Assystem - Registration Document 2016

ÉTATS FINANCIERS

PARENT COMPANY FINANCIAL STATEMENTS

Risk factors

loan and a €200 million revolving credit facility (see “Significant events after the reporting date” below). Consequently, the drawdown on the revolving credit facility included in “Bank borrowings” at 31 December 2016 was repaid in early 2017. Changes in share capital and issue premiums The Company’s share capital totalled €22,218,216 at 31 December 2016, unchanged from 31 December 2015. Significant events after the reporting date On 24 January 2017 Assystem entered into a new €280 million financing arrangement with a pool of banks, comprising (i) an €80 million term loan redeemable at maturity in January 2022 and (ii) a €200 million five-year revolving credit facility with two one-year extension options (subject to the lenders’ agreement). The related financing agreement contains a covenant based on the consolidated gearing ratio (consolidated net debt at the test date/ EBITDA for the past 12 months as adjusted for acquisitions and divestments). This ratio is measured at the end of each half-year period (with the first test taking place at 31 December 2016), and must not exceed 2.75 at end-December and 3.0 at end-June. If the covenant is breached, a qualified majority of lenders (representing at least two thirds of the lending commitments) may demand early repayment of the corresponding borrowings. At 31 December 2016, the Group’s gearing ratio was below the ceiling specified in the covenant. The Odirnane bonds that remained outstanding at 31 December 2016 (representing 8.8% of the original issue) have been redeemed in full in cash, without any Assystem shares allocated to their holders. The cost of these redemptions, including accrued coupons, totalled €14.35 million, which was paid between late February and 6 March 2017.

ASG LEGAL DISPUTE ASG is involved in a legal dispute with Acergy (since renamed Subsea 7) and Iska Marine concerning a fire that occurred in January 2010 on board a ship – the Acergy Falcon – which was dry-docked in Brest for maintenance at the time. There were no significant developments in this case during 2016. The only noteworthy facts during the year were of a procedural nature as the proceedings concerning the merits of the case were re-listed with the Brest Commercial Court, which ordered that all of the pending cases related to this same incident should be joined and heard together. As in prior periods, Assystem still considers that there is no evidence that ASG was at fault or that it will necessarily be held fully or partially liable. In addition, as in previous periods, the Group confirms that in the event ASG is held liable, this claim would be covered under the Group’s third-party liability insurance policies. TAX AUDIT In late 2014 Assystem France received notification of a €13.5 million tax reassessment relating to research tax credits. Assystem considers that this reassessment is based on a general position taken by the French tax authorities which is applicable to all of the French companies concerned. Assystem is contesting the grounds of the reassessment in their entirety. However, in view of new case law in 2015, and based on the opinions of legal experts, the Group set aside a €7.3 million provision in its 2015 financial statements. At 31 December 2016 Assystem had not yet received a payment notice from the tax authorities for the reassessed amount and the valuation of the related risk was unchanged compared with 31 December 2015. The risk related to this litigation was transferred from Assystem France to Assystem SA on 30 December 2016 (see Note 5 – Provisions).

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BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2

Basis of preparation and summary of significant accounting policies Assystem’s parent company financial statements for the year ended 31 December 2016 have been prepared in accordance with French generally accepted accounting principles including the principle of segregation of accounting periods. They are presented on a going concern basis and accounting policies have been applied consistently from one year to the next. Accounting entries are based on the historical cost convention.

Fixed assets Property, plant and equipment are stated at cost, corresponding to either purchase cost (including incidental expenses but excluding transaction costs), or production cost. Interest on borrowings specifically used to finance property, plant and equipment is not included in production cost. Intangible assets are carried at cost, excluding financial expenses, which are not capitalised.

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ASSYSTEM

REGISTRATION DOCUMENT 2016