Annual Report 2008
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23MAY200707092256 Annual Report 2008 This document is comprised of the English language translation of Dassault Systemes’` Document de ref´ erence´ (registration document), which was filed with the AMF (French Financial Markets Authority) on April 2, 2009, in accordance with Articles 212-13 of the AMF General Regulation. Only the French version of the Document de ref´ erence´ is legally binding. DASSAULT SYSTEMES` Annual Report 2008 1 General This Annual Report also includes: – the annual financial report to be prepared and published by any listed company within four months following the end of its fiscal year, pursuant to article L. 451-1-2 of the Monetary and Financial Code and article 222-3 of the AMF General Regulation, and – the annual management report of the Company’s Board of Directors, which must be provided to the general shareholders’ meeting approving the financial statements for each completed fiscal year, pursuant to articles L. 225-100 et seq. of the Commercial Code. The index set forth below provides cross-references to the relevant portions of these two reports. All references to ‘‘euro’’ or to the symbol ‘‘e’’ refer to the legal currency of the French Republic and certain countries of the European Union. All references to the ‘‘U.S. dollar’’ or to the symbol ‘‘$’’ refer to the legal currency of the United States of America. In compliance with article 28 of European Regulation no 809/2004 of the Commission, the following information is incorporated by reference in this Annual Report: • the consolidated financial statements and the related audit report on pages 96 to 133 (inclusive), as well as the parent company financial statements and the related audit report on pages 134 to 156 (inclusive) of the registration document for the year 2007, filed with the AMF (French Financial Markets Authority) on April 4, 2008, under no D.08-0199; • the financial information on pages 9 and 38 to 54 (inclusive) of the registration document for the year 2007 filed with the AMF on April 4, 2008, under no D.08-0199; • the consolidated financial statements and the related audit report on pages 114 to 150 (inclusive), as well as the parent company financial statements and the related audit report on pages 150 to 173 (inclusive) of the registration document for the year 2006, filed with the AMF on May 28, 2007, under no D.07-515; • the financial information on pages 11 and 48 to 67 (inclusive) of the registration document for the year 2006 filed with the AMF on May 28, 2007, under no D.07-515. The portions of these documents which are not incorporated herein are either not of interest for current investors, or are covered in another section of this Annual Report. 2 DASSAULT SYSTEMES` Annual Report 2008 CONTENTS The table of contents below follows the nomenclature set forth in Annex I of the European Regulation no 809/2004 applying the European Directive known as the ‘‘Prospectus Directive’’ 2003/71/CE. PERSON RESPONSIBLE p. 7 RESEARCH AND DEVELOPMENT, 1111.1 Person responsible for the registration PATENTS AND LICENSES p. 49 document p. 7 11.1 Overview p. 49 1.2 Certification by the person responsible for the 11.2 V6 platform p. 49 registration document p. 7 11.3 Mainstream 3D technology p. 50 STATUTORY AUDITORS p. 8 11.4 Intellectual property p. 50 2 TREND INFORMATION p. 51 SELECTED FINANCIAL 12 3 INFORMATION p. 9 PROFIT FORECASTS OR ESTIMATES p. 52 RISK FACTORS p. 10 13 4 4.1 Risks Related to the Company’s Business p. 10 ADMINISTRATIVE, MANAGEMENT 4.2 Market Risk p. 15 AND SUPERVISORY BODIES AND 4.3 Insurance p. 18 14 SENIOR MANAGEMENT p. 53 INFORMATION ABOUT THE 14.1 Board of Directors and Executive Officers p. 53 ISSUER p. 19 14.2 Administrative, Management and Supervisory 5 Bodies and Senior Management Conflicts 5.1 History and development of the Company p. 19 of Interests p. 58 5.2 Investments p. 20 REMUNERATION AND BUSINESS OVERVIEW p. 22 BENEFITS p. 59 6.1 Principal Activities p. 22 15 6 15.1 Compensation of the Company’s Directors 6.2 Principal Markets p. 24 ‘‘Mandataires Sociaux’’ p. 59 ORGANIZATIONAL 15.2 Transactions in the Company’s shares by directors 7 STRUCTURE p. 29 and executive officers of the Company p. 64 7.1 The Company’s position within the Group p. 29 BOARD PRACTICES p. 67 7.2 Principal subsidiaries of the Group p. 29 16 16.1 Report on Corporate Governance and PROPERTY, PLANT AND Internal Control p. 67 EQUIPMENT p. 30 16.2 Report of the Independent Auditors on 8 corporate governance and internal control p. 75 8.1 Properties occupied by the Company and other important existing or planned real EMPLOYEES p. 77 estate interests p. 30 17.1 Social Report p. 77 8.2 Industrial and environmental risk p. 30 17 17.2 Shareholdings and stock options of the 8.3 Environmental Report p. 30 directors and executive officers p. 82 OPERATING AND FINANCIAL 17.3 Arrangements for involving the employees in the capital of the issuer p. 85 9 REVIEW p. 34 9.1 General p. 34 MAJOR SHAREHOLDERS p. 86 9.2 Consolidated Information: 2008 compared 18 18.1 Shareholder base p. 86 to 2007 p. 39 18.2 Voting rights p. 87 9.3 Revenue and Operating Income by Segment p. 45 18.3 Major shareholders p. 87 9.4 Trends in Quarterly Results p. 46 18.4 Shareholder agreements p. 88 9.5 Off-Balance Sheet Arrangements p. 47 9.6 Tabular Disclosure of Contractual Obligations p. 47 RELATED PARTY TRANSACTIONS p. 89 CAPITAL RESOURCES p. 48 19 10 DASSAULT SYSTEMES` Annual Report 2008 3 FINANCIAL INFORMATION THIRD-PARTY INFORMATION AND 20CONCERNING THE ISSUER’S 23 STATEMENTS BY EXPERTS AND ASSETS AND LIABILITIES, DECLARATIONS OF ANY FINANCIAL POSITION AND PROFITS INTEREST p. 163 AND LOSSES p. 90 DOCUMENTS AVAILABLE TO THE 20.1 Historical Financial Information p. 90 PUBLIC p. 164 20.2 Pro forma financial information p. 124 24 20.3 Parent Company Financial Statements p. 124 24.1 Person responsible for financial 20.4 Reports of the Independent Auditors communications p. 164 for 2008 p. 146 24.2 Indicative timetable for the publication 20.5 Date of the last financial statements p. 151 of financial information p. 164 20.6 Interim and other financial information p. 151 24.3 Annual Information Document 2008 p. 164 20.7 Dividend policy p. 152 20.8 Legal and Arbitration Proceedings p. 152 INFORMATION ON HOLDINGS p. 167 20.9 Significant change in the issuer’s 25 financial or trading position since December 31, 2008 p. 152 SHAREHOLDERS’ MEETING p. 168 ADDITIONAL INFORMATION p. 153 26 26.1 Presentation of the resolutions proposed by the Board of Directors to the General 21.1 Share Capital p. 153 21 Meeting of June 9, 2009 p. 168 21.2 Memorandum and Articles of Association p. 158 26.2 Draft resolutions proposed by the Board 21.3 Market information p. 161 of Directors to the General Meeeting of 22 MATERIAL CONTRACTS p. 163 shareholders on June 9, 2009 p. 171 4 DASSAULT SYSTEMES` Annual Report 2008 CROSS-REFERENCE TABLE In order to make it easier to read this document, the cross-reference table below identifies in this Registration document: – the information included in the annual financial report which must be published by listed companies in accordance with the provisions of the French Monetary and Financial Code, which reflects the transposition of the European Directive known as the ‘‘Transparency Directive’’ 2004/109/CE; and – the information included in the annual management report which must be prepared by the Company’s Board of Directors, as required by articles L. 225-100 et seq. of the French Commercial Code. ‘‘TRANSPARENCY DIRECTIVE’’ ANNUAL FINANCIAL REPORT REGISTRATION DOCUMENT 1. ANNUAL FINANCIAL STATEMENTS Paragraph 20.3 2. CONSOLIDATED FINANCIAL STATEMENTS Paragraph 20.1 3. MANAGEMENT REPORT See ‘‘Annual Management Report’’ below 4. DECLARATION OF RESPONSIBILITY Paragraph 1.2 5. AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS Paragraph 20.4.1 6. AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS Paragraph 20.4.2 7. FEES PAID TO INDEPENDENT AUDITORS Chapter 2 ANNUAL MANAGEMENT REPORT – L. 225-100 ET SEQ OF THE FRENCH COMMERCIAL CODE REGISTRATION DOCUMENT 1. GROUP BUSINESS REPORT Chapters 6 and 9 2. BUSINESS AND RESULTS OF OPERATIONS OF THE PARENT COMPANY DASSAULT SYSTEMES SA Chapter 7 and Paragraph 20.3 3. EQUITY HOLDINGS – CONTROLLED AND CONTROLLING COMPANIES – SUBSIDIARIES Chapter 7 4. SOCIAL AND ENVIRONMENTAL INFORMATION Paragraphs 8.3 and 17.1 5. ADMINISTRATIVE AND MANAGEMENT BODIES Chapters 14, 15 and 16 and Paragraphs 17.2, 20.4.3 and 26.1 6. SHARE CAPITAL Chapters 18 and 21 7. EXPLANATION OF THE RESOLUTIONS PROPOSED BY THE BOARD OF DIRECTORS Paragraph 26.1 8. PRESENTATION OF THE RESOLUTIONS PROPOSED BY THE BOARD OF DIRECTORS TO THE GENERAL MEETING OF SHAREHOLDERS Paragraph 26.2 9. SUMMARY OF CURRENT DELEGATIONS TO THE BOARD OF DIRECTORS AND THEIR USAGE DURING THE YEAR 2008 Paragraph 21.1.3 10 SELECTED FINANCIAL INFORMATION OVER FIVE YEARS Paragraph 20.3.2 11 REPORT OF THE CHAIRMAN OF THE BOARD ON CORPORATE GOVERNANCE AND INTERNAL CONTROL Paragraph 16.1 12 INFORMATION REQUIRED BY ARTICLE L. 225-100-3 Paragraph 16.1 DASSAULT SYSTEMES` Annual Report 2008 5 Principal Companies and Brands of the Group The Company organizes its business and markets its products and services according to two market segments: a segment focused on ‘‘Product Lifecycle Management’’ (‘‘PLM’’), and a segment focused on design (‘‘Mainstream 3D’’). The Dassault Systemes` companies listed below develop and market principally the brands shown.