporated derivative instrument (in the case, for instance, of an exchangeable bond) or if it includes a component of shareholders' equity (in the case, for instance, of a convertible bond), then the amortized cost is calculated solely for the debt component, hence once the incorporated derivative instrument or the component of shareholders' equity has been separated. In case of a change in the anticipated future cash flows (for instance, early redemption not initially planned), then the amortized cost is adjusted by earnings counterpart to reflect the value of the new cash flows that are anticipated, discounted at the initial effective interest rate.

199 1.13. Derivative financial instruments

Derivative financial instruments are used for the purpose of managing exposure to financial risks. All derivatives are valued and posted to the accounting at their fair value: initially on the date of contract conclusion, and subsequently at the time of each closeout. The treatment of the revaluation gains or losses depends on the designation or non-designation of the derivative as a hedging instrument, and, if that is the case, on the nature of the element hedged. The variations of fair value of the derivatives that are not designated as hedging instruments are posted to financial earnings during the period to which they refer. The fair values are based on the market values for the listed instruments, or on mathematical models, such as the models for valuation of options, or on methods for discounting cash flows with respect to the unlisted instruments.

The variations of fair value of the derivatives designated as cash flow hedging instruments are posted among other elements of the global result and are presented in the shareholders' equity reserve with respect to the effective part of the variations of fair value of the instruments, and are posted to earnings with respect to the gains and losses relating to the ineffective part. The amounts posted to shareholders' equity are then recycled to the income statement as a function of the impact on the income statement of the hedged elements.

1.14. Provisions

A provision is set aside when the Group has a present, legal or implicit obligation resulting from a past event to a third party, and it is likely or certain that this will lead to an outflow of resources to the benefit of that third party. In case of restructuring programs, an obligation is constituted as soon as the restructuring has been the object of an announcement and of a detailed plan, or execution thereof has begun.

A provision for an onerous contract is posted when the economic advantages which the Group expects from the contract are less than the inevitable costs which have to be assumed to satisfy contractual obligations. The provision is valued at the current value of the lowest cost expected from termination or execution of the contract.

During regrouping of companies, a provision is also posted for purchase contracts held by the acquired company characterized by unfavorable conditions compared to those of the market on the date of acquisition.

1.15. Staff benefits

1.15.1. Fixed contributions system

A fixed contributions system is one offering benefits after employment by virtue of which an entity pays defined contributions to a separate entity and will not be under any legal or implicit obligation to make any additional contributions. The contributions to be paid to a fixed contributions system are posted to charges connected with staff benefits when they are due.

1.15.2. Fixed benefits system

A fixed benefits system is one offering benefits after employment other than a fixed contributions system. The Group's net obligation in connection with fixed benefits systems is valued separately for each system by estimating the amount of the future benefits earned by the staff in exchange for the services rendered during the present and prior periods. The said amount is discounted to determine its present value. The costs of the past services that are not posted and the fair value of the system assets are then deducted. The calculations are made each year by a qualified actuary using the method of projected credit units. The Group immediately posts, to other elements of the global result, all of the actuarial discrepancies in connection with the fixed benefits systems.

1.15.3. Indemnities at the end of employment contract

The indemnities for the end of the employment contract are posted to charges when the Group is obviously committed, without any real possibility of withdrawing, to a formalized and detailed plan either relating to redundancies before the normal retirement age, or offers encouraging voluntary departures with a view to reducing staff, and the employees concerned have been informed before the closeout date. The indemnities for voluntary departures are posted to charges if

200 the group has made an offer encouraging voluntary departures, it is likely that the said offer will be accepted, and the number of persons who will accept the offer may be estimated reliably.

1.15.4. Short-term benefits

The obligations in connection with the short-term benefits are valued on a non-discounted basis and are posted to the accounting when the corresponding service is rendered. A liability is posted in the amount that the Group expects to pay in connection with the optional profit-sharing plans and the premiums are paid on a short-term cash flow basis if the Group has a present legal or implicit obligation to make such payments in exchange for past services rendered by the staff member and the obligation can be reliably estimated.

1.15.5. Payments based on shares

Buy options and share subscription options as well as free shares are granted to the senior managers and to certain Group employees. Pursuant to the IFRS 2 standard called “Payment based on shares”, the options and shares are valued at the fair value as of the date of granting.

- Instruments settled by issue of Hi-Media shares

To value these instruments, the Group uses the Black & Scholes mathematical model. The modifications of market conditions occurring after the date of allocation have no effect on the initial valuation. In particular, the plans concerning allocations of free shares are valued on the basis of the Hi-Media share price on the day of the meeting of the Board of Directors deciding on allocation of such free shares taking account of the period of non-transferability of the share after acquisition of the rights, and of the anticipated dividend. The fair value of these instruments, valued on the date of allocation, is booked as a charge in counterpart of shareholder’s equity. The fair value is spread out over the period during which the beneficiaries acquire their rights. Evaluation of the charge takes account of the likelihood of realization of the performance and presence conditions. The cumulative charge relative to such instruments is revalued at the time of each closeout. If the case arises, the valuation difference is entered in the income statement.

- Instruments settled by cash remittances

The charge, valued on the date of allocation, is spread out over the period during which the beneficiaries acquire their rights. The counterpart of this charge is a debt (liability). The valuation of the charge takes account of the likelihood of realization of the performance and presence conditions. When such plans result from acquisitions of subsidiaries, the estimated lifetime of the instrument is calculated on the basis of the plans initially established for the employees. The cumulative charge relative to such instruments is revalued at the time of each closeout. If the case arises, the valuation difference is entered in the income statement.

1.16. Segment information

Pursuant to IFRS 8 applied beginning with financial year 2008, the Group presents segment information, based on internal reporting, as it is regularly examined by Group management in order to assess the performance of each sector and allocate resources to the sectors.

An operational sector is a component of the business: - that takes part in activities that could cause it to receive income and bear charges (including the income and the charges connected with transactions of other components of the same entity); - whose operating results are regularly examined by the entity's main operational decision-makers in order to make decisions concerning the resources to be assigned to the sector and to assess its performance - and for which separate financial information is available.

In view of this definition, Hi-media's operational sectors correspond to the following activity sectors: - Advertising network activity - Micropayments - Publication of websites This identification is based on the group's internal organizational systems and management structure.

201

Hence in Note 23 the Group provides the following information: - revenue, gross profit and operating profit per segment - assets per segment - reconciliations of the totals per segment with the corresponding amounts of the Group.

No liability is assigned to the segments in the internal system for monitoring results.

1.17. Tax on earnings

The tax on earnings (charge or income) includes the payable tax charge (credit) and the deferred tax charge (credit). The tax is posted to earnings unless it relates to regrouping companies or to elements that are posted directly to shareholders' equity or to other elements of the global result. In this case, the tax is posted to shareholders' equity or to other elements of the global result. The payable tax is the estimated amount of the tax due in connection with the taxable profit for a period, determined by using the tax rates that have been adopted or virtually adopted on the closeout date, added to any adjustment of the amount of the payable tax for the previous periods.

The deferred tax is determined and posted in accordance with the balance sheet approach of the variable carryover method for all timing differences between the book value of the assets and liabilities and their taxation bases. The following elements do not give rise to recording deferred taxes: the initial accounting done on an asset or liability in a transaction that is not a regrouping of businesses and that does not affect either the book profit or the taxable profit, and the timing differences connected with holdings in subsidiaries and joint ventures insofar as it is likely that they will not be reversed in the foreseeable future. Furthermore the deferred tax is not posted to the accounting in case of a taxable timing difference generated by the initial accounting done on goodwill. The deferred tax credits and liabilities are valued at the tax rates that are expected to be applied for the period during which the asset is realized and the liability settled, on the basis of the taxation rules and regulations that have been adopted or virtually adopted as of the closeout date. The deferred tax credits and liabilities are offset if there is a legal enforceable right to offset the payable tax credits and liabilities, and if they concern taxes on earnings deducted by the same taxation authority, either in the same taxable entity, or in taxable entities that are different but that intend to settle the payable tax credits and liabilities on the basis of their net amount or to realize the credits and to settle the tax liabilities simultaneously. A deferred tax credit is posted only insofar as it is likely that the group will record future taxable profits to which the corresponding timing difference can be charged. The deferred tax credits are considered on each closeout date and are reduced to the extent that it is no longer likely that a sufficient taxable profit will be available.

With regard to the component consisting of the Contribution on Added Value of Companies (CVAE) of the Territorial Economic Contribution (CET), a new tax introduced in France by the 2010 Finance Act, the Group has decided to describe it as a tax on earnings. The fact is that the CVAE meets the definition of a tax on earnings as set forth by IAS 12.2 (“taxes due on the basis of taxable profits”). The IFRIC has also stated that to be covered by IAS 12, a tax must be calculated on the basis of a value net of proceeds and of charges, and this net amount may be different from the net earnings posted. The Group considered that the CVAE exhibited the characteristics mentioned in that conclusion insofar as the added value constitutes the intermediate level of earnings which systematically serves as the basis (in accordance with French fiscal rules) for determining the amount due for the CVAE. The Group also considered that the CVAE had characteristics close to some other foreign taxes such as the IRAP in Italy, already analyzed as relevant for the application range of IAS 12.

In addition, since the capital allowances cannot be deducted from the added value on which this tax is based, a deferred tax liability must be established on the basis of the net value of the fixed assets posted to the balance sheet of the entities subject to this tax.

1.18. Recognition of revenue

Recognition of gross revenue Pursuant to IAS 18-7 / 18-8, the company acting as the principal in the transaction recognizes, as revenue, the amounts invoiced to the end customers. In order to determine whether the company is acting as a principal or, on the contrary, as an agent, it is appropriate to assess the risks and responsibilities taken by the company to deliver the goods or render the services. From that viewpoint, Hi-Media has referred to the EITF 99-19 standard, within the framework of application of the IFRS, which gives a list of indicators for determining whether the company is acting as a principal or as an agent. Hi-

202 Media has ensured that the indicators showing that the Company acts as a principal were indeed present in connection with the transactions made with its customers, advertisers or websurfers.

1.18.1. Advertising network activity

The advertising network activity consists in offering advertisers global services relative to their advertising campaigns on the websites with which Hi-Media has signed an agency contract. In this connection, Hi-Media generally intervenes as the advertiser’s sole service provider, and not as a commission agent. Hence in such a case, the advertiser does not have any contractual relationship with the medium website. The price of the services charged to the advertiser inseparably includes the price of the advertising space, the advice relative to the choice of the media, as well as the cost of the technical services for getting items on line, for distribution as well as for follow-up on the campaign (in both quantitative and qualitative terms) and collection on the invoices issued. The revenue corresponds to the amount invoiced to the advertisers. In connection with certain contracts, Hi-Media intervenes as a mere business finder and distributor of the campaign. The website represented in this way then sees, itself, to invoicing the advertiser, as well as to collection of the campaigns. Since Hi-Media intervenes only as an agent, turnover corresponds in this case to the fee charged by Hi-Media to the website.

The activity breaks down into four marketing procedures: - the sale of advertising spaces at a cost per thousand; - the sale of performance-based operations; - the sponsorship contracts; - the sale of direct marketing operations.

The sale of advertising spaces provides for putting on line and dissemination of advertising banners of different formats in one medium or several (websites) under advertising network by Hi-Media for a given period. The value of the contracts depends on a cost per thousand for advertising displays and on the volume purchased by the advertiser. For the contracts completed as of the closeout date, the sales recognized in the income statement correspond to the value of the contract, or else to the value of the number of page views if that is less than that defined in the contract. For the contracts in progress on the closeout date, the turnover recognized on the closeout date corresponds to the value of the number of pages actually seen on the closeout date, if that number of pages is less than or equal to that provided for in the contract.

The sale of performance-based operations calls for a number of clicks on the advertisers’ advertising messages. Only the clicks are valued, and hence are recognized as turnover.

The sponsorship contracts provide for package arrangements as remuneration for the inclusion of the logotype or any other distinctive mark of the advertisers in the medium concerned, under the Hi-Media advertising network. The package is recognized as revenue on a straight-line basis over the duration of the services.

The sale of direct marketing operations calls for selection and availability of addresses of voluntarily listed surfers, as well as for dispatch thereof by Hi-Media, in the interest of carrying out direct marketing operations. Hi-Media also offers companies an opportunity for installing programs for recruiting prospects or improving customer loyalty, as well as for complete management of their databases. The sales are recognized at the time of dispatch of the messages or of realization of the technical service.

The sale of direct marketing operations also includes "natural" listing services of the internet sites in the search engines. In this case, the revenue corresponds to the advisory services for which the customers are charged.

Finally, the sale of direct marketing operations includes paid listing services corresponding to traffic generation on the customer's site, and this is remunerated on a performance basis (generally "clicks"). The revenue corresponds to the amount invoiced to the customer for technical and advisory services, as well as the purchase of keywords on the search engines, if that is done by Hi-Media acting as "principal". The fact is that for certain contracts, the amount recognized as revenue is limited to the company's technical and advisory services insofar as the company, by virtue of the indicators contained in the EITF 99-19 standard, is regarded as acting as agent.

1.18.2. Micropayments

The micropayment activity corresponds to two distinct activities:

203 - sale to surfers of codes that can then be used on various sites to access paid content, - Availability of interactive voice servers and technical service regarding the corresponding invoicing. In the first case, the revenue corresponds to the retransfers made by the telephone operators in connection with telephone numbers or SMS used by the surfers for buying the codes from the company. Hi-Media will then remunerate the website on which the code has been entered. In the second case, Hi-Media intervenes to provide the customer with a technical service, and the revenue will be determined by finding the difference between the amount received from the telephone operators and the retransfers granted to the partners.

1.19. Operating profit

The operating profit is obtained by deducting, from the current operating profit, the charges for stock options and free shares and the other non-current charges. The other non-current charges include, if such cases arise, depreciation of consolidated goodwill, capital gains or losses on disposal of consolidated companies or of activities, restructuring charges, the charges connected with exceptional terminations of contracts, and any other charge or income of non-recurrent nature.

1.20. Earnings per share

The Group presents basic and diluted earnings per share for its ordinary shares. The basic earnings per share are calculated by dividing the earnings attributable to the Company’s ordinary shareholders by the weighted average number of ordinary shares in circulation during the period adjusted by the number of treasury shares held. The net income per diluted share is determined by adjusting the earnings attributable to the holders of the ordinary shares and the weighted average number of ordinary shares adjusted by the number of held treasury shares in circulation for the effects of all dilutive potential ordinary shares, which include the stock options and the free shares allocated to the members of the management and to staff.

2. Management of financial risks

The Group is exposed to the following risks connected with use of financial instruments: - credit risk - liquidity risk - market risk

This note provides information concerning the group's exposure to each of the above risks, its objective, its policy and procedures regarding assessment and management of the risks, as well as its management of the capital. Quantitative information appears in other places in the consolidated financial statements.

It is incumbent on the Board of Directors to define and supervise the framework for the Group's risk management.

2.8. Credit risk

The credit risk represents the risk of financial loss for the Group in case a customer or a counterpart to a financial instrument fails to meet its contractual obligations. That risk results mainly from accounts receivable and from short-term investment securities.

The Group's exposure to the credit risk is influenced mainly by the individual characteristics of the customers. The statistical profile of the clientele, particularly including the risk of default by activity sector and country in which the customers carry on their activity, has no real influence on the credit risk. There is no concentration of the credit risk, whether with respect to the customers or geographically speaking.

The Group has defined a credit policy under which the solvency of each new customer is the object of an individual analysis before it can benefit from the payment and delivery conditions offered by the Group. To that end, the Group uses external ratings, when they are available. Customers not meeting the Group demands with respect to solvency may not conclude any transactions with the Group unless they pay for their orders in advance.

204 At the time of each closeout, the Group determines a depreciation level representing its estimate of the losses incurred in connection with the accounts receivable and other debtors, as well as relative to investments. The said depreciation is determined by an analysis of individualized significant risks.

To limit the credit risk, the Hi-Media SA company has taken out credit insurance. The credit insurance contract concluded is based on three services: prevention, collection, indemnification.

Prevention: the credit insurer provides continuous supervision and informs the company in case of a deterioration of its customers' solvency.

Collection: in case of bad debts, the company forwards the legal proceedings consisting of all documents proving the claim to the insurance company, which intervenes with the defaulting debtor and sees to collection by friendly agreement or by way of legal proceedings.

Indemnification: the company will be indemnified in case of established insolvency or of judicial proceedings affecting the debtor. In the other cases, if it has been impossible to make collection within the waiting period defined in the contract, the insurance company will also provide indemnification for the claim. The insurance company bears 75% of the amount, including all taxes, namely 90% of the amount excluding taxes. The indemnification period is approximately from one to five months. To benefit from such coverage, the subsidiaries must first obtain the insurer's coverage approval customer by customer.

In addition, the companies Allopass SNC, Mobile Trend SAS and Mobile Works SAS have taken out factoring contracts under which the main risks and advantages have been transferred to the factoring company (cf. note 1.9).

The maximum exposure to the credit risk on the closeout date is indicated in the following notes: - Note 15 - Paid accounts and notes receivable - Note 16 - Other current assets Other current assets - Note 17 - Cash and cash equivalents

2.9. Liquidity risk

The liquidity risk corresponds to the risk that the Group runs of experiencing difficulties in honoring its debts when they mature. The Group's approach to managing the liquidity risk is to make sure, insofar as possible, that it will always have sufficient liquidity to meet its liabilities when they come due, whether under normal or "tense" conditions, without incurring any unacceptable losses or impairing the Group's reputation.

The Group has established management of the cash flow needs aimed at optimizing its return of cash flow on investment. This excludes the potential impact of extreme circumstances, such as natural disasters, that one cannot reasonably predict.

Moreover the Group has concluded, for certain subsidiaries, factoring contracts enabling it to obtain short-term financing and to be more flexible in daily management of its liquidity.

As of 31 December 2009, the remaining contractual expiration due dates of the financial liabilities are analyzed as follows (including the interest payments):

Contractual cash (in thousands of euros) Book value less than 1 year 1-5 years More than 5 years flows

Credit line 11 32 992 35 195 10 032 25 163 -

Credit line 2 400 432 308 124 -

AdLink’s Vendor loan 12 195 13 166 664 12502 -

205 Hi-Media SA factor2 debt 5 446 5 555 5 555 - -

Accounts payable 72 067 72 067 72 067 - -

Taxation and social liabilities 17 190 17 190 17 190 - -

Liabilities connected with the holdings 5 376 5 376 5 376 - -

Other liabilities 1 120 1 120 1 120 - -

Bank overdrafts - - - - -

Total 146 786 150 101 112 312 37 789 -

1 Interest rates used to determine the future contractual cash flows are based on 3-month Euribor as of December 31, 2009. 2 The factor debt will be extinguished once all of the customers have paid their debts to the factor or once the factor retransfers the unpaid invoices to Hi-Media.

2.10. Market risk

2.10.1. Exchange risk

The exchange risk corresponds to the risk that variations of exchange rates will affect the Group's earnings or the value of the financial instruments held. The purpose of exchange risk management is to manage and keep exposure to the market risks within acceptable limits, while optimizing the profitability / risk tandem.

The Group is exposed to an exchange risk:

- in connection with the activity of its subsidiaries based in the United States (Group Hi-media USA Inc.) and in Sweden (Hi-media Sales and Hi-media Network) and in the UK (Hi-media Ltd), which are fully consolidated, as well as, to a smaller extent, - in connection with the activity carried on by its subsidiaries consolidated on the basis of the equity method in China (Hi-Media Chine) and in Brazil (Hi-Media Brazil), - on the incomes received through the micropayment activity from outside the Euro Zone (mainly Latin America and United States),

For Group Hi-media USA Inc, the Swedish subsidiaries, Hi-media Ltd and Hi-media China and Hi-midia Brazil, all of the purchases and sales, investment expenditures, and assets and liabilities of those subsidiaries as well as the related goodwill are denominated, respectively, in Dollars, Swedish Crowns, Pounds Sterling, Yuan and Real.

Concerning the micropayment activity, the currency of the payments to the websites can differ from the currency of the income received.

The Group's investments in its subsidiaries having a functional currency other than the euro are not covered insofar as the Group considers such exchange positions as long term by their very nature.

in thousands of euros Sensitivity to the exchange rate USD SEK GBP

Total assets 58 321 18 143 2 536 Total liabilities (4 365) (3 195) (7 088) Net position 53 956 14 948 (4 552)

Assumptions regarding variation against the euro 1% 1% 1%

Impact on the P&L (13) 24 (6)

Impact on shareholders' equity (12) 22 (54)

206

2.3.2. Interest rate risk

Following acquisition of a significant syndicated borrowing in 2007 (cf. note 19 - Borrowings and financial debts), the Group adopted a policy of making sure that at least 50% of the exposure to interest rate variations on borrowings bears on fixed rates.

To that end, some interest rate swaps were taken out at the start of 2008.

2.11. Categorization of financial instruments

CATEGORIES 31 Dec. 2009 Assets Debts at Value in Fair value Loans and Derivative in thousands of euros available for amortized balance Fair value by earnings receivables instruments sale cost sheet Other financial assets 625 300 - - - 925 925 Accounts receivable - - 72 927 - - 72 927 72 927 Other current assets - 12 618 - - 12 618 12 618 Current financial assets 19 - - - - 19 19 Cash and cash equivalents 19 485 - - - - 19 485 19 485 Financial assets 20 129 300 85 545 - - 105 974 105 974

Borrowings and financial liabilities - - - 51 216 - 51 216 51 216 Non-current liabilities - - - - 897 897 897 Accounts payable - - - 72 067 - 72 067 72 067 Other current debts and liabilities - - - 23 686 - 23 686 23 686 Financial liabilities - - - 146 969 897 147 866 147 866

Fair value hierarchy

The financial instruments valued at fair value after their first posting are organized into a hierarchy in the following way: Level 1: the short-term investments are estimated at their fair value by income statement in reference to quoted prices on active markets. Level 2: the derivative instruments are valued by reference to observable parameters on active markets. Level 3: the financial assets available for sale are recognized at their fair value based on valuation techniques using figures that are not based on observable parameters on active markets.

3. Consolidation base

3.8. List of consolidated entities

% held % held Date of Date of directly and directly and financial Corporate name Country creation or indirectly on indirectly on year acquisition 31/12/2009 31/12/2008 closeout

Companies created Hi-media Belgium SPRL Belgium 100% 100% 09.03.00 31.12

207 Hi-media Portugal Lda Portugal 53.90% 53.90% 31.10.00 31.12 Hi-Pi SARL France 100% 100% 13.05.02 31.12 Hi-media Advertising Web SL Spain 100% 100% 29.12.06 31.12 HPMP SPRL Belgium 100% 100% 17.09.07 31.12 HPME SA Belgium 100% 100% 08.05.08 31.12 Allopass Scandinavia Sweden 100% - 30.09.09 31.12 Allopass Mexico SRLCV Mexico 100% - 17.07.09 31.12

Companies acquired Hi-media Network AB Sweden 100% 100% 11.12.00 31.12 Hi-media Deutschland AG Germany 100% 100% 30.04.01 31.12 Europermission SL Spain 50% 50% 25.03.04 31.12 Hi-Midia Brasil SA Brazil 25% 25% 18.07.05 31.12 Hi-media China Limited China 49% 49% 01.05.06 31.12 Allopass SNC France 100% 100% 08.02.06 31.12 L’Odyssée Interactive SAS France 88% 88% 31.05.06 31.12 Hi-media Sales AB Sweden 100% 100% 04.09.06 31.12 Groupe Hi-media USA Inc. USA 100% 100% 27.11.07 31.12 Vivat SPRL Belgium 34% 34% 14.03.08 31.12 Bonne Nouvelle Editions SARL France 100% 100% 06.06.08 31.12 Mobile Trend SAS France 100% 100% 13.06.08 31.12 Mobile Works SAS France 100% 100% 13.06.08 31.12 Netherland 100% - 31.08.09 31.12 Hi-media Nederland BV (ex. AdLink Internet Media BV) s Hi-media Italy Srl (ex. AdLink Internet Media Srl) Italy 100% - 31.08.09 31.12 Hi-media Network Internet España SL (ex. AdLink Internet Spain 100% - 31.08.09 31.12 Media S.L.U.)

Hi-media Ltd (ex. AdLink Internet Media Ltd.) England 100% - 31.08.09 31.12 AdLink Media Deutschland GmbH Germany 100% - 31.08.09 31.12 Net:Dialogs GmbH Germany 100% - 31.08.09 31.12

On August 31, 2009, the Group acquired the online advertising network activity of the AdLink Internet Media AG group.

In order to accompany growth of micro-payments in Europe and the world at large, the Allopass Scandinavia and Allopass Mexico subsidiaries were created on 30 September 2009 and 17 July 2009, respectively.

During the financial year, the legal structure of the group also underwent reorganization: - Hi-media Advertising Web SL absorbed Publicidad y Marketing SL. - Hi-media Belgium absorbed Publicityweb SPRL on 29 April 2009, effective retroactively to 1 January 2009. - The name and legal form of Eurovox SAS on 31 December 2008 was changed on 10 April 2009; Eurovox SAS became Allopass S.N.C. - The corporate names of Hi-media Scandinavia AB and Hi-media Local AB were changed on 12 May 2009 and 6 May 2009, respectively: Hi-media Scandinavia AB became Hi-media Network AB and Hi-media local AB became Hi-media Sales AB. - The corporate name of Fotolog inc. was changed on 22 May 2009: Fotolog Inc. became Group Hi-media USA Inc. Group Hi-Media USA accommodates two establishments/activities: Fotolog (website) and Allopass USA, attached, respectively; to the Publishing and Micropayment segments.. - AdLink Internet Media SAS was the object of a universal transmission of assets to Hi-media France on 29 December 2009 - AdLink Media Belgium was merged with Hi-media Belgium SPRL on 1 July 2009

All subsidiaries are consolidated on the basis of full consolidation, with the exception of Europermission SL, which is consolidated by the proportional method, and, of Hi-media China Limited, Hi-Midia Brasil SA and Vivat, which are consolidated on the basis of the equity method.

208

3.9. Acquisition of the media activity of the AdLink group

3.9.1. Financial statements at the time of joining the group

Assets Liabilities in thousands of euros Net value in thousands of euros Value

Intangible fixed assets 15 Share capital 26 Tangible fixed assets 504 Issue premium 1 014 Long-term investments 69 Earnings, reserves, retained earnings -5 616 Total fixed assets 588 Shareholders’ equity -4 576

Provisions - Accounts receivable 18 377 Financial liabilities - Other receivables 662 Accounts payable 23 160 Liquid assets 1 307 Other liabilities 2 350

TOTAL ASSETS 20 934 TOTAL LIABILITIES 20 934

3.9.2. Analysis of the acquisition

On 6 July 2009, Hi-media signed a draft agreement with a view to acquiring 100% of the voting rights of AdLink Media Deutschland GmBH, the online advertising network activity of the AdLink Internet Media AG group.

This transaction was completed on 31 August 2009, following legal restructuring resulting in the transfer of the securities of the companies in the Adlink group involved in the advertising network activity to a legal entity called Adlink Media Deutschland GmbH, created in connection with the acquisition.

Determination of the valuation In order to calculate the relative value of the two companies, a multi-criteria analysis was used. For Hi-media, the following were taken into consideration: - Recent market performance, - Target prices established by analysts covering the security, - Price-earnings ratios of a sample of comparable companies and - A more fundamental valuation based on the available discounted cash flows.

For AdLink Media Deutschland G mBH, the following were taken into consideration: - Price-earnings ratios and - The available discounted cash flows.

Cost of business combination AdLink Media Deutschland GmbH was transferred to Hi-media in accordance with the following terms of the draft agreement: - Delivery of 3,940,000 shares with a nominal value of € 0.10 and valued in the consolidated accounts at € 4.29 per share (price of the Hi-media share on August 31, 2009), issued by Hi-media as a capital increase measure with a premium on conveyance of € 15.9 million equal to the difference between the value of the conveyances, i.e., € 16.9 million, the nominal capital increase of € 394,000, and the related costs, net of tax effect, for € 0.5 million. - Delivery of 795,000 shares held internally by Hi-media, valued in the consolidated accounts at € 4.29 per share (price of the Hi-media share on 31 August 2009). The historic cost of those treasury shares in the consolidated account was higher than the share price as of 31 August 2009, the difference have been booked in deduction of issue premium. - Deferred payment in the form of a seller’s loan worth € 12.2 million. This loan, whose due date has been fixed as 30 June 2011, is a bullet loan and bears annual interest of 3.7% for the first 12 months and 5% for the remaining period.

209 - Payment, following completion of the financial statements on 31 August 2009 of the entities acquired and of their audit, of an adjustment aimed at covering/redeeming the operating capital need of the group of companies acquired. This adjustment has been fixed at € 3.9 million in favor of Hi-media.

On completion of this transaction, AdLink Internet Media AG holds 10.7% of the share capital in Hi-media. On 6 October 2009, AdLink Group transferred its Hi-media shares to the parent company, United Internet Group, one of Europe’s principal suppliers of Internet access.

Definitive allocation of the acquisition price will be carried out within 12 months following the acquisition.

An allocation of the AdLink goodwill to the different cash generating units identified has been realized as at the date of acquisition depending on the relative value of each cash-generating unit. Those relative values have been determined using the method of discounted future net cash flows.

The calculation of consolidated goodwill before final allocation looks as follows:

in millions of euros Book value of the assets and of the liabilities -4,6

Adjustments of fair value of the assets, liabilities and contingent liabilities on the date of acquisition: Deferred tax credits 0,9 Total adjustments of the fair value of the assets, liabilities and contingent liabilities 0,9

Fair value of the assets acquired, and of the liabilities and contingent liabilities assumed -3,7

Consolidated goodwill before final allocation 34,4

Business combination cost 30,7

4. Revenue

The breakdown of revenue by activities looks as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008 79 928 58 480 Advertising network 94 647 74 356 Micropayments 10 457 10 212 Publication of Internet sites - 12 710 -7 377 Elimination of the intragroup transactions between activities

Revenue 172 323 135 671

The revenue received from publishing Internet sites represents sales after deducting the advertising network commissions. In 2009, total revenue on the group’s site came to 9 % of the total.

5. Payroll charges

The breakdown of the payroll charges between salaries, social security charges and provision for end-of-career indemnities looks as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

210 Salaries 16 534 15 547

Social security charges 6 464 5 837

Provision for end-of-career indemnities 27 20

Payroll charges 23 025 21 404

This increase is mainly explained by the integration of AdLink’s staff as of September 1, 2009.

The staff varied as follows:

31 Dec. 2008 Incoming Outgoing 31 Dec. 2009 France 220 69 62 227 Foreign 170 194 85 279 Staff 390 263 147 506

6. Valuation of stock options and free shares

6.8. Charge of the period

The payroll charges relative to the options and free shares entered in the income statement in accordance with the IFRS 2 standard break down as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Valuation of stock options and free shares 1 774 2 606

Takeover of the Fotolog Inc. retention plans 442 805

Payments based on shareholders’ equity instruments 2 216 3 411

6.9. Future charge

6.9.1. Payments based on shares settled by issue of Hi-Media shares

This charge is calculated at each closing depending on reaching objectives and on turnover. To determine the future expected charge on those plans, parameters are updated at each closing following past performance and management’s best estimates of the future performance. As a result, the final parameters could be different from the ones initially estimated. Consequently, the Group has decided to present this future charge in a sensitivity table.

Charges for 2010 Turnover

0% 5% 10% 15% 20% 25% 30% 35%

20% 1 907 1 700 1 494 1 288 1 082 876 669 463

30% 2 008 1 792 1 576 1 360 1 144 928 712 496

50% 2 210 1 974 1 738 1 503 1 267 1 031 796 560 Probability of

70% 2 412 2 157 1 901 1 646 1 391 1 135 880 625 achieving objectivesachieving

211 90% 2 614 2 339 2 064 1 789 1 514 1 239 964 689

100% 2 715 2 430 2 146 1 861 1 576 1 291 1 006 722

Charges for 2010 to 2013

Turnover

0% 5% 10% 15% 20% 25% 30% 35%

20% 2 847 2 531 2 215 1 898 1 582 1 266 950 633

30% 3 014 2 679 2 344 2 009 1 675 1 340 1 005 671

50% 3 346 2 974 2 603 2 231 1 860 1 488 1 117 745

70% 3 678 3 270 2 862 2 453 2 045 1 637 1 228 820 objectives

90% 4 011 3 566 3 120 2 675 2 230 1 785 1 340 895 Probability of achieving Probabilityachieving of 100% 4 177 3 713 3 250 2 786 2 323 1 859 1 396 932

6.9.2. Payments based on shares settled in cash

These payments based on shares and settled in cash correspond to the option plan awarded by Fotolog Inc. to its employees prior to its acquisition by Hi-Media. Those plans were taken over by Hi-Media as payments based on shares settled in cash and valued, pursuant to IFRS 2, on the basis of the Fotolog Inc. share value as determined during the acquisition.

The future charge to be recognized on those plans looks as follows:

Cumulative from 1 year to 5 in thousands of euros at 1 year future charges years

Payments based on shares settled in cash 347 325 22

7. Other non-current income and charges Non-current charges relating mainly to the costs linked with restructuring costs or termination of service contracts (premises, sites, marketing studies), notably as part of the acquisition of AdLink.

8. Financial net income

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Investment proceeds 46 174

Interest on borrowing - 1 822 -2 028

Other financial charges - 191 -414

Financial net income - 1 967 -2 268

212

9. Tax on earnings

The tax charge breaks down as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Current taxes -3 540 -2 348

Deferred taxes 275 1 620

Tax (charge)/Proceeds -3 265 -728

Effective tax rate (%) 32 % 10 %

The difference between the effective tax rate and the theoretical tax rate is to be analyzed as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Tax rate in France 33,33% 33.33%

Theoretical tax (charge) / proceeds -3 393 -2 384

Elements of comparison with the effective rate

Earnings charged to carryover losses not previously recorded - -

Recognition of deferred tax credits on losses carried over 746 1 236

Difference of tax rate between countries 175 174

Permanent difference and other elements -793 246

Real tax (charge)/proceeds -3 265 -728

Effective tax rate 32 % 10 %

The charge for 2009 current taxes consists mainly of the taxes on profits.

As of 31.12.2009, the effective tax rate results mainly from: - the recognition of deferred tax credits for losses carried over arising during the prior financial years, valued so that the said deferred tax credits are consumed during the coming three years. - permanent differences, particularly as concerns the charge connected with the free shares allocated.

Hi-Media France SA, MobileTrend SAS, Mobile Works SAS, Hi-Pi SARL and Bonne Nouvelle Editions SARL have been consolidated for taxation purposes.

10. Goodwill

During the year, the group recorded the following in particular: - The goodwill of the AdLink subsidiaries for 34.3 M€ (cf. 3.9 - Acquisition of the media activity of the AdLink group) - The variation of the value of the Fotolog Inc. goodwill denominated in dollars, for -2.0 M€.

213 Var. in thousands of euros 31 Dec. 2008 Conversion Transfer Increases Decreases 31 Dec. 2009 perimeter Goodwill 144 709 -2 043 34 324 - 2 984 - 179 974

Depreciation -9 969 ------9 969

Net goodwill 134 740 -2 043 34 324 - 2 984 - 170 005

10.8. MobileTrend

Pursuant to IFRS 3, Hi-media allocated the Mobile Trend acquisition price to the fair value of the assets, liabilities and contingent liabilities which are identified. The assets, liabilities and contingent liabilities identified below meet the criteria of IFRS 3.37: their fair value can be determined in a reliable manner and forms the source for future cash receipts or payments in the case of assets other than intangible assets and liabilities other than contingent liabilities.

Hi-media has identified an intangible asset representing the technologies developed by the technical teams of Mobile Trend before the acquisition for € 101,000. Since the market value of this technology is non-observable, this asset was valued using the reproduction cost method (development charges necessary for reconstitution of such technology). The associated deferred tax liability taken into account comes to € 34,000 and finds its counterpart in goodwill. Taking the nature of this asset into account, Hi-media states that obsolescence is foreseeable, mainly due to technological change. In addition, Hi-media is already capitalizing the development costs, and regards these assets as having a finite useful life. The useful life of the technologies identified at Mobile Trend has been set at 5 years, in accordance with the accounting principles applied by the Group in relation to the depreciation duration of technologies identified during the acquisition.

In accordance with IFRS 3, Hi-media investigated the existence of any other asset, liability or contingent liability not valued by Mobile Trend. With regard to the commercial relationships of Mobile Trend, they mainly consist of relationships with the users of mobile services which are neither contractual nor nominal and whose durability is not demonstrable, and therefore not measurable. Furthermore the trademark is not linked to the purchase deed and does not have any separate identity of its own. Hence the commercial relations and the trademark will not be posted separately from goodwill.

10.9. Fotolog

During the acquisition of Fotolog, the goodwill generated by this acquisition had been assigned to CGU Fotolog Inc. which was regarded as an independent CGU within the publishing sector. Under the principles of IAS 36.80 and IAS 36.87, the following factors prompted us to re-assign the goodwill of Fotolog Inc. as of 31 December 2009:

- Following the application of IFRS 8 since 31 December 2008, the consolidated financial statements present sector-based information for the following 3 sectors: advertising, micropayments and publishing. Fotolog Inc. now releases cash-flows within these 3 segments. - Every legal entity generating independent cash flows corresponds to a CGU attached to one of these 3 sectors. - The range of activities acquired in the purchase of Fotolog includes use of the Fotolog site within the publishing sector, but also provides activity flows to the advertising and micropayment sectors, notably via the additional margin generated by other group subsidiaries that sell Fotolog products as a network and/or payment method. - The acquisition of Fotolog also brought in know-how and commercial relations which will allow the group to establish its micropayment activities on the American continent. As a result, the group considered it necessary to reallocate the initial goodwill of Fotolog Inc. to CGU Allopass USA, Allopass International, Hi-media Spain and Hi-media France. This goodwill reallocation has been calculated as of 31 December 2009, using the discounted cash flows method with the same parameters as those used in the impairment tests.

10.10. Evaluation of the recoverable value of the goodwill on 31.12.2009

Within the framework of the check on the value of the goodwill, a depreciation test was carried out on 31.12.2009 in application of the procedure established by the group. That procedure, relying mainly on the method of discounted future net cash flows, consists in determining the recoverable value of each entity generating its own cash flows.

214 The main assumptions for determination of the value of the cash generating units are as follows: - method for valuation of the cash generating unit: value in use, - number of years for which the cash flows are estimated and projected to infinity: 4 years, - long-term growth rate: 2.5% (2.5 % in 2008), - discounting rate Europe: 8.6 % (9 % in 2008), - discounting rate USA: 8.1 % (9 % in 2008), - Fotolog revenue growth rate between +35 % et +15 % per year on the period 2010-2013 - The assumptions used to determine the recoverable value of Allopass US reflect substantial growth, as the business is just beginning.

The discounting rate corresponds to the weighted average cost of capital. It has been calculated by the company on the basis of internal information for the debt and the shareholders’ equity, and of analysts’ data for the beta, the risk-free rate and the risk premium. The long-term growth rate results from an average of the estimates of a representative sample of analysts’ notes. The result of the said depreciation tests did not lead on 31.12.2009 to recognition of any value losses.

Moreover an analysis of the sensitivity of the calculation to the variation of the key parameters (discounting rate and long- term growth rate) did not point to any likely scenario under which the recoverable value of a cash generating unit would become less than its book value. The result of this sensitivity analysis is presented below.

Discounting rate Long-term growth rate

Rate variation where Rate variation where carrying amount carrying amount In thousands of euros Actual rate Actual rate equals to book value equals to book value (basis point) (basis point)

Hi-media France 8,6 % >1 000 pts 2,5 % - 250 pts

Hi-media Belgique 8,6 % + 190 pts 2,5 % - 250 pts

Hi-media Allemagne 8,6 % + 240 pts 2,5 % - 250 pts

Hi-Media Portugal 8,6 % >1 000 pts 2,5 % - 250 pts

Hi-media Local (Sweden) 8,6 % + 560 pts 2,5 % - 250 pts

Hi-media UK 8,6 % + 320 pts 2,5 % - 250 pts

Hi-media Italie 8,6 % >1 000 pts 2,5 % - 250 pts

Hi-media Pays-Bas 8,6 % + 980 pts 2,5 % - 250 pts

Hi-media Espagne 8,6 % > 1 000 pts 2,5 % - 250 pts

Allopass 8,6 % > 1 000 pts 2,5 % - 250 pts

Allopass USA 8,1 % + 320 pts 2,5 % - 250 pts

Fotolog 8,1 % + 310 pts 2,5 % - 250 pts

L’Odyssée Interactive 8,6 % > 1 000 pts 2,5 % - 250 pts

Hi-Pi / Bonne Nouvelle Editions 8,6 % > 1 000 pts 2,5 % - 250 pts

215

10.11. Net book value of goodwill assigned to each UGT

The net book value of the goodwill assigned to each UGT (Unit Generating Cash Flow) looks as follows:

31 Dec. Var. 31 Dec. in thousands of euros Conversion Transfer Increases Decreases 2008 perimeter 2009

Hi-media France 1 693 - 6 595 401 - - 8 689

Hi-media Belgium 967 - 2 722 - 66 - 3 755

Hi-media Germany 77 - 8 833 - - - 8 910

Hi-Media Portugal 82 - - - - - 82

Hi-media Local (Sweden) 15 174 - - - - - 15 174

Hi-media UK - - 763 - - - 763

Hi-media Italy - - 4 761 - - - 4 761

Hi-media Netherlands - - 1 971 - - - 1 971

Hi-media Spain - - 8 679 2 259 - - 10 938

Advertising Sector 17 993 - 34 324 2 660 66 - 55 043

Allopass 34 899 - - 6 905 2 918 - 44 722

Allopass USA - - - 6 710 - - 6 710

Micropayment Sector 34 899 - - 13 615 2 918 - 51 432

Fotolog 60 181 -2 043 - -16 275 - - 41 863

L’Odyssée Interactive 20 302 - - - - - 20 302

Hi-Pi / Bonne Nouvelle Editions 1 365 - - - - - 1 365

Publishing Sector 81 848 -2 043 - -16 275 - - 63 530

Net Consolidated Goodwill 134 740 -2 043 34 324 - 2 984 - 170 005

Mobile Trend earn-out was booked as the best estimate of management as of that date. This estimate is subject to discussions with sellers.

216 11. Intangible fixed assets

The fixed assets in progress arising during the period correspond either to developments of new products (for instance, new internet sites), or to development of new software items supporting the activity, as well as to the costs incurred in connection with creation of an electronic wallet.

The gross value of the intangible fixed assets has changed as follows:

in thousands of euros 31 Dec. 2008 Var. perimeter Transfer Increases Decreases 31 Dec. 2009

Software and licenses 6 788 55 4 404 1 867 329 12 785

Trademarks 4 574 - - - - 4 574

Customer relations 657 - - - - 657

Fixed assets in progress 3 152 - - 4 404 2 068 816

Other 269 1 - 31 - 300

Total 15 440 56 - 3 966 329 19 132

The cumulative amortization and depreciation of the intangible fixed assets change as follows:

in thousands of euros 31 Dec. 2008 Var. perimeter Transfer Increases Decreases 31 Dec. 2009

Software and licenses 2 694 40 - 2 901 174 5 462

Trademarks ------

Customer relations 191 - - 82 - 273

Fixed assets in progress ------

Other 100 - - - - 100

Total 2 986 40 - 2 983 174 5 835

The net values of the intangible fixed assets change as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Software and licenses 7 324 4 093

Trademarks 4 574 4 574

Customer relations 384 466

Fixed assets in progress 816 3 152

Other 200 169

Total 13 298 12 454

217 The net book value of the intangible fixed assets having an indefinite use duration assigned to each UGT looks as follows:

in thousands of euros UGT Assets 31 Dec. 2009 31 Dec. 2008

Allopass SNC Allopass trademark 384 384

L'Odyssée Interactive SAS jeuxvideo.com trademark 884 884

Hi-Media SA Hi-Media trademark 73 73

Fotolog Inc. Fotolog trademark 3 124 3 233

Total 4 465 4 574

12. Tangible fixed assets

The gross value of the tangible fixed assets changes as follows:

in thousands of euros 31 Dec. 2008 Var. perimeter Transfer Increases Decreases 31 Dec. 2009

Fittings & installations 769 229 -188 225 74 960 Office equipment and computer 5 948 174 -3 1 335 1 580 5 874 hardware Furniture 336 416 191 95 33 1 006

Total 7 053 819 - 1 655 1 687 7 840

The cumulative amortization and depreciation of the tangible fixed assets change as follows:

in thousands of euros 31 Dec. 2008 Var. perimeter Transfer Increases Decreases 31 Dec. 2009

Fittings & installations 117 - -7 143 70 183 Office equipment and computer 3 618 94 -38 1 255 549 4 379 hardware Furniture 182 221 45 106 79 474

Total 3 917 315 - 1 504 698 5 037

218 Changes in the net values of the tangible fixed assets look as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Fittings & installations 777 652 Office equipment and computer 1 495 2 329 hardware Furniture 531 155

Total 2 803 3 136

13. Deferred taxes

13.8. Recognized deferred tax credit and liabilities

The details concerning the deferred taxes posted to earnings are presented in Note 9 above.

The sources of the net deferred tax credit and liabilities recognized as of 31 December 2009 look as follows, presented on a net basis by taxation entity:

NET DEFERRED TAX CREDITS

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Tax loss carryovers 13 585 13 204

Intangible fixed assets -2 151 -1 624

Other timing differences -689 -1 916

Deferred tax credits 10 744 9 664

NET DEFERRED TAX

LIABILITIES in thousands of euros 31 Dec. 2009 31 Dec. 2008

Intangible fixed assets 785 472

Other timing differences -157 215

Deferred tax liabilities 628 687

The deferred tax liability recognized as at 31 December 2009 in connection with the CVAE tax amounts to 133 k€.

219 13.9. Unrecognized deferred tax credits

As of 31.12.2009, the unrecognized deferred tax credits consisted mainly of the following losses which are subject to indefinite carryover (as base): - 1 347 k€ for Hi-Media USA Inc. group, - 352 k€ for Bonne Nouvelle Editions S.A.R.L., - 255 k€ for Hi-Pi S.A.R.L. making a total of 1 954 k€, representing an unrecognized deferred tax credit of 674 k€.

14. Other financial assets

As of 31.12.0909, the other financial assets broke down as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Securities treated on an equity basis 670 364

Other securities 332 300

Deposits and sureties 606 282

Total 1 608 946

Other securities consist of € 300,000 for the Group’s holding in the capital of the company which publishes the information site rue89.com. The group has a 7.5 % interest. That holding is classified under assets available for sale.

15. Trade notes and accounts receivable

All of the accounts receivable are at less than one year. The accounts receivable include the invoices transferred under a factoring contract concluded in 2001 by Hi-Media, for which the company has taken out credit insurance in advance, and hence has not transferred the credit risk to the Factor. The amount of the receivables transferred on 31.12.2009 came to 5,291 k€. The depreciation corresponds mainly to due receivables for which recoverability represents a risk as of 31.12.2009. The invoices to be established correspond mainly to the retransfers to be received by the telephone operators, for the months of November and December, in connection with the “micro-payment” activity, which were not invoiced for as of 31.12.2009. The accounts receivable include the invoices transferred by Hi-media SA under a factoring contract without transfer of the credit risk. The value of these receivables transferred comes to 6,093 k€ as of 30 June 2009.

On the other hand, the contractual conditions of the factoring contracts (concluded in 2008) of Allopass SNC, Mobile Trend SAS and Mobile Works SAS make it possible to transfer the main risks and advantages connected with the transferred receivables, and hence to take them off the balance sheet.

The fact is that, pursuant to IAS 39, the receivables transferred to third parties (factoring contract) are removed from the Group’s assets when the risks and advantages associated with them are substantially transferred to such third parties and if the factoring company in particular accepts the credit risk, the interest risk and the collection period (note 1.9).

The credit risk corresponds to the risk of non-recovery of the receivable. Under the deconsolidating contracts of the entities in the group, the credit risk is borne by the factoring company. This means that the group is no longer exposed to the risks of collection on the invoice, and, as a result, the disposal is regarded as being without recourse.

The rate and collection period risk corresponds to the transfer of the financial risk linked with extending the duration of the recovery of the receivables and to the carrying cost relating thereto. Under the deconsolidating contracts of the group entities, the commission rate for a given disposal is adjusted exclusively subject to EURIBOR and the time it took to settle the previous disposal. The financing commission is paid at the start of the period and is not subsequently modified.

220 The risk of technical dilution is linked with non-payment of the receivable due to shortcomings observed in services rendered or commercial disputes. For every deconsolidating contract signed by the group entities, the guarantee reserve does not cover the general risks or the risk of delayed payment; the basis of the guarantee is constituted to cover the debits (credit notes etc.) resulting from technical dilution.

The accounts receivable that are derecognized in this way in accordance with IAS 39 under the terms of factoring contracts come to 18.3 M€ as of 31 December 2009.

The cash available under these contracts comes to 7.9 M€ as of that date.

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Customers 51 589 39 056

Invoices to be established 20 469 8 758

Depreciation - 2 140 -1 045

Trade notes and accounts receivable 69 918 46 769

The book value indicated above represents the maximum exposure to the credit risk for this heading.

The anteriority of the commercial receivables as of the closeout date breaks down as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Not due 56 099 31 999

0-30 days 4 444 4 101

31-120 days 6 344 7 783

120-360 days 1 689 2 446

More than one year 1 342 440

Other current assets. 69 918 46 769

The depreciation of commercial receivables developed as follows during the financial year:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Depreciation: balance on January 1 1 045 723

Period funding 260 397

Posted loss of value - 388 - 75

Perimeter variation 1 223 -

221 Depreciation: balance on December 2 140 1 045 31

16. Other current assets

All of the other current assets are at less than one year. The prepaid charges correspond mainly to the share of marketing charges invoiced for and overheads relative to the period after 31.12.2009.

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Fiscal and company assets 9 927 6 041

Current accounts 553 537

Prepaid charges 1 782 1 040

Other 2 138 3 101

Other current assets 14 400 10 719

The book value indicated above represents the maximum exposure to the credit risk for this heading.

17. Cash and cash equivalents

in thousands of euros 31 Dec. 2009 31 Dec. 2008

"OPCVM" fund shares 1 000 2 024

Available reserve at factor’s 7 864 11 440

Liquid assets 10 621 5 366

Cash and cash equivalents 19 485 18 830

The book value indicated above represents the maximum exposure to the credit risk for this heading.

18. Shareholders’ equity

For the variation of the group’s consolidated shareholders’ equity, refer to page 147 above.

The par value of the Hi-Media share is 0.10 €.

Management of the shareholders’ equity concerns that equity as defined in the IFRS. It consists mainly in deciding on the level of the present or future capital as well as on payout of dividends.

The shareholders’ equity breaks down into the share of minorities and the group share. The share of minorities consists of the share held by non-group shareholders of L’Odyssée Interactive and of Hi-Media Portugal. It varies mainly as a function of changes in those subsidiaries’ reserves.

222 The group share shareholders’ equity consists of the share capital of Hi-Media S.A., reduced by the internally held shares, as well as the reserves and earnings accumulated by the group.

The group wants to have the employees participate in the capital by allocations of stock options and of free shares.

19. Borrowings and financial debts

On 7 November 2007 Hi-Media obtained a syndicated credit line amounting to 41.5 M€.

That line breaks down into one line of 14 million euros (tranche A1), having a duration of five years, and another line amounting to 27.5 million euros (tranche A2), with a duration of six years.

As of 31 December 2007, tranche A1 and tranche A2 had been drawn on in full.

Tranche A1 made it possible to repay the borrowing of 5 million euros taken out on 30 June 2006 and to partially refinance the price of acquisition of Hi-Media Local AB, formerly Medianet.

Tranche A2 enabled the group to finance the acquisition of Fotolog and of Mobile Trend group, as well as to launch some new projects.

By means of an additional clause to the contract for loans of 41 M€ dated 7 November 2007, the Group has requested that financing aimed specifically at covering the cost of acquiring the AdLink Media Deutschland shares and the restructuring costs associated with this transaction be put in place. This financing (tranche A3) comes to 6 M€.

Balance sheet balance on

31 Dec. 2008 Issue in thousands of euros Non-current Current Expiration Effective rate currency

Syndicated loan - Tranche A1 5 562 2 932 EUR 2012 Euribor 3 months + 1.10 %

Syndicated loan - Tranche A2 13 657 4 800 EUR 2013 Euribor 3 months + 1.35 %

Syndicated loan - Tranche A3 4 470 1 571 EUR 2013 Euribor 3 months + 1.75 %

AdLink seller loan 12 195 154 EUR 2011 3.7 % to 5.0 %

Financing connected with factoring - 5 446 EUR Indet. Euribor 3 months + 0.8 %

Bank overdrafts - - EUR 2009 fixed

Other Borrowings 129 298 EUR/USD 2011 fixed/variable

Total 36 014 15 202

The following were concluded pursuant to the borrowing contract signed in October 2007:

- an initial interest rate swap fixed payer / variable recipient 3-month Euribor starting in February 2008 (due in February 2012) for a notional amount of 9.8 M€, - a second interest rate swap fixed payer / variable recipient 3-month Euribor starting in July 2008 (due in July 2013) for a notional amount of 13.7 M€.

223 The effectiveness tests that were performed showed that hedging accounting could be applied to these two swaps starting in the second half of the year 2008. Thus the variation of fair value of these swaps was posted as a reduction of shareholders’ equity, with, as counterpart, a non-current liability (cf. Erreur ! Source du renvoi introuvable.).

20. Non-current Provisions

20.1. Details concerning non-current provisions

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Provisions for risk 580 593

Provision for charges 28 96

End-of-career indemnities 374 87

Non-current Provisions 982 776

20.2. Staff benefits

The evaluation of commitments is determined by the method of projected credit units.

The commitments have been calculated in accordance with the provisions contained in the advertising collective bargaining agreements for Hi-Media and Hi-Pi, the collective bargaining agreement SYNTEC for l’Odyssée Interactive, Mobile Trend and Allopass, the journalists’ collective bargaining agreement, and the collective bargaining agreement of the special information press for BNE. The trend of the provision relative to the group’s retirement commitments looks as follows:

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Discounted value of the obligations as of 1 January 87 315

Cost of services rendered and financial cost 27 20

Actuarial losses/(gains) posted to shareholders’ equity 17 -228

Perimeter variation 243 -

Discounted value of the obligations as of December 31 374 87

The perimeter variation corresponds to the integration of the AdLink entities. The corresponding obligations have been calculated in accordance with the specific legal requirements of each country.

The assumptions used in evaluation of the retirement commitments at the close are as follows:

2009 2008 2007 Discounting rate 4.75% 5.00 % 4.25 % Rate of future increase of salaries 2.50% 2.50 % 2.50 % Retirement age (Executives) 65 years 65 years 65 years

224 Retirement age (Non-Executives) 62 years 62 years 62 years Survival table INSEE F 2005 INSEE F 2005 INSEE F 2000

21. Non-current liabilities

The non-current liabilities consist mainly of the fair value of the hedging financial instruments concluded in connection with the borrowing (cf. Erreur ! Source du renvoi introuvable.).

22. Other current debts and liabilities

All other debts and liabilities are due at less than one year.

in thousands of euros 31 Dec. 2009 31 Dec. 2008

Taxation and social liabilities 17 190 15 040

Debts on fixed assets 192 592

Prepaid income 451 1 068

Other liabilities 6 054 1 076

Other current liabilities 23 887 27 536

23. Financial information 23.1. Pro forma income statement

23.1.1. Preliminary note

According to the AMF instruction 2007-05 dated 2 October 2007 issued in application of article 222-2 of the AFF general rules and regulations, the provision of pro forma financial information appears necessary in the event of a significant change to an issuer’s situation following a given transaction, such as a variation of more than 25 % in one or more indicators of its activity.

The pro forma financial information refers to the consolidated income statement dated 31 December 2009.

The pro forma income statement given below is presented in thousands of euros and reflects the effect of the acquisition of the media activity of the AdLink group on Hi-media’s consolidated income statement if the said acquisition had taken place on 1 January 2009.

The pro forma income statement: - is presented solely by way of illustration and does not necessarily constitute an indication of the operating results or of the financial situation of the group which emerged from the acquisition, such as they would have been presented if the acquisition had been made on January 1, 2009; - does not constitute an indication of the future operating results or of the future financial situation of the group which emerged from the acquisition; - is based on preliminary estimates and assumptions which Hi-Media considers reasonable.

23.1.2. Retained conventions

The pro forma consolidated accounts dated 31 December 2009 have been prepared as if the acquisition had taken place on 1 January 2009 on the basis of Hi-Media’s audited consolidated accounts dated December 31 and the audited accounts of the media subsidiaries of AdLink group as of 31 December 2009.

225 Since the functional currencies of the entities acquired may be different from the euro, the relevant income statements have been converted using the average exchange rate observed over the period.

23.1.3. 2009 pro forma consolidated income statement

Hi-media as Hi-media pro

published Pro forma forma adjustments in thousands of euros 2009 2009 Revenue 172 323 34 096 206 419 Expenses invoiced by the media -109 272 -24 451 -133 723

Gross margin 63 051 9 645 72 696

Purchases -19 571 -6 074 -25 645 Payroll charges -23 025 -6 463 -29 487 Transfers to and write-backs from depreciation and provisions -3 939 -976 -4 915 Current operating profit 16 516 -3 867 12 649 (before valuation of stock options and free shares) Valuation of stock options and free shares -2 216 - -2 216 Other non-current income and charges -2 520 -1 203 -3 724

Operating profit 11 780 -5 071 6 709

Cost of indebtedness -2 079 - -2 079 Other financial income and charges 111 -78 34

Net income of the consolidated companies 9 812 -5 148 4 664

Share in the earnings of the companies treated on an equity basis 372 - 372

Earnings before tax of the consolidated companies 10 185 -5 148 5 036

Taxes -3 265 7 -3 257

Net income of the consolidated companies 6 920 -5 141 1 779

23.1.4. Notes on the 2009 pro forma consolidated income statement

The pro forma adjustments presented above correspond to the consolidated income statements of the Media entities of the AdLink Group for the period from 1 January 2009 to 31 August 2009. Within the framework of production of those pro forma accounts, Hi-media group chose to restate the revenue and gross profit realized during the first quarter of 2009 and concerning significant website contracts lost at the end of 2008. The impact of those adjustments represents a decrease of 1.9 M€ in revenue and 0.6 M€ in gross profit. An interest cost of 305 k€ has also been added to take account of additional interest on the Adlink vendor’s loan if it had been booked as of 1 January 2009.

226 23.2. Detailed Hi-Media & AdLink income statement

The following table shows the respective contributions of Hi-media and AdLink to the 2009 Group income statement:

in thousands of euros Hi-media AdLink Eliminations Consolidated Revenue 154 232 18 519 -403 172 348 Expenses invoiced by the media -97 289 -12 336 333 -109 292

Gross margin 56 943 6 183 -70 63 056

Purchases -16 436 -3 131 -10 -19 577 Payroll charges -20 121 -2 988 79 -23 030 Transfers to and write-backs from depreciation and provisions -3 837 -102 - -3 939 Current operating profit 16 548 -39 - 16 510 (before valuation of stock options and free shares) Valuation of stock options and free shares -2 216 - - -2 216 Other non-current income and charges -2 114 -407 - -2 520

Operating profit 12 219 -445 - 11 774

Cost of indebtedness -2 079 1 - -2 079 Other financial income and charges 111 - - 111

Net income of the consolidated companies 10 251 -445 - 9 806

Share in the earnings of the companies treated on an equity basis 372 - - 372

Earnings before tax of the consolidated companies 10 623 -445 - 10 178

Taxes -3 437 173 - -3 265

Net income of the consolidated companies 7 186 -272 - 6 914

227 24. Segment information

24.1. Earnings by activity

Advertising Micropayments Publishing Eliminations Total

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

Revenue 79 928 58 480 94 647 74 356 10 457 10 212 (12 710) (7 377) 172 323 135 671 including share generated on the group’s sites 7 981 9 661 4 724 2 419 10 457 10 212 (7 725) (7 175) 15 437 15 117

Gross margin 31 196 24 782 22 564 19 966 9 291 10 175 63 051 54 923

Operating profit by activity 14 000 10 161 10 595 10 713 (744) 655 23 852 21 529

Profitability rate 18 % 17 % 11 % 14 % -7 % 6 % 14 % 16 % Restatement of the margin generated by the Publishing entities over the other entities in the group (2 394) (2 898) (376) (121) 2 771 3 019 - -

Operating profit by restated activity 11 606 7 263 10 219 10 592 2 027 3 674 23 852 21 529

Profitability rate 15 % 12 % 11% 14 % 19 % 36 % 14 % 16 %

Unallocated income and charges (7 336) (6 372) excluding stock options and free shares Operating profit before valuation of 16 516 15 157 stock options and free shares Valuation of stock options and free shares (2 216) (3 411)

Operating profit 11 780 9 368

Financial net income (1 968) (2 268)

Share of earnings, equity basis 372 51

Taxes (3 265) (728)

Net income 6 920 6 423

Group share 6 495 6 079

24.2. Total assets

Sales of advertising Micropayments Publishing Eliminations Total spaces

2009 2008 2009 2008 2009 2008 2009 2008 2009 2008

144 101 102 (27 (20 305 237 Total assets 73 896 82 113 86 916 148 855 213 630) 930) 289 292

Hi-Media SA, while having mainly assets connected with the advertising space selling activity, also bears the holding company’s infrastructures. The connected assets have been left in the advertising space sales sector.

228 24.3. Revenue by geographical area

France Rest of World Eliminations Total 2009 2008 2009 2008 2009 2008 2009 2008 159 110 (39 616 172 135 Revenue 52 660 33 855 (8 561) 279 378 ) 323 671

25. Stock option plan and allocations of free shares

25.1. Stock options

Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. Total 1 2 3 4 5 6 7 8 9 10

30 June 21 April 21 April 21 April 21 April 21 April 25 April 25 April 25 April April 24, Meeting date 99 00 00 00 00 00 03 03 03 2008

Total number of shares - 2 850 - 1 700 2 866 - 70 000 - 89 000 50 000 216 416 available for subscription

Including the number of shares that can be - 2 850 - - - - 50 000 - - - 52 850 subscribed to by the authorised agents Including the number of shares that can be - - - - 2 866 - 20 000 - 67 000 - 89 866 subscribed to by the leading ten employee allocatees 12 Beginning time for exercise 1 July 5 May 15 Sept. 3 Nov. 14 Dec. 23 Oct. 26 May 10 July 19 Dec. January of the options 04 02 02 02 02 03 05 05 08 07 12 30 June 4 May 14 Sept. 2 Nov. 13 Dec. 23 Oct. 25 May 10 July 14 May Date of expiration January 09 10 10 10 10 11 13 13 18 15

Subscription price (in euro) 0,01 8,06 9,93 8,20 5,31 0,59 0,33 0,35 1.14 1.81 (2)

Exercise procedures (3) A B B B B B A A A C

Number of shares 22 879 - - - - - 430 000 350 000 34 500 - 837 379 subscribed to on 31/12/09

Options cancelled during ------the period

Remaining options - 2 850 - 1 700 2 866 - 70 000 - 89 000 50 000 216 416

229 (1) Options allocated to the employees present in the Company to date, the employees having left the Company being unable to retain the benefit of such options.

The number of options and the weighted average of the exercise prices are as follows:

2009 2008

Weighted Weighted Options average Options average exercise price exercise price

Options in circulation at the opening 255 732 1.19 210 311 0.92

Options allocated during the period - - 50 000 1.81

Options exercised during the period 34 316 1.01 4 579 0.01

Options cancelled during the period - - - -

Options in circulation at the close 216 416 1.23 255 732 1.19

Options subject to exercise at the close 216 416 1.23 230 731 1.12

The parameters adopted for valuation of the stock option plans granted after 7 November 2002 are as follows:

12 January Date of the Board of Directors’ meeting 26 May 03 10 July 03 05 19 Dec. 2008

Number of options allocated 500 000 350 000 150 000 50 000

Fair value of an option on the date of allocation 0.36 0.36 1.45 0.06

Fair value on the date of allocation 179 424 125 034 217 270 3 000

Exercise price of the option 0.33 0.35 1.14 1.81

Anticipated volatility of the option price 212% 208% 184% 51%

Anticipated lifetime 4 years 4 years 4 years 2 years

Dividend expected on the options - - - -

Option lapse rate adopted - - - -

Risk-free interest rate adopted 3.11% 2.80% 2.94% 3.51 %

230 25.2. Allocations of free shares

Plan no. 1 Plan no. 2 Plan no. 3 Plan no. 4 Plan no. 5 Plan no. 6 Plan no. 7

Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Meeting date 2005 2005 2005 2005 2005 2005 2005 Dec. 22, Jan. 20, Feb. 23, July 13, Sept. 11, Nov. 2, Dec. 28, Date of the Board of Directors’ meeting 2005 2006 06 2006 2006 2006 2006

Total number of shares allocated 154 000 94 000 275 600 144 500 143 000 10 000 60 000

Including the number of shares that can be subscribed to - 7 500 168 000 10 000 100 000 - - by the authorised agents Including the number of shares that can be subscribed to - 37 500 38 000 47 500 - 10 000 30 000 by the leading ten employee allocatees

Number of cancelled shares 22 000 7 000 10 800 9 000 4 000 - 1 000

Number of shares that can be definitively allocated 132 000 87 000 264 800 135 500 139 000 10 000 59 000 31 Dec. 2009

Number of shares that can be definitively allocated ------

Share price on the date of the board meeting 6.05 7.75 9.99 7.03 7.63 6.36 7.33

Non-transferability discount ------

Fair value of the free share 6.05 7.75 9.99 7.03 7.63 6.36 7.33

231

Plan no. Plan no. Plan no. Plan no. Plan no. Plan no. 8 Plan no. 9 10 11 12 13 14

Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Nov. 2, Meeting date 2005 2005 2005 2005 2005 2005 2005

March 1, May 14, June 14, July 23, Nov. 8, Dec. 19, April 22, Date of the Board of Directors’ meeting 2007 2007 2007 2007 2007 2007 2008

Total number of shares allocated 510 000 8 000 14 500 15 000 28 500 103 000 80 000

Including the number of shares that can be subscribed to 170 626 - - - - - by the authorised agents

Including the number of shares that can be subscribed to 138 666 - - - 5 000 40 000 10 000 by the leading ten employee allocatees

Number of cancelled shares 121 358 - 3 000 - 7 000 - 30 000

Number of shares that can be definitively allocated 388 642 8 000 11 500 15 000 21 500 57 000 - 31 Dec. 2009

Number of shares that can be definitively allocated - - - - - 12 000 50 000

Dec. 19, March 1, May 14, June 14, July 23, Nov. 8, 2009 April 22, End of acquisition period 2009 2009 2009 2009 2009 Dec. 19, 2010 2011 March 1, May 14, June 14, July 23, Nov. 8, Dec. 19, April 22, End of retention period 2011 2011 2011 2011 2011 2011 2012

Share price on the date of the board meeting 6.70 7.15 7.38 7.52 6.94 5.45 5.20

Non-transferability discount ------Yes

Fair value of the free share 6.70 7.15 7.38 7.52 6.94 5.45 4.28

232

Number of cancelled shares - 29 000 - - - 244 158

Non-transferability discount Yes Yes Yes Yes Yes

Fair value of the free share 3.52 2,33 1.38 1.58 3.58

233 26. Off balance sheet commitments

26.1. Commitments received

During the acquisition of Fotolog Inc. (which became Group Hi-media USA Inc.), of the Mobile Trend group and of the online advertising network entities of the AdLink Internet Media AG group, Hi-Media benefits from a clause guaranteeing the liabilities.

The shares retained by United Internet are still subject to a commitment to retain shares received by way of remuneration for the AdLink Internet Media AG conveyance for a period of 1 year to end on 31 August 2010 (on 6 October 2010, the AdLink Internet Media AG group transferred its Hi-media shares, representing 10.7% of the group’s capital to its parent company, United Internet group). This retention commitment could end before this date, notably if a third party were to make a bid for Hi-media or if Hi- media were to either alter the substance of its assets or merge with another entity. In addition, United Internet undertakes not to increase its holding beyond 21% for the next two years. In the event that Hi-media decides on a capital increase before the end of the "vendor’s loan”, AdLink AG has committed itself to subscribing (by offsetting the debt which becomes due) to the capital increase under the following conditions: - If the share issue price is equal to or lower than 3.63 €, AdLink AG will acquire the shares not subscribed by the public within the limits of the principal amount of the debt. - If the capital increase is carried out with retention of preferential subscription rights and the price of the share is higher than € 3.63, AdLink AG has committed itself to subscribing to this capital increase up to its preferential subscription rights and within the principal amount of its debt.

26.2. Commitments given

In connection with the acquisition of MobileTrend, Hi-Media committed itself to paying an additional price in 2010 based on a multiple of the pre-tax earnings of MobileTrend group for financial year 2009.

The lease signed 15 May 2008 concerning the premises of the French activities of the Group represents a commitment of 1.6 M€ per year (not index-linked) until 15 December 2017.

26.3. Covenants

Conclusion of the syndicated credit line mentioned in Erreur ! Source du renvoi introuvable. above requires Hi-Media to respect covenants based on the following financial ratios:

As of 31 December 2009, Hi-Media was in compliance with those covenants.

26.4. Pledges

Within the framework of the syndicated credit line acquired by Hi-Media (cf. Note 19 on Borrowings and Financial Debts, above), Hi-Media pledged, to the benefit of the participating credit institutions, the securities of its subsidiaries Allopass SNC, L’Odyssée Interactive SAS and Hi-Pi SARL ,as well as the Hi-Media SA business.

Hi-Media Deutschland pledged K€ 20 worth of short-term investment securities in order to guarantee payment of its rentals.

26.5. Disputes

By a document dated 20 July 2007, SPORT24 served a writ on HI-MEDIA on the main issue to appear before the Commercial Court of Paris on the grounds of termination of talks and of an alleged impossibility of concluding an advertising network contract with another service provider, and applying for 180 k€. Hi-Media is resisting those applications and is applying for 240 k€ in a cross-application.

234

In addition, in July 2007, Allopass and Eurovox companies were the object of a tax reassessment bearing on financial years 2005 and 2006. The cost of the said reassessment should be covered by the guarantee of liabilities obtained in connection with acquisition of Eurovox group.

In December 2005, Hi-Media served writs on the companies Winch Hébergement and Ieurop to obtain forced execution of the advertising network contract signed on 11 March 2005 between Hi-Media and Winch Hébergement for marketing the advertising space of the website ifrance.com. The Commercial Court rejected Hi-Media’s application and fined it 28k€. Hi-Media has appealed that decision.

There is a dispute between Hi-Media and the former partners of a company acquired by it. That dispute bears on the conditions concerning payment of the additional price provided for in the acquisition contract. Hi-media was fined 43 k€ by the court of first instance but has appealed that decision.

There was a dispute between the Hi-media USA Inc. group (formerly Fotolog Inc.) and Fotomedia concerning alleged illicit use of a patent. The cost of this dispute, if any, should be covered by the guarantee of liabilities concluded in connection with acquisition of the Hi-media USA Inc. group.

A commercial dispute existed between Hi-media and La Poste regarding execution of an advertising network contract. A settlement, taken into account for the financial year, was reached with La Poste in December 2009.

Some industrial tribunal disputes have arisen with former employees disputing the legitimacy of their dismissals. The company has set aside the provisions it considers necessary in the light of its judgement of the justification for the plaintiffs’ demands.

27. Events occurring since December 31, 2009

On 26 February 2010, Hi-media increased its holding from 7.5% to 9.35% in the capital of Rue89 by subscribing to a capital increase for 150 k€.

On 9 March 2010, Hi-media Belgium Sprl increased its stake from 34.3% to 44% in the capital of Vivat by acquiring 13 additional shares from some other shareholders for an amount of 1 euro.

28. Transactions between affiliated parties

28.1. Compensation paid to the members of the management organs

This compensation includes the remuneration paid to the Chairman of the Board of Directors, the attendance fees received by the directors who are individuals and are not paid by the Company (3 directors), and the compensation paid to the Chief Operating Officer.

Thee compensation and benefits relative to the Group’s senior managers came to 1,064 k€ on 31 December 2009, compared to 1,394 k€ one year earlier.

28.2. Transactions with subsidiaries

Hi-Media SA invoices its subsidiaries for the holding company expenses as well as for the trademark expenses, which are eliminated in the consolidated financial statements.

28.3. Other affiliated parties

During 2009, no other significant transactions were carried out with:

- shareholders holding a significant amount of voting rights in the capital of Hi-Media S.A., - members of the management organs, including the directors, - entities over which one of the main senior managers exercises control, joint control or notable influence, or in which he holds a significant amount of voting rights.

235 CHAPTER 21 – ADDITIONAL INFORMATION

21.1. SHARE CAPITAL

21.1.1. AMOUNT OF THE SUBSCRIBED CAPITAL

Amount of the capital: 4,426,999.50 €, paid up in full (as of the date of the present document)

Number of shares: 44,269,995 shares, all of the same class

Par value: 0.1 €

21.1.1.1 Authorised capital not issued The Combined Shareholders’ Meeting held on 30 April 2009 delegated, for a period of 26 months, its power to the Board of Directors for deciding on an issue of equity warrants during a public offer period in a maximum amount of 600,000 euros.

The Combined Shareholders’ Meeting held on 30 April 2009 delegated, for a period of 26 months, its power to the Board of Directors for deciding on an issue, with maintenance or suppression of the shareholders’ preferential application right, of ordinary shares of the company and of securities offering access by any means, immediately or eventually, to the company’s ordinary shares, whether existing or to be issued. The maximum amount of the increases of the share capital, immediate and/or eventual, that could be carried out by virtue of these delegations was set at 700,000 euros.

Finally, pursuant to articles L. 225-129-1, L. 225-129-6 and L. 225-138-1 of the Code of Commerce and to article L. 3332-18 of the Labour Code, the Combined Shareholders’ Meeting held on 30 April 2009 authorised the Board of Directors, for a period of twenty-six months, to increase the share capital by issue of shares reserved, directly or through a company joint investment fund, for the members of a company savings plan as provided for in articles L. 3332-18 et seq. of the Labour Code, which would be open to the employees of the company and of the companies connected with it in the meaning of article L. 225-180 of the Code of Commerce. The maximum par value of the capital increase resulting from issue of the shares that could be issued in this way was set at eighty thousand (80,000) euros.

21.1.1.2 Comparison of the numbers of shares in circulation on the opening and on the closing date of the financial year Number of shares on the opening date of the financial year (1 January 2009): 39 806 458 Number of shares on the closing date of the financial year (31 December 2009): 44,269,995

21.1.2. SHARES NOT REPRESENTING THE CAPITAL None.

21.1.3. SHARES HELD BY THE ISSUER OR BY ITS SUBSIDIARIES As of 31 December 2009, Hi-media S.A. held 239,153 treasury shares.

Moreover, under the liquidity contract, Hi-media held 103,518 treasury shares as of 31 December 2009.

21.1.4. SECURITIES THAT ARE CONVERTIBLE, EXCHANGEABLE OR PAIRED WITH WARRANTS None.

21.1.5. INFORMATION CONCERNING THE CONDITIONS GOVERNING ANY RIGHT OF ACQUISITION AND/OR ANY OBLIGATION ATTACHED TO THE CAPITAL THAT IS SUBSCRIBED BUT NOT PAID UP, OR CONCERNING ANY UNDERTAKING AIMED AT INCREASING THE CAPITAL None.

21.1.6. INFORMATION CONCERNING THE CAPITAL OF ANY GROUP MEMBER THAT IS THE OBJECT OF AN OPTION OR OF A CONDITIONAL OR UNCONDITIONAL AGREEMENT PROVIDING FOR MAKING IT SUBJECT TO AN OPTION None.

236 21.1.7. HISTORY OF THE SHARE CAPITAL The following table traces the development of the company’s capital during the last three financial years, until 31 December 2009:

Date Nature of the Number of Nominal increase of Premium on shares Par value of Amount of the Cumulative operation securities the capital the share share capital number of issued shares Cash capital 49,000 4,900 14,910 30,715,729 14/06/07 0.1 3,071,572.90 increase1 Cash capital 882,577 31,598,306 23/07/07 88,257.70 0.1 3,159,830.60 increase Capital increase by 7,414,852 49,753,658 39,013,158 22/11/07 741,485.20 0.1 3,901,315.80 conveyance in kind Cash capital 35,000 3,500 8,050 39,048,158 19/12/07 0.1 3,904,815.80 increase1 Cash capital 132,000 13,200 39,180,158 17/01/08 0.1 3,918,015.80 increase2 Cash capital 87,000 8,700 39,267,158 21/01/08 0.1 3,926,715.80 increase2 Cash capital 264,800 26,480 39,531,958 06/03/08 0.1 3,953,195.80 increase2 Cash capital 135,500 13,550 39,667,458 22/07/08 0.1 3,966,745.80 increase2 Cash capital 139,000 13,900 39,806,458 24/09/08 0.1 3,980,645.80 increase2 Cash capital 457,642 4,026,410 40,264,100 13/03/09 45,764.20 0.1 increase2 Cash capital 9,579 40,273,679 13/03/09 957.90 0.1 4,027,367.90 increase1 Cash capital 19,500 1,950 40,293,179 30/06/09 0.1 4,029,317.90 increase2 Cash capital 21,816 40,314,995 30/06/09 2,181.60 0.1 4,031,499.50 increase1 Cash capital 15,000 1,500 40,329,995 31/08/09 0.1 4,032,999.50 increase2 Capital increase by 3,940,000 394,000 44,269,995 31/08/09 0.1 4,426,999.50 conveyance in kind 1 Exercise of equity warrants 2 Definitive allocation of free shares

21.2. ACT OF CONSTITUTION AND ARTICLES OF INCORPORATION

21.2.1. BUSINESS PURPOSE (ARTICLE 3 OF THE ARTICLES OF INCORPORATION) Hi-media has the following purpose: design, realisation, development, production, publication and marketing of all advertising programs, media and spaces, as well as distribution thereof, supply of any services relating to communication techniques on any bases (particularly media and audio-visual) and to advertising, and generally any commercial, industrial or financial operations or operations relating to movables or immovables connected, directly or indirectly, with the business purpose or with any similar or related purposes.

21.2.2. SUMMARY OF THE PROVISIONS CONCERNING THE ADMINISTRATIVE AND MANAGERIAL ORGANS Articles of incorporation Board (articles 18, 19 and 20 of the articles of incorporation): The company is administered by a board consisting of at least three members and of eighteen at most. The directors are appointed by an Ordinary Shareholders' Meeting, which may remove them at any time.

A company employee may be appointed as a director only if his employment contract reflects actual employment. The number of directors connected with the company under an employment contract may not exceed one-third of the sitting directors.

The number of shares that must be owned by each director pursuant to the legal requirements is set at 1.

237 The directors serve for a period of four years, ending at the conclusion of the Ordinary Shareholders' Meeting having ruled on the financial statements for the past financial year and held during the year in which the term expires. Any outgoing director is eligible for reappointment.

A director appointed by the Board of Directors to replace another one retains his position only for the remaining duration of his predecessor’s term.

Board Chairman (article 21 of the articles of incorporation): The Board of Directors elects a Chairman from among its members who are individuals, and determines the duration of his functions, which may not exceed the duration of his term as director. The Chairman of the Board of Directors represents the Board. He organises and directs the Board’s work and reports thereon to the Shareholders’ Meeting.

General Management (article 24 of the articles of incorporation): General Management of the company is provided, on his own responsibility, either by the Chairman of the Board of Directors or by another individual appointed by the Board of Directors and bearing the title of Managing Director, pursuant to a decision by the Board of Directors, which must choose between these two procedures for exercise of General Management. It informs the shareholders of its decision under the regulation conditions.

Managing Director (article 24 of the articles of incorporation): The Managing Director is invested with the most extensive powers for acting in the company’s name under any circumstances. He exercises the said powers within the limits of the business purpose and subject to the ones explicitly assigned by law to the Shareholders’ Meetings and to the Board of Directors.

Internal rules The company has established internal rules organising the operation of the Board of Directors. The said internal rules of the Board of Directors were adopted by the Board at its meeting on 9 November 2005. The main points of the said internal rules are defined in greater detail in section 16.2 of chapter 16 concerning “Operation of the administrative and managerial organ or organs” of the present document.

21.2.3. PRIVILEGES AND RESTRICTIONS ATTACHED TO EACH CLASS OF SHARES The company has issued only ordinary shares, all of the same class.

Each share creates a right to a share, proportional to the amount of capital that it represents, in ownership of the business assets, in the shareout of profits, and in the liquidation surplus.

Distribution of the profits (article 34 of the articles of incorporation) If the financial statements for the financial year, as approved by the Shareholders’ Meeting, show the existence of a distributable profit, the Shareholders’ Meeting decides to enter it in one or several reserves of which it determines the purpose or use, to carry it forward, or to pay it out in the form of dividends.

After having noted the existence of reserves available to it, the Shareholders’ Meeting may decide to pay out amounts deducted from the said reserves. In that case, the decision must explicitly indicate the reserve headings from which the said deductions are made. However, the dividends are to be paid as a priority from the distributable profit for the financial year.

The procedures concerning payment of the dividends are established by a Shareholders’ Meeting or, failing that, by the Board of Directors.

The dividends must be paid within nine months following the end of the financial year.

The Shareholders’ Meeting ruling on the financial statements for the financial year may grant an option to each shareholder, with respect to all or part of the dividend paid or of the interim dividends, between payment of the dividend or of the interim dividends in cash or in shares.

When a balance sheet established during or at the end of the financial year and certified by the auditor(s) shows that the company, since the end of the previous financial year, after setting aside the necessary depreciation and provisions and after deduction of the prior losses, if any, as well as of the amounts to be entered in the reserves in application of law or of the present articles of incorporation, and in the light of the retained earnings, has made a profit, the Board of Directors

238 may decide to pay interim dividends before approval of the financial statements for the financial year as well as determine the amount thereof and the distribution date. The amount of the said interim dividends may not exceed the amount of the profit defined in the present paragraph. If it does, the Board of Directors may not make use of the option described in the above paragraphs.

Double voting right (article 30.2 of the articles of incorporation) A double voting right is allocated to each share paid up in full for which there is proof of an entry in the name of one and the same shareholder for at least two years starting on 21 April 2000.

There are no provisions in the articles of incorporation to the effect that the registered shares allocated free to a shareholder in connection with old shares for which he benefits from a double voting right also benefit from a double voting right.

Any share converted to bearer or of which ownership is transferred loses the double voting right, except for transfer in case of succession, liquidation of community property, or of a donation inter vivos to the benefit of a spouse or of a relative eligible for succession.

21.2.4. ACTIONS FOR MODIFICATION OF THE SHAREHOLDERS’ RIGHTS The shareholders’ rights may be modified under the legal conditions.

21.2.5. HOLDING OF ANNUAL AND EXTRAORDINARY SHAREHOLDERS’ MEETINGS, AND ADMISSION CONDITIONS (ARTICLE 30 OF THE ARTICLES OF INCORPORATION) The Shareholders’ Meetings are called under the conditions laid down in law.

They are held at the registered office or at any other place specified in the meeting notice.

The Shareholders’ Meeting consist of all shareholders, however many shares they may hold, as long as they have been paid up to the extent of the required payments.

The right to take part in the meetings is conditional:

- with respect to the holders of registered shares, on entry of the shares in the shareholders’ name in the company’s ledgers at least five days before the date of the Shareholders’ Meeting;

- with respect to the holders of bearer shares, on the filing, at least five days before the date of the Shareholders’ Meeting, under the conditions laid down in article 136 of the decree of 23 March 1967, at the places indicated in the meeting notice, of a certificate issued by the broker holding their account indicating the unavailability of the shares entered in the account until the date of the Shareholders’ Meeting.

If the shareholder cannot personally attend the meeting, he may choose among the following three possibilities: - grant a proxy to another shareholder or to his spouses, or - vote by correspondence, or - send a proxy form to the company without any indication of mandate, under the conditions laid down in law and in the rules and regulations.

The meetings are chaired by the Chairman of the Board of Directors or, in his absence, by a director specially delegated for that purpose by the Board. Failing all this, the meeting elects its Chairman itself.

21.2.6. PROVISIONS HAVING THE EFFECT OF DELAYING A CHANGE OF CONTROL None.

21.2.7. PROVISIONS RELATIVE TO THE DECLARATIONS OF CROSSING OF THRESHOLDS (ARTICLE 13 OF THE ARTICLES OF INCORPORATION) Any individual or legal entity, acting alone or in concert, that comes to hold – directly or indirectly through one or several legal entities that it controls in the meaning of article 355-1 of law No. 66-537 of 24 July 1966 (article L 233-3 of the Code of Commerce) - a fraction equal to two percent (2 %) of the capital or of the voting rights or any multiple of that

239 percentage must inform the company of the total number of shares or of voting rights that it possesses by registered letter with receipt addressed to the registered office within two weeks following the crossing of one of the said thresholds.

This information obligation applies in the same conditions as the ones set forth above whenever the fraction of the share capital or of the voting rights possessed becomes less than one of the thresholds provided for above.

In case of non-observance of these provisions and at the request of one or of several shareholders holding at least 5% of the capital or of the voting rights, the shares or voting right certificates exceeding the fraction that should have been reported are deprived of the voting right for all shareholders’ meetings held until the end of a period of two (2) years following the date of service of the notification.

21.2.8. PROVISIONS CONCERNING MODIFICATIONS OF THE CAPITAL (ARTICLES 9 AND 10 OF THE ARTICLES OF INCORPORATION) The share capital may be increased, reduced or redeemed under the conditions laid down in law.

240

CHAPTER 22 – IMPORTANT CONTRACTS

Other than the contract concerning acquisition of the company Bonne Nouvelle Editions in 2008 and of the contract concerning acquisition of the AdLink entities in 2009, the company has not concluded any significant contracts except the ones concluded in the normal course of business.

No other contracts have been concluded (other than the ones arising in the normal course of business) signed by any member whatsoever of the group and containing provisions conferring, on any member whatsoever of the group, an obligation or an important commitment for the group as a whole.

241 CHAPTER 23 – INFORMATION COMING FROM THIRD PARTIES – EXPERTS’ DECLARATIONS AND DECLARATIONS OF INTERESTS

None.

242 CHAPTER 24 – DOCUMENTS ACCESSIBLE TO THE PUBLIC

For the duration of validity of the reference document, the following documents (or copies thereof) may, if desired, be consulted at the company’s registered office (15-17 rue Vivienne 75002 Paris) or on the company’s Internet site (www.hi- media.com/himediafi/) or the site of the Financial Markets Authority (www.amf-france.org) with respect to the financial information and the reference documents:

(a) the act of constitution and the articles of incorporation of the issuer; (b) all reports, letters and other documents, historical financial information, evaluations and declarations established by an expert at the issuer’s request part of which is included or mentioned in the reference document; (c) the historical financial information concerning the issuer or, in the case of a group, the historical financial information concerning the issuer and its subsidiaries for each of the two financial years preceding publication of the reference document.

Furthermore, and pursuant to the provisions of articles L. 451-1-1 of the Monetary and Financial Code and 221-1-1 of the general rules of the Financial Markets Authority, the company has established its annual information document mentioning the list of all information published or made public by Hi-media S.A. since 1 January 2009 to comply with the legislative or regulatory obligations concerning financial instruments, issuers of financial instruments and financial instrument markets. That document was published on 13 March 2010 and may be consulted on the Hi-media site.

Finally, to inform its individual shareholders, institutional investors and financial analysts, Hi-media uses the following information vectors: - press releases and financial notices; - the semi-annual report; - the reference document.

Those documents are sent by email, fax or via the post to any person requesting them, and may be consulted on the Internet site www.hi-media.com. Since January 2007, Hi-media has concluded a contract with a professional distributor for distribution of the regulation information in accordance with the transparency directive and the general rules of the Financial Markets Authority as modified by the order of 4 January 2007. Information meetings for financial analysts take place twice a year, on the occasion of publication of the annual and semi- annual results.

The company is available to individual shareholders, institution investors and financial analysts to answer their questions.

Contact: [email protected]

For the year 2010, the anticipated financial communication schedule looks as follows:

Tuesday, 26 January 2010: Announcement of sales figures for the 4th quarter of 2009 Wednesday, 17 March 2010: Announcement of the 2009 annual results Thursday, 18 March 2010: SFAF Meeting Tuesday, 04 May 2010: Annual Shareholders’ Meeting Tuesday, 04 May 2010: Sales for the 1st quarter of 2010 and quarterly information Tuesday, 20 July 2010: Announcement of sales figures for the 2nd quarter of 2010 Tuesday, 31 August 2010: Narrative semi-annual report Tuesday, 31 August 2010: SFAF Meeting Wednesday, 3 November 2010: Sales for the 3rd quarter of 2010 and quarterly information Tuesday, 25 January 2011: Announcement of sales figures for the 4th quarter of 2010

These anticipated dates are subject to modification. To obtain the definitive dates of those events, the reader is invited to consult the site or to contact the company.

243

CHAPTER 25 - Information concerning holdings

The company does not have any holdings in unconsolidated companies that could have a significant effect on judgement of its assets, financial situation or results.

The company’s significant holdings are described in chapter 7 as well as in the appendix (notes) to the consolidated financial statements appearing in section 20.1.2.3 of the present document.

244 Additional documents

A1 – REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS CONCERNING THE CONDITIONS REGARDING PREPARATION AND ORGANISATION OF THE WORK DONE BY THE BOARD OF DIRECTORS AND CONCERNING THE INTERNAL CONTROL PROCEDURES

To the shareholders:

Pursuant to the provisions of article L 225-37 of the Code of Commerce, I have the honour of reporting to you on the conditions regarding preparation and organisation of the work done by your Board of Directors as well as concerning the internal control procedures implemented by the company, and the limitations that your Board of Directors places on the Managing Director’s powers.

On 19 December 2008, the Board of Directors familiarised itself with the Afep-Medef recommendations dated 6 October 2008 concerning the compensation paid to senior managers acting as authorised agents of listed companies, and asked the company to distribute a press release indicating that the company refers to the AFEP-MEDEF Corporate Governance Code for development of the present report. The press release was disseminated on 23 December 2008.

1. CONDITIONS REGARDING PREPARATION AND ORGANISATION OF THE BOARD OF DIRECTORS’ WORK

Composition of the Board

The company is administered by a Board consisting of at least three members and of eighteen members at most. The directors are appointed by an Ordinary Shareholders' Meeting, which may remove them at any time.

The Board of Directors consists of the following:

245

Last name and given name Date of first Date of end of Main function Main function Business address Other mandates and functions exercised in Mandates exercised Management expertise and or corporate name of the appointment term exercised in the exercised outside the any group company outside the group at experience member company company present or during the last five years

A director of: - Hi-media Publicidad y Marketing; - Hi-media Advertising Web In the last 5 years: - Hi-media Portugal; Manager of Laroquette - Hi-media Scandinavia; Musique & Media Shareholders’ - and a member of the Supervisory Board At present: Cyril Meeting ruling of Hi-media Deutschland AG; Manager of the Zimmermann has been on the financial President and Managing Cyril 15/17 rue Vivienne - Hi-media Network Internet Espana SL company Les Créations statements for Managing Director Director of Hi-media company Zimmermann Paris 2ème - AdLink Internet Media SRL (Italie); du 8, of the SPRL 21/12/98 the financial - - Hi-media Ltd; Cyril Zimmermann, since its creation. He is a year ending on - Hi-media Nederland BV member of the graduate of ESC Paris and of 31/12/09 - Net: dialogs GmbH Supervisory Board of IEP Paris. Manager of: Rue89 - Hi-Pi; member of the Board - Bonne Nouvelle Editions; of Directors of Believe - Hi-media Belgium; SA - Allopass -Manager of the group Hi-media USA Inc. In the last 5 years: - member of the David Bernard has exercised Executive Board of the the following functions: A director of: company Intern. André - Assistant Managing Director Shareholders’ Hi-media Local AB; Trigano –André Trigano Group (March Meeting ruling - Hi-media Network Internet Espana SL; - Manager of “les 03 – Sept 05) on the financial - AdLink Internet Media SRL (Italie) Assistant Managing 15/17 rue Vivienne Campéoles”, “Lac et - Assistant Managing Director David Bernard 21/04/00 statements for - -Manager of the group Hi-media USA Inc; Director Paris 2ème Rivières”, and of Hi-Media (Feb 00 – Feb 03) the financial - Hi-media Ltd; “Campasun Servon” - EI Internal Audit Manager year ending on - Hi-media Nederland BV; -permanent (Sept 97 – Feb 00) 31/12/11 - member of the Supervisory Board of Hi- representative of - Mazars auditor (94- Sept 97). media Deutschland AG. “Campéoles” on the Graduate of the EDHEC and Arepos-Vacances DECF. Board of Directors President of Shareholders’ - the EIAA Meeting ruling Valkiria Network SL - Wunderloop on the financial Camino Tomillaron - Buy VIP Co-founder of ADlink Media Michael Kleindl 30/01/09 statements for - 194 - A director of AG the financial 28 230 Las Rozas - Ormigo GmbH year ending on Spain - United Mailsolutions 31/12/08 AG - Cityguide AG IDI mandates: Holder of an MBA from the -IDI Asset Insead, Marco De Alfaro joined Shareholders’ Management SA IDI group at the end of 2004. Meeting ruling - -SORGEM Holding He began his career at FIAT on the financial Marco De Alfaro is IDI represented by Marco 18 avenue Matignon SA group’s holding company, 01/07/08 statements for - Managing Partner of De Alfaro Paris 8ème -ACTEON SA before joining the BCG as a the financial IDI company -LILAS SA consultant for 4 years. He then year ending on -Société des éditions de made LBO investments for 9 31/12/11 presse Affiches years at TCR, and finally Parisiennes investments in the technology

246 -Claude et Goy SA sector for 4 years at NATEXIS -Rivoli Participation PRIVATE EQUITY Mandats Marco De Alafro: -SORGEM Holding -ACTEON SA -World Freight Company Shareholders’ Adidas International Meeting ruling Marketing – De on the financial Prinsenhof – Koningin At present: Now Adidas Sponsorship Adidas Sponsorship - Jocelyn Robiot 02/11/05 statements for - Wilhelminaplein 30 A director of Manager and former business Manager the financial P.O. Box 69001 – 1060 Euprosoft. developer for Havas Sports year ending on CA Amsterdam – 31/12/10 Holland Until January 2010: - Member of the Board of Directors of Pôle Emploi - a director and treasurer of the Medef Shareholders’ international Meeting ruling Formerly Assistant Managing - liquidator, on the financial Director of the MEDEF and - representative of Jean-Charles Simon 02/11/05 statements for - - - Manager of the AFEP and Medef and of the the financial advisor to Denis Kessler at the associations Astas, year ending on FFSA. Apic, Apic Formation 31/12/10 and Stac. Until March 2010: A director of SA ETP (Editions et Services Techniques Professionnels) BV is a director of: - Angie’s List - Sonim Technologies Inc - Vuze.com - YuMe Networks Inc - AppFolio Inc Shareholders’ BV Capital - Experteer GmbH Meeting ruling Management LLC, a - K2 Network Inc on the financial company under At present Managing Director BV Capital, represented by - Managing Director BV - - MoreTV 22/11/07 statements for American law, located of BV Capital Management Jan Buettner Capital Broadcasting GmbH the financial at 600 Montgomery LLC - MrTed Ltd year ending on Street, 43 rd floor, San - Peanutlabs 31/12/12 Francisco, CA 94111 - Pronto Networks, Inc - Sonos Inc - ACE Dragon Enterprises Ltd (WinZone Information Technology Co. Ltd)

247 Board of Directors’ role

The Board of Directors lays down the guidelines for the company’s activity and sees to their implementation. Subject to the powers explicitly assigned to the Shareholders’ Meetings and within the limits of the business purpose, it considers any matter relating to proper operation of the company, and by its decisions it settles the matters concerning it.

Board meetings

The Board of Directors meets whenever required in the company’s interest. The meetings are called by the Chairman.

An attendance sheet is kept, and minutes are established after each meeting.

The Board may make valid decisions only if at least half of its members are present.

The decisions are made by a majority of the members present or represented. In case of a tie vote, the meeting Chairman holds a casting vote.

The Board of Directors makes the checks and verifications that it considers appropriate. Each director receives all information required for performance of his tasks, and may obtain any documents he considers useful.

During financial year 2009, the Board of Directors met twelve times. The average attendance rate for the financial year was 83%.

Board of Directors’ internal rules

Compensation Committee

The Compensation Committee was established on 23 February 2006. It now consists of three members: Jean-Charles Simon, Jocelyn Robiot and Marco de Alfaro (IDI).

Audit Committee

On 13 March 2009, the Board of Directors decided to meet as an Audit Committee at least twice a year. The first Audit Committee meeting was held on 25 January 2010.

2. LIMITATIONS PLACED ON THE MANAGING DIRECTOR’S POWERS

The Managing Director, who is also Chairman of the Board of Directors, acts within the framework of an annual budget determined by the Board of Directors. The Board meets regularly during the year to make sure that the budget is being implemented in accordance with forecasts, and if need be, it queries the Managing Director about the differences noted and issues the recommendations to him required for adapting the budget to the situation.

The Managing Director informs the Board before any establishment of a subsidiary, acquisition of a holding or disposal.

3. PARTICIPATION IN THE MEETINGS

The rules regarding participation in the company’s meetings are specified in article 28 of the articles of incorporation. In particular, there is a double voting right for each share paid up in full for which proof can be provided of a personal entry for at least two years in the name of one and the same shareholder.

4. ELEMENTS THAT COULD HAVE AN EFFECT IN CASE OF A PUBLIC OFFER The Shareholders’ Meeting held on 30 April 2009 empowered the Board of Directors to issue equity warrants during a public offer period in a maximum nominal amount of 600,000 euros. The said delegation was granted for a duration of 26 months, namely until 30 June 2011. The meeting will be requested to renew this authorisation.

248

5. INTERNAL CONTROL PROCEDURES INSTALLED BY THE COMPANY

1. Company’s objectives with respect to internal control procedures

The internal control procedures in effect in the company have the following object:

on one hand, see to it that the management acts as well as the employees’ behaviour comply with the guidelines set for the company’s activities by the corporate organs, by the applicable laws, rules and regulations, and by the company’s internal rules, on the other hand, make sure that the accounting and financial information communicated to the corporate organs, to the company’s shareholders and to the public accurately reflect the company’s activity and situation.

2. Description of the control procedures installed a) Internal control procedures in the financial and accounting domains

SALES (TURNOVER)

In the advertising activity, for sales to be posted it is necessary for a proposal to follow an order form signed by the customer and recorded in the Mediareporting sales administration tool. Sales are recorded in real time via Mediareporting, which is also used in establishing commercial proposals and order forms. This means that the sales team cannot issue proposals or order forms without any trace thereof remaining in this interface. Once the order form has been recorded, the "traffic-managers" schedule the advertising or direct marketing campaign on the distribution tool for advertising objects. That distribution tool dialogues with the sales administration tool and informs it in real time concerning the status of delivery of the campaign.

The Financial Department makes sure that the sales posted do indeed correspond to actual distribution of the campaigns.

At present there is no automatic interface between Mediareporting and accounting.

In the micropayment activity, the company has developed an interface for monitoring the number of transactions carried out by surfers, with detailed indications concerning the amount of each transaction and the kind of payment means used so as to be able to calculate sales in real time. However, that tool provides only an estimate for Hi-media. The final figures, which are binding on all parties, are the ones transmitted by the telephony operators or payment service providers (telecommunications operators’ report concerning the audiotel calls, and the reports by the mobile telephony operators or their intermediaries concerning the SMS+). When the traffic reports sent by the operators are received, comparisons are made between those data and the data coming from the company’s interface. That same tool makes it possible to determine the partner sites on which the codes sold to the surfers have been used, and thus to determine the amount of the retransfers to such partner sites.

In the Publishing activity, sales are generated essentially by the services activities. Hence the check is made upstream within the framework of the agreement and micropayment activities.

Whatever activity sectors may be concerned, calculation of the sales figures by way of the sales administration tools makes it possible to automatically determine the margin level for Hi-media, and hence the level of retransfers to be made to the partners. The fact is that the various mark-ups determined contractually with the partners are entered in those tools. The Accounting Department then checks on the consistency of the charges posted in the light of the sales and invoices received by partners in order to obtain their retransfers (determined by the sales administration tools).

249 CHECK ON COSTS (EXCLUDING RETRANSFER CHARGES CONSIDERED ABOVE)

Each expenditure commitment gives rise to signature of an order form by the person originating the expenditure. To be validated, that order form must be cosigned by the department head, and, beyond an amount of 7,500 euros, by the Managing Director, the Assistant Managing Director or the General Secretary.

The commissions paid to the sales teams are calculated on the basis of sales for month M-1. The Financial Department establishes the calculation of those commissions and makes sure that the criteria for payment of the bonuses have indeed been satisfied.

All of the expense accounts are checked by the Financial Department and are validated by the General Management (Managing Director and/or Assistant Managing Director) or by the sector managers (Advertising Network, Micropayments and Publishing).

FORWARDING SUBSIDIARIES’ INFORMATION

Management control is centralised in Paris. Establishment of the sales made by the fully integrated foreign subsidiaries is carried out in identical fashion among the various countries. In addition, the sales administration tools as well as Hi-media’s advertising campaign distribution tool are established in each country, except with respect to the German subsidiary for the sales administration tool and the subsidiary Hi-media Local AB. The AdLink entities used sales administration tools differing from Hi-media’s, and they have gradually adopted Hi-media’s kind. That migration has been completed. The sales for each country may be consulted in real time in the same way as the French sales figures, by using the same reporting interfaces.

Complete data including sales, costs and an estimate of the simplified income statement are forwarded monthly (about 20 days after the end of the month in question) from each subsidiary to the group’s Management Control Department in Paris, headed by the Chief Administrative and Financial Officer. After analysis, he sends them on to the General Management.

RECEIPTS-DISBURSEMENTS AND CASH MANAGEMENT

A weekly review is made by the accounting managers and is submitted to the Chief Financial Officer concerning the receipts obtained, the ones in progress, reminders and the cases turned over to the lawyers due to late payment. A monthly review is made with the General Management.

The accounting officials make a monthly determination of the payments to be made to suppliers and submit them for checking by the Chief Administrative and Financial Officer.

At the same time, bank reconciliation is carried out at the beginning of each week by the accountants and is submitted to the Chief Administrative and Financial Officers for purposes of internal control and in order to optimise cash management.

The subsidiaries forward weekly cash reports for checking by Central Management and to the Chief Administrative and Financial Officer.

Every week, the accounting officials submit a summary concerning the cash position to the Chief Administrative and Financial Officer. That review is then forwarded to the General Management.

TRANSMISSION OF INFORMATION TO THE BOARD OF DIRECTORS

The complete data concerning the sectors (advertising, micropayments and publishing) and an estimate of the monthly income statement of each group entity are sent, after being checked by the Chief Financial Officer and by General Management, to be members of the Board of Directors at least once every quarter.

At the time of each semi-annual and annual closeout, the financial information is communicated to the shareholders. That financial information is produced by the Financial Department and the Legal Department on the General Management’s responsibility, and is audited by the auditors.

250 b) Other control procedures

CHECKING ON THE FRENCH ACTIVITIES

Bimonthly meetings are held with the managers of each sector (advertising, micropayments and publishing) to review activity, to anticipate or settle possible commercial disputes to avoid any financial impact, and to review commercial development and expenditure commitments.

CHECKING ON THE SUBSIDIARIES

The Managing Director or the Assistant Managing Director makes a monthly review by telephone, and meets every quarter with the foreign subsidiaries to review, with the local managers, the activity and operation of the subsidiary in question.

Significant contracts are submitted for advance approval by the Managing Director or the Assistant Managing Director.

6. RISK MANAGEMENT

6.1 OPERATING RISKS

6.1.1 LOSS OF MARKET SHARE – LOSS OF COMPETITIVENESS Hi-media has to cope with intensive competition in Europe on the online advertising market. Its competitors are not only other independent networks or affiliate networks having rather comparable economic models and profiles, but also the main portals on each market that have developed a network offering vis-à-vis third party sites, not to mention the networks of sponsored links such as Google (by way of its Ad Sense offering), Yahoo Search Marketing (ex- Overture), and MSN, and the network marketing leftovers.

In micropayments, Hi-media is an intermediary between the providers of payment solutions and the sites offering to buy content or access to a paying service. The competition is becoming more intense with the arrival of some new players on the market.

Under those circumstances, to protect and improve its positions on the online advertising market, Hi-media continuously adapts its commercial offering and its rates, and anticipates changes on that market by means of a competition watch in France and abroad by way of its network of subsidiaries in Europe and in the United States.

In micropayments, the optimisation and diversification of payment means as well as adaptations to surfers’ changing behaviour make it possible to contain the competition provided by the other market players.

6.1.2. CORRELATION OF THE ADVERTISING AND MICROPAYMENT MARKETS WITH THE ECONOMIC CYCLE

The advertising market is strongly correlated with changes in the economic cycle.

The micropayment market, still a new one, is based on the same fundamentals as online commerce, but is only partly linked with changes in household consumption in view of the modest amount of the transactions.

In that still uncertain context and despite some encouraging signs of recovery, Hi-media continues to closely monitor the effects of the crisis on its markets, and it could adapt its cost structure in sharply deteriorating conditions. Hi- media is also developing internationally in order to reduce the impact of a crisis that would affect part of its activity markets.

6.1.3. RISK OF IN-HOUSE HANDLING OF SERVICES BY THE SITES The possibility of in-house handling of the advertising network or micropayment functions by sites generating substantial traffic, particularly the major portals and the main theme sites, may represent a risk for Hi-media, both with respect to the attractiveness of its offering vis-à-vis advertisers and in connection with its negotiating power vis-à-vis the providers of payment solutions. This risk mainly relates to players of very significant size, and the majority of such players able to do so have already made this adaptation.

251 The diversification of Hi-media activities in the advertising network activity toward direct marketing and micropayments as well as the strong development of the number of customer sites make it possible to attenuate this risk, as well as the creation of Internet sites and the capital links now existing with certain companies that publish sites.

By developing the synergies among its trades, Hi-media is increasing the level of competence that a customer site should acquire, thus limiting this risk of in-house performance of the network functions and of micropayment solutions.

6.1.4. RATE FLUCTUATION The company could be affected by a sharper decline of the rates charged by the profession, particularly by a lower CPM for its network activity or a decline in the amounts retransferred by the providers of micropayment solutions (particularly telephone operators).

With respect to the advertising network activity, such a decline occurred in 2001 and 2002. Prices then stabilised, and then rose again, before once more falling in 2008 and 2009 with the slowdown on the advertising market. The equilibrium price will vary depending on the growth or the decline of the advertising market in coming years. This price decline is offset by the sustained growth of available advertising spaces (inventories) on the Internet and by the increasing number of advertisers using the Internet medium. The downward pressure on online advertising rates should also be countered by the improved tools for advertising target and exposure aimed at increasing the effectiveness of online advertising. With respect to the amounts of the retransfers granted by the operators of online payment solutions, the prices have developed in a rather favourable way, in the light of the increased volumes handled and of the strong competition reigning among the various operators. However, Hi-media is still exposed to a possible risk of rate changes decided on by those operators. Still, because of the volumes handled, Hi-media enjoys a certain negotiation capacity.

Looking beyond the variation of unit prices of advertising spaces and of email or postal addresses, or the rates of retransfer in connection with its micropayment activity, Hi-media could be affected by intensified competition that might pull down the commission rate obtained by the company in its two trades (advertising and micropayments). The diversification of the offering, on one hand, and the installation of new products and services on the other are aimed at strengthening Hi-media’s differentiation vis-à-vis its competitors, and hence at reducing the pressure on margins.

However, in the presence of strong growth and of developing activities, this pressure remains strong.

6.1.5 Changes in the rules and regulations in effect

Since the company’s business is governed by a certain number of laws, rules or regulations, any modification of the legal or right-of-way provisions that would have the effect of laying additional obligations on the company could affect its activities.

THE AMERICAN REGULATORY ENVIRONMENT

Regulation applicable to copyrights Since 2007, an international agreement concerning the struggle against counterfeits and protection of commercial interests called the “Anti-Counterfeiting Trade Agreement” (ACTA) has been under discussion by the United States, the European Union, Australia, South Korea, New Zealand, Mexico, Jordan, Morocco, Singapore, the United Arab Emirates, Canada, Japan and Switzerland.

That agreement could have the result, in particular, of requiring the publishers of “participative-content sites” to institute an anti-counterfeiting system taking the material form of a strengthened identification system for infringing content, as well as strengthened co-operation with the authorities at international level.

Such a legislative development would imply, at group level, installation of the new anti-counterfeiting technical approaches, as well as creation of an international standard for responding to the authorities’ requests.

252 Note 2. EUROPEAN REGULATORY ENVIRONMENT

Protection of private life and security Directive 2009/136/EC of the European Parliament and of the Council of 25 November 2009 modifying directive 2002/22/EC concerning universal service and users’ rights in connection with electronic communication networks and services, directive 2002/58/EC concerning the handling of personal information and protection of private life in the electronic communications sector, and rule (EC) No. 2006/2004 concerning co-operation among the national authorities responsible for seeing to application of legislation dealing with consumer protection entail a modification of the notion of “personal data” or “personal information” by way of the definition of “location data”:

“location data”: all data handled in an electronic communications network or by an electronic communications service indicating the geographical position of the terminal equipment of a user of an electronic communications service accessible to the public.

This definition again raises the issue of characterisation of the nature of the IP address, thus creating uncertainty about the company’s behavioural targeting activity and concerning the policy for handling the data relating thereto.

In a decision dated 13 January 2009, the Supreme Court of Appeals offered the beginning of a response by deciding that collection of an IP address for the purposes of identifying the author of a violation did not require a declaration of advance processing of automated surveillance. Thus the French court laid down the basis for a contextual characterisation of the IP address as personal information.

Hence one should await a new decision by that highest court to have confirmation of the context required for acknowledgement of the IP address as personal information.

As a function of that decision, the company could be led to revamp and modify its activity and its policy for handling personal information in connection with behavioural targeting.

Protection of minors With respect to protection of minors and in parallel to the “Safer Internet plus” program launched in 2005 at the initiative of the European Parliament and of the Council, the development of private initiatives and the creation of associations and regroupings of Internet service providers could lead to development of a “protective label” outside the legal framework (along the lines of the European agreement signed on 10 February 2009 by 17 Internet players).

The adaptation of certain group activities to comply with the criteria of that label would then be the logical consequence of this new standard.

Payment regulation The European Parliament adopted directive 2007/64/EC of 13 November 2007 "concerning payment services on the interior market [.]”. That directive, which enshrines the principle of the payment establishments, initiated the revamp of the payment system on a European scale.

The group has begun to take steps to obtain approval for its activities as a payment services provider.

NATIONAL REGULATORY CHANGES THAT COULD AFFECT THE BUSINESS

Rules and regulations applicable to the liability of content hosts The First Civil Division of the Supreme Court of Appeals issued a decision-in-principle on 14 January 2010 ruling out the benefit of the specific liability rules relating to content hosts (allowing the host, under certain conditions, to avoid liability in connection with content put on line by a surfer) for operators operating hosting platforms and reserving, for themselves, management and marketing of the advertising spaces of the pages hosted in this way (example: blog platform).

That decision, in France, could represent a risk to the group’s publishing activities and to its advertising strategy, because it would require: - either the inclusion, in the general conditions regarding use of the group’s platforms, of contractual provisions allowing users to remunerate the group for its hosting activities by way of all proceeds resulting from the marketing of the advertising spaces of the pages created by the users,

253 - or the installation of a strict advance check on the messages or blogs created by the users, - or a halt to the marketing of advertising on such bases.

However, this risk must be qualified, since the decision issued by the Supreme Court of Appeals was handed down in connection with the law of 1 August 2000 (prior to the law of 21 June 2004, now applicable with respect to hosts’ liability). Hence one should await a new decision by the Supreme Court of Appeals on the basis of the law of 21 June 2004 before talking about an actual risk. Furthermore, the context in which the decision was handed down could open the way for a restrictive construction of the scope of the text as a function of the presentation of the pages created by users as being or not being an extension of an editorial site of the host.

Rules and regulations applicable to transactions The development of the legislative framework in the context of directive 2007/64/EC of 13 November 2007 "concerning payment services on the interior market [.]” tends to imply a transposition into standards on the legislators’ part of new security criteria.

As an example, the development of the 3D-Secure system by VISA group, its adoption by MASTERCARD, and its gradual implementation by the banking structures in 2008 (which tends to make this security standard for transactions carried out by bank card almost mandatory) could thus be the object of a transposition into standards.

The risk to the group’s activities mainly lies in the needs for quick reaction and for a technical adaptation in the face of changes in legislative constraints, which represents investment costs.

Rules and regulations applicable to the status and supervision of credit institutions The order of 11 September 2008 modifying various regulatory provisions concerning prudential auditing of credit institutions and of investment companies opened the way for a gradual strengthening of supervision of credit institutions, mainly connected with the crisis affecting financial instruments. Hence the rules and regulations applicable to the group’s electronic money activity will experience sharp changes requiring continuous adaptation to the context and follow-up by the group.

6.1.6. DEFAULT ON THE PART OF THE COMPANIES ADTECH AND EDATIS

Having decided to subcontract with AdTech and Edatis for a large part of its technological needs in connection with the advertising network and direct marketing activities, Hi-media is now dependent on the continuity of those two companies’ services.

AdTech is a German company founded in 1998 and based near Frankfurt (www.adtech.de), whose activity consists of marketing its technological solutions (particularly the Helios advertising server). AdTech was acquired by AOL. Edatis is a Paris-based company specialising in the online relational marketing sector. (www.edatis.fr). To the company’s best knowledge, there is no potential conflict of interest that would lead AdTech or Edatis to stop collaboration with Hi-media.

Hi-media remains exposed to a cessation of activity by those companies or to a reorientation of their activity to other trades. However, those companies have competitors who could provide Hi-media with substitute solutions. A change of supplier would imply a temporary continuity solution when it comes to technical management of the advertising network and direct marketing activity.

In addition, Hi-media is continuing development of its own advertising server so as to provide, in the future, a larger part of the distribution of advertising objects on the Internet thanks to its own technology.

Thus in 2006, Hi-media developed its own solution for management and administration of sales and of advertising space inventories (Mediareporting), replacing the tool previously used, which had been developed by Fivia company.

6.2 TRANSVERSE RISKS

6.2.1. RISKS CONNECTED WITH THE SYSTEMS Five risks must be taken into account:

254 a major breakdown of all AdTech and Edatis servers, of the servers used for the micropayment functions, of the servers used by the publication sector’s sites (fotolog, jeuxvideo …), or a lack of hosts of such servers. That could result, for instance, from over-voltage in the electrical network or from a very long electricity blackout. In case of excess voltage, the equipment could be destroyed; a failure on the part of suppliers of bandwidth and of the telecommunications operators. Hi-media has multiplied those suppliers to limit this type of risk, but cannot guarantee its ability to counter all adverse effects in case of a breakdown of one or of several such suppliers; a hacker attack on the production site of AdTech or of Edatis, on the micropayment servers used for the micropayment functions, on the servers used for hosting the publishing sector’s sites. Those companies have installed high-security systems, but cannot guarantee elimination of such a systemic risk; deterioration of the hardware at one of the Edatis hosts, of the group’s Internet sites (particularly fotolog and jeuxvideo) or directly at AdTech or Hi-media; delayed equipment supplies (disks, servers, …) and a bandwidth increase for the publishing sector’s sites (particularly Jeuxvideo, Blogorama and Fotolog) in case of an uncontrolled audience increase (storage disks for photos and videos saturated, saturated bandwidth, saturated servers).

Those risks are particularly marked in the field of micropayments with respect to the Hipay electronic wallet. To reduce such risks, Hi-media has redundant hosting centres. Those two centres are interconnected by a 1 Gbit/s redundant fibre. Those two Datacenters make it possible to assure service continuity in case of a dysfunction of the principal site.

6.2.2. DEPENDENCE ON KEY EMPLOYEES The company’s success depends to a significant extent on the permanence of its relationships with its key employees in charge of the technical domain, the marketing and sales in France and internationally. To guarantee its growth and establish its leadership in Europe, the company must be able to attract, train, keep and motivate new highly qualified employees working, in particular, in the special sector of Internet advertising.

To maintain the permanence of its human resources, Hi-media implemented plans for allocations of free shares in 2005 and 2008. The most significant allocations are paired with performance conditions and are aimed at keeping key employees. A special profit-sharing agreement is also under study.

6.2.3. LABOUR FORCE AND ENVIRONMENTAL RISKS

The legal 35-hour work week has been applicable in the company since 1 January 2002. A company agreement was concluded with the employees during financial year 2002. It was effective retroactive to 1 January 2002.

The company established a supplementary health insurance plan at the beginning of 2010 to the benefit of the employees of the group’s Paris entities.

The meetings with the Works Council offer an opportunity for exchanges with the employees and bring out the good labour relations reigning within the company.

In view of its activity, the company does not create any environmental risks.

6.2.4 Legal risks With the exception of the information appearing in note 20 of the appendix to the corporate financial statements and in note 26.5 of the appendix to the consolidated financial statements, it is specified that there are no governmental, judicial or arbitration proceedings that are pending or with which the company is threatened that could have or have had, during the last 12 months, any significant effects on the financial situation or the profitability of the company and/or of the group.

The disputes mentioned are all commercial disputes connected with operation of the company, or disputes in the industrial tribunals connected with dismissals. Such disputes are reviewed regularly with the company’s advisors to obtain their evaluation and to have them manage them.

255 6.2.5 Risk of integration of acquired companies The acquisition of companies may give rise to strong turnover and a loss of clientele. The audits made before the acquisitions make upstream identification possible of the difficulties that will be encountered when new companies join the perimeter.

6.2.6 Risk connected with financial information To make sure that erroneous financial information does not distort the vision of senior managers and of third parties, the group has installed the following: tools for monitoring the activity, subsidiaries’ reporting to the Financial Department, checks made by the Financial Department, and outside auditing.

6.3 FINANCIAL RISK

6.3.1. Insolvency risk In connection with the advertising network activity, the company invoices the advertisers for its services, and for the micropayment activity, the payments operators or the telecommunications operators. Because of the increased volume of business, those customers’ account balances have increased strongly, and must receive special attention from the Financial Department. No customer represents more than 10% of receivables.

The insolvency risk represents the risk of financial loss for the group in case a customer or a counterparty in connection with a financial instrument fails to meet its contractual obligations. That risk results essentially from accounts receivable and short-term investment securities.

The group’s exposure to the insolvency risk is influenced mainly by the individual characteristics of the customers. The statistical profile of the clientele, particularly including the risk of default by activity sector and country in which the customers do their business, has no real influence on the insolvency risk. There is no concentration of that risk, either with respect to the customers or geographically.

The group has established a credit policy under which the solvency of each new customer is analysed individually before the customer can benefit from the group’s payment and delivery conditions. To that end, the group uses external ratings, when they are available. Customers not complying with the group demands with respect to solvency may conclude transactions with the group only if they pay for their orders in advance.

In addition, the group has strengthened its collection unit to maximise its effectiveness.

At the time of each closeout, the group determines a depreciation level representing its estimate of the losses incurred in connection with accounts receivable and other debtors as well as in connection with the investments. That depreciation is determined by an analysis of the individualized significant risks.

To limit the insolvency risk, Hi-media SA company has taken out a credit insurance contract, based on three services: prevention, collection and indemnification.

Prevention: the credit insurer exercises continuous surveillance and informs the company in case of a deterioration of its customers’ solvency.

Collection: in case of bad debts, the company forwards the legal proceedings file, containing all of the documents establishing the claim, to the insurance company, which intervenes with the defaulting debtor and is responsible for collection by friendly agreement or in the courts.

Indemnification: the company will be indemnified in case of established insolvency of the debtor or of legal proceedings affecting it. In the other cases, if collection cannot be obtained within the period defined in the contract, the insurance company will also make indemnification for the claim. The insurance company bears 75% of the amount, including all taxes, making 90% of the amount excluding taxes. The indemnification period is about 1 to 5 months. To benefit from this coverage, the subsidiaries must first obtain the insurer’s approval of coverage customer by customer.

In addition, the companies Allopass SNC, Mobile Trend SAS and Mobile Works SAS have taken out factoring contracts under which the main risks and advantages are transferred to the factoring company.

256 6.3.2. LIQUIDITY RISK The liquidity risk corresponds to the risk that the group may experience difficulties in paying its debts when they come due. The group’s approach to managing the liquidity risk is to make sure that it will always have sufficient cash to honour its liabilities, when they come due, under normal conditions or “tense” conditions, without incurring unacceptable losses or impairing the group’s reputation.

The group has installed management of cash flow needs aimed at optimising its cash return on investments. This excludes the potential impact of exceptional circumstances, such as natural disasters, which cannot reasonably be foreseen.

Furthermore, for certain subsidiaries, the group has taken out a factoring contract enabling it to obtain short-term financing and to be more flexible in daily management of liquidity.

6.3.3 EXCHANGE RISK The exchange risk corresponds to the risk that variations of exchange rates may affect the group’s earnings or the value of the financial instruments held. Management of the exchange risk is aimed at managing and controlling exposures to the market risk to keep them within acceptable limits, while optimising the profitability / risk tandem.

The group is exposed to an exchange risk:

in connection with the activity of its subsidiaries based in the United States (Groupe Hi-media USA Inc.), Sweden (Hi-media Sales and Hi-media Network), and England (Hi-media Ltd), consolidated on the basis of full consolidation, as well as to a smaller extent, in connection with the activity of its subsidiaries consolidated on an equity basis in China (Hi-media Chine) and in Brazil (Hi-midia Brazil), in connection with the income received from the micropayment business outside the euro zone (essentially Latin American and the United States).

For the Groupe Hi-media USA Inc., the Swedish subsidiaries, Hi-media Ltd as well as for Hi-media China and Hi- midia Brazil, 100% of the purchases and sales, the investment expenditures, the assets and liabilities of those subsidiaries as well as the consolidated goodwill relating to them are denominated, respectively, in dollars, Swedish crowns, pounds sterling, Yuan and Real.

With respect to the micropayment activity, the currency for retransfers to the partner sites may differ from the one of the revenue received.

The group’s investments in its subsidiaries using a functional currency other than the euro are not covered in that the group feels that those exchange positions are long-term by their very nature.

6.3.4. INTEREST RATE RISK

Following conclusion of a significant floating-rate syndicated borrowing in 2007, the group adopted a policy of making sure that at least half of the exposure to exchange rate variations on borrowings bears on fixed rates.

In that connection, some variable recipient/fixed payer interest rate swaps were concluded at the beginning of 2008.

6.3.5. DEPENDENCE

In the light of the weight of each player in determining the group’s sales, there is no risk of dependence on a medium, a director advertiser or an agency.

Similarly, the risk connected with a default of technological subcontractors is limited insofar as those companies have competitors that could provide Hi-media with substitute solutions.

6.3.6. RISK OF FRAUD

The risk of fraud corresponds to the risk of embezzlement of funds by hacking into the systems.

257 To limit this risk, the group sees to it that the principal of separation of tasks is applied as broadly as possible, and it makes access to the software secure and controls it.

6.3.7 INSURANCE RISKS

The group companies have taken out all insurance contracts required for their business, and the coverage conforms to the practices in effect in their field of activity.

The group’s foreign companies manage their insurance policies independently in the light of the local rules and regulations, while informing the parent company about the policies taken out.

The company and its French subsidiaries have taken out the following insurance policies:

Insurance Policy Object of the coverage Amount of coverage period The policy covers the liability that the insured may incur individually or jointly vis-à-vis third parties in 31/07/2009 to Senior manager’s case of professional misconduct in exercise of their Euros: 15,000,000 30/07/2010 civil liability (1) functions, whatever jurisdiction may be concerned: per insurance year inclusive civil, criminal or administrative.

Key man Coverage of death/absolute and definitive disability 24/07/2009 to Euros: 5,000,000 Insurance - Insured: Mr. Cyril Zimmermann 23/07/2010

(2) - Beneficiary: Hi-media inclusive The contract covers the insured for the pecuniary All bodily injury and physical consequences of the liability that it might incur in and consequential immaterial exercise of its activities, as declared, namely: damage taken together Euros: 8,000,000 per insurance year - Advertising network activity and direct marketing on (Including: the Internet, management of the Internet network. Bodily injury 8,000,000 Euros, - Design, site maintenance and host with email service, Physical and consequential online information. immaterial damage taken together Company 01/01/2010 to - Telepayments, micropayments. Euros: 3,000,000) Civil liability 31/12/2010 - Identification of records distributed by radio, (3) inclusive telephone service. Non-consequential immaterial - SMS rings, dedication, hosting of voice services, radio damage monitoring, Euros: 3,000,000 - Internet publication on behalf of the group per insurance year

Unpardonable fault Euros: 1,000,000 per insurance year

Coverage of all French sites of the Hi-media group PROPERTY DAMAGE: companies: Buildings and/or rental risks: - 15/17 rue Vivienne 75002 PARIS To the extent of the new rental - 14 Av du Garric 15000 AURILLAC risks - 11 rue Arthur III 44000 NANTES Company Equipment, furniture, fittings, comprehensive installations: 01/01/2010 to (Fire and related Euros: 500,000 30/12/2010 risks) inclusive (4) Expenses and losses (rehousing,

demolition, decontamination,

etc): Euros: 1,000,000

Recourse by neighbours, third parties, occupants, loss of rental, disturbance of

258 possession: Euros: 2,000,000

Records guarantee Euros: 100,000

OPERATING LOSSES:

Additional operating expenses Euros: 3,000,000

Theft insurance Euros: 100,000

Electrical damage Euros: 100,000

Machine breakage Euros: 100,000

Coverage of the computer hardware and immaterial LCI all coverage taken together risks (data, security), bureaucratic risks, per event and per insurance telecommunications on the various premises and at the year following service providers: Euros: 4,265,820

Including:

Data reconstitution expenses Euros: 3,000,000 per insurance year Computer 01/01/2010 to comprehensive Fixed equipment and 31/12/2010 DATAGUARD - C/O GLOBAL SWITCH infrastructure installations inclusive (4) - C/O GLOBAL EQUINIX Euros: 925,090 per insurance year

Portable equipment Euros: 48,730 per insurance year

Computer virus Euros: 300,000 per insurance year

(1) the insurance contract is taken out by HI-MEDIA both in its own behalf and in behalf of its subsidiaries. (2) the benefit of the insurance contract was delegated to guarantee a bank loan until repayment thereof. (3) the contract is concluded by HI-MEDIA both in its own behalf and in behalf of its French subsidiaries. (4) the insurance contract is taken out by HI-MEDIA both in its own behalf and in behalf of its French subsidiaries.

The estimated costs of the risks and disputes are 100% covered by provisions as long as there is a likelihood that such costs will materialise. There are no significant risks that are not insured or are insured in-house.

Signed in Paris, on 10 March 2010

THE PRESIDENT

259

A2 – AUDITORS’ REPORT ESTABLISHED IN APPLICATION OF ARTICLE L. 225-235 OF THE CODE OF COMMERCE, ON THE BASIS OF THE REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS AS CONCERNS THE INTERNAL CONTROL PROCEDURES RELATIVE TO DEVELOPMENT AND PROCEDURES OF THE ACCOUNTING AND FINANCIAL INFORMATION

Ladies and Gentlemen:

As auditors of the company Hi-media S.A. and in application of the provisions of article L.225-235 of the Code of Commerce, we hereby present to you our report on the report established by the Chairman of your company in accordance with the provisions of article L.225-37 of the Code of Commerce for the financial year ending on 31 December 2009.

It is up to the Chairman to establish and submit a report for approval by the Board of Directors indicating the internal control and risks management procedures installed within the company, and providing the other information required under article L.225-37 of the Code of Commerce relative, in particular, to the corporate governance program.

It is up to us:

29. to inform you of the remarks called for on our part concerning the information in the Chairman’s report with respect to the internal control and risks management procedures relating to the development and processing of the accounting and financial information, and 30. to attest that the said report contains the other information required under article L.225-37 of the Code of Commerce, it being specified that it is not up to us to verify the correctness of the said other information. We carried out our work in accordance with the professional standards applicable in France.

Information concerning the internal control and risk management procedures relative to development and processing of the accounting and financial information

The professional standards require steps aimed at judging the accuracy of the information concerning the internal control procedures and the risk management procedures relative to development and processing of the accounting and financial information contained in the Chairman’s report. Those steps consist in particular of the following:

- familiarisation with the internal control and risks management procedures relative to development and processing of the accounting and financial information underlying the information presented in the President’s report, as well as of the existing documentation; - familiarisation with the work having made it possible to develop the said information and the existing documentation; - determine whether the major shortcomings in connection with internal control relative to development and processing of the accounting and financial information that we may have noted in connection with our assignment are the object of appropriate information in the Chairman’s report. On the basis of the said work, we have no remarks to make concerning the information about the company’s internal control and risk management procedures relative to development and processing of the accounting and financial information contained in the reports by the Chairman of the Board of Directors, established in application of the provisions of article L.225-37 of the Code of Commerce.

Other information

We hereby attest that the report by the Chairman of the Board of Directors includes the other information required under article L.225-37 of the Code of Commerce.

260

Paris La Défense, 22 March 2010 Boulogne Billancourt, 22 March 2010

KPMG Audit EREC Associés A department of KPMG SA

Stéphanie Ortéga Sophie Lechevalier Partner Partner

261

A3 – AUDITORS’ FEES AND MEMBERS OF THEIR NETWORK PAID BY THE GROUP

KPMG EREC Associés Other auditors Amount (excluding Amount (excluding Amount (excluding % % % taxes) taxes) taxes) 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 Auditing Auditor, examination of the individual and

consolidated financial statements - Hi-Media S.A. 136 000 95 000 27 % 38 % 28 000 27 000 93 % 100 % - - - Subsidiaries consolidated in full 132 128 60 771 26 % 24 % 2 000 - 7 % - 34 533 62 193 100 % -

Other steps and services connected with the

auditing assignment - Hi-Media S.A. 233 772 94 460 47 % 38 % ------Subsidiaries consolidated in full ------

Subtotal 501 900 250 231 100 % 100 % 30 000 27 000 100 % 100 % 34 533 62 193 100 % -

Other services performed by the networks for the

fully consolidated subsidiaries Legal, taxation, social ------2 600 - - - Other ------Subtotal ------2 600 - - -

TOTAL 501 900 250 231 30 000 27 000 37 133 62 193

262

A4 – MANAGEMENT REPORT

To the shareholders:

We have called on you to meet in the form of an Ordinary Shareholders' Meeting pursuant to the provisions of law and of our company’s articles of incorporation to ask you to approve the financial statements for the financial year ending on 31 December 2009.

The required notices were sent to you in regular fashion, and all documents and other items provided for under the rules and regulations in effect were made available to you for the legal periods.

SITUATION AND ACTIVITY OF THE COMPANY AND OF THE GROUP DURING FINANCIAL YEAR 2009

1. Sales and earnings of Hi-media S.A. for financial year 2009

Hi-media S.A recorded corporate sales of 37.9 million euros against 36.5 million euros the previous year.

The corporate net income comes to 13,486 K€, broken down in particular into:

- an operating profit of 3,063 K€;

- a financial profit of 13,414 K€;

- extraordinary net income of – 3,760 K€;

- tax proceeds of 769 K€.

2. Comments the consolidated financial statements – Activity and Earnings

Financial year 2009 brought consolidated sales excluding taxes of 172.3 million euros against 135.7 million euros for the previous financial year, a 27% increase.

The breakdown by activity reflects the balance between the group’s two main revenue sources, with 44.3% (+24%) for advertising and 55.7% (+30%) for micropayments.

The share of activity done by the subsidiaries accounted for 78% of year 2009 sales. The share of activity attributable to the foreign subsidiaries represents 26% of year 2009 sales.

The consolidated net income for the financial year stands at 6 920 K€, broken down in particular into:

9. operating net income of 11 780 K€; 10. financial net income of – 1 968 K€; 11. a share of companies treated on an equity basis of 372 K€; 12. a tax charge of – 3 265 K€.

The company’s operating profit came to 11,780 K€ as of 31 December 2009 against 9 368 K€ on 31 December 2008. The main variations are as follows:

- a 27% increase in sales compared with 2008;

- a relatively stable mark-up of 37% (40% in 2008);

- an 8% increase in the payroll following acquisition of the online advertising network activity of the group AdLink Internet Media AG;

263 - a 37% increase of other operating costs (excluding the cost of stock options and of free shares), mainly due, as was true of salaries, to the acquisition of the online advertising network activity of the group AdLink Internet Media AG;

- the non-current charges concern mainly the costs connected with restructuring programs or with the termination of services contracts (premises, sites, marketing reports), particularly in connection with the merger with AdLink.

The company’s indebtedness excluding receivables transferred to the factoring company stood at 45,587 K€ on 31 December 2009, against 34 940 K€ one year earlier.

INVESTMENTS – R&D ACTIVITIES

The investments in tangible fixed assets for the year 2009 came to 1 655 K€, mainly reflecting the acquisition of computer hardware needed for proper operation of the business (servers and computer stations).

The investments for the year 2009 in intangible fixed assets came to 3 966 K€, corresponding to the continuation of in- house development of technological tools, mainly software for monitoring the advertising network and micropayment activities, an advertising server, as well as the costs for developing new functionalities at the sites in production.

3. Significant events during financial year 2009 On 30 January 2009, a new independent director (Mr. Michael Kleindl) joined the Board of Directors, replacing Mr. Dominique Bezier, who retains his position as General Secretary.

On 31 August 2009, Hi-media acquired AdLink Media, AdLink group’s online advertising network activity, by issue of 3,940,000 Hi-media shares, delivery of 795,000 Hi-media treasury shares, and deferred payment in the form of a vendor’s credit of 12.2 million euros. (cf. notes 3.2 and 25 of the appendix to the consolidated financial statements).

During financial year 2009, Allopass continued its international development, and it is now present in France, Spain, Belgium, the United States, Scandinavia, Germany and the United Kingdom.

During financial year 2009, Hi-media group also launched its Hipay electronic wallet, so that it can carry on that activity from Belgium in the 27 countries of the European Union.

4. Significant events since the financial year closeout

On 26 February 2010, Hi-media increased its holding from 7.5% to 9.40% in the capital of Rue89 company, by subscribing to a capital increase in an amount of 150,120 euros.

On 9 March 2010, Hi-media Belgium Sprl increased its holding from 34.3% to 44% in the capital of Vivat company by acquiring 13 additional partnership shares from other partners for an amount of 1 euro.

ANTICIPATED CHANGES AND PROSPECTS

With respect to the online advertising network activity, following a severe crisis in 2009, the display advertising market in 2010 should gradually get back to growth during the year, resulting in a rather weak increase for the year if one accepts the latest Publicis forecasts. In addition, the online advertising market should again display much more significant growth rates in the following years. The Hi-media business should be in line with these major trends, but the company could nevertheless gain market shares due to its leading position.

The French activities resisted better than in the other countries due to the strong market share held by the advertising network in France. In addition, the sales recorded on smaller markets, such as Portugal and Belgium, increased thanks to the dynamic commercial relationship with MSN in Portugal and to a substantial gain of market share in Belgium. On the other hand, activity declined in Sweden, Germany and Spain. The acquisition of Adlink Internet media on 31 August 2009 the enabled the advertising network to consolidate its market shares in France, Spain, Germany, and Belgium and to gain a foothold in The Netherlands, the United Kingdom and Italy. Thus the company got back onto a strong growth path in the last four months of the year because of that acquisition.

264 Growth of the micropayment business remained strong all year, even if an unfavourable base effect (Mobiletrend was integrated in June 2008) caused a weakening of the growth rate during the second part of the year. The activity should continue its strong development during 2010 thanks to the international deployment of Allopass and to conclusion of some new contracts in France. For the longer term, the HiPay electronic wallet should be a new source of growth.

Description of the main risks

The risks are described in the Chairman’s report concerning the conditions regarding preparation and organisation of the work of the Board of Directors as well as the internal control procedures installed by the company.

Employee profit-sharing and employee shareholding

There is no profit-sharing contract in the company. A special profit-sharing agreement is under study.

Two special reports informing you about the operations carried out by virtue of the provisions laid down, respectively, in articles L 225-177 to L 225-186 of the Code of Commerce (stock options) and in articles L 225-197-1 to L 225-197-3 of the Code of Commerce (free shares).

SECURITIES OFFERING ACCESS TO THE CAPITAL The securities offering access to the capital are detailed in the corporate appendix in note 10.3, as well as in the appendix to the consolidated financial statements in note 25.

SUBSIDIARIES AND AFFILIATES

TRANSFERS OF HOLDINGS Hi-media company did not dispose of any holdings or subsidiaries during financial year 2009.

CONSTITUTION OF A SUBSIDIARY Hi-media company established the companies Allopass Scandinavia in Sweden and Allopass Mexico in Mexico.

ACQUISITION OF HOLDINGS OR OF CONTROL None

ACQUISITIONS OF COMPANIES On 31 August 2009, Hi-media acquired the company AdLink Internet Media GmbH, holding the securities of the following companies: AdLink Internet Media NV, AdLink Internet Media SAS, AdLink Internet Media SLU, AdLink Internet Media Srl, AdLink Internet Media Ltd; AdLink Internet Media BV, and Net:dialogs GmbH. In November and December 2009, the company AdLink Internet Media GmbH transferred the securities of the following companies: AdLink Internet Media NV, AdLink Internet Media SAS, AdLink Internet Media SLU, AdLink Internet Media Srl and AdLink Internet Media Ltd to Hi-media S.A.

SHORT-TERM INVESTMENT SECURITIES HELD ON 31 DECEMBER 2009 Cf. note 8 of the corporate appendix and note 17 of the appendix to the consolidated financial statements.

SOCIAL AND ENVIRONMENTAL IMPACT The staff stood at 506 employees on 31 December 2009 against 390 on 31 December 2008. That breaks down into 227 persons in France and 279 abroad.

The legal 35-hour work week has been applicable to the company since 1 January 2002. During financial year 2002, a company agreement was concluded with the employees, effective retroactively to 1 January 2002.

In view of its activity, the company does not create any environmental risks.

265 DISTRIBUTION OF THE SHARE CAPITAL

The company’s capital comes to 4,426,999.50 euros, divided into 44,269,995 shares, all of the same class.

Pursuant to the provisions of article L 233-13 of the Code of Commerce and in the light of the information received in application of articles L 233-7 and L 233-12 of the said code, we inform you, below, of the identities of shareholders possessing, as far as we know, more than one-twentieth, one-tenth, three-twentieths, one-fifth, one-fourth, one-third one- half, two-thirds, eighteen-twentieths or nineteen twentieths of the share capital or of the voting rights:

Shareholders Number of Hi-media shares held in % on 31 December 2009

IDI 2 657 127 shares, namely 6%

BV Capital 2 589 242 shares, namely 5.85%

United Internet 4 735 000 shares, namely 10.7%

On 16 January 2009, the company Henderson Global Investors informed the company and the AMF that it had crossed, downward, the threshold of 5% of the capital and of the voting rights.

On 31 August 2009, the company AdLink Internet Media AG informed the company and the AMF that it had crossed, upward, the threshold of 10% of the capital and of the voting rights. On 29 September 2009, the company United Internet Beteiligungen GmbH informed the company and the AMF that it had crossed, upward, the threshold of 10% of the capital and of the voting rights (by acquisition off market of the shares previously held by AdLink Internet Media AG).

To the company’s best knowledge, there are no other shareholders that hold, directly, indirectly or in concert, 5% or more of the capital or of the voting rights.

Treasury shares held on 31 December 2009

As of 31 December 2009, Hi-media S.A. held 239 153 treasury shares. Moreover, within the framework of the liquidity contract, Hi-media held 103 518 treasury shares on 31 December 2009.

The fact is that that within the framework of the liquidity contract, during financial year 2009, 1 235 773 shares were purchased at an average price of 3.56 euros, and 1 321 188 shares were sold at an average price of 3.61 euros.

Market capitalisation trend over a period of 18 moths

Trading volume and market price of the Hi-media share

Market price in EUR

Month Number of securities High Low Average closing price: exchanged July-08 1,854,019 4.48 3.76 4.18

August-08 998,993 4.28 3.65 4.08

Sept.-08 2,246,367 3.80 2.53 3.32

Oct.-08 3,041,517 2.93 1.75 2.18

Nov.-08 3,468,257 2.69 1.67 2.03

Dec.-08 2,674,537 2.14 1.61 1.82

Jan.-09 3,067,546 2.27 1.65 1.98

Feb.-09 1,744,934 2.50 1.91 2.12

266

March-09 1,869,162 2.43 1.81 2.09

April-09 1,989,054 3.12 2.19 2.57

May-09 3,066,005 3.75 3.05 3.38

June-09 2,243,494 4.08 3.39 3.71

July-09 2,868,795 4.15 3.54 3.79

August-09 2,196,739 4.47 3.73 3.95

Sept.-09 3,061,100 4.84 3.93 4.37

Oct.-09 3,525,635 5.44 4.33 5.05

Nov.-09 3,015,757 5.45 4.46 5.06

Dec.-09 1,552,630 5.14 4.70 4.88

EARNINGS – APPROPRIATION – DIVIDENDS

CORPORATE FINANCIAL STATEMENTS The past financial year resulted in a profit of 13,486,186.73 €, which we would like to have you appropriate as follows:

- to the legal reserve, it thus being funded to an extent of 10% of the amount of the share capital, or 44,635.37 euros; - the balance: 13,441,551.36 euros, to retained earnings.

The rules regarding presentation and the evaluation methods adopted for establishing the said corporate financial statements conform to the rules in effect and are identical with the ones adopted for the previous financial years.

Dividends For financial year 2006, a dividend was paid for the first time, 0.10 euro to each of the 30 666 729 shares. That dividend was eligible for the 40% reduction. No dividends have been paid out since then.

TABLE OF EARNINGS

Pursuant to the provisions of article 148 of the decree of 23 March 1967, the table showing the company’s earnings during the last five complete financial years is attached to the present report.

SUMPTUARY EXPENDITURES AND OVERHEAD GIVING RISE TO REINSTATEMENT The company did not have any charges mentioned in article 39-4 of the General Code of Taxation during the financial year ending on 31 December 2009.

CONVENTIONS MENTIONED IN ARTICLE L 225-38 OF THE CODE OF COMMERCE We also request you to approve the conventions mentioned in article L 225-38 of the Code of Commerce regularly authorised by your Board of Directors during the past financial year.

The auditors have been informed about the said conventions, which they describe to you in their special report.

CONVENTIONS MENTIONED IN ARTICLE L.225-39 OF THE CODE OF COMMERCE The list of conventions bearing on ordinary operations concluded on normal terms was made available to you for the legal periods and was communicated to our auditors.

267 CONVENTIONS MENTIONED IN ARTICLE L 225-42 OF THE CODE OF COMMERCE There were no conventions mentioned in article L225-42.

The auditors were informed about the said conventions, which they describe to you in their special report.

INFORMATION CONCERNING THE AUTHORISED AGENTS Pursuant to the provisions of article L 225-102-1 of the Code of Commerce, we report to you, below, on the total remuneration and the benefits of all kinds paid during the past financial year to each authorised agent.

You are reminded that on 19 December 2008, the Board of Directors decided that the company would comply with the Afep-Medef recommendations of 6 October 2008 concerning the remuneration of senior managers acting as authorised agents of listed companies, and the company brought this information to the public’s attention by a press release dated 23 December 2008.

The total gross annual remuneration paid for financial year 2009 to the senior managers acting as authorised agents is as follows:

Recapitulative table concerning the remuneration of each senior manager acting as authorised agents 2009 2008 Amounts due for the financial Amounts paid during the Amounts due for the financial Amounts paid during the year financial year year financial year

Fixed compensation 317 303 (1) 317 303 (1) 222 434 (1) 222 434 (1) Variable compensation 37 500 50 000 50 000 50 000 Extraordinary compensation 68 000 (6) - - Attendance fees - - - Benefits in kind 16 058 (4) 16 058 (4) 14 346 (3) 14 346 (3) Total 370 861 383 361 286 780 354 780 David Bernard, Assistant Managing Director Fixed compensation 162 000 162 000 162 000 162 000 Variable compensation 64 800 48 600 38 475 51 075 Extraordinary compensation - - - Attendance fees - - - Benefits in kind 12 032 (3) 12 032 (3) 11 683 (3) 11 683 (3) Total 238 832 222 632 212 158 224 758 Erik-Marie Bion (5) Fixed compensation - - 78 013 78 013 Variable compensation - - - 28 800 Extraordinary compensation - - - - Attendance fees - - - - Benefits in kind - - 2 278 (2) 2 278 (2) Total - - 80 291 109 091 (1) The amounts of fixed compensation include 141,303 euros (2009) and 47,101 euros (2008) paid to SPRL Cyril Zimmermann for management of Hi-media Belgium. (2) company car (3) guarantee covering loss of employment and supplementary retirement (4) company car, guarantee covering loss of employment and supplementary retirement (5) Erik-Marie Bion left his position on 18 April 2008 (6) Since Cyril Zimmermann waived his bonuses due for the second half of 2006 and due for financial year 2007, the Board of Directors had decided in December 2007 that an extraordinary bonus could be paid to him in the first half of 2008 in the light of the earnings for financial year 2007. Payment of that bonus was decided on by the Board of Directors on 6 March 2008.

The company has taken out a contract covering loss of employment and a supplementary retirement contract for its President (Chairman) and Assistant Managing Director, as well as life insurance contract for its President. The costs connected with the said commitments for the company are limited to payment of the insurance premiums. The amounts paid by the company under the contracts covering loss of employment and supplementary retirement are treated as benefits in kind in connection with the remuneration paid to those two beneficiaries.

It is specified that the senior managers acting as authorised agents do not receive any compensation for their other activities and/or mandates within Hi-media group, with the exception of Cyril Zimmermann, who receives, via Sprl Cyril Zimmermann, remuneration for his mandate to manage Hi-media Belgium (included in the above table).

No bonus is planned for arrival or departure of the authorised agents.

268 The authorised agents’ variable compensation is based on reaching objectives in terms, in particular, of current operating profit. The said variable compensation is paid semi-annually and depends on the percentage or realisation of the objective.

The following table presents a history of the allocations made to the authorised agents, whether they are senior managers or not.

Information concerning the stock options and free shares Meeting date 21 April 00 25 April 03 25 April 03 2 Nov. 05 2 Nov.05 2 Nov.05 2 Nov.05 2 Nov.05 24 apr08 Board meeting date 27 June 00 26 May 03 10 July. 03 22 Dec. 05 20 Jan06 13 July06 11 Sept06 01 March07 24 Sept08 Number of shares that could be subscribed to by or allocated to Cyril Zimmermann ------240 000 David Bernard ------160 000 Beginning of exercise of the options or end of the 5 May 02 26 May 05 10 July.05 22 Dec.07 20 Jan08 13 July08 11 Sept08 01 March09 24 July11 acquisition period Expiration date 4 May 10 25 May 13 10 July. 13 22 Dec. 09 20 Jan10 13 July10 11 Sept10 01 March11 24 July13 Subscription price/fair 8.06 0.33 0.35 6.05 7.75 7.03 7.63 6.70 2.33 value Number of shares subscribed to acquired on 31/12/09 by Cyril Zimmermann - - 350 000 - - - - 87 750 - David Bernard ------100 000 58 500 - Number of options ------3 750 - cancelled or lapsing Subscription options remaining at the end of ------400 000 the financial year

Pursuant to the law of 30 December 2006, on 24 September 2008 the Board of Directors decided that with respect to the allocattees who were authorised agents, the retention period was set at two years starting with the end of the acquisition period (also of two years) for 70% of the shares allocated, and at the longer period as between two years and the duration of their mandate for the remaining 30%.

The other members of the Board of Directors received attendance fees (cf. section below concerning “Attendance fees”).

In addition, the list of the mandates and functions exercised in any company by the members of the Board of Directors appears below.

269 Last name and given Date of first Date of end of term Main function Main function Business address Other mandates and functions exercised in any group Mandates exercised outside Management expertise and experience name or corporate appointment exercised in the company the group name of the member company exercised outside the company at present or during the last five years

A director of - Hi-media Publicidad y Marketing; - Hi-media Advertising Web - Hi-media Portugal; During the last 5 years: - Hi-media Scandinavia; Manager of Laroquette Shareholders’ - and a member of CS de Hi-media Deutschland AG; Musique & Media Cyril Zimmermann has been President Meeting ruling on - Hi-media Network Internet Espana SL At present: and Managing Director of Hi-Media the financial Managing - AdLink Internet Media SRL (Italie); Cyril Zimmermann 15/17 rue Vivienne Paris 2ème Manager of the company Les company since its creation. He is a statements for the Director - Hi-media Ltd; 21/12/98 - Créations du 8, of SPRL Cyril graduate of the ESC Paris and of the financial year - Hi-media Nederland BV Zimmermann, member of the IEP de Paris. ending on 31/12/09 - Net: dialogs GmbH Supervisory Board of Rue89 Manager of: member of the Board of - Hi-Pi; Directors of Believe SA - Bonne Nouvelle Editions; - Hi-media Belgium; - Allopass -Manager of the Group Hi-media USA Inc. David Bernard has exercised the following functions

- Assistant Managing Director – Groupe André Trigano (March 03 – During the last 5 years: A director of: Sept 05) - member of the Executive Shareholders’ Hi-media Local AB; Board of cie Intern. André Meeting ruling on - Hi-media Network Internet Espana SL; Assistant Trigano - Assistant Managing Director of Hi- the financial - AdLink Internet Media SRL (Italie) David Bernard 21/04/00 Managing - 15/17 rue Vivienne Paris 2ème - Manager of “les Campéoles”, Media (Feb 00 – Feb 03) statements for the - manager of the Group Hi-media USA Inc; Director “Lac et Rivières”, and financial year - Hi-media Ltd; “Campasun Servon” ending on 31/12/11 - Hi-media Nederland BV; - Internal Audit Manager of EI (Sept -permanent representative of - member of Supervisory Board of Hi-media Deutschland “Campéoles” on the Arepos- 97 – Feb 00) AG. Vacances Board of Directors - Mazars auditor (94- Sept 97).

A graduate of the EC and DECF.

Valkiria Network SL Shareholders’ President of - the EIAA Meeting ruling on Camino Tomillaron 194 the financial - Wunderloop Michael Kleindl 30/01/09 - - Co-founder of ADlink Media AG statements for the - Buy VIP financial year 28 230 Las Rozas A director of ending on 31/12/08 - Ormigo GmbH - United Mailsolutions AG Spain - Cityguide AG

Shareholders’ Marco De Alfaro is - IDI mandates: Holder of an MBA from the Insead, IDI represented by 18 avenue Matignon Paris 01/07/08 Meeting ruling on - a Managing Partner -IDI Asset Management SA Marco De Alfaro joined IDI group at Marco De Alfaro the financial 8ème -SORGEM Holding SA the end of 2004. He began his career at of IDI company statements for the -ACTEON SA FIAT group’s holding company, financial year -LILAS SA before joining the BCG as a consultant

270 ending on 31/12/11 -Société des éditions de presse for 4 years. He then handled LBO Affiches Parisiennes investments for 9 years at TCR, and -Claude et Goy SA finally investments in the technology -Rivoli Participation sector for 4 years at NATEXIS Marco De Alafro’s Mandates: PRIVATE EQUITY -SORGEM Holding -ACTEON SA -World Freight Company Shareholders’ Adidas International Marketing Meeting ruling on – De Prinsenhof – Koningin Now Adidas Sponsorship Manager the financial Adidas Sponsorship Jocelyn Robiot 02/11/05 - Wilhelminaplein 30 P.O. Box - and former business developer for statements for the Manager At present: 69001 – 1060 CA Amsterdam Havas Sports financial year A director of Euprosoft. - Holland ending on 31/12/10

Until January 2010: - Member of the Board of Directors of Pôle Emploi Shareholders’ - a director and treasurer of Meeting ruling on Medef international Formerly Assistant Managing Director the financial of the MEDEF and Manager of the Jean-Charles Simon 02/11/05 - - - - - liquidator, representative of statements for the Medef and of the associations AFEP and advisor to Denis Kessler at financial year Astas, Apic, Apic Formation the FFSA. ending on 31/12/10 and Stac. Until March 2010: A director of SA ETP (Editions et Services Techniques Professionnels) BV is a director of: - Angie’s List - Sonim Technologies Inc - Vuze.com - YuMe Networks Inc Shareholders’ BV Capital Management LLC; - AppFolio Inc Meeting ruling on a company under American - Experteer GmbH BV Capital the financial Managing Director law, located at 600 - K2 Network Inc At present Managing Director of BV represented by Jan 22/11/07 - - statements for the BV Capital Montgomery Street, 43 rd - MoreTV Broadcasting Capital Management LLC Buettner financial year floor, San Francisco, CA GmbH ending on 31/12/12 94111 - MrTed Ltd - Peanutlabs - Pronto Networks, Inc - Sonos Inc - ACE Dragon Enterprises Ltd (WinZone Information Technology Co. Ltd)

271 Attendance fees

By virtue of the total attendance fees budget approved by the Shareholders’ Meeting on 30 April 2009, the following payments will be made for financial year 2009.

- to Mr. Jocelyn Robiot, 13,517.24 € - to Mr. Jean-Charles Simon, 15,448.28 €. - To Mr. Mathias Schilling, 7,724.14 €. - To Mr. Michael Kleindl, 19,310.34 €.

The budget approved by the Shareholders’ Meeting held on 30 April 2009 was 56,000 euros. It is distributed as a function of the number of directors concerned by payment of attendance fees, the number of Board meetings during the financial year and the times each director was present.

56,000 / 28 = 2,000 euros per director present and per meeting.

The Chairman indicates that the directors remunerated in another connection by the company under an employment contract or because they hold a corporate mandate do not receive any attendance fees.

Summary of the senior managers’ securities transactions

Reporting party Instrument Transaction Date Place Unit price Total amount David Bernard shares Acquisition 6/01/2009 Paris 1,186 € 8,699 € David Bernard shares Acquisition 02/09/2009 Paris 3.96 € 6,771 € BV Capital shares Disposal 18/09/2009 Off- 4.3482 € 434,820 € market Cyril Zimmermann shares Disposal 09/11/2009 Paris 5.1311 € 138,539 €

Report concerning the delegations of authorisation and powers to the Board of Directors

Date of the Type de delegation Maximum amount of the HAL XXX Durée de Expiration date delegation capital increase la délégation AGM 30 April 2009 Authorisation of a 18 months 30 October 2010 share repurchase program AGM 30 April 2009 Delegation of 600,000 € 26 months 30 June 2011 authorisation BSA during a public offer period AGM 30 April 2009 Authorisation for a 10% of the capital per 24 months 18 months 30 October 2010 capital reduction AGM 30 April 2009 Delegation of 700,000 € with maintenance of 26 months 30 June 2011 authorisation the DPS AGM 30 April 2009 Delegation of 700,000 € with suppression of the 26 months 30 June 2011 authorisation DPS AGM 30 April 2009 Delegation of Increase of the number of 26 months 30 June 2011 authorisation securities to be issued (15%) AGM 30 April 2009 Delegation of power 10% capital increase to 26 months 30 June 2011 remunerate conveyances in kind AGM 24 April 2008 Delegation of power Issue of 2,000,000 free shares 38 months 24 June 2011 AGM 30 April 2009 Authorisation L3332- 80,000 € 26 months 30 June 2011 18 of the Labour Code AGM 30 April 2009 Delegation of Issue of 650,000 BSAA* 18 months 30 October 2010 authorisation AGM 24 April 2008 Delegation of power Issue of 650,000 stock options* 38 months 24 June 2011 AGM = Combined Shareholders’ Meeting *These amounts of 650,000 options or warrants are charged to the global ceiling of 2,000,000 free shares.

Pursuant to the provisions of articles L 225-184 and L 225-197-4 of the Code of Commerce, your Board of Directors informs you, in its special reports, about the operations carried out by virtue of the provisions laid down in articles L 225- 177 to L 225-186 concerning options for subscription to or purchase of shares and the transactions carried out by virtue of the provisions laid down in articles L 225-197-1 to L 225-197-3 in connection with the free shares.

Elements that may have an effect in case of public offer

272 The Shareholders’ Meeting held on 30 April 2009 empowered the Board of Directors to issue equity warrants during a public offer period in a maximum nominal amount of 600,000 euros. That delegation was granted for 26 months.

Your Board of Directors invites you to adopt the resolutions that it is submitting for your consideration.

LME law – Payment times in k€ 31/12/2009 Not due 15 721 0-30 days 2 543 30-120 days 504 120-360 days 134 >360 days 994 TOTAL 19 897

Signed in Paris, On 10 March 2010

The Board of Directors

273

Company’s results during the last five financial years Financial years concerned 2005 2006 2007 2008 2009 Nature of the indications

CAPITAL AT FINANCIAL YEAR END Share capital 2 663 171 3 066 673 3 904 816 3 980 646 4 426 999 Number of ordinary shares in existence 26 631 714 30 666 729 39 048 158 39 806 458 44 269 995 Number of existing preferential shares - - - - - Maximum number of future shares to be issued By conversion of bonds - - - - - By exercise of BSA warrants 937 183 909 667 - - By exercise of subscription rights 526 491* 1 201 091* 1 686 827* 2 297 373* 2 059 416*

FINANCIAL YEAR OPERATIONS AND EARNINGS Sales excluding taxes 14 372 911 25 221 175 32 520 535 36 459 645 37 946 196 Net income before taxes, employee profit-sharing and transfers to depreciation and provisions 196 676 664 445 3 648 726 6 490 352 10 588 845 Taxes on profits 15 000 16 250 127 576 (3 047 680) 768 581 Employee profit-sharing for the financial year - - - - - Earnings after taxes, employee profit-sharing and transfers to depreciation and provisions 3 662 412 9 509 062 2 885 174 4 377 054 13 486 187 Earnings paid - 3 066 673 - - -

EARNINGS PER SHARE Earnings after taxes and employee profit-sharing, but before transfers to depreciation and provisions 0.007 0.02 0.09 0.24 0.26

Earnings after taxes, employee profit-sharing and transfers to depreciation and provisions 0.14 0.31 0.07 0.11 0.30 Dividend paid to each share - 0.10 - - -

Staff Average salaried staff during the financial year 28 46 70 94 101 Amount of the financial year payroll 1 615 191 2 809 218 4 127 484 5 236 475 5 774 530 Amounts paid as fringe benefits during the financial year 726 893 1 223 117 1 874 317 2 434 900 2 648 467 * This figure corresponds to the numbers of subscription options and/or equity warrants for business creator shares allocated on 31 December to the employees still present in the company, employees having left it not being entitled to retain the benefit of such warrants and options.

274

A5 – SPECIAL REPORT BY THE BOARD OF DIRECTORS CONCERNING THE OPERATIONS CARRIED OUT BY VIRTUE OF THE PROVISIONS OF ARTICLES L. 225-177 TO L. 225-186 OF THE CODE OF COMMERCE

To the shareholders:

Pursuant to the provisions of article L225-184 of the Code of Commerce, we have the honour of reporting to you on the transactions carried out by virtue of the provisions of articles L225-177 to L225-186 of the said code relative to options for purchase of and subscription to shares.

We inform you, below, of the number, the due dates and the prices of the subscription and purchase options that, during the past year and in connection with the mandates and functions exercised in the company, were granted to each of the authorised agents by the company or were exercised:

No share subscription options were granted to the company’s authorised agents during financial year 2009.

No authorised agent exercised any options during the financial year.

Finally, we also report to you concerning the options granted and exercised during the year by the company to each of the company’s ten employees, not authorised agents, having the highest numbers of options granted in this way.

No share subscription options were granted during financial year 2009.

Two of the company’s ten employees, not authorised agents, holding the highest number of options granted exercised 21,816 at an exercise price of 0.01 euro and of 1.14 euro. Those options had been granted to them on 30 June 1999 and 12 January 2005.

Signed in Paris on 10 March 2010

The Board of Directors

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A6 – SPECIAL REPORT BY THE BOARD OF DIRECTORS CONCERNING THE OPERATIONS CARRIED OUT BY VIRTUE OF THE PROVISIONS OF ARTICLES L. 225-197-1 TO L. 225-197-3 OF THE CODE OF COMMERCE

To the shareholders:

Pursuant to the provisions of article L225-184 of the Code of Commerce, we have the honour of reporting to you on the operations carried out by virtue of the provisions of articles L225-197-1 to L225-197-3 of the said code relative to allocations of free shares.

We inform you, below, of the number and of the dates of expiration of the free shares that, during the past year and in connection with the mandates held and functions exercised within the company, were allocated to the authorised agents by the company.

No free shares were allocated to the authorised agents during financial year 2009.

Finally, we also report to you concerning the shares allocated during the year by the company to the company’s ten employees, not authorised agents, holding the largest numbers of shares awarded in this way.

No free shares were allocated to the company’s ten employees, not authorised agents, to whom the highest numbers of such shares were awarded.

Signed in Paris on 10 March 2010

The Board of Directors