BBN2018 DRF VA LIVRE - BOURBONOFFSHORE.COM · 2019-05-29 · CONTENTS BOURBON IN 2018 7 1. Key ﬁ...

BOURBONOFFSHORE.COM Building together a sea of trust

2018REGISTRATION DOCUMENTANNUAL FINANCIAL REPORT

CONTENTS

BOURBON IN 2018 7

1. Key fi gures 8

2. Stock market data 9

3. Management bodies 11

GENERAL INTRODUCTION TO THE GROUP 13

1. BOURBON timeline 14

2. Simplifi ed overview of activities 15

3. Activities and business models 16

4. Organisation 19

5. Innovation 20

6. Competitive environment 21

7. Main market trends 22

MANAGEMENT REPORT AFR 25

1. Activities and highlights 26

2. Results 27

3. Report of the Board of Directors on Corporate

Governance 34

4. Control environment 73

5. Risk factors 76

6. Statement of non-fi nancial performance 90

7. BOURBON Corporation SA and its shareholders 101

8. Report explaining the Board of Directors’ resolutions

proposed to the combined shareholders’ meeting

of June 28, 2019 103

CONSOLIDATED FINANCIAL STATEMENTS AFR 111

Statement of financial position 112

Statement of comprehensive income 113

Statement of consolidated cash flows 115

Statement of changes in equity 116

Notes to the consolidated financial statements 120

Statutory auditors’ report on the consolidated financial

statements (Year ended December 31, 2018) 189

PARENT COMPANY FINANCIAL STATEMENTS 193

Parent company balance sheet – BOURBON Corporation SA 194

Income statement of the parent company BOURBON

Corporation SA 196

Notes to the parent company financial statements 197

Statutory Auditors’ report on the annual financial statements

(year ended December 31, 2018) 212

Statutory Auditors’ special report on regulated agreements

and commitments 215

OTHER LEGAL AND FINANCIAL INFORMATION 217

General information about BOURBON Corporation SA

and its share capital 218

Trademarks, licenses, patents, property, plant and equipment 232

Agenda for the combined Shareholders’ Meeting

of June 28, 2019 235

Draft resolutions for the Combined General Meeting

of June 28, 2019 236

Statutory auditors’ report on the share capital reduction 241

Statutory auditors’ report on the authorization

to grant free shares (existing or to be issued) 242

Statutory auditors’ report on the share capital increase

reserved for members of a company savings plan 243

Persons responsible for the Registration Document

and the audit of the financial statements 244

Cross reference tables 245

The elements of the annual report financier are identifiés in the summary using the pictogram AFR

1. 5.

6.

2.

3.

AT A GLANCE 2

4.

This Registration Document is an unofficial translation of the French Document de référence, which was filed with the

French Autorité des marchés financiers (AMF) on April 26, 2019, in accordance with Article 212-13 of the AMF General

Regulation. The French Document de référence may only be used for the purposes of a financial transaction if supplemented

with an offering memorandum approved by the AMF. The French Document de référence was prepared by the issuer

and its signatories are liable for its content. The Registration Document can be viewed in its entirety on and downloaded from

http://www.bourbonoffshore.com/en/investors/regulated-information

BOURBON CorporationA French Société anonyme with capital of 49,189,434 euros

Company registration: RCS MARSEILLE 310 879 499

Head offi ce:

148, rue Sainte - 13007 MARSEILLE - France

Tel.: +33 (0)4 91 13 08 00

Fax: +33 (0)4 91 13 14 13

Investor relations, analysts, shareholders:

[email protected]

BOURBONOFFSHORE.COM

Building together a sea of trust

2018 REGISTRATION DOCUMENTANNUAL FINANCIAL REPORT

1BOURBON 2018 REGISTRATION DOCUMENT

AMERICAS REVENUE

€94.5m

When it presented its #BOURBONINMOTION strategic action plan in February 2018, BOURBON sent a strong signal that, as a group, it takes a proactive stance toward changes in its environment and it is ready to make every effort

to meet the challenges of today’s offshore market , which is more demanding and

constantly seeks to optimize costs.

The g roup has been undertaking this transformation, supported by the strategic action plan, for over a year. It requires a change of mindset, and its purpose is to give the group control of

its own destiny through a paradigm shift, a change in its operating model and a redesigned service offering . Transformation amid crisis is not an easy option but an act of responsibility, toward our customers, our partners, our shareholders and, of course, toward our employees, who both embody and play the principal role in this transformation .

Each of the newly created standalone companies bears the mark of this change in mindset: integrated logistics services at Bourbon Marine & Logistics, turnkey projects at Bourbon Subsea Services, passenger experience as a core priority via new digital services at Bourbon Mobility.

Through its Smart Shipping program that connects its fl eet, BOURBON is undergoing a total transformation and writing a new page in its long history. Both ambitious and pragmatic, the g roup is aware of the considerable efforts it has to make to overcome the challenges of this new market, without forgetting the values on which it was built: professionalism, enthusiasm, responsibility and solidarity.

Gaël BODÉNÈS

Chief Executive Offi cer

AT A GLANCE

80%OFFSHORE

CREWS

20%ONSHORE

PERSONNEL

84NATIONALITIES

+8,200EMPLOYEES

ADJUSTED GROUP REVENUE

€689.5m

ADJUSTED REVENUE

€357,3m

€133.6m

€187.7m

2 BOURBON 2018 REGISTRATION DOCUMENT

AFRICAREVENUE

€381.7m

ASIAREVENUE

€77.0m

EUROPE-MEDITERRANEAN /MIDDLE EAST

REVENUE

€136.4m

31OPERATING

SUBSIDIARIES

AE

AAAUE

1.00 TRIR*

2019 GOAL = 0.60*Total rate of incidents reported

96.0%TECHNICAL AVAILABILITY

RATE

52.2%VESSEL UTILIZATION

RATE

483VESSELS

OUR CLIENTS

1. National oil companies

2. International oil companies

SUPERMAJORS

NOCs1

18%

IOCs2

OTHER

CONTRACTORS

49%

13% 16%

4%


RESHAPE COSTSTRUCTURE

Local & technological partnerships

SMART SHIPPING PROGRAM

• Target: • 25% cost reduction by simplifying and

digitalizing our operations

• Increased safety and quality of services

• Deployment on more than 100 "smart vessels"

SMART G&A• Adapt organization & cost

structure to the new size

of BOURBON (-40%

of turnover since 2015)

3 Stand-alone companies, ready to deliver fit for purpose services

• Barrel price: 60$/70$

• Clients needs in deep evolution

• Loss of 40% of offshore services

market

• 30% OSV fleet stacked

OIL & GAS NEW NORMAL ENVIRONMENT

BOURBON’s 4 pillars:

• Safety

• Technical availability of the fleet

• Competences

• Cost reductions

CLIENTS DEMAND: OPERATIONAL EXCELLENCE

BOURBONMOBILITY

With the fall in the price of a barrel in 2014, the oil industry

experienced its most serious crisis in the past 30 years.

The Offshore services market was hit hard and contracted

by 30 to 40% in three years. BOURBON is convinced that,

once the crisis is over, the Offshore services sector’s current

model will have changed. This is why the g roup launched its

#BOURBONINMOTION strategic action plan in 2018 to keep it

competitive and meet the new requirements of its customers.

This plan is structured around four priorities:

3 Adapting our business model to more services for

Bourbon Marine & Logistics, Bourbon Subsea Services

and Bourbon Mobility.


RESTORE FINANCIALLEEWAY

• Results oriented

• Simplification

• Accountability

CULTURAL CHANGE

SERVICES ORIENTEDBUSINESS MODELS

• Cash focus

• Financial efficiency

Operational Support CenterRemote control

DIGITAL FOR ALL• Applications

• Business intelligence

• Artificial intelligence

• Machine learning

• IoT for maintenance

• Internal E-learning

Local shore support

NEW SERVICES• Integrated logistics

• Turnkey projects

in renewable energies

• Onboard passengers

entertainment (VOD,

games, etc.) &

"door-to-rig" offers

Head Office

Be the preferred company in offshore marine services.

#BOURBONINMOTION 2021 Strategic plan

to their customers and capture sustainable growth.

BOURBONMARINE &LOGISTICS

BOURBONSUBSEASERVICES

3 Optimizing our operational and organizational cost

structure by capitalizing on the digital revolution.

3 Restore fi nancial leeway.

3 Meeting the human challenge involved in the scope of the

#BOURBONINMOTION plan by supporting changes in the

g roup’s culture.

This infographic gives a schematic overall view of the

strategic plan and a comprehensive look at its main pillars

and actions in progress. For more details on the plan, see

Chapter 2.3, p 32.


1BOURBON IN 2018

1. KEY FIGURES 8

2. STOCK MARKET DATA 9

2.1 Historic data 10

3. MANAGEMENT BODIES 11

3.1 Senior management as of December 31, 2018 11

3.2 Composition of the Board of Directors as of

December 31, 2018 11

3.3 Committees of the Board of Directors as of

December 31, 2018 11


BOURBON IN 20181 Key fi gures

1. KEY FIGURES

* Adjusted.

* The adjusted financial information is presented by Activity and by Segment based on the internal reporting system and shows internal segment information

used by the principal operating decision maker to manage and measure the performance of BOURBON (IFRS 8). Internal reporting (and thus adjusted

financial information) records the performance of operational joint ventures in which the g roup has joint control by the full consolidation method. Furthermore,

internal reporting (and again the adjusted fi nancial information) does not take into account IAS 29 (Financial Reporting in Hyperinfl ationary Economies),

applicable for the fi rst time in 2017 (retroactively from January, 1) to an operational joint venture in Angola.

3 REVENUE* (IN € MILLIONS)

1,102.6

860.6

689.5

2016 2017 2018

3 BREAKDOWN OF 2018 REVENUE BY ACTIVITY

Bourbon SubseaServices

19%

Bourbon Mobility

27%

52%

Other

2%

BourbonMarine & Logistics

3 EBITDAR* (IN € MILLIONS)

383.0

252.4

142.7

2016 2017 2018

3 EBITDA* (IN € MILLIONS)

193.3

87.8

-4.3

2016 2017 2018

3 EBIT* (IN € MILLIONS)

-165.1

-313.9

-403.9

2016 2017 2018

3 NET INCOME, GROUP SHARE (IN € MILLIONS)

-279.6

-457.8

-576.3

2016 2017 2018


BOURBON IN 2018

11

Stock market data

3 VESSELS OPERATED BY BOURBON*

451

62

449

59

424

59

Proprietary In bareboat rental

2016 2017 2018

* Excluding endeavor.

3 NET DEBT (IN € MILLIONS)

2016 2017 2018

1,4681,365

1,278

2. STOCK MARKET DATA

(in euros)

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20132011 2012 2015 2017 201820162014

0

5

10

15

20

25

30

35

40

Stock price as of March 22, 2019:

€2.43

Initial public offering:

October 21, 1998


BOURBON IN 20181 Stock market data

2.1 HISTORIC DATA

2018 2017 2016

Number of shares as of December 31 77,499,214 77,499,214 76,342,603

Closing share price (in €)

- high 8.11 12.65 15.12

- low 3.43 6.70 9.46

- at December 31 3.43 7.00 12.25

Stock market capitalization as of December 31 (in € millions) 266 542 935

Net earnings per share (in €) (5.92) (7.47) (3.68)

Dividend per share (in €) 0 0.25 1.00

Total dividend (in € millions) 0 8.5 25.5

Shareholders’ calendar

May 2, 2019

Publication of first quarter revenue for 2019

June 28, 2019

Shareholders’ Meeting

September 5, 2019

1st Half Year Results 2019 press release and presentation

November 7, 2019

Publication of third quarter revenue for 2019

Investor relations – analysts – shareholders

BOURBON Corporation SA

148, rue Sainte

13007 Marseille, France

Tel: +33 (0)4 91 13 08 00

Fax: +33 (0)4 91 13 14 13

[email protected]

www.bourbonoffshore.com


BOURBON IN 2018

11

Management bodies

3. MANAGEMENT BODIES

3.1 SENIOR MANAGEMENT AS OF DECEMBER 31, 2018

Gaël Bodénès


At its meeting of July 23, 2018, in accordance with the internal

regulations of the Board of Directors, on the proposal of

Gaël Bodénès, the Board appointed Thierry Hochoa to assist the

Chief Executive Offi cer as Group Chief Financial Offi cer, effective

August 6, 2018.

3.2 COMPOSITION OF THE BOARD OF DIRECTORS AS OF DECEMBER 31, 2018

Jacques d’Armand de Chateauvieux, Chairman of the Board of

Directors

Adrien de Chomereau de Saint André

Adeline Challon-Kemoun(1)

Christian Lefèvre

Baudouin Monnoyeur(3)

Antoine Grenier(1)

Mahmud Tukur(1)

Élisabeth Van Damme(1)

Xiaowei Wang

Stéphane Leroux(2)

The Board of Directors is also assisted by an advisor, Henri d’Armand

de Chateauvieux.

3.3 COMMITTEES OF THE BOARD OF DIRECTORS AS OF DECEMBER 31, 2018

The Board of Directors is assisted in preparing its work by two special

committees. These committees have a research and preparation

role for various Board deliberations and they submit their opinion,

proposals or recommendations to the Board of Directors.

3.3.1 Nominating, Compensation and Governance Committee

The purpose of this committee is to study and submit to the Board

proposals concerning the selection of Directors, the succession plan

for members of the management team, and the compensation of the

corporate officers, including allocations of stock options for new or

existing shares, where applicable.

As of December 31, 2018, the Nominating, Compensation and

Governance Committee was composed of four members:

3 Adeline Challon-Kemoun, Independent Director, who chairs

the C ommittee;

3 Adrien de Chomereau de Saint-André, Director;

3 Elisabeth Van Damme, Independent Director;

3 Stéphane Leroux, Director representing the employees.

3.3.2 Audit Committee

The mission of the Audit Committee is to assist the Board of

Directors so that it can monitor the accuracy and consistency of

BOURBON Corporation SA’s parent company and consolidated

financial statements, the quality of internal control and the information

available to shareholders and the markets.

As of December 31, 2018, the Audit Committee was composed of

three members:

3 Antoine Grenier, Independent Director, who chairs the C ommittee;

3 Mahmud Tukur, Independent Director;

3 Christian Lefèvre, Director.

3.3.3 Ad-hoc Restructuring Committee

The purpose of the ad-hoc Restructuring Committee is to assist the

Board with the g roup’s fi nancial restructuring and the search for new

fi nancial partners.

As of December 31, 2018, the Audit Committee was composed of

four members:

3 Antoine Grenier, Independent Director, who chairs the C ommittee;




(1) Independent Directors.

(2) Director representing employees; Patrick Lièvre is his alternate.

(3) The term of offi ce of Baudouin Monnoyeur ended on April 24, 2019 because he reached the statutory age limit.


BOURBON IN 20181


2GENERAL INTRODUCTION TO THE GROUP

1. BOURBON TIMELINE 14

2. SIMPLIFIED OVERVIEW OF ACTIVITIES 15

3. ACTIVITIES AND BUSINESS MODELS 16

3.1 Major clients 16

3.2 Geographical footprint 17

3.3 Activities 17

3.4 Business models and contracting models 18

4. ORGANISATION 19

5. INNOVATION 20

6. COMPETITIVE ENVIRONMENT 21

6.1 Marine services 21

6.2 Subsea Services 22

7. MAIN MARKET TRENDS 22


GENERAL INTRODUCTION TO THE GROUP2 BOURBON timeline

Among the market leaders in offshore marine services, BOURBON offers the most demanding companies a wide range of

marine services, both surface and sub-surface, for offshore oil & gas fi elds and wind farms. These extensive services rely on a

broad range of the latest-generation vessels and the expertise of more than 8,200 skilled employees. BOURBON also protects

the French coastline for the French Navy. Classified by ICB (Industry Classification Benchmark) in the “Oil Services” sector, as

of December 31, 2018, BOURBON Corporation SA had been listed in capitalization compartment B of NYSE Euronext Paris since

January 2016.

1. BOURBON TIMELINE

From its origins as a family company specialised in sugar production, BOURBON has become a “pure player” in offshore oil and

gas marine services. Here are the major stages of this transformation:

→ 1948 to 1979Founded in 1948, BOURBON Corporation SA (then known as

“Sucreries de BOURBON”) was a sugar company based on the

island of Reunion for more than 30 years. In 1979, Jacques de

Chateauvieux became President.

→ 1980 to 1989Industrial restructuring of the Sugar activity. Diversification of activities

into food-processing, then distribution and marine services.

→ 1992Acquisition of the Compagnie Chambon and its subsidiary Surf,

dedicated to offshore oil and gas marine services.

→ 1998Initial Public Offering on the Paris secondary market.

→ 2001The group steadily disengaged from its historic activities in Foods,

Distribution and Sugar and began to concentrate on marine services.

→ 2003Implementation of the 2003-2007 strategic plan, which stepped up

the group ’s shift toward the sole business of offshore marine services.

→ 2004BOURBON was classified by Euronext in the “Oil Services” sector.

→ 2005“BOURBON Group” became “BOURBON” and the head office was

transferred from Reunion to Paris.

→ 2006BOURBON was added to the SBF 120 index.

BOURBON completed the 2003-2007 plan a year ahead of schedule

and launched a new strategic plan: Horizon 2010.

→ 2008BOURBON extended its strategic plan and outlook within the new

strategic plan: Horizon 2012.

BOURBON positioned itself in the offshore oil field IMR (Inspection,

Maintenance and Repair) market: the group extended its range of

services by launching a new Subsea Services business.

→ 2010BOURBON announced its new strategic plan, the “BOURBON 2015

Leadership Strategy”, which furthered the objectives of the previous

plan: a new, USD2 billion investment program to support growth

in the deepwater offshore sector while continuing to upgrade its

shallow water offshore fleet.

→ 2013BOURBON implemented its “Transforming for beyond” plan, to

prepare for its future growth. As part of the transformation project,

BOURBON announced its intention to sell supply vessels for up to

USD2.5 billion, while continuing to operate them for ten years under

a bareboat chartering contract.

→ 2014After a takeover bid, JACCAR Holdings, controlled by Jacques

d’Armand de Chateauvieux, jointly holds with other shareholders

55.8% of BOURBON’s capital and voting rights.

BOURBON successfully completed its first bond issuance (Perpetual

Deeply Subordinated Notes (TSSDI)), for €100 million. This was

followed a year later by a second bond issue for an amount of

€20 million that is part of the same issuance as the initial bonds.

→ 2016In an offshore oil industry marked by the drop in the price of a barrel

of oil, BOURBON’s earnings were strongly impacted by the crisis.

The group was still resilient because of its operational performance

and control of its costs, as well as the end of its “Transforming for

Beyond” action plan, which generated free cash fl ow.

“BOURBON SA” became “BOURBON Corporation SA”.

→ 2017 to 2018:The group initiated discussions with its main financial partners, both

in France and abroad, in order to balance the servicing of its debt

with the expected gradual market recovery and the corresponding

upturn in the group ’s performance.

In February 2018, BOURBON announced its strategic action plan

#BOURBONINMOTION, which will enable the group to remain

competitive and meet its clients’ new requirements in a market

environment which has put all Oil & Gas industry players to the test.

It conducted a reorganization, creating three standalone companies:

Bourbon Marine & Logistics, Bourbon Subsea Services and

Bourbon Mobility.


GENERAL INTRODUCTION TO THE GROUP

2

Simplifi ed overview of activities

2. SIMPLIFIED OVERVIEW OF ACTIVITIES

BOURBON provides its clients with marine resources (vessels, equipment, Remotely Operated Vehicles, etc.) and crews, billing its clients for

daily charters under chartering contracts ranging from spot to five-year charters. Several subsidiaries in charge of ship management ensure

the reliability of the fl eet on a daily basis. Supported by two centralized organizations (maintenance in Bucharest and Supply Chain in Dubai),

these subsidiaries ensure that every vessel is certifi ed, manned, supplied and effi ciently maintained.

Furthermore, Bourbon Subsea Services offers its clients integrated contracts which limit the number of interfaces for the client. These contracts

include the provision of IMR vessels and Remotely Operated Vehicles operated by BOURBON personnel, as well as engineering and project

management services. Some services can also be carried out at a fi xed-rate price with a performance undertaking.

Range of services of the group ’s three standalone companies:

BOURBON MOBILITY

252 Crew boats

2.7 Million passengers per year

Offers ultra-fast offshore passenger

transport and light equipment

services at all distances, and offers

a unique transport capacity of

nearly 8,000 passengers per day.

Thus, offers the oil industry a safe,

economical and reliable alternative

to helicopters.

BOURBON MARINE & LOGISTICS

BOURBON SUBSEA SERVICES

87

124

20 MPSVs

25 ROVs

Offers a full range of deepwater

and shallow water offshore

support services: supplying

offshore installations and vessels,

refueling facilities and transportation

of offshore equipment, towage,

anchor handling via platform

positioning, support for floating

production units, and assistance,

salvage and pollution remediation.

Manages complex submarine

operations and offers three main

lines of services: engineering,

underwater operation supervision

and management; oil and gas

field and offshore wind farm

development support; Inspection,

Maintenance and Repair (IMR)

of offshore structures at depths

of up to 4,000 m.

deepwater offshore vessels

shallow water offshore vessels

BOURBON responds to the needs of its clients in the four main stages of the oil & gas life cycle:

Seismic support Personnel transportOff shore installation

and vessel supplyOff shore installation and vessel

supply

Personnel transport Off shore operation engineering and supervision

Off shore installation anchor handling, towage and positioning

Off shore installation anchor handling, towage and positioning

Installation and logistical support for fi eld

development

Support for fl oating production, storage and oil and gas

unloading units

Support for fl oating production, storage and oil and gas

unloading units

Remotely operated vehicle operations

Assistance, salvage and pollution remediation

Assistance, salvage and pollution remediation

Subsea well stimulation Personnel transport Personnel transport

Off shore operation engineering and supervision

Off shore operation engineering and supervision



Installation and support for fi eld development

Inspection, maintenance and repair

Employee accommodation

1

SEISMIC STUDY

2

EXPLORATION

3

CONSTRUCTIONS

4PRODUCTION & MAINTENANCE


GENERAL INTRODUCTION TO THE GROUP2 Activities and business models

3. ACTIVITIES AND BUSINESS MODELS

3 BREAKDOWN OF 2018 ADJUSTED REVENUE BY TYPE OF CLIENT

4%

OTHER

NOCs

IOCs

SUPERMAJORS

CONTRACTORS

49%13%

16%

18%

1 - IOCs: International Oil Companies

2 - NOCs: National Oil Companies

₁

2

BOURBON supplies a wide range of maritime support services for

exploration, production and development of offshore gas and oil

fields, either in shallow water offshore or deepwater offshore.

The group offers local services through its 31 operating subsidiaries,

which are close to clients and their operations. It meets the highest

operational excellence and risk management standards all over the

world. For over 30 years, it has also been protecting the French

coast on behalf of the French navy.

BOURBON’s added value comes from its ability to provide solutions

to all oil and gas clients through a range of maritime services which

reflect its operational excellence and risk management priorities

based on:

3 a modern, diversified fleet of 483 offshore vessels, most of which

were built in series;

3 8.200 employees working under the flag of excellence;

3 a single operations and security management system with a “zero

incidents” goal;

3 a network of local subsidiaries that supports vessel operations

and provides local services to customers.

3.1 MAJOR CLIENTS

BOURBON has a diversifi ed client portfolio that is representative of

the offshore oil and gas industry.

The majority of its clients are the international majors in the industry,

entrepreneurs (or contractors) and national companies, most of

which have been loyal customers for many years. BOURBON

maintains long-term ongoing relationships with these demanding

clients through master agreements or long-term contracts. This

makes BOURBON a “strategic supplier”.

The second type of client is independent companies or international

oil companies (IOCs), with more specifi c needs for smaller and

often shorter-term volumes. Representing 16% of its client portfolio,

BOURBON has close relationships with them.



2

Activities and business models

3.2 GEOGRAPHICAL FOOTPRINT

BOURBON operates in the main oil producing areas, apart from the

US section of the Gulf of Mexico. BOURBON is present in:

3 Africa, in particular the Gulf of Guinea;

3 the Mediterranean Sea;

3 the North Sea;

3 Brazil, Mexico and the Caribbean;

3 India and the Middle-East;

3 South-East Asia.

3 BREAKDOWN OF 2018 ADJUSTED REVENUE BY GEOGRAPHICAL REGION

American

continent

14%

Europe

and Mediterranean /

Middle East

20%55%

Asia

11%

Africa

3.3 ACTIVITIES

3.3.1 Bourbon Marine & Logistics

BOURBON is a leader in the offshore oil maritime services industry,

which relies on a modern, standardized and competitive fleet.

The group applies very high international quality standards in the

provision of both shallow water and deepwater offshore maritime

services. With a fl eet of more than 200 vessels, Bourbon Marine &

Logistics is a “pure player” in offshore oil and gas maritime services.

Having made operational risk management its main priority, this

activity has established a client satisfaction chain process. This

unique organizational model focuses on vessels, in line with the four

pillars of operational excellence:

3 safety of people and equipment, while respecting the environment,

both on land and at sea;

3 competence to ensure service quality;

3 technical availability of the vessels, to ensure service continuity;

3 optimization of costs and fuel consumption (maneuverability

of vessels thanks to azimuth thrusters and reduced diesel fuel

consumption thanks to diesel electric propulsion).

3.3.1.1 The fl eet – vessels dedicated to supporting off shore operations

Anchor Handling Tug Supply vessels (AHTS)

AHTS are used to set up and anchor oil platforms. They have

powerful engines and winches, can tow drilling rigs and barges, lay

and lift anchors, and deploy various pieces of equipment related to

oil and gas production.

Platform Supply Vessels (PSV)

These vessels supply offshore rigs with special equipment and

products. In addition to their large deck area, which enables them to

transport all types of equipment such as irregular sized parcels, they

have considerable storage capacity and optimized fuel consumption.

BOURBON also provides seismic assistance and support services

with a series of six hybrid propulsion seismic support vessels (SSV).

Terminal Tugs

BOURBON’s fleet of terminal tugs is used for assistance, standby

and intervention operations on offshore oil and gas terminals, and

is specialized in FPSO (floating production, storage and unloading

unit) assistance.

3.3.1.2 Coastal protection fl eet These assistance and salvage tugs specialize in the protection of

3,120 km of French coastline and prevent vessel strandings, assist

and rescue vessels in distress and fight against oil pollution. To

carry out their mission of protecting the coastline, these vessels

are equipped with the latest anti-pollution techniques, such as

dispersant tanks, pumps and fl oating dams.

3.3.2 Bourbon Mobility

For over 30 years, Bourbon Mobility has offered major players in the

oil industry ultra-fast offshore passenger transport and light package

services for all distances. With nearly 2.7 million people transported

every year, Bourbon Mobility has established itself as a world leader

in personnel transportation in the oil industry, offering its customers a

safe, economical and reliable alternative to helicopters.

With a unique transport capacity of almost 6,500 seats, the crews

operate a fl eet of more than 250 modern vessels. They manage

the transfer of passengers and ensure their well-being and safety,

overseeing navigation, maintenance and compliance with operational

standards.

To improve the passenger experience and achieve operational

excellence, Bourbon Mobility has defi ned a strategy based on:

3 a standardized training program that enables all crews to reach

the highest level of expertise;

3 a fl eet of high-performance, series-produced vessels that

combine comfort, safety and reliability at speeds ranging from

20 to 45 knots;


GENERAL INTRODUCTION TO THE GROUP2 Activities and business models

3 a unique network of Surfer Repair Centers as close as possible to

operations to optimize vessel maintenance management.

This activity offers a range of three services:

3 Crewliner

The Crewliner service is the transport service for personnel

between onshore bases and offshore structures over long

distances. To offer complete services, operational standards are

inspired by the aviation industry. New free entertainment services

(games and movies) are being offered this year to passengers on

a dedicated network, accessible from smartphones, tablets and

laptops (upon request from clients).

3 Inter-Field

This service corresponds to the daily transportation of personnel

and light equipment between offshore oil and gas fi elds. Bourbon

Mobility provides the bulk of these around the clock inter-fi eld

services.

3 Rapid intervention services

Fast Intervention Vessels (FSIVs) allow urgent deliveries of small

containers or parcels and transportation of intervention teams.

3.3.3 Bourbon Subsea Services

From chartering vessels to turnkey services, Bourbon Subsea

Services offers oil operators or contractors a complete range of

services to support them at every stage of their oil fi eld’s life, from

surveying and exploration phases, during subsea construction to

offshore operations and dismantling.

This range includes:

3 subsea multipurpose vessels;

3 underwater Remotely Operated Vehicles (ROV) which can

perform operations at depths of up to 4,000 meters;

3 teams of engineers and technicians who can provide solutions

for the installation and maintenance of offshore platforms and

subsea fields, in addition to the installation of equipment and

cables for the offshore renewable energy business.

The teams’ range of skills covers the three main subsea business

lines:

3 engineering, supervision and management of subsea operations;

3 Offshore oil and gas field and wind farm development support;

3 Inspection, Maintenance and Repair (IMR) of offshore structures.

3.3.3.1 The Subsea fl eet

IMR vessels

These are multipurpose vessels mainly used for ultra-deepwater

Installation and Inspection, Maintenance and Repair (IMR) operations.

They can also provide support for wind farms. Bourbon Subsea

Services offers a wide range of vessels with dynamic positioning

technology and cranes with a wave compensation system and a

lifting capacity ranging from 10 t to 250 t at the surface and up to

120 t per 3,500 m of seabed up to 4,000 m deep. Vessels have large

deck and cargo capacity in addition to the capacity to accommodate

over 100 people.

This range of vessels has been specially developed to meet the

needs of oil operators during:

3 exploration for test wells;

3 contractor construction and field development;

3 surface or subsea maintenance of offshore oil and gas fields;

3 emergency situations, including fire protection, surface and

subsea anti-pollution, and personnel safety.

The current generation of Bourbon Evolution 800 vessels benefit

from support of and synergies with the Bourbon Marine & Logistics

activity, and the standardization of propulsion and communication

equipment.

Remote Operated Vehicles (ROV)

Bourbon Subsea Services’ fleet of underwater robots (ROV) includes

three main categories:

3 ROVs for light observation;

3 compact ROVs used for instrumental surveys and light

construction work at depths of between 600 and 2,000 m;

3 ROVs of the UHD (Ultra Heavy Duty) and HD (Heavy Duty) Work

Class type, which enable crews to work and handle packages on

all types of sites at depths of up to 4,000 m with great stability

and precision.

3.3.3.2 Turnkey project engineering and management services

Bourbon Subsea Services also offers recognized expertise in the

engineering of IMR projects on oil fi elds in operation (replacement

of subsea connections, wellheads, cables, small diameter pipe

laying, etc.) and in the management of turnkey projects, especially

on offshore wind farms.

These services include the complex project management and

planning of procedures and the provision of specialized personnel to

manage the operations on board the vessels.

3.4 BUSINESS MODELS AND CONTRACTING MODELS

Maritime services are governed by vessel time chartering contracts

according to which the service is billed on the basis of daily rates.

These services include the provision of the vessel and its crew to the

oil operator for a period of time agreed in advance. These periods

can vary from a few days to several years.

The standard terms of these contracts are set out in a sample contract

created by the BIMCO (Baltic and International Maritime Council),

which is commonly used in the industry. However, BOURBON also

signs framework agreements with the oil majors (Exxon, Chevron,

Total, BP, etc.), through its role as a strategic supplier.

From the start of operations, the performance of the service is closely

monitored by the Contracts Manager who is the client’s main point

of contact. His or her role is to be available at any time to meet client

expectations and enable operational excellence targets to be met.



2

Organisation

Bourbon Subsea Services specificities

The service is contracted as follows:

3 bareboat vessel chartering;

3 chartering vessels with associated crew, crane operator, catering

services, remote operated vehicles and operations management;

3 on a fixed-price basis for some installation contracts, with a

performance commitment and limitation of liability.

Chartering of Remote Operated Vehicle (ROV) are billed on per day

basis and may include additional services such as positioning, survey

services. Other services such as diving are subcontracted.

Vessel and ROV chartering contracts involve an obligation to provide

associated resource with limited liabilities and associated waiver

of recourse.

Engineering services are mostly provided on a lump sum basis and

their liability extends to repeating the study in the event of a defect.

Engineering studies are performed also for vessel charter usually

limited to lifting calculation analysis in order to protect BOURBON

asset and equipment integrity.

For some turnkey contracts, particularly in the field of renewable

energy, BOURBON provides fixed-price installation services subject

to limitation of liability.

4. ORGANISATION

As part of its #BOURBONINMOTION strategic action plan, the group made changes to its organisational structure in 2018. The purpose

of this new organisation is to enable BOURBON to better serve its customers through the creation of three market-specifi c standalone

companies that can implement their own strategies and focus on profi table growth by evolving their models towards more integrated services.

BOURBON CORPORATION

CORPORATE

STANDALONE COMPANIES SHARED SERVICES

PERFORMANCE CONTROLLING

MASTER DATA MANAGEMENT COMMUNICATION

HR DEVELOPMENT

HSE, STANDARD AND BRAND

#BOURBONINMOTION

AUDIT, COMPLIANCE AND RISKS

BOURBON MARINE &LOGISTICS

BOURBON SUBSEA SERVICES

BOURBONMOBILITY

HEAD OFFICE

SUBSIDIARIES

JVS

HEAD OFFICE

SUBSIDIARIES

JVS

HEAD OFFICE

SUBSIDIARIES

JVS

ONE BOURBONSUPPORT FUNCTIONS

ONE BOURBON OPERATIONS

- Treasury and financing

- Consolidation and Accounting

- Taxes

- Legal and insurance

- IT

- HR Services

- Smart Shipping

- Maintenance

- Supply Chain

- Purchasing

- New buildings and innovation

The list of companies in the group and their geographical location is presented in note 5.8 to the consolidated fi nancial statements.


GENERAL INTRODUCTION TO THE GROUP2 Innovation

5. INNOVATION

As a key factor in the competitiveness and attractiveness of

BOURBON service offering, innovation has always been at the heart

of the group ’s model and strategy.

It has largely contributed to the positioning of BOURBON as leader

in the offshore support vessel market, with the series construction of

vessels from 2008 to 2010. As the fl agships of our standardization

strategy, the Bourbon Liberty, Bourbon Evolution and Bourbon

Explorer series offer our clients optimized quality of execution

compared to traditional AHTS, PSVs and MPSVs. These vessels

share a number of innovative features: reduced fuel consumption, a

cargo capacity increased by around 30% for Bourbon Liberty vessels

(compared to comparable-size vessels), equipment redundancy,

azimuth thrusters, dynamic positioning and excellent maneuverability.

Because maintenance is facilitated by standardization, these modern

vessels guarantee a high level of availability. All these assets generate

significant productivity gains on operations conducted for clients,

efficiently and over the long term.

To reduce costs and optimize the quality of service for our clients, the

group ’s two current main areas of innovation are:

3 Data Management;

3 D igitization of processes.

The group cultivates a collaborative approach to innovation

and works in close cooperation with several of its clients and an

ecosystem of innovative technological partners, such as Kongsberg,

Bureau Veritas, Automated Ships Ltd, Predict, STC Global, etc.

BOURBON has been a digital transformation visionary since

2015 with the creation of the myBOURBON platform, which

allows its customers to access their operational data in real time

(vessel position, contract, fuel consumption, crews, maintenance,

certifi cates, etc.), and it accelerated its digital initiatives in 2017 with

a connected vessel pilot project in Angola. This pilot project gave

birth to the launch of the Smart Shipping program, backbone of the

#BOURBONINMOTION action plan, in 2018. The group has made

it a strategic priority to capitalize on the digital revolution and in order

to set itself apart by connecting the fl eet and reducing costs. This

four-year program is made up of 12 project teams and is deployed

by nearly six ship managers and 30 change offi cers with the mission

of ensuring the proper management of change on board.

With its ambition of revolutionizing our operational model to improve

quality of service while reducing costs, the Smart Shipping program

is present on the three levels of the operational process: the vessel,

local onshore support and remote central support. It was deployed

in pilot mode on six vessels in 2018 and will be introduced on at least

50 vessels in industrial mode in 2019. It should be rolled out on the

Bourbon Marine & Logistics fl eet of over 130 modern Supply vessels

(known as the “Smart Fleet”) by 2022.

BOURBON is aiming to explore, develop and implement technical

and digital solutions to enhance safety and optimize operational

costs while improving the level of operational excellence, thus laying

the foundations for a new generation of autonomous and connected

vessels and 4.0 maritime services .



2

Competitive environment

6. COMPETITIVE ENVIRONMENT

6.1 MARINE SERVICES

There are two types of operators:

3 international players in key global markets (33%)(1) about the total

fl eet (including BOURBON). The main companies are as follows:

Tidewater (United States), Seacor (United States), Solstad

Offshore (Norway), Maersk Supply (Denmark), Edison Chouest

(United States), Hornbeck (United States) and Swire Pacifi c

(Hong Kong);

3 over 500 local operators, each with a fleet made up of a small

number of vessels.

BOURBON is a world leader in the offshore oil and gas services

market owing to the size of its fleet and its geographical positioning.

BOURBON’s vessels are standardized and equipped with Dynamic

Positioning Systems (DP2), diesel electric propulsion engines

and satellite communication systems. BOURBON has one of the

youngest fl eets and the second-largest in number of vessels. Only

four competitors have a fl eet of more than 100 vessels, seven

companies have a fl eet of 50 to 70 vessels, eight companies have

a fl eet of 30 to 50 vessels, 72 companies have a fl eet of 10 to 30

vessels and many other companies have a fl eet of fewer than 10

vessels.

(1) Source: IHS Petrodata, excluding vessels over 30 years old.

BOURBON

Concu

rrent #

1

Concu

rrent #

2

Concu

rrent #

3

Concu

rrent #

4

Concu

rrent #

5

Concu

rrent #

6

Concu

rrent #

7

Concu

rrent #

8

Concu

rrent #

9

Concu

rrent #

10

Number of Supply vessels

0

50

100

150

200

250

3 GEOGRAPHICAL POSITIONING

ASIAMED/

MIDDLE- EAST NORTH SEA AMERICAS AFRICA

BOURBON x x x x x

Concurrent #1 x x x x

Concurrent #2 x


Concurrent #4 x x x

Concurrent #5 x

Concurrent #6 x

Concurrent #7 x x



Concurrent #10 x x x

Source: IHS Petrodata.


GENERAL INTRODUCTION TO THE GROUP2 Main market trends

7. MAIN MARKET TRENDS

The International Energy Agency (IEA) is forecasting that the oil

market in 2019 will be remain balanced thanks to controlled growth

in supply and demand supported by lower prices. Growth in global

oil demand is increasingly steadily by 1.4 million barrels per day (bpd)

and will reach 100.7 bpd in 2019 (source: IEA). With regard to oil

supply, OPEC and other producing countries adopted a policy to

reduce their supply at the beginning of 2017. In December 2018,

they decided to continue this action for at least the fi rst six months

of 2019, reducing their total production by 1.2 million barrels a day.

This cut in production led to a decline in world stocks and stabilized

oil prices after the sharp drop that began in November 2018. Overall,

the price of a barrel of Brent rose $17 in 2018 compared to the

previous year, from $54 to $71. For 2019, a number of experts see

the price of oil settling at an average of around US$60. The Energy

Information Agency (EIA) is looking at US$62 per barrel, the US

bank Goldman Sachs US$62 per barrel and the World Bank US$67.

In this context, the amount spent by oil companies on exploration

and production capital expenditures increased by 6% in 2018 to

approximately $455 billion. (source: Rystad Energy).

Deepwater off shoreFrom mid-2014 through 2016, oil companies reacted swiftly to the

rapid collapse in the price of oil with cuts to spending on exploration

and production, notably by significantly reducing drilling programs.

Since 2017, the rise in oil prices led to increased demand for

drilling platforms. This trend was further confi rmed in 2018 with the

resumption of investments in exploration and capital expenditure. The

utilization rate of semi-submersible-type drilling rigs and drill ships

increased from 65% in 2017 to 66% in 2018 (source: Clarksons).

The fall in oil prices and the decline in offshore activity since mid-

2014 have seriously affected some of BOURBON’s competitors.

Several companies went bankrupt and their assets were dispersed,

especially in Asia, while others restructured heavily by putting

themselves under the protection of the US Chapter 11 bankruptcy

law. This mechanism enabled certain US companies to clean up

their balance sheets, at the expense of shareholders and financial

partners. Another approach was that taken by Norwegian companies

who chose to consolidate in order to reduce structural costs and

increase volumes.

In an offshore services market with overcapacity, BOURBON fi rst

chose to adapt its operating costs by proactively stacking vessels

without a contract and reactivating them as and when its customers’

activities resumed.

6.2 SUBSEA SERVICES

The major shipowners renegotiated their debt to equity ratios in

2017. The changes to their financial and equity structures could

create charter pricing distortions based on their short-term cash

generation strategy. Non-shipowner companies benefited from

relatively low chartering rates this year but will be exposed when the

market recovers.

Depending on the area of activity, the main competitors are

shipowners such as Maersk Supply (Denmark) and Solstad Offshore

(Norway) when it comes to pure charters, as well as service

integrators such as DOF Subsea (Norway), DeepOcean (Norway)

and Oceaneering (USA).

The world fl eet of IMR/crane vessels includes 284 vessels (source:

IHS Petrodata) with crane capacities of between 40T and 400T. The

market remains highly fragmented, with the two leading shipowners,

Bourbon Subsea Services and Solstad, having 18 vessels respectively.

33% of the fl eet is owned by the nine largest shipowners, and 66%

of the fl eet is owned by 33 shipowners. Seventy shipowners hold

between one and two vessels under a local fl ag.

The Bourbon Subsea Services fl eet is young compared to its

competitors’ and regularly maintained during major refi ts. This

standardized fl eet has been positioned in three geographical areas:

Africa, MMI (Middle East, Mediterranean, India) and Asia, which

minimizes interregional transits. Shipowners with only one or two

vessels are exposed to being single-client companies and do not

have the effects of volume, standardization, and reduced operating

costs.

The Subsea Charter Services activity is distinguished by an obligation

to provide resources, either single vessels, depending on the type

of hoisting, or vessels with remotely operated vehicles. Among the

nine largest shipowners, two have vessels and ROVs: Bourbon

Subsea Services and DOF Subsea. The strength of Bourbon Subsea

Services lies in its control over its vessels, cranes, and ROVs, which

enables it to ensure the reliability and availability of its services. For

this reason, Bourbon Subsea Services, confi dent in its performance,

takes on turnkey contracts.

Service integrators DeepOCean and Oceaneering have chosen

a different vessel chartering strategy vis-à-vis ship owners, taking

advantage of the current overcapacity of the market. In the context

of their services, this involves performing services by taking interface

risks (vessel and ROVs), or completing turnkey projects with

performance targets.



2

Main market trends

UTILIZATION RATE

UNITS UNDER CONSTRUCTION

% OF WORLDWIDE FLEET

Semi-submersible drilling rigs and drill ships

66% (+1 pt)

(2018 vs. 2017) 37 9%

The average age of BOURBON’s deepwater offshore fleet is 11 years, in a global fleet estimated at more than 1,950 units, 10% of which are

over 25 years old (source: IHS Petrodata/BOURBON).

Shallow water off shoreIn this market, activity grew in 2018. The usage rate for jack-ups in 2018 was 71% (source: Clarksons).

UTILIZATION RATE

UNITS UNDER CONSTRUCTION

% OF WORLDWIDE FLEET

Jack Up

71% (+6 pts)

(2018 vs. 2017) 72 13%

To meet the demands of oil operators, the phenomenon of substitution

of old vessels considered obsolete by newer vessels has accelerated

with the crisis. The jackup market has consolidated in favor of the

biggest players on the market such as Borr Drilling, whose fl eet of

recent jackups requires the support of modern vessels.

The accelerated stacking of older vessels during the crisis is visible

when we look at the changes in the fl eet of vessels over 20 years

old. The percentage of stacked vessels in this age group has

risen 9 points over the last three years, while the percentage of

vessels under 10 years old has fallen 9 points. The average age of

BOURBON’s shallow water offshore fleet is eight years, in a global

fleet estimated at more than 1,950 units, 23% of which are over 25

years old (source: IHS Petrodata/BOURBON).

Stacked worldwide fleetAn analysis of the worldwide fleet of vessels dedicated to supporting

offshore operations (AHTSs and PSVs, tugs and vessels over 30

years old excluded - source: IHS Petrodata) shows that out of an

estimated fleet of 3,100 vessels worldwide, 780 (25% of the fleet)

are stacked (moored dockside, crewless or having suspended their

navigation and classification certificates).

Some of its vessels are over 15 years old, and there is very little

chance that they will be able to return to the market. The issue

of technological obsolescence and vessel reactivation costs are

important parameters when owners decide whether a vessel will be

able to return to the market.

This analysis shows that there is uncertainty surrounding the ability

of stacked vessels to return to the market and hence the balance

between supply and demand.

In this context, BOURBON has adopted a rigorous maintenance

policy for its stacked vessels, grouping them into clusters and

assigning them dedicated maintenance teams tasked with preserving

the integrity of the assets and enabling BOURBON to reactivate

vessels quickly to meet market demand.

Furthermore, of the 241 vessels ordered worldwide in 2018 (source:

Clarksons), the share of vessels ordered by BOURBON is not

significant, with only two vessels due to be delivered. For the record,

BOURBON’s share was 5% in 2012 and 4.2% in 2013, < 2.7% in

2014 and 0.5% in 2015.


1. ACTIVITIES AND HIGHLIGHTS 26

1.1 Highlights 26

1.2 Signifi cant events after the end of the reporting period 27

2. RESULTS 27

2.1 Financial performance 27

2.2 Results by business 30

2.3 Growth strategy 32

2.4 BOURBON Corporation SA results 33

2.5 Change in accounting methods 34

2.6 Outlook 34

3. REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE 34

3.1 Separation of the functions of Chairman and Chief

Executive Offi cer – powers of the Chief Executive Offi cer 34

3.2 Manner in which the Board of Directors plans and

organizes its work, terms of offi ce and functions of

corporate offi cers 36

3.3 Principle of governance 54

3.4 Manne r in which the Board of Directors plans and

organizes its work, diversity of the Board of Directors 55

3.5 Assessment of the Board of Directors and the committees 57

3.6 Specialized committees of the Board of Directors 58

3.7 Compensation and benefi ts of corporate offi cers for

the year ended December 31, 2018 60

3.8 Principles and criteria for the determination, distribution

and allocation of the fixed, variable and exceptional

components of total compensation and benefi ts of any

kind payable to Executive Directors in 2019 66

3.9 Application of the AFEP-MEDEF corporate Governance

Code: summary table 69

3.10 Shareholder participation in the shareholders’ meeting 70

3.11 Factors that could have an impact in the event of

a public offer 70

3.12 Agreements made, directly or by any intermediary

person, between, fi rstly, one of the corporate offi cers

or one of the shareholders with a fraction of the voting

rights greater than 10% of a company and, secondly,

another company in which the fi rst directly or indirectly

possesses more than half of the capital,

with the exception of agreements covering current

transactions and concluded under normal conditions 71

4. CONTROL ENVIRONMENT 73

4.1 General organization of internal control 73

4.2 Managing internal control 74

4.3 Statutory Auditors 75

4.4 Risk management 75

4.5 Compliance 75


3MANAGEMENT REPORT

5. RISK FACTORS 76

5.1 Risks related to the offshore oil and gas marine services

market 76

5.2 Risks relating to BOURBON’s activity 79

5.3 BOURBON Legal risks 81

5.4 Ethical and non-compliance risks 81

5.5 Financial risk management objectives and policy 82

5.6 Insurance cover for risks 89

6. STATEMENT OF NON-FINANCIAL PERFORMANCE 90

6.1 Social information 90

6.2 Societal information 95

6.3 Environmental information 97

6.4 Note on social and environmental reporting methodology 99

7. BOURBON CORPORATION SA AND ITS SHAREHOLDERS 101

7.1 Share capital and shareholder base 101

7.2 Dividends paid for the last three fi scal years 101

7.3 Transactions in the company’s securities 102

7.4 Factors that could have an impact in the event

of a public offer 103

8. REPORT EXPLAINING THE BOARD OF DIRECTORS’ RESOLUTIONS PROPOSED TO THE COMBINED SHAREHOLDERS’ MEETING OF JUNE 28, 2019 103

8.1 Approval of the fi nancial statements for the year ended

December 31, 2018 103

8.2 Appropriation of net income 103

8.3 Related party agreements 104

8.4 Directors’ terms of offi ce 104

8.5 Approval of the principles and criteria for determining,

allocating and granting the components of Executive

Director compensation (Chairman of the Board of

Directors and Chief Executive Offi cer) 104

8.6 Approval of the components of compensation paid

or granted in respect of the fi scal year ended

December 31, 2018 to Jacques d’Armand de

Châteauvieux, Chairman of the Board of Directors,

Gaël Bodénès, Chief Executive Offi cer, and

Astrid de Lancrau de Bréon, Chief Financial Offi cer 104

8.7 Share buyback program – cancellation of treasury shares 104

8.8 Delegation of fi nancial authority 105

8.9 Realignment of the company’s bylaws 106


MANAGEMENT REPORT3 Activities and highlights

1. ACTIVITIES AND HIGHLIGHTS

1.1 HIGHLIGHTS

On February 12, 2018, the Board of Directors of BOURBON

Corporation approved the new #BOURBONINMOTION strategic

action plan , which began at the end of 2017. This plan should help

the group in terms of competitiveness and the new demands of

its clients in a market environment that has been challenging to all

players in the Oil & Gas industry. BOURBON’s goal is to accelerate its

transformation in order to be ready for the expected recovery.

The fi rst plan was based on three priorities and broadened to cover

the fi nancial aspect. It represents a total investment of €75 million

over three years.

This plan is now based on four priorities:

3 better serve clients through development of its business model

to include more integrated services, and the reorganization of

the group ’s activities into three standalone companies: Bourbon

Marine & Logistics, Bourbon Mobility, and Bourbon Subsea

Services. These three companies have now implemented their

own strategies. A Chief Executive Offi cer was appointed to

oversee each of these entities in 2018, along with a management

team. Their objective: to deliver profi table growth through:

3 integrated logistical services for Bourbon Marine & Logistics,

which won its fi rst contract in an exploration campaign, as

well as several chartering contracts that include performance

bonuses linked to fuel economy,

3 the transformation of the “passenger” experience for Bourbon

Mobility, which offers new client services aboard its Surfers,

such as access to entertainment through an interactive

platform,

3 light turnkey projects and integrated solutions for Bourbon

Subsea Services. Bourbon Subsea Services installed the

fi rst fl oating wind turbine for the Kincardine offshore wind

farm in Scotland in 2018, and won a turnkey contract for

the installation of the Windfl oat Atlantic fl oating wind farm in

October 2018, in Portugal.

The three new standalone companies have privileged market

access through numerous existing partnerships in the main

countries where BOURBON currently operates;

3 capitalize on digital transformation by connecting the fl eet of

vessels to stand out, improve operational excellence, and reduce

costs. With the help of the Smart Shipping program that is currently

being deployed, by 2022, the Bourbon Marine & Logistics fl eet

of 133 modern Supply vessels (called the Smart Fleet) will be

connected. This program is structured around four main projects:

automating dynamic positioning systems, simplifying on-board

processes, optimizing maintenance, and land-based as well as

remote operational support. The investments made will result

in a 25% sustainable reduction in vessel operating costs. It will

rely on technological partnerships such as those entered into

with Kongsberg in 2017 or Bureau Veritas in 2018. At the end of

2018, BOURBON had already converted its fi rst vessels to Smart

Shipping, and will step up the conversions in 2019;

3 meet the human challenge involved in the scope of the

#BOURBONINMOTION plan. On three fronts:

3 redefi ning organization and governance,

3 deploying a specifi c internal communication plan,

3 supporting the growth of the group ’s culture,

3 rediscovering fi nancial agility.

In addition to its fi nancial restructuring, the Bourbon Group

is committed to optimizing its fi nancial operations, including

the creation of shared service centers for the three standalone

companies that are newly created. BOURBON is also working on

optimizing its cash fl ow, reducing its general costs, and disposal

of non-strategic assets.

Regarding the group ’s fi nancial restructuring, on March 15, 2018,

BOURBON announced that it had initiated discussions with its

main financial partners, both in France and abroad, to balance the

servicing of its debt with the expected gradual market recovery and

the corresponding upturn in the group ’s performance.

On April 20, 2018, the General Meeting of holders of Perpetual Deeply

Subordinated Fixed- to Floating-rate Notes issued by BOURBON

Corporation SA (TSSDIs) authorized Bourbon Corporation to

postpone payment of interest due for an amount of about €3.867

million, due on April 24, 2018, to April 24, 2019. The interest carried

interest from October 24, 2018 (inclusive) until April 24, 2019

(exclusive) at the rate applicable to the TSSDIs.

On July 10, 2018, BOURBON announced that a general waiver was

fi nalized with lessors and debt holders representing the majority of its

debt, thus allowing the group to withhold the payments of its loans

and the servicing of its debt.


MANAGEMENT REPORT

3

Results

This general waiver demonstrates the motivation of all stakeholders

to reach an appropriate restructuring of the debt, while preserving

cash and operating within a secured legal framework. It allows

BOURBON to stay focused on its operational priorities and on the

implementation of its strategic plan, #BOURBONINMOTION.

On November 2, 2018, having received no confi rmation of the renewal

of the general waiver, the group announced that the presiding judge

of the Marseille Commercial Court allowed the initiation of conciliation

proceedings for the 22 subsidiaries of BOURBON Corporation SA.

BOURBON also confi rmed that it was actively engaged in discussions

with its debt holders, and seeking new fi nancing to ensure its

development and the implementation of its strategic plan; the terms

of this possible new fi nancing, including amounts and structures

(debt instruments / capital instruments) was not yet determined.

1.2 SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

On January 3, 2019, BOURBON announced that it had renewed

the general waiver with its lessors and debt holders representing

the majority of the group ’s debt, thus allowing it to suspend the

payments of its loans and debt.

BOURBON also confi rmed that the discussions with its main fi nancial

partners and the active search for new fi nancing were ongoing, so

that it can balance the servicing of its debt with its performance.

In this context, several offers subject to conditions, notably due

diligence, have been received by the group , proposing in particular

new fi nancing and a debt reduction including, for some of them,

conversion of part of this debt into equity.

At this stage, the terms and conditions of these offers, including

their fi nancial parameters, are being evaluated by the group and

its advisors. March 13th, 2019, the Board of Directors carried out a

preliminary review of these propositions. BOURBON specifi es that

no decision or commitment has been made and that no exclusivity

has been granted to any of the fi nancial partners it is in discussion

with.

The group remains confi dent in its ability to fi nd such a solution and

will notify the market in due time in accordance with regulations.

On April 17, 2019, the General Meeting of TSSDI holders authorized

BOURBON Corporation SA to defer the April 2018 payment, due on

April 24, 2019, to July 24, 2019 (the Deferred April 2018 Interest),

after acknowledging the decision of the General Meeting of TSSDI

holders of April 20, 2018 which approved deferment of the interest

payment amounting to €3.867 million due on April 24, 2018 for the

TSSDIs (the “April 2018 Payment”) to April 24, 2019.

Therefore, the interest accrued for the Interest Period running from

October 24, 2017 (included) to April 24, 2018 (excluded) will be paid

on July 24, 2019 (the “Deferred April 2018 Interest”). The Deferred

April 2018 Interest will accrue interest, from the Date of Payment

of Interest, October 24, 2018 (included) and until July 24, 2019

(excluded) at the rate applicable to the TSSDIs, on the Interest

Payment Date in question (the “Additional April 2018 Interest”).

The Additional April 2018 Interest will mature and be payable on

July 24, 2019.

2. RESULTS

2.1 FINANCIAL PERFORMANCE

Segment information and the reconciliation of adjusted financial information with the consolidated financial statements are presented in note 4

to the consolidated financial statements.

2018 2017CHANGE

2018/2017 CHANGE %

Operational indicators

Number of vessels (FTE)* 500.1 511.5 (11.4) -2.2%

Total fl eet in operation (FTE) 317.1 333.7 (16.6) -5.0%

Number of stacked vessels (FTE) 182.9 178.2 4.7 +2.6%

Utilization rate of fleet in operation(1) 82.3% 82.4% -0.1 pt

Average utilization rate(2) 52.2% 53.7% -1.5 pt

Average daily rate $/d 7,942 8,725 (783) -9.0%

* FTE: Full Time Equivalent.

(1) Utilization rate of the fl eet in operation: over a period, number of revenue-generating days divided by the number of calendar days, for non-stacked

vessels.

(2) Utilization rate: over a period, the number of revenue-generating days, divided by the number of calendar days.


MANAGEMENT REPORT3 Results

(in € millions, unless otherwise noted) 2018 2017CHANGE €

MILLION CHANGE %

Financial performance

Adjusted Revenues 689.5 860.6 (171.1) -19.9%

(change at constant rate) -13.0%

Operational and general costs (546.9) (608.3) 61.4 -10.1%

Adjusted EBITDAR (ex. cap. gain) 142.7 252.4 (109.7) -43.5%

As a % of adjusted revenues 20.7% 29.3% -8.6 pts

Bareboat charters (148.3) (164.4) 16.1 -9.8%

Adjusted EBITDA (4.3) 87.8 (92.1) -104.9%

Impairment (75.7) (196.8) 121.1 -61.5%

Adjusted EBIT (313.9) (403.9) 90.0 -22.3%

EBIT (320.3) (406.6) 86.3 -21.2%

Net income (group share) (457.8) (576.3) 118.5 -20.5%

For definitions of financial indicators, refer to the financial glossary presented in note 6 to the consolidated financial statements.

2.1.1 For the income statement

Adjusted revenues came out at €689.5 million, representing a decline

of 19.9% on the previous year, impacted by an unfavorable exchange

rate, the reduction in the number of chartering days, project delays

in Subsea activity and delays in reactivating our vessels. At constant

exchange rates, the decline in revenue would have been 13%.

The number of stacked vessels and the utilization rate of the fl eet in

operation have stabilized, refl ecting reactivations and a timid market

recovery.

Operating and general costs have continued to decrease thanks

to the deployment of the #BOURBONINMOTION plan and the

Smart G&A program in particular. Implemented in October 2018,

this program should lead to additional full-year savings in general

costs, in addition to the 35% savings already generated since 2014.

Operating and general costs were, however, impacted in 2018 by

transformation costs due to the efforts to streamline our operating

companies and onshore maintenance bases as well as additional

expenses related to ongoing discussions with fi nancial partners.

As a result, the EBITDAR/adjusted revenues margin amounted

to 20.7%, down by 8.6 points on the previous year. At constant

exchange rates, the decline would have been 3.1 points to 26.2%.

Adjusted EBIT for 2018 registered an impairment loss of -€75.7

million, following impairment tests carried out as of December 31,

2018 and exceptional impairment recorded for certain non-strategic

vessels held for sale.

Net income, group share, stood at -€457.8 million compared to

-€576.3 million in the previous year. It includes a fi nancial loss of

-€116.6 million.

2.1.2 Balance Sheet Statement

CONSOLIDATED CAPITAL EMPLOYED (in € millions) 12.31.2018 12.31.2017

Net non-current Assets 1,704.1 2,028.3

Non-current Assets held for sale 12.0 -

Working capital (79.0) 102.0

TOTAL CAPITAL EMPLOYED 1,637.1 2,130.3

Shareholders’ equity 201.0 643.6

Non-current liabilities (provisions and deferred taxes) 158.5 121.5

Net debt 1,277.6 1,365.2

TOTAL CAPITAL EMPLOYED 1,637.1 2,130.3

In addition to usual depreciation and amortization, net non-current

assets decreased by €312.2 million, in line with our desire to

streamline our fl eet by disposing of “non-smart” and non-strategic

vessels. Ten vessels were sold and six scrapped. This decrease

is also related to impairment losses recorded as of December 31,

2018.

The working capital requirement was negative at -€79.0 million

compared to +€102 million as of December 31, 2017, mainly due

to the unpaid bareboat charter debt, inventory reductions and the

decrease in trade receivables.

Consolidated shareholders’ equity amounted to €201.0 million as

of December 31, 2018, down by €442.6 million due to the loss

recorded for the year.

In accordance with IFRS, €1,052.2 million in borrowings were

reclassifi ed as current liabilities as of December 31, 2018. These are

the loans which are the subject of ongoing discussions and covered

by a general waiver, borrowings for which payments have been

suspended and borrowings that have contractual clauses which may

entail early repayment.


MANAGEMENT REPORT

3

Results

2.1.3 Cash flow

SIMPLIFIED CASH FLOW STATEMENT (in € millions) 2018 2017

Cash fl ow from operating activities

consolidated net income (loss) (451.3) (608.9)

cash fl ow from operating activities 587.2 759.6

Net cash fl ow from operating activities (A) 135.8 150.7

Cash flow from investing activities

Acquisition of property, plant and equipment and intangible assets (47.1) (47.1)

Sale of property, plant and equipment and intangible assets 13.5 24.2

Other cash flow from investing activities 2.0 20.6

Net cash flow from investing activities (B) (31.7) (2.3)

Cash fl ow from fi nancing activities

net increase (decrease) in borrowings (75.3) 94.1

Perpetual bond issue - -

Dividends paid to parent company shareholders - (8.5)

Dividends paid to non-controlling interests (3.5) (7.6)

Cost of net debt (17.8) (56.2)

other cash fl ow from fi nancing activities 1.0 (0.2)

Net Cash fl ow used in fi nancing activities (C) (95.5) 21.6

Impact from the change in exchange rates and other reclassifi cations (D) (2.6) 9.0

Change in net cash (A) + (B) + (C) + (D) 6.0 179.0

Consolidated cash remained generally stable over 2018 with a slight €6 million increase:

3 the positive cash fl ows generated by operations, at €135.8 million benefi ted from the bareboat charter payment suspension;

3 vessel sales (including eight “non-smart” vessels and two non-strategic vessels) enabled cash infl ows of €13.5 million, whilst planned vessel

dry dock expenses and other investments remained at the same level as the previous year. Cash fl ows used in investing activities amounted

to -€31.7 million;

3 cash fl ows used in fi nancing activities were -€95.5 million. These mainly refl ect the suspension of the servicing of the majority of the group ’s

debt within the context of ongoing negotiations with its lessors and lenders.

In the context of the discussions for the restructuring of its debt,

several offers under conditions, notably due diligence, have been

received by the group , proposing in particular new fi nancing and a

debt reduction including, for some of them, conversion of part of this

debt into equity.


their fi nancial parameters, are being evaluated by the group and its

advisors. On March 13, 2019, the Board of Directors carried out

a preliminary review of some of these propositions. BOURBON

specifi es that no decision or commitment has been made and that

no exclusivity has been granted to any of the fi nancial partners it is

in discussion with. The Company remains confi dent in its ability to

fi nd such a solution and will notify the market in due time according

to regulation.

This situation raises a material uncertainty concerning the continuity

of operations. The group has, however, prepared its consolidated

fi nancial statements at December 31, 2018 with the going concern

assumption given:

3 its confi dence in the outcome of the discussions with its lessors

and debt-holders;

3 the receipt of several proposals subject to conditions as part of

the active search for new fi nancial partners;

3 The cash fl ow generated by the business allowing the group to

meet its current operating needs over the next 12 months.



2.2 RESULTS BY BUSINESS

2.2.1 Bourbon Marine & Logistics

2018 2017CHANGE 2018 VS.

2017 CHANGE %



Total fl eet in operation (FTE) 126.7 123.6 3.1 +2.5%

Number of stacked vessels (FTE) 87.8 96.9 (9.1) -9.4%

Utilization rate of fleet in operation(1) 87.1% 87.4% -0.3 pt

Average utilization rate(2) 51.4% 49.0% +2.4 pts

Average daily rate $/d 10,378 11,542 (1,164) -10.1%



vessels.



MILLION CHANGE %


Adjusted revenues* 357.3 411.2 (53.9) -13.1%


Adjusted EBITDAR* (ex. cap. gain) 73.3 106.2 (32.9) -31.0%


Bareboat Charters (104.6) (119.0) 14.4 -12.1%

Adjusted EBITDA* (30.6) (13.2) (17.4) ns

Impairment (69.0) (167.2) 98.2 -58.8%

Adjusted EBIT* (224.2) (358.1) 133.9 -37.4%

* For definitions of indicators, refer to the financial glossary presented in note 6 to the consolidated financial statements.

The 2018 results refl ect activity stabilization, with average utilization

rates up 2.4 points compared to 2017, mainly driven by the Shallow

water offshore activity. Six vessels have also been reactivated.

The 13.1% decrease in adjusted revenues is mainly due to the

decrease in average daily rates corresponding to the renewals of old

contracts at current market rates. However, the new contracts were

signed at stable or very slightly increased rates at the end of 2018.

The reduction in costs amounts to almost 7%, mainly due to

the adaptation of the cost structure to the decrease in revenue

(site restructuring and closure) as well as the start of the Smart

Shipping program leading to the reduction in on-board crews and

improvements to safety and technical reliability.

The sale of eight “non-smart” vessels took place at a slower pace

than expected, due to the overcapacity in the OSV vessel market.

2.2.2 Bourbon Mobility

2018 2017CHANGE 2018

VS. 2017 CHANGE %




Number of stacked vessels (FTE) 89.7 75.1 14.6 +19.4%

Utilization rate of fleet in operation(1) 80.2% 79.0% +1.2 pt

Average utilization rate(2) 53.1% 56.9% -3.8 pts

Average daily rate $/d 4,308 4,418 (110) -2.5%



vessels.



MANAGEMENT REPORT

3

Results


MILLION CHANGE %





EBITDAR / Revenues 17.2% 25.6% -8.4 pts

Bareboat charters - - - -

Adjusted EBITDA 33.2 55.5 (22.3) -40.2%

Impairment (5.2) (9.8) 4.6 -46.9%

Adjusted EBIT (33.8) (16.4) (17.4) +106.2%


Down by 13.2% compared to 2017 (including -5 pts due to

exchange rate effects), 2018 adjusted revenues was mainly

impacted by a slower than expected reactivation of Surfers and

a higher maintenance and repair activity than 2017 (notably large

long- distance crewliner-type transport vessels).

As the fl eet’s technical availability rate deteriorated in 2018,

Bourbon Mobility carried out signifi cant efforts to streamline

onshore maintenance bases to prepare for the recovery and raise

our operating standards, notably with the opening of a new base in

Angola and the temporary expansion of the Congo base. Margins

were down 8.4 points, directly impacted by the decrease in the

number of chartering days.

Business recovery is manifest in certain markets, including Nigeria

and Congo, and is expected to sustainably consolidate across all

West Africa. In this context, the teams began to reactivate and

reposition Surfers in West Africa, in order to meet the new demand.

2.2.3 Bourbon Subsea Services

2018 2017CHANGE 2018 VS.

2017 CHANGE %




Number of stacked vessels (FTE) 5.5 6.2 (0.7) -11.3%

Utilization rate of fleet in operation(1) 66.5% 84.4% -17.9 pts

Average utilization rate(2) 48.5% 60.7% -12.2 pts

Average daily rate $/d 32,592 35,328 (2,736) -7.7%



vessels.



MILLION CHANGE %






Bareboat charters (43.7) (45.4) 1.7 -3.7%

Adjusted EBITDA (10.5) 40.6 (51.1) ns

Impairment (1.6) (19.8) 18.2 -92.1%

Adjusted EBIT (54.4) (27.6) (26.8) +96.6%




Activity saw a signifi cant decrease in 2018, impacted by the

reduction in the order book for oil and gas fi eld construction from

contractors, and the increase in market access constraints. The

decrease of almost 40% in 2018 adjusted revenues is mainly due

to the weakness of activity and as a result utilization rates, project

delays that started in Q3 and the sale of one vessel. In these market

conditions, Bourbon Subsea Services will continue to consider

selling its oldest vessels.

Currently repositioned in three geographic zones (West Africa,

Mediterranean/Middle East-India and South-East Asia), the fl eet

allows for fl exible management of different market dynamics.

Having installed the fi rst 2.4 MW fl oating wind turbine in Scotland,

Bourbon Subsea Services will continue to diversify in 2019, notably

in Offshore wind turbines in Portugal. Turnkey projects represented

almost 6% of 2018 revenue.

2.2.4 Other


MILLION CHANGE %






Adjusted EBITDA 3.6 4.9 (1.3) -25.5%

Adjusted EBIT (1.6) (1.8) 0.2 -13.3%


“Other” activities are those that do not fi t into the Marine & Logistics, Mobility or Subsea Services segments. The majority of the total represents

earnings from ship management activities.

2.3 GROWTH STRATEGY

Continuation and acceleration of the #BOURBONINMOTION strategic plan launched in early 2018

BOURBON became the leader in offshore oil and gas marine

services following a long development program marked by significant

investments in innovative vessels, which are series-produced to

enable better control over operations and customer costs.

With the fall in the price of a barrel in 2014, the oil industry experienced

its most serious crisis in the past 30 years. The offshore services

market was hit hard and contracted by 30 to 40% in three years.

BOURBON is convinced that, once the crisis is over, the offshore

services sector’s current model will have changed. For this reason,

on February 13, 2018, BOURBON Corporation SA presented its

#BOURBONINMOTION strategic action plan, which will enable the

group to remain competitive and meet its clients’ new requirements.

The plan represents a total investment of €75 million over three years:

It is now based on four priorities:

3 providing better service to clients through changes to its business

model to enable more services and reorganization of the group ’s

activities into three distinctive subsidiaries: Bourbon Marine

& Logistics, Bourbon Subsea Services and Bourbon Mobility.

These three companies have now implemented their own

strategies. A Chief Executive Offi cer was appointed to each of

these entities in 2018, as well as a management team. They will

focus on profitable growth through the development of their

models towards integrated services in the areas of:


which won its fi rst integrated logistics contract in an exploration

campaign, as well as several chartering contracts that include

performance bonuses linked to fuel economy,




platform,


Subsea Services. Bourbon Subsea Services installed the fi rst

fl oating wind turbine for the Kincardine offshore wind farm in

Scotland in 2018, and also won a turnkey contract for the

installation of the Windfl oat Atlantic fl oating wind farm in


The three new standalone subsidiaries benefit from privileged

market access thanks to the numerous partnerships already in

place in the main countries where BOURBON currently operates,

in accordance with the rules of the countries involved, particularly

in terms of local regulations;

3 capitalizing on the digital revolution to stand out through a

connected fleet and reduce operating costs with the aim of

improving operational excellence at the optimum cost, the “Smart

Shipping” program will connect Bourbon Marine & Logistics’ fleet

of 133 modern supply vessels (termed the “smart fleet”) by 2022.

It is structured around four main projects: automation of dynamic

positioning systems, simplification of on-Board processes,

optimization of maintenance and onshore and remote operational

support. The investments carried out will result in a sustainable

reduction in vessel operating costs. It will rely on technological

partnerships such as those entered into with Kongsberg in 2017

or Bureau Veritas in 2018.


MANAGEMENT REPORT

3

Results

At the end of 2018, BOURBON had converted its fi rst vessels to

Smart Shipping, and will step up the conversions in 2019, resulting

in a sustainable reduction in vessel operating costs of 25%;


In addition to its fi nancial restructuring, the group is committed

to optimizing its fi nancial operations, including the creation of

shared service centers for the three newly created subsidiaries.

BOURBON is also working on optimizing its cash fl ow, reducing

its general costs, and disposing of non-strategic assets;





3 supporting the growth of the group ’s culture.

2.4 BOURBON CORPORATION SA RESULTS

The Company had no revenue in 2018. The operating loss of €7.1

million was down compared to the previous year’s loss of €8.8 million.

Financial income was -€2.9 million, a sharp drop of nearly €52 million

from the previous year. This drop is primarily related to financial

income from investments, which fell €49.5 million from the previous

year, and the interest expense on the bond issue, which was up

€2.3 million.

Non-recurring income was -€0.2 million.

As a result, net income for the year was -€1.3 million, due mainly to

the decline in fi nancial income.

No expense referred to in Articles 39.4 and 223 quarter of the French

General Tax Code was identified.

Information on BOURBON Corporation SA payment terms

In accordance with Article L. 441-6-1 of the French Commercial Code, information relating to the payment period of suppliers and customers

at December 31, 2018 is shown in the table below:

(in euros)

ARTICLE D. 441 L.-1: INVOICES RECEIVED, OUTSTANDING

AND PAST DUE AT YEAR-END

ARTICLE D. 441 L.-2°: INVOICES ISSUED, OUTSTANDING

AND PAST DUE AT YEAR-END

0 DAYS (REFERENCE)

1 TO 30 DAYS

31 TO 60 DAYS

61 TO 90 DAYS

91 DAYS OR MORE

TOTAL (1 DAY OR

MORE)0 DAYS

(REFERENCE)1 TO 30

DAYS31 TO 60

DAYS61 TO 90

DAYS91 DAYS

OR MORE

TOTAL (1 DAY OR

MORE)

(A) Late payment ranges

Number of invoices

concerned0 8 0 0

Total amount incl.

tax of all invoices

concerned

0 4,990 - 0 0 4,990 0 0 0 0 0 0

Percentage of

total amount of

purchases for

the year

0.0% 0.1% 0.0% 0.0% 0.0% 0.1%

Percentage of

revenues for

the year

0.0% 0.0% 0.0% 0.0% 0.0% 0.0%

(B) Invoices excluded from (A) relating to disputed or unrecorded liabilities and receivables

Number of invoices

excluded0 0

Total amount

incl. tax of

excluded invoices

0 0

(C) Reference payment periods used (contractual or statutory period – Article L. 441-6 or Article L. 443-1 of the French Commercial Code)

Reference

payment periods

used to calculate

late payments

Contractual periods Contractual periods


MANAGEMENT REPORT3 Report of the Board of Directors on Corporate Governance

2.5 CHANGE IN ACCOUNTING METHODS

There is no change in accounting method to report.

2.6 OUTLOOK

After four years of drastic reductions, the oil and gas majors have

started to increase their investment commitments again, mainly

focusing on Deepwater offshore drilling campaigns and maintenance

activities for Shallow water offshore fi elds in particular. This recovery

is already seen in demand for OSV vessels in several market

segments and several regions, notably West Africa, the Caribbean

zone and the North Sea.

However, it will only be sustainable if the market manages to absorb

the global vessel overcapacity and if the main Offshore services

players fi nd fi nancial solutions to allow them to reactivate the most

modern vessels.

In this complex environment, BOURBON is focusing on its

#BOURBONINMOTION strategic action plan, which will enable

it to regain room for maneuver and position itself in order to take

advantage of the recovery under optimum competitive conditions.

The fi rst results for the various focus points of the action plan are

tangible:

3 service-oriented business models: the fi rst successes have been

recorded. An integrated logistics contract has just been signed

by Bourbon Marine & Logistics with Shell in Bulgaria, Bourbon

Mobility is currently deploying its fi rst on-board entertainment

services and Bourbon Subsea Services has won signifi cant

turnkey contracts in fl oating wind turbines;

3 cost structure: adapting the size of the Company to the new

economic environment is key. This was achieved through the

Smart G&A and Smart Shipping programs. After having deployed

the Smart Shipping program in pilot mode on six vessels in 2018,

the teams are mobilized to deploy it in industrial mode in 2019.

3. REPORT OF THE BOARD OF DIRECTORS ON CORPORATE GOVERNANCE

To our Shareholders,

Pursuant to the provisions of Article L. 225-37 et seq. of the

French Commercial Code, the purpose of this report is to inform

shareholders of:

3 the composition of the Board of Directors and it committees and

the application of the principle of balanced gender representation;

3 conditions for the preparation and organization of the work of the

Board of Directors during the year ended December 31, 2018;

3 the restrictions placed by the Board of Directors on the powers of

the Chief Executive Officer;

3 the Code of Corporate Governance used by the Company and

the provisions of the Code that have not been followed;

3 the particular methods for shareholder participation in

Shareholders’ Meetings;

3 current delegations and financial authorizations for a capital

increase;

3 the principles and rules established by the Board of Directors for

determining the compensation and benefits of any kind granted

to corporate officers.

This report drafted by the Board of Directors was prepared based on

the work carried out by various Company departments, in particular

the group ’s Legal and Accounting Departments. It was approved by

the Board of Directors at its meeting on March 13, 2019, following a

preliminary review by the Audit Committee.

The Company applies the corporate governance practices set out in

the AFEP-MEDEF Corporate Governance Code for listed companies,

which are those primarily taken into account in preparing this report.

This Code can be found on the website www.afep.com.

The Internal Regulations of the Board of Directors and

the bylaws of the Company are available on its website

http://www.bourbonoffshore.com – under “Group” – “Governance”

– “Board of Directors” and under “Capital and shareholding” –

“bylaws”.

3.1 SEPARATION OF THE FUNCTIONS OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER – POWERS OF THE CHIEF EXECUTIVE OFFICER

After a period in which the offices were merged, on March 14,

2018, in accordance with Article 16 of the Company’s bylaws,

on the proposal of the Chairman and Chief Executive Officer and

having received the opinion of the Nominating, Compensation and

Governance Committee, the Board of Directors decided to separate

the functions of Chairman of the Board of Directors and Chief

Executive Officer of the Company, in the belief that the separation

of functions is in line with the announced changes in governance

on September 8, 2017, and appointed Jacques d’Armand de

Chateauvieux as Chairman of the Board of Directors and Gaël

Bodénès as Chief Executive Officer of SA BOURBON Corporation.

The Board also confi rmed Astrid de Lancrau de Bréon as Executive

Vice President - Chief Financial Officer.


MANAGEMENT REPORT

3

Report of the Board of Directors on Corporate Governance

Furthermore, on July 23, 2018, the Board of Directors duly noted

the resignation of Astrid de Lancrau de Bréon as Executive Vice

President with effect from July 10, 2018 and, on the proposal of the

Chief Executive Offi cer, appointed Thierry Hochoa as Chief Financial

Officer effective August 6, 2018.

The Board has nine members (including the Director representing

the employees), four of whom are independent. It has three

specialized committees chaired by Independent Directors, which

meet without the Chief Executive Officer being present. Lastly, the

Board of Directors has set authorization limits, particularly with

regard to investments and divestments, which are specified in its

internal regulations. Together, these factors militate for balanced and

satisfactory corporate governance.

The Chairman of the Board of Directors organizes and directs the

work of the Board and provides the Shareholders’ Meeting with a

report on said work. He supervises the proper functioning of the

Company’s administrative bodies and ensures, in particular, that

the Directors are in a position to perform their mission. Under the

Company’s bylaws on the roles of Director and Chairman of the

Board of Directors, the Chairman of the Board of Directors must be

less than 70 years old.

In addition to the duties of Chairman of the Board of Directors as

defined by law and the bylaws, the Chairman provides assistance

and advice to the Chief Executive Officer on the following subjects:

financial communication; promotion of corporate image and culture;

relations with the group ’s partners and shareholders. The Chairman

of the Board of Directors oversees shareholder relations with the

Board of Directors, particularly as regards matters of corporate

governance. He reports to the Board of Directors on this mission.

The Chairman organizes his activity to guarantee his availability so

that his experience can be used for the benefit of the group . At the

request of the Chief Executive Officer, he may participate in any

internal meeting dealing with matters relating to strategy, organization

or investment or divestment projects.

The Chief Executive Officer is responsible for the Company’s general

management. By coordinating the operational and financial strategy,

he can deliver insight to the group ’s financial communication and

promotion of the Company’s image through the media. The Chief

Financial Officer oversees the implementation of the strategic

guidelines, in particular during the current transformation period, and

assists the Chief Executive Officer in his operational responsibilities

and the Company’s day-to-day management.

The Chief Executive Officer represents the Company in its dealings

with third parties and has power to act on its behalf in all situations.

With respect to internal measures, in accordance with the provisions

of the internal regulations of the Board of Directors, which are

available on the bourbonoffshore.com website, the Chief Executive

Officer has all necessary powers to carry out investments and

divestments approved by the Board in accordance with the budget

and/or strategy defined by the Board; beyond said budget and/or

strategy, he must seek the approval of the Board for investments and

divestments of amounts equal to or exceeding €10 million.

The following decisions fall within the exclusive authority of the Board

of Directors:

(a) entry into any strategic partnership for an amount exceeding

ten million euros (€10,000,000) or for a duration exceeding two

(2) years;

(b) determination of the Company’s dividend policy;

(c) any planned merger, spin-off, or partial asset contribution;

(d) any capital increase (including any decision to eliminate the

shareholders’ pre-emptive subscription right either immediately

or in the future) in kind or in cash, including capital increases

resulting from a merger, partial asset contribution or contribution

in kind;

(e) issuance of any securities, whether or not giving access

(immediately or in the future) to the Company’s share capital or

voting rights;

(f) any decision to hire or appoint any employee or corporate

officer to be a member of the Executive Committee or to be

Chief Executive Officer of BOURBON Corporation SA and

its subsidiaries.



3.2 MANNER IN WHICH THE BOARD OF DIRECTORS PLANS AND ORGANIZES ITS WORK, TERMS OF OFFICE AND FUNCTIONS OF CORPORATE OFFICERS

3.2.1 Overview of the Board of Directors as of the date of this document

PERSONAL INFORMATION EXPERIENCE

Age(1) Gender Nationality

Number

of shares

Number of offi ces

in listed companies

(including BOURBON

Corporation SA)

Executive Director/Director

Jacques d’Armand de Chateauvieux 67 M French 28,257 2

Directors

Christian Lefèvre 61 M French 224,314 1

Mahmud B. Tukur 45 M Nigerian 300 1

Xiaowei Wang 50 F Chinese 300 1

Adeline Challon-Kemoun 51 F French 300 3

Elisabeth Van Damme 52 F Belgian 1,376 2

Adrien de Chomereau de Saint-André 37 M French 300 2

Antoine Grenier 45 M French 300 1

Director representing employees

Stéphane Leroux 48 M French 0 1

Advisor

Henri d’Armand de Chateauvieux 71 M French 367,449 1

(1) Number of full years as of December 31, 2018.

(2) According to the decision of the Board of Directors of April 25, 2019.

(3) Renewals proposed to the Shareholders’ Meeting of June 28, 2019.


MANAGEMENT REPORT

3


POSITION ON THE BOARD PARTICIPATION IN BOARD COMMITTEES

Independence(2)

Date initially

appointed

Expiration of term (date

of the Shareholders’

Meeting called to

approve the financial

statements for the

previous fi scal year)

Seniority on

Board(1)

Audit

Committee

Nominating,

Compensation and

Governance

Committee

Ad h oc

Committee

No 10.14.1977 2019(3) 41

No 05.28.2013 2019(3) 5 Member Member

Yes 06.01.2012 2021 6 Member

No 05.20.2014 2019(3) 4

Yes 03.13.2017 2020 1 Chairwoman

Yes 05.23.2017 2020 1 Member Member

No 06.19.2017 2020 1 Member Member

Yes 05.30.2018 2021 7 months Chairman Chairman

No 11.09.2018 11.08.2021 2 months Member

No 08.25.2014 09.03.2020 4 years



3.2.2 Directors in office as of December 31, 2018

Business address:


148 rue Sainte

13007 Marseille

67, French nationality

First term of office: October 14, 1977

Term expires on: Shareholders’ Meeting

called to approve the financial statements for

the fi scal year ended December 31, 2018

Shares held: 28,257

Jacques d’ARMAND de CHATEAUVIEUX

Chairman of the Board of Directors Participation in committees

W None

Biography

A graduate of ISG (Paris) and holder of an MBA from Columbia (New York, USA), Jacques

d’Armand de Chateauvieux was the leading force in the transformation of the Company

from a conglomerate involved in a variety of activities to an international Group devoted

to offshore oil and gas marine services. Jacques d’Armand de Chateauvieux has been

Chairman of the Board of Directors since March 14, 2018, the date on which the Board

of Directors decided to separate the functions of Chairman of the Board of Directors

and Chief Executive Officer.

Jacques d’Armand de Chateauvieux is Chairman and Deputy Director of JACCAR

Holdings SAS, the majority shareholder of BOURBON Corporation SA.

Positions held outside the group

- Statutory Manager of CT Lux Sarl (Luxembourg)

- President of JACCAR Holdings SAS (France)

- Chairman of SAGES (France)

- Chairman of Sapmer SA (listed on Euronext Paris)

- Chairman and Director of Sapmer Holding (Singapore)

- Chairman of Sapmer Investissements SAS (France)

- Chairman and Director of Greenship Holdings Manager Pte.

Ltd. (Singapore)

- Director of Sinopacific Shipbuilding Group (China)

- Chairman of Evergas A/S (Denmark)

Positions currently held in the group ’s main subsidiaries(1)

None

Terms of offi ce and functions that have expired over

the past fi ve years

- Chairman and Managing Director of JACCAR Holdings SA

(Luxembourg)

- Advisor to CBO Territoria SA (listed on NYSE Euronext

Paris)

- Director, AXA

- Director, Sinopacific Off shore and Engineering (China)

(1) Based on the main subsidiaries listed on page 224 of the 2018 Registration Document.


MANAGEMENT REPORT

3


Business address:

JACCAR Holdings SAS

148 rue Sainte

13007 Marseille


First term of office: May 28, 2013




Shares held: 224,314

Christian LEFÈVRE

Director Participation in committees

W Member of the Audit Committee

W Member of the a d h oc Committee

Biography

Graduate of the École nationale de la Marine in 1984. He began his career at BOURBON

as an officer then Chief Engineer and Captain of offshore vessels before becoming

Head of Agencies in Gabon and Cameroon. He was then successively appointed

Chief Operating Officer at Bourbon Offshore Surf (an indirect subsidiary of BOURBON

Corporation SA) from 1990 to 1995, then CEO of Bourbon Offshore Surf from 1996

to 2001. CEO, Offshore Division in 2001, Chief Operating Officer of BOURBON

Corporation SA, in December 2005, and Chief Executive Officer in January 2011. On

October 1, 2017, he resigned as Chief Operating Officer of the Company and is now

Chief Executive Officer of JACCAR Holdings SAS


- Chairman of Marine SAS

- Director of Sapmer Holding (Singapore)

- Director of Evergas A/S (Denmark)

- Chairman of Greenship Gas SAS

- Director of Île Du Port Handling Service LTD (Seychelles)


None



- Director of Sapmer SA (Company listed on Euronext Paris)

- Director of ENSM

- Representative of BOURBON Off shore SASU and Chairman

of BOURBON Supply Investissements SASU

- Chairman of BOURBON Maritime SASU

- Chief Operating Officer of BOURBON Corporation SA




Business address:

Eterna plc

5a Oba Adeyinka Oyekan Avenue

Lagos – Nigeria

45, Nigerian nationality

First term of office: June 1, 2012




Shares held: 300

Mahmud B. TUKUR

Independent Director Participation in committees

W Member of the Audit Committee

Biography

A graduate with honors of the University of Wales College (Cardiff, Wales) Mahmud

B. Tukur has a double major in accounting and management.

Vice Chairman of Ecomarine Group, a shipping line and Terminal Operator in West Africa,

he is also an Independent Director of Independent Energy Limited (IEL), an indigenous

Oil Exploration and Production Company. IEL is the operator of the Ofa marginal field.

Mahmud B. Tukur has also served for a number of years as Chief Executive Officer and

Managing Director of Daddo Maritime Services Limited. Since June 2010, he has been

Chief Executive Officer and Managing Director of Eterna Plc.


- CEO and Director of Eterna Plc (Nigeria)

- Director of Daddo Maritime Services Ltd (Nigeria)

- Director of ECM Terminals Ltd (Nigeria)

- Director of Independent Energy Ltd (Nigeria)

- Director of Lenux Group (Nigeria)

- Director of Dragnet Solutions Ltd (Nigeria)

- Director of Micro Access Ltd (Nigeria)


None



None



MANAGEMENT REPORT

3


Business address:

23/F, Jing An Kerry Centre Tower 1,

1515 Nanjing West Road, Shanghai 200040,

China

50, Chinese nationality





Shares held: 300

Xiaowei WANG


W None

Biography

A graduate of the Northeast University of Finance and Economics (China). She also

holds an Executive MBA from the China Europe International Business School (CEIBS)

in Shanghai. Xiaowei Wang has occupied senior executive finance and accounting

positions for over 22 years, including a position as Finance Director at Baosteel in New

York (USA) for seven years, followed by Chairwoman of Shenyin & Wanguo Alternative

Investment Co, a subsidiary of one of the largest fi nancial companies in China. She is

currently Senior Special Advisor for Roland Berger.


None


None



- Chairperson and Director of SYWG Alternative Investment Co

(China)




Business address:

23 Place des Carmes Déchaux

63040 – Clermont Ferrand Cedex 9


First term of office: March 13, 2017




Shares held: 300

Adeline CHALLON-KEMOUN


W Chairwoman of the Nominating,

Compensation and Governance

Committee

Biography

A Graduate of the IEP of Paris and the French Society of Financial Analysts (SFAF).

From 1989 to 2011, Adeline Challon-Kemoun was successively a partner at the

firm Image 7, Deputy Chief Executive Officer of the Euris G roup, General Secretary

of Rallye, then Director of Communications at Casino G roup and Director of External

Communication and Marketing at France Télévisions.

In 2012, she became Communication and Brand Director of Air France and was

appointed in 2015 as Deputy Director of Marketing Digital & Communication at Air

France-KLM, where she held office until 2017.

Since 2016, she has been an Independent Director on the Econocom G roup Board of

Directors. On April 3, 2018, Adeline Challon-Kemoun joined the Michelin G roup as the

new Brand Director


- Independent Director of Econocom G roup

- Director of the Michelin Foundation


None

Positions that have expired in the past five years

- Director of Air France Foundation



MANAGEMENT REPORT

3


Business address:

Bureau Van Dijk-Moodys

250, Avenue Louise

1050 Brussels

52, Belgian nationality





Shares held: 1,376

Elisabeth VAN DAMME


W Chairman of the Nominating,


Committee


Biography

She has a degree in applied economics and is currently a partner of Redwood Finance,

a financial consulting services Company. She is also a Director at Elior G roup and a

member of the Audit Committee. She previously held positions as CFO for over ten

years with Bureau van Dijk Editions Electroniques, Air Creative Associates and Villa

Eugénie She was also a Financial Controller at Coca-Cola Services and an Auditor at

KPMG. As of May 1, 2019, she has been employed by Dijk-Moodys Analytics Company.


Independent Director of the Elior G roup


None


None




Business address:

Freeport Zone 8

Quay D Road

Port Louis – Mauritius

Son-in-law of the Chairman of the Board of

Directors


First term of offi ce: June 19, 2017




Shares held: 300

Adrien de CHOMEREAU de SAINT-ANDRÉ




Committee


Biography

A graduate in Finance from the Sorbonne (Paris), he joined KPMG AUDIT in 2005,

where he spent three years. From 2008 to mid-2014, he worked for JACCAR Holdings

in Paris, Ho Chi Minh City (Vietnam) and Shanghai (China), first as head of financial

services and then head of portfolio management. In August 2014, he joined SAPMER as

Chief Financial Officer, and from December 2014 as Chief Executive Officer and Director.


- Director and Chief Executive Officer, SAPMER SA and

holder of offices in Sapmer G roup subsidiaries.

- Chief Executive Offi cer of Sapmer Investissements SAS

(Reunion) – Majority Shareholder of Sapmer SA

- Director, Vietnam Century Fund (Mauritius)

- Director, Jaccar Investment Manager (Mauritius)

- Director, Jaccar Capital Fund (Mauritius)

- Chairman of COMPAGNIE D’ARMEMENT À LA PÊCHE

(Reunion)


None


- Director, BOURBON Ben Luc (Vietnam)



MANAGEMENT REPORT

3


Business address:

FONCIA Groupe SAS,

13, avenue Le Brun

92188 Antony Cedex






Shares held: 300

Antoine GRENIER


W Chairperson of the Audit Committee

W Chairperson of the a d h oc

Committee

Biography

A graduate of Université Paris Dauphine and the prestigious Trium Global Executive

MBA Program, Antoine Grenier has more than 10 years of experience in the Oil & Gas

industry at Schlumberger, where he began his career as an internal Auditor, and then

as Chief Financial Officer Africa for the group ’s seismic activities and at Geoservices,

as Treasurer for Europe, Africa and Russia and as CFO. In 2011, he joined the Altran

G roup as Deputy Chief Financial Officer. In May 2015, he co-founded the Finance &

Performance Department of Argon Consulting, which he has headed for three years.

Antoine Grenier is currently Chief Financial Officer of the Foncia G roup, in charge of

finance, mergers and acquisitions, legal affairs and internal audit.


Offi ceholder in FONCIA Group subsidiaries: - Chairman of ANGEL

- Chairman of LOGIDIS

- Director of EFFICITY

- Director of FONCIA PIERRE GESTION

- Director of FONCIA BELCOURT

- Director of FONCIA NICE

- Member of the Supervisory Board of FONCIA SATURNE


None


- Director of the Altran G roup’s Indian subsidiary




Business address:


148 rue Sainte

13007 Marseille


First term of office: November 9, 2018

Term expiration date: November 8, 2021

Shares held: Pursuant to Article 13 bis

of the BOURBON Corporation SA bylaws,

the Director representing employees is

not required to hold a minimum number of

shares.

Stéphane LEROUX

Director representing employees* Participation in committees



Committee

Biography

Stéphane Leroux has more than 25 years of experience as a Chief Engineering Offi cer

and Technical Engineer in the maritime industry. He began his career as a shift supervisor

at the MRCC Fort de France in 1992. Then, as a holder of a Chief Engineering Offi cer

certifi cation, he successively held the functions of Chief Engineering Offi cer and

Technical Engineer with the Compagnie Maritime Nantaise from 1996 to 2003. In 2010

he joined BOURBON as Chief Engineering Offi cer at Bourbon Offshore Surf.

Since 2013, Stéphane Leroux has been a Technical Engineer at Bourbon Offshore Surf.

He is in charge of the supervision and oversight of emergency repair work on vessels

and inspection and technical control of the Bourbon Offshore Surf fl eet.


None


None


None

* Alternate Director representing employees: Patrick Lièvre.



MANAGEMENT REPORT

3


3.2.3 Directorships that expired in 2018 and 2019

Business address:

FONCIA Groupe SAS,

13, avenue Lebrun

92188 Antony Cedex



End of term of office: March 12, 2018

Philippe SALLE




Committee


- Chairman of FONCIA Groupe SAS

- Chairman of Finellas SAS

- Permanent representative of CIC Associés, Banque

Transatlantique

- Director of GTT

Positions held in the group ’s main subsidiaries(1)

None


- Chairman and Chief Executive Officer and Director of Altran

Technologies (Company listed on Euronext Paris)

- Chairman of the Altran Innovation Foundation

- Chairman of Altimus

- Chairman and Chief Executive Officer and Director of Elior

(Company listed on Euronext Paris)

- Chairman and Chief Executive Officer and Director of Elior

Restauration et Services

- Director of Elior UK Holdings Limited (UK)

- Chairman and Chief Executive Officer and Director of Areas

Worldwide (Spain)


Business address:

Compagnie des Alpes

50/52 Boulevard Haussmann

75009 Paris


First term of office: August 24, 2009

End of term of office: October 17, 2018

Agnès PANNIER-RUNACHER


W Chairperson of the Audit Committee

W Chairperson of the a d h oc

Committee


- Executive Vice President of Compagnie des Alpes (listed

Company – France)

- Member of the Supervisory Board of Futuroscope

- Director of CMB

- Member of the Supervisory Board of ELIS SA (listed

Company – France)

- Director, AREA SA

- Director, Eiff arie SA

- Director, Adelac SAS

- Director, Macquarie Autoroutes de France

- Director, Cryptolog SAS


None


- Director of AFP

- Director, BPI Groupe

- Director, Grévin et Compagnie




Business address:

Monnoyeur SA

117 rue Charles-Michels

93200 SAINT-DENIS



Term expires on: April 24, 2019, due to the

achievement of the statutory age limit

Baudouin MONNOYEUR


W None


- Chairman of the Board of Directors of Monnoyeur SA and

Chairman of the group ’s subsidiaries


None


- Member of the Fonds Quelium Policy Committee (CDC)

- Chairman of Pleyel Investissements SA



MANAGEMENT REPORT

3


3.2.4 Advisor in office as of December 31, 2018

Business address:


148 rue Sainte

13007 Marseille

Brother of the Chairman of the Board of

Directors


First term of office: August 25, 2014

End of term of office: September 3, 2020

Shares held: 367,449

Henri d’ARMAND de CHATEAUVIEUX

Advisor Participation in committees

W None

Biography

A pilot for Air France for over 30 years, Henri d’Armand de Chateauvieux was a Director

at BOURBON from 1987 to 2014. As of December 31, 2018, through the companies

Mach-Invest and Mach-Invest International, Henri d’Armand de Chateauvieux held

7.92% of BOURBON Corporation SA’s capital.


- Chairman of Mach-Invest SAS

- Chairman and Managing Director of Mach-Invest

International (Luxembourg)

- Director of Sapmer Holding pte Ltd (Singapore)


None


- Director of Sapmer SA (company listed on Euronext Paris)


Except for the family ties mentioned above between Jacques d’Armand de Chateauvieux, Henri d’Armand de Chateauvieux and Adrien de Chomereau de

Saint-André, there is no family link between the other members of the Board and General Management.



3.2.5 Other non-Director corporate officer member of the General Management of BOURBON Corporation SA at December 31, 2018


None


- Representative of BOURBON Bourbon Marine & Logistics

SASU and Chairperson of Bourbon Off shore Surf SAS

- Representative of Bourbon Marine & Logistics SASU and

Chairperson of Bourbon Supply Investissements SASU

- Chairman of Bourbon Maritime SASU

- Chairman of the Board of Directors of Bourbon Ships AS


- Chief Executive Officer of Bourbon Supply Investissements

SASU

- Chief Executive Officer of Bourbon Maritime SASU

- Director of Bourbon Supply Asia PTE LTD


Business address:


148 rue Sainte

13007 Marseille





Shares held: 6,256

Gaël BODÉNÈS


W S ince March 14, 2018

Participation in committees

W None

Biography

Gaël Bodénès is a naval engineer and graduated from ENSTA Bretagne in 1991. He also

has an MBA awarded by HEC (Business School) Paris in 2007.

He began his career with the French Navy (DGA) as a naval engineer in the Newbuilding

Design Department, then joined the Sales Department of the DCN in Brest (France). In

1998, he joined Barry Rogliano Salles as an offshore shipbroker.

In September 2002, Gaël Bodénès joined BOURBON as Marketing and Business

Development Manager for the Offshore Division. In line with the growth of the business,

he contributed to the structuring of the Offshore Division and to the development of the

Marketing Department of BOURBON Offshore.

In September 2005, he was appointed Deputy CEO of BOURBON Offshore, before

becoming Deputy CEO of the Offshore Division, in charge of Business Management,

in 2010.

In January 2011, he was appointed Chief Operating Officer of BOURBON Corporation

SA. Since March 14, 2018, the date when the Board of Directors decided to separate

the functions of Chairman of the Board of Directors and Chief Executive Officer, Gaël

Bodénès has been Chief Executive Officer of BOURBON Corporation SA.


MANAGEMENT REPORT

3


During its meeting held on April 5, 2019, the Nominating,

Compensation and Governance Committee reviewed current

Company practices in the light of the provisions of the AFEP-

MEDEF Corporate Governance Code, as interpreted in the guide

to the application of the AFEP-MEDEF Code published by the High

Committee on Corporate Governance (January 2019 version). The

Committee concluded that the Company’s practices were consistent

with the recommendations, except for three provisions, which are

not applied for the reasons given in the table in section 3.9 of this

management report.

As provided for in Article 18 of the Company’s bylaws, the Board

may appoint up to two advisors. Henri d’Armand de Chateauvieux,

a shareholder owning more than 5% of the share capital and a member

of the concert party, appointed advisor by the Board at its meeting of

August 25, 2014 for a three-year term that was renewed by the Board

on September 4, 2017, has taken office after serving as a Director of

the Company for many years. In that capacity, the Advisor examines

the issues that the Board of Directors or its Chairman submits for

his/her opinion, provides guidance and makes observations to the

Board of Directors. He or she ensures compliance with the bylaws.

The Advisor assists the Board in its missions and participates in its

meetings in an advisory and non- deliberative capacity; his or her

absence cannot affect the validity of the deliberations. He or she is

called to attend meetings of the Board under the same conditions

as the Directors.

The Board of Directors appoints its Chairman from among

its members.

Half of the current members of the Board of Directors have joined the

Board in the past three years. They were chosen for their expertise,

experience and knowledge of the strategic challenges posed by the

complex market in which BOURBON operates. They also represent

the interests of the two concert party members bound by the

shareholders’ agreement, as mentioned in the latest version of the

Board’s internal regulations dated August 25, 2014, available on the

Company’s website.

The Board of Directors will propose to the Combined Shareholders’

Meeting of June 28, 2019 the renewal of the terms of offi ce of

Xiaowei Wang, Jacques d’Armand de Chateauvieux and Christian

Lefèvre, given their seniority on the Board and their knowledge of

the Company.

Directors are appointed by the Shareholders’ Meeting for a term

of three years. Between two meetings, in the event of a vacancy

due to death or resignation, temporary appointments may be made

by the Board of Directors and submitted for ratification by the

meeting. The Board of Directors is staggered in accordance with

the recommendations of the AFEP-MEDEF Code, with members

re-elected on a rolling basis to ensure the continuity of the work

performed by the Board and its committees.



Changes to the Board’s composition during the 2018 fiscal year and since the beginning of the 2019 fiscal year

DATE DEPARTURE COOPTATION/APPOINTMENTRENEWAL/

RATIFICATION

Board of Directors

04.24.2019Baudouin

Monnoyeur

11.09.2018Stéphane Leroux (Director

representing employees)

10.17.2018Agnès

Pannier-Runacher

05.30.2018 Antoine Grenier

05.30.2018 Mahmud B. Tukur

05.30.2018

Adrien de

Chomereau de

Saint-André

03.14.2018

Jacques d’Armand de

Chateauvieux (Chairman of the

Board of Directors)

03.12.2018 Philippe Salle

Audit Committee

12.03.2018 Christian Lefèvre

10.17.2018Agnès

Pannier-Runacher


03.14.2018Elisabeth

Van Damme

Nominating, Compensation

and Governance Committee

11.09.2018 Stéphane Leroux

03.14.2018 Elisabeth Van Damme

Ad h oc Committee

10.22.2018Elisabeth

Van Damme

10.17.2018Agnès

Pannier-Runacher

07.23.2018 Christian Lefèvre


07.23.2018 Agnès Pannier-Runacher

07.23.2018Adrien de Chomereau

de Saint-André

Changes to management during the 2018 fiscal year and since the beginning of the 2019 fiscal year

DATE DEPARTURE APPOINTMENT

Chairman and Chief Executive Offi cer 03.14.2018

Jacques d’Armand

de Chateauvieux

Chief Executive Offi cer 03.14.2018 Gaël Bodénès

Chief Financial Offi cer 07.10.2018

Astrid

de Lancrau

de Bréon


MANAGEMENT REPORT

3


Independence of Board members with respect to the criteria specified in the AFEP-MEDEF Code

The Board of Directors reviews annually and on an individual basis,

after conferring with the Nominating, Compensation and Governance

Committee, the individual position of each Director having regard to

all of the AFEP-MEDEF Code’s rules on independence. The rules

class a Director as independent when he or she “has no relationship

of any nature with the Company, the group or its management,

which could compromise the exercise of his or her free judgment”

according to the specific independence criteria recommended

by the AFEP-MEDEF Code. At its meeting on April 25, 2019, the

Board discussed whether Directors’ relations with the Company

were significant or not. As a result, on the advice of the Nominating,

Compensation and Governance Committee, the Board of Directors

considered four of its members to be independent according to

both qualitative and quantitative criteria: Mahmud B. Tukur, Adeline

Challon-Kemoun, Élisabeth Van Damme and Antoine Grenier.

Regarding the signifi cance of the business relationship, the analysis

of the Board of Directors focused on several criteria, namely:

seniority and history of the contractual relationship between the

group in which a Director of the Company holds a corporate offi ce

or exercises an executive function and BOURBON, application to

the contractual relationship of normal market conditions, absence

of economic dependence or exclusivity, insignifi cant proportion

of revenue resulting from the relationships between the group

in question and BOURBON. On the recommendation of the

Nominating, Compensation and Governance Committee, the Board

of Directors has determined that none of the independent Directors

has any signifi cant business relationships directly or indirectly with

BOURBON that could create a confl ict of interest from either the

point of view of the group or of the Director in question.

You are reminded that, in accordance with the recommendations of

the AFEP-MEDEF Code, various measures relating to the prevention

of confl icts of interest are stated in the internal regulations, namely:

(i) if the independent status of a member of the Board with

respect to the Company changes, he or she shall inform the

Chairman in writing immediately to allow the Chairman to

inform the Board and the Shareholders’ Meeting;

(ii) each Director, regardless of method of appointment,

undertakes to represent all shareholders;

(iii) a Director must inform the Board of Directors as soon as he or

she becomes aware of any potential confl ict of interest situation

and must abstain from taking part in the debates and the vote

on the corresponding deliberation. He or she must resign in the

event of a permanent confl ict of interest;

(iv) each Director is also required to make a declaration of honor as

to whether or not there is a confl ict of interest, real or potential,

at the time of his or her assumption of offi ce and each year

after that, in response to a request made by the Company

when the Registration Document is being prepared.

The table below presents the situation of each Director with regard to the independence criteria set out in paragraph 8 of the AFEP-MEDEF Code:

Criterion 1: Employee or corporate offi cer during the previous fi ve yearsNot to be, either currently or at any time in the previous five years:

- an employee or Executive Director of the Company;

- an employee, Executive Director or Director of a company that the Company consolidates;

- an employee, Executive Director or Director of its parent or a company that the parent consolidates.

Criterion 2: Cross-directorshipsNot to be an Executive Director of a Company in which the Company holds a directorship, directly or indirectly, or in which an

employee appointed as such or an Executive Director of the Company (currently in office or having held such office for less than

five years) is a Director.

Criterion 3: Signifi cant business relationshipsNot to be a customer, supplier, investment banker or commercial banker:

- that is material for the Company or its Group; or

- for a significant part of whose business the Company or its Group accounts.

The assessment of whether or not the relationship with the Company or its Group is signifi cant is discussed by the Board and

the quantitative and qualitative criteria that led to such assessment (continuity, economic dependence, exclusivity, etc.)

explained in the annual report.

Criteria 4: Family tiesDoes not have close family ties with any corporate officer in the Company.

Criterion 5: Statutory AuditorsHas not been a Statutory Auditor of the Company within the previous five years.

Criterion 6: Term of offi ce exceeding 12 yearsHas not been a Director of the Company for more than 12 years. The loss of the status of Independent Director occurs on

twelfth anniversary of assumption of offi ce.

Criterion 7: Non-Executive Director statusA Non-Executive Director may not be considered independent if he or she receives variable compensation in cash or securities

or any compensation related to the performance of the Company or the group .

Criterion 8: Signifi cant shareholder statusDirectors representing signifi cant shareholders of the Company or its parent company may be considered independent if such

shareholders do not participate in the control of the Company. However, beyond a threshold of 10% in capital or voting rights, the

Board, based on the report of the Nominating Committee, shall always examine the independent status, taking into account the

composition of the capital of the Company and the existence of a potential confl ict of interest.



(1) In this table, √ represents an independence criterion that has been met and X represents an independence criterion that has not been met.

CRITERIA

JACQUES D’ARMAND DE

CHATEAUVIEUXCHRISTIAN

LEFÈVREMAHMUD B. TUKUR

XIAOWEI WANG

ADELINE CHALLON-

KEMOUN

ELISABETH VAN

DAMME

ADRIEN DE CHOMEREAU

DE SAINT-ANDRÉ

ANTOINE GRENIER

STÉPHANE LEROUX

Criterion 1: Employee or

corporate offi cer

during the

previous fi ve

years X X √ √ √ √ X √ X

Criterion 2: Cross-

directorships √ √ √ √ √ √ √ √ √

Criterion 3: Signifi cant

business

relationships X √ √ √ √ √ √ √ √

Criteria 4: Family

ties X √ √ √ √ √ X √ √

Criterion 5: Statutory

Auditors √ √ √ √ √ √ √ √ √

Criterion 6: Term

of offi ce

exceeding 12

years X √ √ √ √ √ √ √ √

Criterion 7: Non-executive

Director status X √ √ √ √ √ √ √ √

Criterion 8: Signifi cant

shareholder

status X X √ X √ √ X √ √

3.3 PRINCIPLE OF GOVERNANCE

The Board of Directors has had its own internal regulations

since December 10, 2007, defining its methods of organization

and operation supplementing the prevailing legal and statutory

provisions. This document has been reviewed regularly to adapt it to

changes in governance rules and practices. The most recent version

of the internal regulations (dated August 25, 2014) is available in full

on the Company’s website. The internal regulations also include a

Director’s charter which sets out the rights and obligations of the

Directors, in addition to the rules concerning the ban and/or other

restrictions on trading by the Directors in the Company’s shares,

particularly when they have information not yet made public (“inside

information”) or during so-called “blackout periods” prescribed by

law or recommended by the AMF. In that regard, the Company

notifies Directors of the restrictive periods at the start of the fiscal

year according to the financial calendar established for the year.

Every member of the Board of Directors is individually required to

comply with these internal regulations. Every newly appointed

Director is made aware of his or her responsibilities and undertakes

to comply by signing the Director’s charter.

3.3.1 Directors’ ownership of BOURBON Corporation SA shares

Although French law no longer requires Directors of incorporated

companies to hold a minimum number of shares, Article 13-V of the

Company’s bylaws requires each Director (with the exception of the

Director representing employees) to own at least 300 shares.

3.3.2 Directors’ duty of confidentiality

Directors have a general duty of confidentiality concerning Board

and committee discussions and with regard to information of a

confidential nature of which they become aware as part of their

responsibilities as Directors. The general duty of confidentiality of

Directors has been extended to all of the information and documents

of which they are aware as part of their responsibilities as Directors.


MANAGEMENT REPORT

3


3.3.3 Obligation to declare conflicts of interest

Every Director must continually ensure that their personal situation

does not place them in a situation of conflict of interest with the

group . In accordance with the Director’s charter, any Director who

has a conflict of interest must inform the Board so that it can make a

ruling, and he or she must abstain from participating in debates and

voting on the corresponding resolution.

Every Director is also required to make a statement certifying whether

or not there is a situation of a conflict of interest, even if potentially:

3 when they are appointed;

3 every year, as required by the Company during the preparation of

the Registration Document.

Additional information on the corporate officers

To the Company’s knowledge, in the past five years, no corporate

officer:

3 has been found guilty of fraud;

3 has been involved in a bankruptcy, receivership or liquidation;

3 has been found guilty of any offense or been subject to any official

public sanction issued by any statutory or regulatory authority;

3 has ever been prevented by a court of law from acting as a

member of any administrative, management or supervisory body

of any issuer, or from participating in the management or conduct

of the business of any issuer.

In addition, apart from under related party agreements, concerning

potential conflicts of interest, no corporate officer has been involved

in any arrangement or agreement with the major shareholders,

clients, suppliers or others, by virtue of which he has been selected

as a Director or as a member of Management. These agreements

are not a source of conflict of interest as they are negotiated and

dealt with under normal conditions.

To the Company’s knowledge, on the date of this document, and

subject to these same reserves, no conflict of interest has been

identified between the duties of each member of the Board of

Directors and the Management with regards to the Company in their

capacity as corporate officers and their private interests or other

duties.

To the Company’s knowledge, on the date of this document, with the

exception of the Shareholders’ Agreement signed on June 26, 2014

between JACCAR Holdings, Cana Tera, Jacques d’Armand de

Chateauvieux, Henri d’Armand de Chateauvieux, Mach-Invest

and Mach-Invest International, which entered into effect on June

30, 2014 for a term of five years as from such date, and which

includes undertakings with respect to transfers of the Company’s

securities (AMF decision No. 214C236 of June 30, 2014), and

subject to the collective retention undertakings described in

section 2.8 in “Other Legal and Financial Information”, the members

of the Board of Directors and of the Management have not agreed to

any restrictions on the sale of their shares of the Company.

3.4 MANNE R IN WHICH THE BOARD OF DIRECTORS PLANS AND ORGANIZES ITS WORK, DIVERSITY OF THE BOARD OF DIRECTORS

3.4.1 Role of the Chairman of the Board of Directors

The Chairman organizes and directs the work of the Board of

Directors, and provides the Shareholders’ Meeting with a report on

said work. He supervises the proper functioning of the Company’s

administrative bodies’ compliance with the principles and practices

of good governance, particularly with regards to the Board’s

specialized committees. He ensures that the Directors are capable

of performing their duties and that they are properly informed.

3.4.2 Duties of the Board of Directors

On the recommendation of the Management, the Board of Directors

determines the group ’s medium-term strategy and reviews it regularly,

appoints the corporate officers in charge of managing the Company

in accordance with that strategy, oversees the management of the

Company and ensures the quality of the information provided to the

shareholders and the markets.

The Board of Directors examines and approves the medium-term

strategic plan and, every year, the annual budget. It ensures that they

are properly implemented.

The Board of Directors receives regular briefings and can obtain

information at all times on any changes in the activity or results of

the group , its financial position, indebtedness, cash position and

more generally on any of the group ’s commitments, particularly any

difficulties calling into question the implementation of any of the

guidelines in the strategic plan.

The Board determines the objectives in terms of financial structure

and keeps itself appraised of changes to that structure.

In accordance with the provisions of the internal regulations of the

Board of Directors, available on the bourbonoffshore.com website,

the following decisions may be made solely by the Board of Directors:

(a) entry into any strategic partnership for an amount exceeding

ten million euros (€10,000,000) or for a duration exceeding two

(2) years;

(b) determination of the Company’s dividend policy;

(c) any planned merger, spin-off, or partial asset contribution;

(d) any capital increase (including any decision to eliminate the

shareholders’ pre-emptive subscription right either immediately

or in the future) in kind or in cash, including capital increases

resulting from a merger, partial asset contribution or contribution

in kind;

(e) issuance of any securities, whether or not giving access

(immediately or in the future) to the Company’s share capital or

voting rights; and

(f) any decision to hire or appoint any employee or corporate

officer to be a member of the Executive Committee or to be

Chief Executive Officer of BOURBON Corporation SA and its

subsidiaries.

The Board of Directors reviews and approves the information

published in the Registration Document.

It approves the composition of the group ’s Management. The Board

of Directors reviews its composition whenever necessary. It reviews

its functioning annually.



3.4.3 Diversity of the Board of Directors

The Board of Directors takes particular care to maintain a diversifi ed

composition. This diversity makes it possible to refl ect the

international dimension of the group and enrich the quality of the

Board’s debates and decisions.

Accordingly, the Board of Directors ensures that:

3 it contains members of foreign nationality;

3 its objective of balanced representation of women and men is

being pursued;

3 balanced representation is maintained on the Board in terms of

independence, age and seniority;

3 the skills necessary for the development and implementation of

the group ’s strategy are represented;

3 employees are always represented; and

3 the continuity of the Board is preserved through regular renewal

of its membership.

At April 24, 2019, the Board is composed of nine members

(including the Director representing employees): six men and three

women, all with general management experience, with different

and complementary areas of expertise. The average age is 52.

Three Directors are of foreign nationality (Belgian, Chinese and

Nigerian). Four Directors are independent. A Director representing

employees sits on the Board (one Director and one alternate) and

on the Nominating, Compensation and Governance Committee and

also participates in the executive sessions of the Board. The Board

of Directors is assisted by one Advisor.

The Board is in compliance with the gender parity required by

the Coppé-Zimmermann Law (Article L. 225-18-1 of the French

Commercial Code), under which the proportion of Directors in

listed companies must be at least 40% of each gender (Directors

representing employees are not taken into account to assess the

proportion of 40% or determine the minimum number and maximum

number of Directors as described in Article L. 225-17 of the French

Commercial Code).

3.4.4 Meetings of the Board of Directors

The Board of Directors meets as often as required by the interests

of the Company. All Directors receive the information necessary to

perform their duties, particularly to prepare for every Board meeting.

The written texts and documents in support of items on the agenda

are sent to them in advance, in the week preceding the meeting,

for prior consideration and analysis. The Directors also receive

all information on significant events occurring in the Company

between Board meetings. The annual performance review and the

compensation of Executive Directors is always carried out without

the presence of the executive in question.

The minutes of the meetings of the Board of Directors are drafted

at the end of each meeting and sent to all the Directors within the

stipulated deadlines. The minutes are generally subject to their

express approval at the following Board meeting.

The Statutory Auditors are invited to the meetings in which the Board

of Directors closes the financial statements.

The Board of Directors held 12 meetings in 2018, with an average

duration of four hours for Board meetings dealing with ongoing

topics, and a full day for strategic Board Meetings (one meeting).

Three additional meetings were held by teleconference as provided

for in the bylaws and the Board’s internal regulations to discuss

specific items leading to strategic decisions without delay, for

which the Directors were very responsive. Directors were also

consulted electronically to give their opinions on specific subjects

when necessary.

3.4.5 Table summarizing attendance rates at Board and Committee meetings in 2018

DIRECTORS BOARDAUDIT

COMMITTEE

NOMINATING AND COMPENSATION

COMMITTEEAD HOC

COMMITTEE

Jacques d’Armand de Chateauvieux 11/12 (92%) - -

Adrien de Chomereau de Saint André 08/12 (67%) - 2/2 (100%) 7/9 (78%)

Christian Lefèvre 12/12 (100%) - - 9/9 (100%)

Baudouin Monnoyeur 10/12 (84%) - -

Agnès Pannier-Runacher(1) 07/12 (59%) 2/3 (67%) - 3/9 (33%)

Philippe Salle(2) 02/12 (17%) - 1/2 (50%)

Adeline Challon-Kemoun 10/12 (84%) - 2/2 (100%)

Élisabeth Van Damme(3) 09/12 (75%) 1/3 (34%) 0/2 (0%) 6/9 (67%)

Mahmud B. Tukur 09/12 (75%) 3/3 (100%) -

Xiaowei Wang 08/12 (67%) - -

Antoine Grenier(4) 07/12 (59%) 2/3 (67%) 9/9 (100%)

Stéphane Leroux(5) 02/12 (17%)

Advisor

Henri de Chateauvieux 100% - -

(1) Agnès Pannier-Runacher’s term as a Director ended on October 17, 2018.

(2) Philippe Salle’s term as a Director ended on March 12, 2018.

(3) Élisabeth Van Damme left the Audit Committee on March 14, 2018 to join the Nominating and Compensation Committee; Élisabeth Van Damme joined

the a d h oc Committee on October 22, 2018.

(4) Antoine Grenier has been a Director since May 30, 2018.

(5) Stéphane Leroux has been a Director representing employees since November 9, 2018.


MANAGEMENT REPORT

3


The meetings of the Board of Directors in 2018 focused on reviewing

and discussing the following issues:

3 monitoring of day-to-day management:

3 review of the group ’s cash position and indebtedness,

3 detailed review of Group activity,

3 approval of interim statutory and consolidated financial

statements, approval of annual statutory and consolidated

financial statements,

3 implementation of the share buyback program,

3 review of the risk management and internal audit system,

3 monitoring of the competitive environment and the business

environment in which the group operates, especially in a

challenging market,

3 preparations for the Annual Shareholders’ Meeting and

proposal to set a dividend,

3 review of the annual budget;

3 strategic guidelines:

3 validation of a new strategic action plan called

#BOURBONINMOTION initiated at the end of 2017 to

enable the group to increase its competitiveness and meet

the new requirements of the market and its clients through

new innovative service offerings and digitization/digital

transformation,

3 discussion on the group ’s fi nancial restructuring and review of

General Management’s action plan,

3 review of the process for seeking new fi nancial partners,

3 discussion on organizational and managerial changes for the

BOURBON of tomorrow, as well as the achievements and

issues related to the management of operations and clients,

3 monitoring of local partnerships and decisions to implement

new joint venture agreements and formation of companies

both in France and abroad,

3 disposals of non-strategic assets,

3 currency hedging policy;

3 functioning of corporate bodies:

3 change in governance,

3 systematic follow-up of committee reports presented at the

next Board meeting after these committee meetings,

3 consideration of all aspects of compensation paid to

corporate officers,

3 evaluation, rules of corporate governance, position of Directors

with regard to the independence criteria, functioning of the

Board and a diversifi ed membership, Directors’ fees,

3 approval of Board reports,

3 composition of the Board and recruitment of new Directors,

election of a Director representing employees,

3 composition of the General Management,

3 policy on gender equality and equal pay,

3 review of the group ’s CSR issues and performance,

3 review of the succession plan for key talent and senior

executives of the Company;

3 authorization and review of “related party” agreements pursuant to

Article L. 225-38 of the French Commercial Code.

As such, the Board of Directors’ meeting of December 31, 2018

reviewed agreements authorized and entered into during previous

fi scal years whose performance was ongoing.

In addition, at its meeting on December 3, 2018, the Board conducted

its annual review of related party agreements in accordance with

Article L. 225-40-1 of the French Commercial Code and informed the

Statutory Auditors thereof. This review, which was carried out in the

absence of the Directors in question on the basis of the information

provided by Management and the Audit Committee, enabled the

Board of Directors to conclude, in accordance with the committee’s

recommendation, that the Company has an interest in continuing the

performance of said related party agreements until their extinction,

taking into account the interest that they continue to present for

BOURBON.

The Directors also receive a regular report from General Management

informing them of the monitoring of the decisions made by the Board,

the progress of discussions with all BOURBON’s lenders, the process

for seeking new fi nancial partners, the situation of the surrounding

market and developments in the main operational indicators. Where

necessary, they are also able to question members of Management

and may communicate with each other without Executive Directors

being present.

3.5 ASSESSMENT OF THE BOARD OF DIRECTORS AND THE COMMITTEES

Every three years, a formal assessment is made in the form of a

detailed questionnaire about the Board of Directors and the two

specialized Committees, which is given to each member of the Board.

Once a year during the intervening years when the Board does not

conduct a formal assessment, it devotes one item on its agenda to a

discussion of its procedures and the diversity of its membership. At the

end of Board meetings, the Directors frequently share their opinion

of the meetings, expressing any need for additional information, or

alternatively their thoughts on the quality of the preliminary documents

provided and the Board proceedings in general.

The last formal assessment of the Board of Directors and its two

specialized Committees took place at the end of 2017.

The conclusions of this self-assessment were positive overall,

particularly regarding:

3 the composition and functioning of the Board, in particular with

regard to the number of Directors, their age and nationality and

the representation of women;

3 the proper balance in the composition of the Committees;

3 the clear and comprehensive minutes on the work performed by

the Committees;

3 a high level of involvement by the Directors in the work of the

Board and the access to information by Directors before and

between each meeting of the Board was judged by the members

to be very satisfactory;

3 the subjects addressed during the meetings appropriate to the

challenges facing the Company;

3 quality and effi ciency of meetings: the members believe that the

time for individual expression at meetings is very satisfactory and

that the Board of Directors devotes adequate time to subjects and

their importance and that there is a strong climate of trust between

the members of the Board of Directors, which allows debates of

high quality and considerable freedom of expression.



3.6 SPECIALIZED COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors is assisted in its work by three specialized

Committees: the Audit Committee, the Nominating, Compensation

and Governance Committee and an a d h oc Committee.

These Committees cannot be delegated powers reserved by law or

bylaws to the Board of Directors, nor can they reduce or limit the

powers of the Management. Depending on its remit and where

appropriate, each committee issues proposals, recommendations

and advice for the Board.


The mission of the Audit Committee is to assist the Board of Directors

so that it can monitor the accuracy and consistency of BOURBON

Corporation SA’s company and consolidated financial statements, the

quality of internal control and the information available to shareholders

and the markets.

The Audit Committee works as a specialized Committee to oversee

questions relating to the preparation and control of accounting and

financial information pursuant to Articles L. 823-19 and L. 823-20-4°

of the French Commercial Code.

In this context:

3 it reviews any changes in IFRS, the internal control structure and

any matters pertaining to financial presentation, particularly for the

Registration Document;

3 it manages the procedure for selecting Statutory Auditors before

submitting the results to the Board; it examines their independence

and objectivity;

3 it oversees the process of preparing financial data and, where

appropriate, makes recommendations to ensure their integrity;

3 it reviews in advance and gives its opinion on the draft annual and

interim annual financial statements;

3 it examines the relevance and consistency of the accounting

policies and standards used to prepare the financial statements

and prevents any non-compliance with those standards;

3 it ensures that any changes in the scope of the consolidated

companies are presented, and provides any necessary

explanations;

3 it evaluates the Company’s risk exposure and off-balance sheet

commitments;

3 it assesses the effectiveness and quality of the group ’s internal

control systems and procedures and, where necessary,

the effectiveness of the internal auditing of procedures for

preparing and processing accounting and financial data, without

compromising its independence, ensuring in particular that the

Internal Control committee has been appointed and operates

satisfactorily;

3 it reviews the financial and cash position;

3 it examines the procedures adopted to evaluate and manage

significant risks;

3 it examines the financial commitments given to shipyards handling

orders authorized according to the procedure for related party

agreements, for vessels under construction;

3 it makes recommendations concerning the Statutory Auditors,

whose appointment (or reappointment) is proposed at the

Shareholders’ Meeting;

3 it monitors the performance of the Statutory Auditors and if

necessary takes into account the observations and conclusions

of the French Audit Office Board (HCCC) following the audits

carried out;

3 it approves the provision by the Statutory Auditors of services

other than the certification of the fi nancial statements;

3 it reports regularly to the Board of Directors on the results of the

certification of the accounts, on how this work has contributed

to the integrity of the financial data, and on the role it played in

this process. It also informs it immediately of any difficulties

encountered.

The Audit Committee follows the recommendations issued on

July 22, 2010 by the AMF working group on Audit Committees.

3.6.1.1 Composition and functioning of the Audit Committee

The Audit Committee consists of at least three members appointed

by the Board of Directors. The duration of the members’ term of

office coincides with their term as Directors. The committee members

appoint their Chairman from among themselves. For the deliberations

of the committee to be valid, at least half of its members must be

present. Directors who take part in the meeting by videoconference

or telecommunication methods are deemed to be present provided

that these methods enable them to be identified and ensure their

effective participation. The nature and application conditions of these

methods are set by a decree of the French Conseil d’État.

The Audit Committee adopted internal regulations on March 10, 2010

which were revised at the meeting of the committee on August 28,

2015.

As of December 31, 2018, the Committee is composed of three

people, of which two are Independent Directors, complying with the

proportion of at least two-thirds recommended by the AFEP- MEDEF

in listed companies:

3 Antoine Grenier, Independent Director, who chairs the Committee;

3 Mahmud B. Tukur, Independent Director;


Its members all have recognized financial and accounting expertise,

as evidenced by their professional backgrounds (see section 3.2

“Composition of the Board of Directors and manner in which it plans

and organizes its work, terms of office and functions of corporate

officers” of this report).

The Audit Committee reviewed the financial statements prior to their

examination by the Board of Directors.

When the annual and interim financial statements are closed, the

members of the Audit Committee consult the Statutory Auditors on

the methods used to carry out their work.

Thierry Hochoa, in his capacity as Group Chief Financial Officer, has

participated since his appointment in all the meetings of the Audit

Committee.

The Audit Committee is regularly informed of the risk management

procedures deployed within the group , as well as of the work

conducted by internal audit, which was the subject of two

presentations by the Director of Internal Audit during the year.

The Audit Committee may, when it deems it necessary, question

Senior Management, the Finance Department, the Director of Internal

Audit or any other member of management.


MANAGEMENT REPORT

3


The Chairman of the Audit Committee reports to the Board on

the work of the committee and issues its recommendations at the

start of each session of the Board of Directors’ meeting following a

committee meeting.

3.6.1.2 Work of the Audit CommitteeThe Audit Committee met three times in 2018. The Statutory Auditors

attended committee meetings discussing the closing of the audited

financial statements. In this context, they explained the context in

which they carried out their duties and presented their conclusions.

During those meetings, the committee:

3 examined the financial statements for the fiscal year ended

December 31, 2017, and the 2018 interim financial statements;

3 reviewed related party agreements;

3 assessed the management of foreign exchange risk and in

particular unrealized foreign exchange losses;

3 analyzed the risks in the countries in which the group operates;

3 reviewed the group ’s financial position, indebtedness and cash

position;

3 analyzed the results of the impairment tests on the group ’s Cash

Generating Units;

3 evaluated the financial risks relating to the shipyards where the

group ’s vessels are built;

3 oversaw and evaluated the work of the Internal Audit Department

and approved the audit plan for 2019;

3 reviewed the independence, fees and duties of the Statutory

Auditors of the Company. It also pre-approved other assignments

carried out by the Statutory Auditors.

3.6.2 Nominating, Compensation and Governance Committee

The main responsibilities of the Nominating, Compensation and

Governance Committee are to issue recommendations, proposals

and remarks to the Board of Directors and to assist it in the following

areas:

3 examining all proposals for nomination to a position as a member

of the Board of Directors or to any position as a corporate

officer, formulating an opinion on those proposals and/or a

recommendation to the Board of Directors;

3 recommending the total amount and distribution of Directors’

fees to be proposed to the Shareholders’ Meeting;

3 recommendations concerning the compensation, pension and

benefits system, in-kind benefits and other pecuniary rights

awarded to the corporate officers and/or Executive Directors of

the group , including any stock options. To do so, the committee

is kept informed of the compensation policy for the group ’s key

managers;

3 examining the overall policy for awarding stock options, bonus

shares to employees and any form of staff incentive in the

Company’s results;

3 examining the succession plan for members of the General

Management and for key talent in senior positions within the

group ;

3 monitoring governance practices and proposing governance

rules to the Board to be applied by the Company.

3.6.2.1 Composition and functioning of the Nominating, Compensation and Governance Committee

The Committee consists of at least three members appointed by

the Board of Directors. The Committee appoints its Chairman from

among its members.

The Committee meets at least once a year.

As of December 31, 2018, the Nominating, Compensation and

Governance Committee is composed of four members, two of

whom are Independent Directors and one of whom is the Director

representing employees:

3 Adeline Challon-Kemoun, Independent Director, who chairs the

Committee;



3 Stéphane Leroux, the Director representing employees since

November 9, 2018.

The Nominating, Compensation and Governance Committee

adopted internal regulations on March 15, 2010.

The Chairman of the Board and the Chief Executive Officer participate

in the Committee’s discussions on nominations. The succession plan

for key positions within the Company is submitted annually to the

Committee.

3.6.2.2 Work of the Nominating, Compensation and Governance Committee

The Committee met twice in 2018 with a 100% attendance rate at

the meeting held on March 12, 2018 and a 67% attendance rate at

the meeting held on April 10 2018.

The Committee dealt with various issues, particularly:

3 reviewing the independent status of Directors;

3 reviewing the candidacies for new Directors affecting the current

configuration of the Board of Directors;

3 evaluating the performance and quality of management of each

corporate officer;

3 the compensation of the corporate officers and definition of the

criteria for the variable part in accordance with industry practice

and in line with the compensation paid to the other executives in

the Company;

3 reviewing the succession plan for key talent holding senior

positions within the group .

3.6.3 Ad h oc Restructuring Committee

The a d h oc Restructuring Committee, created on July 23, 2018

by the Board of Directors, meets several times a month and its

main responsibilities are to issue recommendations, proposals and

remarks to the Board of Directors and to assist it in the following

areas:

3 reviews, discussions and recommendations regarding the

fi nancial restructuring of the group ;

3 reviews, discussions and recommendations regarding the

process for seeking new fi nancial partners;

3 the work of this Committee is reported to the Board of Directors.



3.6.3.1 Composition and functioning of the ad hoc Restructuring Committee

The Committee is composed of at least four members, two of

whom independent Directors and two non independent Directors

appointed by the Board of Directors. The committee appoints its

Chairman from among its members.

The Committee meets according to the calendar of discussions

related to the fi nancial restructuring of the Company.

As of December 31, 2018, the ad hoc Committee is composed of

four persons, two of whom are Independent Directors:

3 Antoine Grenier, Independent Director, who chairs the Committee;




3.6.3.2 Work of the a d h oc Restructuring CommitteeThe Committee met nine times in 2018 with a 76% attendance rate.

The Committee dealt with various issues, particularly:

3 review of the Company’s work regarding fi nancial restructuring;

3 review of discussions with all of the Company’s lessors and

lenders;

3 review and discussions regarding the fi nancial restructuring

timetable;

3 review and discussion of the New Money search timetable and

process, and recommendations to the Board of Directors;

3 review and discussions of the group ’s current trading and cash

fl ow.

3.7 COMPENSATION AND BENEFITS OF CORPORATE OFFICERS FOR THE YEAR ENDED DECEMBER 31, 2018

This paragraph describes, pursuant to the compensation policy

decided by the Board of Directors on March 14, 2018 and approved

by the Shareholders’ Meeting of May 30, 2018 (tenth ordinary

resolution), the compensation and benefi ts paid (or payable) for

fi scal 2018 to the Company’s Executive Directors, namely Jacques

d’Armand de Chateauvieux, in his capacity as Chairman and

Chief Executive Offi cer and, as of March 14, 2018, as Chairman

of the Board of Directors, Gaël Bodénès in his capacity as Chief

Operating Offi cer and from March 14, 2018 in his capacity as Chief

Executive Offi cer, and Astrid de Lancrau de Bréon, Chief Operating

Offi cer whose term expired on July 10, 2018, it being specifi ed that

the components of variable compensation can only be paid after

the approval of the Shareholders’ Meeting of June 28, 2019 in

accordance with Article L. 225-100 of the French Commercial Code.

They are detailed in this document (see the draft resolutions of the

Combined General Meeting of June 28, 2019).

3.7.1 Compensation of the Chairman and Chief Executive Officer for fiscal year 2018

At its meeting on March 14, 2018, the Board of Directors of BOURBON

Corporation, on the proposal of the Nominating, Compensation and

Governance Committee, decided that the components of Jacques

d’Armand de Chateauvieux’s compensation in respect of the 2018

fiscal year would be as follows:

3 fi xed annual compensation unchanged at €144,000;

3 variable compensation, which remains entirely linked to the

Company’s performance, corresponding to 1% of surplus net

income (group share) for the fi scal year in question and capped at

70% of the fixed compensation;

3 Directors’ fees paid by BOURBON Corporation SA.

With respect to variable compensation, the Board of Directors

did not follow the recommendation of the AFEP-MEDEF Code,

which provides that variable compensation must be subject to the

achievement of specific objectives, but instead granted variable

compensation with terms similar to the compensation terms of the

other shareholders (that is to say, a percentage of net income where

it is positive). This decision was based on the fact that the objectives

set for the two other corporate officers, linked to quantitative and

qualitative performance criteria, cannot apply to the Chairman and

CEO, who is the Company’s principal shareholder.

Jacques d’Armand de Chateauvieux has no other commitments

from the Company.

The Board, having approved the Company’s financial statements,

noted that net income (group share) was negative. Therefore,

no variable compensation will be paid to Jacques d’Armand de

Chateauvieux for fiscal year 2018.

3.7.2 Compensation of the Chief Executive Officer for fiscal year 2018

At its meeting on March 14, 2018, the Board of Directors of

BOURBON Corporation SA, on the proposal of the Nominating,

Compensation and Governance Committee, decided that the

components of the compensation paid to Gaël Bodénès in respect

of the 2018 fiscal year would be as follows:

3 fixed annual compensation of €280,260;

3 for the variable compensation, at its meeting on March 14, 2018,

the Board of Directors decided on a calculation procedure based

on the fi xed compensation; the variable compensation can be

up to 50% of fi xed compensation if the targets are met, and up

to 70% if the targets are exceeded. Targets are reviewed and

set each year by the Board of Directors on the proposal of the

Nominating, Compensation and Governance Committee and

aligned with the targets linked to the group ’s strategic priorities.

The degree to which each objective must be achieved is

precise and progressive, but is not made public for reasons of

confidentiality.

As the Chief Executive Offi cer is in office at December 31, 2018, he is

also allocated unemployment insurance for senior executives and a

company car.


MANAGEMENT REPORT

3


On the basis of the objectives defined at the meeting of March 14,

2018, the Board of Directors, having heard the opinion of the members

of the Nominating, Compensation, and Governance Committee,

which examined the extent to which the various performance criteria

had been achieved and analyzed the personal contribution of each

of the Executive Vice Presidents, and after deliberations, fixed the

variable compensation to be paid for fiscal year 2018, subject to the

approval of the Shareholders’ Meeting of June 28, 2019.

Achievement of objectives for fiscal year 2018

TARGET % % GRANTED

Economic parameters: 40% 10%

Target for EBITDA excl. capital gains 20% Not achieved

Objective for Days Sales Outstanding (DSO) 20% Achieved

Operational/HSE parameters: 40% 0%

Target for average fleet utilization rate 20% Not achieved

Target for Group TRIR 20% Not achieved

Personal contribution: 20% 20%

TOTAL 100% 30%

3.7.3 Compensation of the Chairman of the Board of Directors for fiscal year 2018

The BOURBON Corporation SA Board of Directors, at its meeting

held on April 10, 2018, on the proposal of the Nominating,

Compensation and Governance Committee, decided on the

compensation components payable to Jacques d’Armand de

Chateauvieux, in respect of his term as Chairman of the Board of

Directors for the 2018 fi scal year:




from the Company.

The Nominating, Compensation and Governance Committee

reviews this fixed compensation annually.

3.7.4 Compensation of the Executive Vice Presidents in respect of fiscal year 2018




components of the compensation paid to Gaël Bodénès and Astrid

de Lancrau de Bréon in respect of the 2018 fiscal year would be as

follows:

3 for Gaël Bodénès: fi xed annual compensation of €280,260;

3 for Astrid de Lancrau de Bréon: fi xed annual compensation of

€240,000;

3 for the variable portion, several years ago the Board of Directors

defined a calculation procedure based on fixed compensation;

variable compensation can reach 50% of fixed compensation if

the objectives are achieved, and up to 70% if the objectives are

exceeded. Targets are reviewed and set each year by the Board

of Directors on the proposal of the Nominating, Compensation

and Governance Committee and aligned with the targets linked

to the group ’s strategic priorities. The degree to which each

objective must be achieved is precise and progressive, but is not

made public for reasons of confidentiality.

For his term of offi ce as Chief Operating Offi cer, Gaël Bodénès

was allocated unemployment insurance for senior executives

and a company car. Astrid de Lancrau de Bréon was entitled to

unemployment insurance for senior executives until the end of her

term of offi ce, i.e. until July 10, 2018.

On the basis of the objectives defined at the meeting of

March 14, 2018, the Board of Directors, having heard the opinion

of the members of the Nominating, Compensation, and Governance

Committee, which examined the extent to which the various

performance criteria had been achieved and analyzed the personal

contribution of each of the Executive Vice Presidents, and after

deliberations, fixed the variable compensation to be paid for fiscal

year 2018, subject to the approval of the Shareholders’ Meeting of

June 28, 2019.



Achievement of objectives for fiscal year 2018

GAËL BODÉNÈS, EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER THEN CHIEF EXECUTIVE OFFICER TARGET % % GRANTED








TOTAL 100% 30%

ASTRID DE LANCRAU DE BRÉON, EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL OFFICER TARGET % % GRANTED








TOTAL 100% 10%

3.7.5 Summary table of the compensation, stock options, and shares granted to each Executive Director in office as of December 31, 2018 (in euros)

JACQUES D’ARMAND DE CHATEAUVIEUX, CHAIRMAN OF THE BOARD OF DIRECTORS FISCAL YEAR 2017 FISCAL YEAR 2018

Compensation due for the year (detailed in table 3.7.7) 174,000 182,000

Variable long-term compensation allocated over the year - -

Value of stock options awarded during the year - -

Value of shares awarded during the year - -

TOTAL 174,000 182,000

GAËL BODÉNÈS, CHIEF EXECUTIVE OFFICER FISCAL YEAR 2017 FISCAL YEAR 2018





TOTAL 408,512 340,971

3.7.6 Summary table of the compensation, stock options and shares granted to each Executive Director whose term of office ended in 2018 (in euros)

ASTRID DE LANCRAU DE BRÉON, EXECUTIVE VICE PRESIDENT (END OF TERM 7.10.2018) FISCAL YEAR 2017 FISCAL YEAR 2018


Variable long-term compensation allocated over the year -



TOTAL 283,508 133,415


MANAGEMENT REPORT

3


3.7.7 Summary table of the compensation of each Executive Director in office at December 31, 2018 (in euros)

JACQUES D’ARMAND DE CHATEAUVIEUX, CHAIRMAN OF THE BOARD OF DIRECTORS

FISCAL YEAR 2017 FISCAL YEAR 2018

DUE FOR THE YEAR

PAID OVER THE YEAR

DUE FOR THE YEAR

PAID OVER THE YEAR

Fixed compensation 144,000 144,000 144,000 144,000

Variable compensation(1) - - - -

Variable long-term compensation - - - -

Exceptional compensation - - - -

Directors’ fees(2) 30,000 30,000 38,000 32,000

Benefits in kind - - - -

TOTAL 174,000 174,000 182,000 176,000

(1) Variable compensation is payable the following year, after approval of the financial statements by the Shareholders’ Meeting.

(2) The amount due may vary according to the number of Board meetings held during the year.

GAËL BODÉNÈS, CHIEF EXECUTIVE OFFICER


DUE FOR THE YEAR

PAID OVER THE YEAR

DUE FOR THE YEAR

PAID OVER THE YEAR

Fixed compensation 326,337 326,337(3) 280,260 280,260

Variable compensation(1) 63,662 26,500 42,039 63,662



Directors’ fees for terms of office served in the group - - - -

Benefits in kind(2) 18,513 18,513 18,672 18,672

TOTAL 408,512 371,350 340,971 362,594


(2) Company car + unemployment insurance for senior executives.

(3) Of which pay in lieu of vacation amounting to €61,204.

No supplementary scheme has been granted by BOURBON Corporation, nor any benefits in kind other than those mentioned in the tables

above, for the Chairman and Chief Executive Officer.

3.7.8 Summary table of the compensation of each Executive Director (in euros) whose term of office ended in 2018

ASTRID DE LANCRAU DE BRÉON, EXECUTIVE VICE PRESIDENT (UNTIL 7.10.2018)


DUE FOR THE YEAR

PAID OVER THE YEAR

DUE FOR THE YEAR

PAID OVER THE YEAR


Variable compensation(1) 52,800 - 6,323 52,800



Directors’ fees for terms of office served in the group 29,000 -

Benefits in kind(2) 4,247 4,247 640 640

TOTAL 283,508 259,708 133,415 179,892


(2) Housing until December 3, 2017; as of December 4, 2017, Astrid de Lancrau de Bréon had unemployment insurance for senior executives




3.7.9 Directors’ fees

Members of the Board of Directors receive, as their only

compensation, Directors’ fees up to the overall amount set by

decision of the Combined Shareholders’ Meeting. These fees

are paid based on attendance at the meetings held between two

Ordinary General Meetings.

The Combined Shareholders’ Meeting of May 20, 2014 decided to

allocate an overall amount of €400,000 for 2014 and subsequent

years.

The procedures for distributing Directors’ fees are now as follows:

3 fixed compensation of €10,000;

3 variable compensation which takes into account actual

participation by each Director in the work of the Board of Directors

and its committees, consisting of:

3 €5,000 for attendance at “strategic and operational” Board

meetings and €3,000 for attendance at other Board meetings,

3 €5,000 for attendance at committee meetings.

Under these terms, the amount paid in 2018 to the members of

the Board of Directors (before withholding tax for foreign Directors)

totaled €387,000.

(in euros)DIRECTORS’ FEES

PAID IN 2017DIRECTORS’ FEES

PAID IN 2018

Directors

Jacques d’Armand de Chateauvieux 30,000 32,000

Adrien de Chomereau de Saint André - 42,000

Adeline Challon-Kemoun 3,000 47,000

Christian Lefèvre 30,000 32,000

Baudouin Monnoyeur 30,000 32,000

Mahmud B. Tukur 37,000 42,000

Elisabeth Van Damme - 44,000

Xiaowei Wang 24,000 22,000

Antoine Grenier - -

Directors representing employees

Stéphane Leroux (Director) - -

Patrick Lièvre (alternate) - -

Advisor

Henri d’Armand de Chateauvieux 15,000 16,000

Director whose term ended during the fiscal year

Agnès Pannier-Runacher 45,000 42,000

Philippe Salle 34,000 36,000

TOTAL 359,000* 387,000

* Of which Directors’ fees paid to Directors whose terms expired in 2017:

members of the Board of Directors did not benefit from any other compensation or benefit during the year.

3.7.10 Stock options awarded and/or exercised during 2018

None.

3.7.11 Stock options awarded during the year 2018 to each Executive Director

None.


MANAGEMENT REPORT

3


3.7.12 Stock options exercised during the year by each Executive Director

None.

3.7.13 Stock options or stock purchase options awarded to the first ten non-corporate officer employees/stock options or stock purchase options exercised by the first ten non-corporate officer employees during 2018

None.

3.7.14 Performance shares awarded and/or that became available during the 2018 fiscal year

None.

3.7.15 History of stock options awarded

The table below shows all the information related to stock option plans granted by the Company in force during the fi scal year ended

December 31, 2018.

MEETING DATE

JUNE 1, 2011

PLAN NO. 10 PLAN NO. 11

Date of Board meeting November 30, 2012 December 2, 2013

Start date for exercising options November 30, 2016 December 2, 2017

Expiration date November 29, 2018 December 1, 2019

Original number of beneficiaries 2 68

Total number of stock subscription or purchase options: 29,700 1,037,000

a) Corporate officers(1) 140,000

Jacques d’Armand de Chateauvieux - -

Gaël Bodénès - 60,000

Astrid de Lancrau de Bréon - -

b) Top 10 employee beneficiaries 29,700 198,000

Subscription or purchase price €19.82 €19.68

Discounts granted non non

Options exercised at 12.31.2018 - -

Options canceled or voided at 12.31.2018 29,700 400,000

Options remaining to be exercised at 12.31.2018 - 637,000

(1) List of the corporate offi cers with these duties during the year ended December 31, 2018.

3.7.16 History of bonus share allocations in force as of December 31, 2018

None.



3.8 PRINCIPLES AND CRITERIA FOR THE DETERMINATION, DISTRIBUTION AND ALLOCATION OF THE FIXED, VARIABLE AND EXCEPTIONAL COMPONENTS OF TOTAL COMPENSATION AND BENEFITS OF ANY KIND PAYABLE TO EXECUTIVE DIRECTORS IN 2019

In accordance with Article L. 225-37-2 of the French Commercial

Code, the principles and criteria are set out below for determining,

distributing and allocating the fi xed, variable and exceptional

components of total compensation and benefi ts of any kind

attributable to the Chairman of the Board of Directors and the Chief

Executive Offi cer in connection with their terms of offi ce for fi scal

2019 as set by the Board of Directors at its meeting of April 25, 2019,

on the proposal of the Nominating, Compensation and Governance

Committee, subject to the approval thereof by the Shareholders’

Meeting of June 28, 2019. (see draft resolutions for the Combined

Shareholders’ Meeting of June 28, 2019). The Company’s position

does not allow a comprehensive view of the implementation of its

compensation policy over several years and the tendency has been

to maintain current compensation without any increases until a return

to better fortunes for the Company.

In accordance with Article L. 225-37-2 of the French Commercial

Code, we declare that the payment of the variable and exceptional

components of compensation presented in the present report will

be subject to the approval of the compensation of the persons in

question by the Shareholders’ Meeting that will take place in 2020

in order to approve the financial statements for the 2019 fiscal year.

3.8.1 General principles for determining the compensation of Executive Directors

The principles for determining the compensation of Executive

Directors are set by the Board of Directors on the recommendation

of the Nominating, Compensation and Governance Committee

in accordance with the provisions of the AFEP-MEDEF Code of

Corporate Governance as revised in June 2018 and which ensures

compliance with the following principles:

3 the compensation policy is tailored to reflect the responsibilities

of each person and ensures that the compensation components

fit the group ’s overall compensation policy for executives in key

positions;

3 the compensation policy must remain consistent with those of

companies of the same size and for similar positions, and with

international companies operating in the same business sector;

3 the compensation of Executive Directors is composed of a

fixed component and a variable component; The Nominating,

Compensation and Governance Committee reviews the fixed

compensation annually;

3 the remuneration criteria for the variable component are reviewed

each year in order to remain aligned with the Company’s strategy.

The amount of the variable component may not exceed a given

percentage of the fixed component;

3 the allocation of stock options or the allocation of bonus shares

must reflect a policy of proportional distribution that is not

concentrated on the Executive Directors. It is conditional on

performance criteria. If they exercise their options or in the case

of definitive allocation of bonus shares, the Executive Directors

are required to retain 20% of the shares until the end of their

terms of offi ce.

The stock option plans relate exclusively to shares of BOURBON

Corporation SA.

The stock options granted for new and/or existing shares reflect

a policy of proportional distribution which is not concentrated

on one category of beneficiaries and, more particularly, on the

Executive Directors, in accordance with the recommendations of the

AFEP- MEDEF Code.

Each plan is decided by the Board of Directors, as delegated by the

Shareholders’ Meeting, on the recommendation of the Nominating,

Compensation and Governance Committee, which is specifically

responsible for recommending the number of options to be awarded

to Management and for setting performance criteria.

Stock options can only be exercised after the expiration of a period

of four years, subject to presence conditions. Their exercise price

corresponds to the average price of the share for the 20 stock

market trading sessions prior to the date of award of the options,

with no discount applied.

The bonus share award plans relate exclusively to BOURBON

Corporation SA shares.

The bonus share award plans reflect a policy of proportional

allocation which is not concentrated on one category of beneficiaries

and, more particularly, on the Executive Directors, in accordance

with the recommendations of the AFEP-MEDEF Code.

Each plan is decided by the Board of Directors, as delegated by the

Shareholders’ Meeting, on the recommendation of the Nominating,

Compensation and Governance Committee, which is specifically

responsible for recommending the number of shares to be awarded

to Management and for setting performance criteria.

The Board of Directors sets the vesting and lock-up periods, and

then determines the plan regulations, which govern the terms and

conditions of the allocation of shares to beneficiaries.

3 the compensation policy for Executive Directors set by the Board

of Directors may, under certain conditions, schedule the payment

of severance payments or compensation for a non-compete

undertaking capped at 24 months of annual compensation (fi xed

and variable) for the relevant executive;

3 the Board of Directors considers, in respect of other

compensation, such as exceptional and standard compensation,

indemnities or benefits due or likely to be due as a result of taking

office, that in the interest of BOURBON and stakeholders, the

principle of paying these to corporate officers under very specific

circumstances should not rule out in principle. The payment of

such compensation must be justified and the grounds for its

implementation laid down by the Board. In any event, this other

compensation must meet the requirements of the AFEP- MEDEF

Code of Corporate Governance and may only be paid after

approval by a Shareholders’ Meeting in accordance with

Article L. 225-100 of the French Commercial Code amended by

ruling No. 2017-1162 dated July 12, 2017;

3 Directors’ fees: members of the Board of Directors receive, as

their only compensation, Directors’ fees up to the overall amount

set by decision of the Combined Shareholders’ Meeting. These

fees are paid based on attendance at the meetings held between


MANAGEMENT REPORT

3


two Ordinary General Meetings. The Combined Shareholders’

Meeting of May 20, 2014 decided to allocate an overall amount

of €400,000 for 2014 and subsequent years. The procedures for

distributing Directors’ fees are as follows: fixed compensation of

€10,000; variable compensation which takes into account actual

participation by each Director in the work of the Board of Directors

and its committees, of €5,000 for attendance at “strategic and

operational” Board meetings and €3,000 for attendance at other

Board meetings as well as €5,000 for participation in committees.

3.8.2 Principle and criteria for determining the compensation of the Chairman of the Board of Directors in respect of fiscal year 2019

Following a proposal from the Nominating, Compensation and

Governance Committee, the Board meeting of April 25, 2019

approved the following compensation for the Chairman of the Board

of Directors in respect of fi scal year 2019:

3 Directors’ fees: the Chairman of the Board of Directors may receive

and retain Directors’ fees paid by BOURBON Corporation SA,

up to the limit set by the Shareholders’ Meeting, in accordance

with the allocation rule defined by the Board (see section 3.7.9,

“Directors’ fees”);

3 annual fixed compensation: it will remain unchanged at an amount

of €144,000.

The Nominating, Compensation and Governance Committee reviews

this fixed compensation annually.

3.8.3 Principle and criteria for determining the compensation of the Chief Executive Officer in respect of fiscal year 2019

Following a proposal from the Nominating, Compensation and

Governance Committee, the Board meeting of April 25, 2019

approved the following compensation for the Chief Executive Offi cer

in respect of fi scal year 2019:

3 annual fixed compensation: the Chief Executive Officer receives

fixed compensation in respect of his or her term of office,

determined by the Board of Directors on the recommendation of

the Nominating, Compensation and Governance Committee;

3 annual variable compensation: the Chief Executive Officer receives

variable compensation in respect of his or her term of office,

determined by the Board of Directors on the recommendation of

the Nominating, Compensation and Governance Committee.

The formula for calculating this variable compensation is re-examined

annually by the Nominating, Compensation and Governance

Committee and the Board of Directors.

The Board of Directors has decided to continue using a calculation

method based on fixed compensation. The variable compensation

may reach 50% of the fixed compensation if the objectives are

achieved, and up to 70% if the objectives are exceeded. The

objectives for the 2019 fiscal year based on the objectives of the

2019 budget would be as follows:

TARGET %

Economic parameters: 40%

- Target for EBITDAR excluding capital gains (1) 20%

- Objective for Days Sales Outstanding (DSO) (2) 20%

Operational parameters: 20%

- Target for average fleet utilization rate (3) 20%

Corporate social responsibility (HSE) parameters: 20%

- Target for Total Recordable Incidents Rate (Group TRIR) (4) 20%

Personal contribution 20%

TOTAL 100%

The method used to determine the achievement of the target objectives specific to each parameter (economic/operational/CSR) would

continue to be based on the application of a scale according to the result (R) reached of the target objective (TO).

1) R = 110% TO = 150%

R = 100% TO = 100%

R = 90% TO = 50%

R < 90% TO = 0%

2) R= 110% TO = 150%

R = 100% TO = 100%

R = 90% TO = 50%

R < 90% TO = 0%

3) R > 105% TO = 150%

R = 100% TO = 100%

R > 98% TO = 50%

R < 98% TO = 0%

4) R = 110% TO = 140%

R = 100% TO = 100%

R = 95% TO = 80%

R < 95% TO = 0%



In any event, this compensation must meet the requirements of the

AFEP-MEDEF Code of Corporate Governance and may only be

paid after approval by a Shareholders’ Meeting in accordance with


The Chief Executive Officer may be allocated stock subscription and/

or purchase options as well as bonus shares under the conditions

provided for in paragraph 3.8.1; under certain conditions, he may

be paid severance benefits, or indemnities under a non-competition

commitment, up to an amount not exceeding 24 months of his

annual compensation (fi xed and variable).

3 Benefi ts of any kind: the Chief Executive Officer may be provided

with a company car and unemployment insurance for senior

executives.

3.8.4 Commitments of any kind made by the Company to its Executive Directors

EXECUTIVE DIRECTORS AFFECTED BY THE AFEP-MEDEF RECOMMENDATION

EMPLOYMENT CONTRACT

SUPPLEMENTARY PENSION SCHEME

INDEMNITY OR BENEFITS PAYABLE OR POTENTIALLY

PAYABLE DUE TO TERMINATION OR CHANGE OF FUNCTION

INDEMNITY AS A RESULT OF A

NON-COMPETITION CLAUSE

YES NO YES NO YES NO YES NO

Jacques d’Armand de ChateauvieuxChairman of the Board of Directors

Start of term of office: 03.14.2018

End of term of office: Shareholders’

Meeting called to approve the financial

statements for the year ended 12.31.2018 x x x x

Gaël BodénèsChief Executive Offi cer

Start of term of offi ce: 14.03.2018

End of term of office: Shareholders’

Meeting called to approve the financial

statements for the year ended 12.31.2018 (1) x x x

(1) Gaël Bodénès has a contract of employment with the EIG Bourbon Management, which has been suspended by the Board, deeming that his corporate

term of offi ce was an extension of the salaried duties that he has been performing since he joined the group in 2002; ending it would have deprived him

of the rights attached to his length of service. The Chief Executive Offi cer does not benefi t from any special indemnifi cation clause in the event of

departure.


MANAGEMENT REPORT

3


3.9 APPLICATION OF THE AFEP-MEDEF CORPORATE GOVERNANCE CODE: SUMMARY TABLE

Under the “comply or explain” rule laid down in Article L. 225-37 of the French Commercial Code and referred to in section 27.1 of the

AFEP- MEDEF Code, BOURBON Corporation SA believes that the Company complies with the recommendations of the latest version of the

AFEP-MEDEF Code published in June 2018. However, some provisions have been left out for the reasons stated in the table below:

AFEP-MEDEF RECOMMENDATIONS NOT APPLIED EXPLANATIONS REFERENCE

Variable compensation in respect of the 2018 fiscal yearSection 24.3.2 of the

AFEP-MEDEF Code states

that “variable compensation

should be subject to the

achievement of specific and

predefined objectives”.

Given the difficulties encountered by the off shore oil and gas activity and its

impact on the Company’s results, the Directors of BOURBON Corporation

SA, at the Board meeting of July 4, 2016, decided to assign moderate fixed

compensation to the Chairman and Chief Executive Officer for his executive

responsibilities. It was also decided to assign him variable compensation

based only on the broadest criterion for the performance of the Company:

its net income (group share), a mode of compensation implying the

acceptance of equivalent risk, as Executive Director, and in his capacity as

controlling shareholder.

Eff ectively, this result takes into account all components of management

that the executive has at his disposal: revenue and margin over direct costs,

asset management policy, impacting depreciation and amortization, external

vessel chartering and any provisions on these amounts. The management of

overheads, and of course those of financing, their rearrangement and

consequences for cash, and therefore on the continuity of operations in a

highly disrupted context.

The Board considered that the choice, for the Chairman and Chief Executive

Officer, of a broad criterion wholly related to the performance of the

Company was fair and appropriate in the challenging economic context,

given the low likelihood that, in the remaining years left to run until the

possible renewal of his term of office, this would give rise to any payment.

The Board meeting of March 14, 2018 decided to separate the functions of

the Chairman of the Board of Directors and Chief Executive Officer of the

Company, and appointed Jacques d’Armand de Chateauvieux as Chairman

of the Board of Directors. At its meeting of April 25, 2019, the Board noted

that the conditions for the payment of variable compensation to Jacques

d’Armand de Chateauvieux as Chairman of the Board of Directors had not

been met and that therefore he would not receive any variable compensation.

As Chairman of the Board of Directors, Jacques d’Armand de Chateauvieux

no longer receives variable compensation.

Management report

3.7.1 Compensation

of the Chairman

and Chief Executive

Officer

Departure of Executive DirectorsRules governing information

Section 24.5.2 of the

AFEP-MEDEF Code states

that “when an Executive

Director leaves the

Company, the fi nancial

conditions relating to his or

her departure must be

published in detail”.

At its meeting of July 23, 2018, the Board of Directors took note of the

resignation of Astrid de Lancrau de Bréon as Executive Vice President

on July 10, 2018, without any special extra-legal fi nancial conditions,

and the immediate reinstatement of her employment contract as Chief

Financial Offi cer with BOURBON Corporation SA.

No announcement was made following this Board meeting, since the

information had previously been disclosed in a detailed press release

on July 11, 2018, in line with the recommendations of the French Financial

Markets Authority.

The terms and conditions of the termination of her employment contract on

September 11, 2018, not made public since not specifi cally referred to in

section 24.5.2 of the AFEP-MEDEF Code, were set forth in an agreement

containing a non-disclosure clause.

By law, the payment of Ms. de Lancrau de Bréon’s variable compensation for

2018, in proportion to the duration of her term of offi ce as Executive Vice

President for the year in question, will be subject to the approval of the

Ordinary General Meeting of June 28, 2019.

Management report

3.7.6 Summary table

of the compensation

of each Executive

Director (in euros)

whose term of offi ce

ended in 2018

Evaluation of the Board of DirectorsSection 9.2 of the AFEP-MEDEF

Code states that “the actual

contribution of each director

to the Board’s work” must be

assessed.

In a bid to improve the group ’s practices while complying with the

AFEP-MEDEF Code, the detailed questionnaire to be given to the Directors

for the next evaluation in 2020 will ask them to assess each Director’s

contribution to the Board’s work.

Management report

3.5 Evaluation of

the Board of

Directors and

Committees



3.10 SHAREHOLDER PARTICIPATION IN THE SHAREHOLDERS’ MEETING

The methods for shareholder participation in Shareholders’ Meetings

are described in Article 19 of the Company’s bylaws, in section 6,

“Other Legal and Financial Information”.

3.11 FACTORS THAT COULD HAVE AN IMPACT IN THE EVENT OF A PUBLIC OFFER

Pursuant to Article L. 225-37-5 of the French Commercial Code,

the following factors may have an impact in the event of a public offer

concerning the Company’s shares.

3.11.1 Capital structure of the Company

The capital structure of BOURBON Corporation SA is detailed in

section 7.1 of the management report.

3.11.2 Statutory restrictions on the exercise of voting rights and stock transfers or contractual clauses of which the Company is aware pursuant to Article L. 233-11 of the French Commercial Code

The bylaws, which are available on the Company’s website www.

bourbonoffshore.com, in the section “Investors” – “Capital and

Shareholding” – “Company Bylaws”, do not specify any restriction

on exercising voting rights or on transfers of shares.

Contractual clauses providing for shareholding commitments,

brought to the knowledge of the Company, are included in

the shareholders’ agreements mentioned below in the section

“Agreements between shareholders of which the Company is aware

and which may entail restrictions on the transfer of shares and the

exercise of voting rights” and quoted in section 2.8 “Other legal and

financial information” of this Registration Document.

3.11.3 Direct or indirect stakes in the Company’s capital of which the Company is aware pursuant to Articles L. 233-7 and L. 233-12 of the French Commercial Code

This information is detailed in section 7.1 of the management report.

3.11.4 List of holders of any securities conferring special control rights and a description thereof

The bylaws of BOURBON Corporation SA do not contain any provision

contrary to the application of Article 7 of Law No. 2014-384 of March

29, 2014 (the “Florange Law”), whereby “in companies whose

shares are admitted to trading on a regulated market, the double

voting rights provided for in the first paragraph [of Article L. 225-123

of the French Commercial Code] are valid, unless the bylaws contain

a clause to the contrary adopted after the promulgation of the law,

for all fully paid-up shares which have been registered in the name of

the same shareholder for two years. The same applies for the double

voting rights conferred upon issuance to bonus registered shares

allocated under the second paragraph.”

Consequently, all fully paid-up shares that have been registered for

at least two years in the name of the same shareholder are eligible

for double voting rights.

Subject to this caveat, there are no securities conferring the special

rights of control referred to in section 4 of Article L. 225-100-3 of the

French Commercial Code.

3.11.5 Control mechanisms provided for by employee shareholding schemes, if any, where the employees do not exercise control themselves

BOURBON Corporation SA has an employee shareholding scheme

via the mutual investment fund “BOURBON Expansion”, which

exercises the control rights.

3.11.6 Agreements between shareholders of which the Company is aware and which may entail restrictions on the transfer of shares and the exercise of voting rights

The Company was not aware of any agreements of this type between

shareholders, other than:

The shareholders’ agreement to act in concert in respect of the

Company, which was signed on June 26, 2014 between JACCAR

Holdings, at the time a Luxembourg company, the company Cana

Tera, Jacques d’Armand de Chateauvieux, Henri d’Armand de

Chateauvieux, the SAS Mach-Invest and the Luxembourg company

Mach-Invest International. This shareholders’ agreement, which

came into force on June 30, 2014 for a term of five years, includes

commitments regarding the transfer of the Company’s securities

(AMF Decision No. 214C236 of June 30, 2014).

Shareholders’ agreements relating to the collective commitment to

hold BOURBON Corporation SA shares signed under Articles 787 B

and 885-I bis of the French General Tax Code, mentioned in

section 2.8 “Other legal and financial information” of this Registration

Document.

3.11.7 Rules applicable to the appointment and replacement of members of the Board of Directors and amendments to the bylaws

The rules applicable to the appointment and replacement of members

of the Board of Directors comply with current regulations and the

AFEP-MEDEF Code on Corporate Governance of Listed Companies,

as interpreted by the Application Guide for the AFEP- MEDEF Code

published by the High Committee for Corporate Governance (version

of November 2016).

The internal rules of the Board of Directors can be found on the

Company’s website at www.bourbonoffshore.com, under “Group”

− “Corporate governance” − “Board of Directors” − “Related

documents”. Articles 13 and 13 bis of the bylaws are reproduced

in the section entitled “Information about the Company” in the

Registration Document, which sets out the rules for the appointment

of Directors.


MANAGEMENT REPORT

3


The rules applicable to amendments to the bylaws comply with

prevailing regulations. Amendments to the bylaws, except in cases

expressly stipulated by law, come under the exclusive competence

of the Extraordinary General Meeting. The Company has not

identified any significant impact concerning these rules in the event

of a takeover.

3.11.8 Powers of the Board of Directors, in particular concerning the issue or repurchase of stock

Concerning capital increases, the summary table of currently valid

delegations of authority and the powers granted by the Shareholders’

Meeting to the Board of Directors is presented in this report on

corporate governance.

As regards the repurchase of stock, the Combined Shareholders’

Meeting of May 30, 2018 in its fi fteenth ordinary resolution, authorized

the Board of Directors, with sub-delegation powers, for a period of

18 months, to buy company shares, up to a limit of 5% of the share

capital, adjusted where necessary, in accordance with the provisions

of Articles L. 225-209 et seq. of the French Commercial Code, in

order to:

3 stimulate the secondary market or maintain the liquidity of

BOURBON Corporation SA shares through an investment

service provider, operating within the scope of a liquidity contract

in accordance with the AMAFI Code of professional practice as

approved by the French Financial Markets Authority;

3 hold shares to cover stock option plans and/or bonus share

allotment plans (or similar plans), for the benefit of employees

and/or representatives of the group , and to allow allotments of

shares within the scope of a company or group savings plan (or

similar plan) or as part of employee participation in the results

of the Company and/or any other form of share allotment to

employees and/or representatives of the group ;

3 cancel any shares acquired, in accordance with the authorization

granted by the Shareholders’ Meeting of May 30, 2018 in its

sixteenth extraordinary resolution.

These shares can be purchased by any means, including through

the acquisition of blocks of shares, and at times to be decided by

the Board of Directors.

The Company reserves the right to use options and derivatives within

the bounds of applicable regulations.

The maximum purchase price was fixed at €23 per share. In

the event of any transaction affecting the capital, notably stock

splits, consolidation of shares or allocation of bonus shares, the

abovementioned sum will be adjusted proportionally (multiplication

coefficient equal to ratio between the number of shares forming the

capital prior to the transaction and the number of shares following

the transaction).

The ceiling for the operation is thus fixed at €89,124,080.

The Shareholders’ Meeting has granted full powers to the Board of

Directors, which may delegate those powers, to proceed with these

operations, to fix the terms and conditions thereof, to enter into any

agreements and to satisfy all formalities.

It will be proposed to the Shareholders’ Meeting on June 28, 2019

that the share buyback program be renewed in accordance with the

description of the share buyback program outlined in this Registration

Document under “Transactions in the Company’s securities – Share

buyback program”.

3.11.9 Agreements entered into by the Company that are amended or that terminate in the event of a change of control of the Company, disclosure of which, except where required by law, does not adversely affect its interests

Certain of the bank loans arranged by BOURBON contain clauses

allowing the bank to demand early repayment of the loan in the event

of a change of control of BOURBON Corporation SA.

Most shareholder agreements signed by BOURBON with its foreign

partners, in the context of the establishment of joint ventures, contain

exit clauses in the event of a change of control of one of the parties,

allowing each of them to buy out the other or, in the absence of an

agreement between them on the buyout of their respective interests,

to liquidate the Company.

Construction agreements contain no clause that could be invoked in

the event of a change of control of BOURBON. These agreements

contain no provision that could jeopardize the financial conditions,

such as in the event of the departure of Jacques d’Armand de

Chateauvieux.

3.11.10 Agreements providing for compensation for members of the Board of Directors or employees if they resign or are dismissed without just cause or if their employment is terminated due to a public offer

None.

3.12 AGREEMENTS MADE, DIRECTLY OR BY ANY INTERMEDIARY PERSON, BETWEEN, FIRSTLY, ONE OF THE CORPORATE OFFICERS OR ONE OF THE SHAREHOLDERS WITH A FRACTION OF THE VOTING RIGHTS GREATER THAN 10% OF A COMPANY AND, SECONDLY, ANOTHER COMPANY IN WHICH THE FIRST DIRECTLY OR INDIRECTLY POSSESSES MORE THAN HALF OF THE CAPITAL, WITH THE EXCEPTION OF AGREEMENTS COVERING CURRENT TRANSACTIONS AND CONCLUDED UNDER NORMAL CONDITIONS

None.


MANAGEMENT REPORT3 Summary table of delegations of power and current authorizations granted by

the Shareholders’ Meeting to the Board of Directors for capital increases

SUMMARY TABLE OF DELEGATIONS OF POWER AND CURRENT AUTHORIZATIONS GRANTED BY THE SHAREHOLDERS’ MEETING TO THE BOARD OF DIRECTORS FOR CAPITAL INCREASES

DATE OF THE SHAREHOLDERS’ MEETING NATURE OF THE DELEGATION/AUTHORIZATION DURATION USE DURING 2018

Combined Shareholders’

Meeting of 05.26.2016

17th resolution

Authorization for the Board of Directors to allot existing or

new bonus shares to members of the salaried staff

(and/ or certain authorized Shareholders’ Meeting

corporate officers).

Maximum amount(1): 5% of the share capital on the day of

the meeting of May 26, 2016 and 1% within this ceiling for

Executive Directors.

Thirty-eight

months, i.e.

until

07.25.2019* None



18th resolution

Delegation given to the Board of Directors to issue shares

and/or marketable securities with cancellation of

preferential subscription rights by off er to the public.

Maximum amount(1):

Shares: €8 million.

Debt securities: €350 million.

Twenty-six

months, i.e.

until

07.22.2019 None



19th resolution

Authorization given to the Board of Directors to waive the

conditions for fixing the issue price of marketable securities

issued in respect of the capital increase specifi ed in the

18th resolution of the Shareholders’ Meeting of May 23,

2017

Twenty-six

months, i.e.

until

07.22.2019 None



20th resolution

Authorization given to the Board of Directors to increase

the amount of issues in case of excess demand for each of

the issues of ordinary Shareholders’ Meeting shares or

marketable securities giving access to capital decided in

application of the 18th resolution of the Shareholders’

Meeting of May 23, 2017

Twenty-six

months, i.e.

until

07.22.2019 None



21st resolution

Delegation given to the Board of Directors to increase the

capital with the cancellation of preferential subscription

rights in favor of members Shareholders’ Meeting of a

Company savings plan

Maximum amount(1):

Shares: €5 million.

Twenty-six

months, i.e.

until

07.22.2019* None



22nd resolution

Authorization for the Board of Directors to grant options to

subscribe to new shares and/or purchase existing company

shares.

Maximum amount: 5% of the existing share capital on the

day of the meeting of May 23, 2017 and 1% within this

ceiling for Executive Directors.

Thirty-eight

months, i.e.

until

07.22.2020 None



17th resolution

Delegation given to the Board of Directors to increase the

capital by incorporating reserves, profits or premiums

Maximum amount(1): €7 million

Twenty-six

months, i.e.

until

07.30.2020 None

(1) Separate ceilings.

* Since these authorizations expire in 2019, it is proposed that they should be renewed at the next Shareholders’ Meeting of June 28, 2019. Please refer to

Chapter 6 “Other Legal and Financial Information” of this Registration Document for a presentation of the draft resolutions of the Combined

Shareholders’ Meeting of June 28, 2019.


MANAGEMENT REPORT

3

Control environment

4. CONTROL ENVIRONMENT

Organizing and implementing the internal control system means

raising the awareness of all BOURBON’s employees and getting

them involved.

4.1 GENERAL ORGANIZATION OF INTERNAL CONTROL

Under the authority issued by the Board of Directors, the group

is managed by the Chief Executive Officer assisted by three

committees:

3 the General Management Committee

The BOURBON General Management Committee is the body

accountable towards customers, employees and shareholders

for implementing the strategy and achieving the objectives of the

group . It examines the best options for achieving the strategy,

particularly in the areas of safety, innovation, human resources and

cost control. It decides on priorities and allocates the resources

and the means necessary for the growth of the Company;

3 the Performance Committee

Under the authority of the Executive Committee, the Performance

Committee is responsible for the management, analysis and

coordination of the group ’s safety, financial and business

performance in line with the budget. In addition to the members

of the General Management Committee, this committee is

composed of eight members representing the group ’s central

functions, as well as the heads of the main subsidiaries;

3 the Management Committee

Under the authority of the Executive Committee, the Management

Committee oversees the implementation of the strategic

objectives and deals with questions of general interest to the

group in its monthly meetings. In addition to the members of

the Executive Committee and Performance Committee, this

committee is composed of 18 members representing the group ’s

central functions as well as the heads of the main subsidiaries.

The central functions involve experts in the business lines specific

to the group or else they involve conventional support functions.

They propose the group strategies and policies in their respective

areas and provide assistance to the operating units, ensuring among

other things that best practices are disseminated.

The Company adopts guidelines and other internal standards which

must be followed and implemented within the group .

BOURBON’s operational units are grouped within three activities:

Subsea Services, Marine & Logistics and Mobility.

Each entity implements the strategy in compliance with the budgets

assigned to it by their respective management bodies and the

guidelines and internal standards of the group . They have broad

authority to ensure the best possible customer satisfaction. They are

directly involved and have the proper authority to perform internal

control.

In addition, they report to the General Management Committee on

their operational and financial performance.

4.1.1 Presentation of the overall organization of the group ’s internal control systems

The different internal control activities serve to make certain that the

procedures and standards defined by the group are in line with the

guidelines defined by the Management.

Operating standards and proceduresThe group ’s policy in terms of conducting operations and controlling

risks is clearly defined by a management system contingent on:

3 empowering Management to implement and monitor this policy;

3 and issuing organizational and management procedures aimed

at compliance with regulations, controlling operating risks,

managing health and safety and the environment, training and

certification of employees, maintenance, purchases, analysis and

the treatment of incidents and accidents.

Internal control procedures related to the preparation and treatment of financial and accounting informationThe processes covered fall into two categories: those that enable

information to be entered into the accounting data base and financial

and accounting information to be generated, and the procedures for

year-end closure and financial communication.

The reliability of the financial and accounting information that is

published is underpinned by a set of mechanisms, rules, procedures

and controls. Gradually documenting and formalizing procedures will

help to reinforce this reliability.

This mainly involves the following:

3 the group ’s planning process. It results in the drafting of the annual

budget, which makes it possible to break down the group ’s

strategic guidelines into operational action plans. In this spirit, the

Management Control Department supervises and coordinates

the budget control system using a procedures manual that sets

the management rules and methods for preparing the budget

and the management report applicable at both the operational

level and the group level;

3 procedures for consolidating the financial statements in

accordance with rules established and approved by Management.

The Company draws up its consolidated financial statements

according to IFRS. An integrated software program is used to

consolidate the group ’s financial statements. The interim and

annual consolidated financial statements are presented to the

Audit Committee prior to their approval by the Board of Directors;

3 procedures for drafting the Registration Document to ensure

accuracy, consistency, compliance with applicable laws and

regulations, and the quality of the financial information.


MANAGEMENT REPORT3 Control environment

4.2 MANAGING INTERNAL CONTROL

The internal control systems are themselves the subject of controls,

on an ongoing basis by Management as well as through periodic

evaluations by bodies that do not have direct authority over

operations nor responsibility for them.


The attributes of the Audit Committee and the work conducted by it

are described in section 3.6.1. of this report.

4.2.2 Internal Control and Risk Committee

As of December 31, 2018, the Internal Control Committee was

composed of the Chief Executive Officer and the Chief Financial

Officer. The Internal Audit, Risk Director and Group Compliance

officer presents the audit results and main conclusions.

This committee is tasked with examining the quality of internal

control, managing risks and implementing the internal audit plan and

the compliance program within BOURBON:

3 it approves the group ’s annual internal audit plan before its

presentation to the Audit Committee;

3 it examines the conclusions and recommendations made

following the quarterly audits by the Internal Control and Risk

Committee;

3 it examines the quality of follow-up to action plans by Group

entities in response to internal audit recommendations;

3 it oversees follow-up to risk mapping and action plans for major

risks;

3 it supervises the compliance program within the group ;

3 it examines any other matter relating to internal audit, internal

control or risk management and compliance that it wishes to

include on its agenda.

4.2.3 Internal Audit, Risk Management and Compliance Department

The mission of BOURBON’s Internal Audit, Risk Management and

Compliance Department is to help the group manage its risks

through a systematic, disciplined and complementary approach to:

3 internal audit;

3 risk management;

3 compliance.

Group Internal Audit is an independent and objective department

that makes sure BOURBON has full control over its operations, offers

advice on improvements and so contributes to create value added.

It helps the organization achieve its objectives by systematically and

methodically assessing procedures for risk management, control

and corporate governance and by making recommendations on

how these could be more effective.

Risk management allows BOURBON to identify, evaluate, manage

and monitor the risks it faces. Risks of all kinds are monitored:

operational, financial, strategic, human resources, regulatory

and reputational.

Compliance includes all measures already in place or to be

implemented within BOURBON to ensure compliance with ethical

rules and external and internal regulations.

The group Internal Audit, Risk Management and Compliance

Department has four members of staff, including a Director, two

internal auditors, and an expert in charge of compliance. Risk

Management is directly managed by the department’s Director.

4.2.4 Group Internal Audit

As of December 31, 2018, Group Internal Audit reported to the

Chief Financial Officer and to the General Management Committee.

If necessary, it has access to the Chief Executive Officer and to

the Chairman of the Audit Committee. It reports regularly to the

Audit Committee on its analysis of the group ’s internal control.

Group Internal Audit covers all fields and functions of BOURBON

companies, including the operational businesses, all other functional

and operational activities as well as the information, IT and

management systems.

It carries out internal audits (assurance and advice) or investigations

for the group as a whole and subsidiaries as necessary.

It carries out audits of operations, finances, effectiveness,

compliance, acquisitions or major projects, which may be recurrent

or one-off. These audits cover all high-level management, business

and support processes.

It leads and promotes internal control throughout the group and

validates the effectiveness of internal control and risk management.

4.2.5 Key Group internal controls

The group has prepared a manual of key basic controls. This manual

groups the 91 key controls into eight main Group administrative and

financial processes. This guide applies to all of the group ’s entities.

An internal control self-assessment process has been in place within

each of the group ’s operational subsidiaries since 2018. This process

is periodically reviewed by Group Internal Audit.

4.2.6 Group control of operating activities

The group ’s HSE (Health, Safety and Environment) managers and

referring officers carry out regular controls of operating units to

check the effectiveness of the system and the proper application of

BOURBON standards. Furthermore, every operating unit is subject

to periodic or one-off external audits aimed at making certain that

its internal organization and its vessels meet the recommendations

under standards or codes that are either mandatory or adopted

intentionally.


MANAGEMENT REPORT

3

Control environment

4.2.7 Quality management system

The Quality Department is responsible for seeing to it that an

integrated quality management system is set up and maintained.

Under this system the group is broken down by the nature of each

process: strategic, support, key or evaluation.

4.3 STATUTORY AUDITORS

The Statutory Auditors audit the financial statements of BOURBON

Corporation SA and all its subsidiaries as of December 31st each

year. An interim audit that takes the form of a limited review is also

conducted by the Statutory Auditors on June 30th each year.

Their work provides the group with reasonable assurance regarding

the reliability and accuracy of the accounting and financial information

produced. In the course of their audit, the Statutory Auditors review

the internal control system in order to identify and evaluate the risk of

any significant misstatement in the financial statements so that they

can design and implement their audit procedures.

4.4 RISK MANAGEMENT

Risk management is a group-wide process that involves a large

number of players (Operating and Functional Departments, risk

managers, General Management, Audit Committee, Internal Audit,

insurance).

In 2005, the group developed a risk map in a bid to ensure that

wherever possible, the internal control system as a whole can

prevent any risks to which the group is exposed. In 2015, the group

redesigned its risk map to enable it to pinpoint the most significant

risks it might face.

A wide range of potential risks were identified, both at the group level

and in terms of its operational activities, including all risks resulting

from BOURBON’s business model.

The inventoried risks are ranked based on their possible frequency

(from frequent to improbable) and their impact (negligible to

catastrophic), which would require an action plan to be implemented

immediately by a crisis unit. The risk map is updated whenever

necessary and at least once a year; this information is regularly

shared with the Internal Control and Risk Committee and the Audit

Committee of BOURBON.

The risk management process covers the updating of risk mapping

and risk management, monitoring and control.

The Internal Audit, Risk Director and Group Compliance officer is

responsible for the design, implementation and leadership of the risk

management process.

4.5 COMPLIANCE

BOURBON’s compliance program is composed of seven steps:

3 Tone at the Top: the General Management Committee has

undertaken to promote compliance and maintain a culture of

ethical decision-making within the group ;

3 risk assessment: by identifying all risks of non-compliance, the

tools, techniques and corrective measures necessary to prevent

these risks can be developed; the group ’s risk assessment also

includes corruption risk. Since 2015, the specifi c non-compliance

risk map has been updated at least once a year;

3 policies and procedures: the establishment and deployment of

specific guidelines ensures that adequate compliance processes

exist within the group ;

3 communication: all employees are kept regularly informed of the

program’s roll-out;

3 in 2015, the group also successfully launched an e-learning

compliance program aimed at all onshore and offshore

employees; this program continued during 2018;

3 coordination and monitoring: a centralized compliance function

is in operation and coordinates the group ’s entire compliance

program;

3 penalties: any infringement of the compliance rules is taken

extremely seriously and the appropriate penalties are imposed

where necessary.

In 2014, the group set up a dedicated compliance organization

with 26 compliance representatives across the group ’s subsidiaries,

reporting to the group ’s compliance team.

BOURBON strengthened its ethical approach by providing its

employees and stakeholders with an ethics alert line available 24/7

enabling anyone to report behavior contrary to the BOURBON code

of conduct.


MANAGEMENT REPORT3 Risk factors

5. RISK FACTORS

BOURBON’s objective is to ensure that the internal control system

can, as far as possible, prevent all risks to which the group might be

exposed.

The group ’s risk management process is described in note 4.4 of this

Registration Document.

Investors are invited to take into consideration all the information

contained in this Registration Document, including the risk factors

described in this section, before deciding to invest. On the date

of this Registration Document, these risks include such risks,

the occurrence of which according to BOURBON could have a

significantly prejudicial impact on the group , its business, its financial

position, its results or its growth. Investors’ attention is drawn to the

fact that there may exist other risks, which have not been identified

yet on the date of this Registration Document or whose occurrence

was not considered on that same date as being likely to have a

significantly prejudicial effect on the group , its business, its financial

position, its results or its growth.

5.1 RISKS RELATED TO THE OFFSHORE OIL AND GAS MARINE SERVICES MARKET

The business cycle for offshore marine services depends on demand

from oil operators and the supply of vessels on the market.

Demand from oil companies is linked to their exploration/development

cycles. This activity is correlated with the ten-year average price per

barrel assumptions. Exploration investments may also be influenced

by short-term barrel prices, and by the need for oil companies to

maintain their reserve levels. However, the production activity on

existing fields is much less sensitive.

3 PRICE OF OIL (BRENT)

($/bbl)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

0

20

40

60

80

100

120

140

160

U.S.A, Cushing WTI Average Oil Price, $/bbl

U.K., Brent Blend Spot Average Oil Price, $/bbl

Since June 2014, there has been a sharp drop in the barrel price.

The average price of a barrel of Brent crude fell from $99 in 2014 to

$52 in 2015, reaching an average low of $31 in January 2016. This

fall in prices is due to an imbalance between supply and demand as

the demand from importers was not as sustained as expected, due

to slower growth in China. However, supply remained stable, with

oil and shale gas production in the United States and Saudi Arabia

maintaining its production levels.

The barrel price was volatile throughout 2016. Prices began to

recover shortly after OPEC members – followed by other major

producers – announced their agreement to cut oil production. OPEC

pledged to scale back production by 1.2 million barrels per day.

This was swiftly followed by non-OPEC countries (558,000 barrels),

resulting in a total decrease in production of 1.8 million barrels per

day in the FIrst half of 2017. In November 2017, they decided to

continue this action until the end of 2018. This production cut-off

led to a reduction in global stocks and consolidated the rise in the

price of oil.


MANAGEMENT REPORT

3

Risk factors

The decision triggered a steady rise in the price per barrel during

the fi rst 10 months of 2018, peaking at over USD80. However,

oil prices slipped back in the autumn, falling to around USD50 in

December on the back of stronger-than-expected growth in U.S.

output. In December, OPEC members and Russia again agreed

to pursue their policy of reducing supply, cutting daily production

by 1.2 million barrels. This stopped prices from falling any further

and led to the price of Brent stabilizing at around USD60, despite

the geopolitical uncertainties (political crisis in Venezuela, economic

sanctions against Iran, and the U.S.-China trade war).

Due to the fl uctuating oil prices, and with the sudden freeze on new

investment by oil companies, the level of activity in the offshore oil

and gas marine services industry contracted sharply from 2014

onwards. A sharp slowdown in deepwater and shallow water

offshore drilling led to a slump in demand for supply vessels in the

years that followed.

Since the summer of 2017, the price of Brent has remained above

USD50, allowing activity to stabilize in 2018. There has also been a

gradual recovery in investment by oil companies. This recovery is

already refl ected in the fi nal investment decisions made for numerous

offshore development projects, which will gradually impact service

vessel utilization rates. Daily rates will continue to be squeezed owing

to the vessel overcapacity that still exists in the market.

With regard to supply, changes to the fl eet of offshore supply

vessels will depend on the rate at which old vessels are scrapped

and investment is made in new vessels. These two aspects are

influenced by several factors, including:

3 forecasts made by marine services suppliers with regard to

changes in customer demand;

3 obsolescence of old vessels, this being dependent upon changes

in oil companies’ expectations;

3 access to financial resources enabling operators to invest.

Unforeseen changes in oil companies’ demand cycle and changes

in numbers of vessels available on the market, events which by their

very nature are beyond BOURBON’s control and affect one or more

of the markets on which BOURBON has a presence, may have a

significantly prejudicial effect on BOURBON’s business, financial

position, results or outlook.

5.1.1 Risks related to changes in demand

A reduction in investments in the oil sector could result in

a decline in demand for offshore oil and gas services, with

an unfavorable impact on BOURBON’s financial position

and results.

The demand for offshore oil and gas services is dependent on the oil

companies’ capacity to invest. The price of oil on world markets has

a significant influence over decisions to engage in new investments

in this sector. In fact, new investment projects are based on future

projections, internal to each company, of the price per barrel that will

be needed to cover the cost of extraction. The price of oil in the short

term has a lesser influence once oil projects have been launched

and in the production phase. The potential impact remains limited

to exploration phases which may be delayed or even canceled.

Generally, oil investment cycles are long, between 10 and 20 years

on average between the construction phase and the exploitation/

production phase.

The price per barrel depends on demand, which is related to global

growth and the production capacity of the producing countries.

With forecasts for an increase in demand for oil and the accelerating

decline in production at existing fields, the oil services activity is

expected to grow in the long term. In the shorter term, however,

a slump in oil prices could affect activity in the sector, with some

deepwater offshore projects being canceled or delayed. This is what

has happened in the last three years. Nevertheless, the price trend

since 2017 has shown that despite various geopolitical uncertainties,

the major oil-producing countries have resolved to cut production

where necessary in order to shore up oil prices. This has given oil

companies the confi dence to make new investment decisions and

revive offshore exploration projects.

BOURBON’s strategy is to develop close relationships with the

national and international oil majors that have sustained investment

plans, as well as a policy of long-term contractualization for vessels.

The long-term contractualization rate of offshore support vessels

was 45.3% as of December 31, 2018. Active monitoring of the

market in the field of production and exploration/development has

been set up to react quickly to changes in the market.

The loss of one or more of its main clients could, however, have

a significantly prejudicial effect on BOURBON’s business, financial

position, results or outlook.

Risks related to changes in technical requirements for marine

oil and gas exploitation and related services.

Oil companies have a very high risk management requirement. Until

recently, major incidents on oil platforms have served as a reminder

that operational safety is a number one priority in this industry.

On this account, oil companies generally prefer cutting-edge, high

performance vessels like those belonging to the BOURBON fleet.

The technological obsolescence of vessels over 25 years old reduces

the number of vessels available each year.

BOURBON has established long-term relationships with major

oil companies, thereby enabling it to better understand their

expectations. This has led BOURBON to develop a four-pillar

model of operational efficiency, i.e. safety of people and materials,

respecting the environment on land and at sea; monitoring skills to

guarantee service quality; technical availability of vessels to ensure

continuity of service; optimization of cost and fuel consumption

through the use of low fuel consumption diesel-electric propulsion

vessels, enabling net savings on diesel.



It is noteworthy that oil companies and the industry in general are

increasingly focused on lowering energy consumption in a bid to

reduce atmospheric emissions and energy costs of projects. In

this context, BOURBON’s diesel-electric propulsion vessels are

particularly appreciated for their low fuel consumption.

BOURBON cannot, however, guarantee that it will always be able to

perfectly predict its clients expectations, nor discount the fact that, in

one or more of the geographical areas where it has a presence, some

of its competitors may, due to their size or expertise, have at their

disposal financial, commercial, technical or human resources that

are equivalent, or superior, to those offered by BOURBON and that

are also likely to meet the requirements of the major oil companies,

which could, under certain circumstances, lead to market losses for

BOURBON.

5.1.2 Risks related to changes in supply

In the deepwater offshore vessels market, in the event of new

ships being delivered faster than the growth in demand, a

temporary over capacity may lead to BOURBON experiencing

a reduction in daily rates as well as a reduction in utilization

rates for its deepwater offshore vessels in certain geographical

regions.

Investments by oil companies in offshore exploration and production

expenditure dropped by 14% in 2017 and 5% in 2018 (source:

Rystad Energy). Most of the regions where BOURBON operates

have been affected by this slowdown.

BOURBON’s commercial strategy focuses on long-term contracts,

which minimizes the risks of exposure to short-term market

fluctuations.

Lastly, in a challenging market with a very low oil price and given

the sharp downtrend in capital expenditure within the oil industry,

BOURBON has reacted quickly by anticipating the stacking of

vessels with very low utilization rates and optimizing the use of the

fl eet in operation. This strategy enabled BOURBON to maintain an

operating fl eet utilization rate of 87.1% in 2018, demonstrating its

ability to maintain customer confi dence in a depressed market.

Concerning strategic choices, it is possible that certain

BOURBON competitors may decide to develop their market

share in specific geographical regions or with targeted clients

through an aggressive commercial policy. The immediate

consequences for BOURBON would be the loss of new

contracts or failure to renew existing ones in a particular area

or vis-à-vis a client.

This type of commercial approach would need substantial

investment, both by the competitor providing availability of a

dedicated fleet of vessels corresponding to the needs of clients or of

the targeted geographical region, by establishing a pricing policy that

is considerably below the market price. Generally, a targeted attack

from a competitor is a localized event and difficult to sustain over

time as it is limited by operating costs and investments in vessels.

In light of this risk, the first measure taken by BOURBON is to actively

monitor the positioning of the fleets of its principal competitors and

their pricing policy. The second measure is to geographically diversify

the positioning of its fleet and the third is to screen its client portfolios,

and thereby ensure diversification of the client portfolio.

This market oversight did not reveal any significant movements by

the competition of their fleets from one market to another. Moreover,

BOURBON adapted its pricing policy to customer expectations,

allowing us to maintain our market share and a utilization rate 5

to 10 points above the average (Source: Clarksons, BOURBON).

BOURBON can count on key agreements with its main customers

and local partnerships, which enable it to continue operating even in

countries that have taken steps to protect their industry. This market

information was reported during the #BOURBONINMOTION

conference on February 13, 2018. The strong presence of our local

teams in areas where the vessels operate allows active monitoring

of vessels working in production or exploration. The sales network

monitors market trends on a permanent basis and is supported

by a network of Contracts Managers who are in daily contact with

the clients to respond to their requirements in real time. The task of

these teams is to keep an eye on the vitality of the market and on

client satisfaction in order to provide them with service that is always

adapted to their needs.

BOURBON is always looking for innovative solutions to meet

the needs of its customers and to differentiate itself from the

competition. To that end, the #BOURBONINMOTION plan involves

the development of new services such as the “integrated logistics”

service, providing turnkey support for drilling campaigns by including

the provision of a logistics base and maritime transport.

Nevertheless, sporadic intensification of competition as a result of an

aggressive commercial and/or pricing policy targeted at geographical

areas may lead to the loss of new contracts.

The need for BOURBON to adopt a different approach in order

to return to profitability in the new market conditions could be

impeded due to a lack of energy and/or readiness for change

among staff.

To withstand the adverse market conditions, BOURBON has

implemented cost-cutting action plans which have been effective

thanks to the intensive efforts of staff. BOURBON is also endeavoring

to radically transform its work methods in general so that it can return

to profitability in the new market conditions. The success of these

initiatives will depend on the commitment, energy and skills agility of

staff. The tools for measuring and strengthening this commitment,

energy and skills agility could fall short if there are insufficient

resources. This could lead to a lack of readiness for change and

hamper the success of the initiative, which could potentially take

longer or cost more.


MANAGEMENT REPORT

3

Risk factors

5.2 RISKS RELATING TO BOURBON’S ACTIVITY

Non-compliance by BOURBON with regulations applicable to

its businesses or the deterioration in the quality of its services

in terms of safety and reliability could potentially affect the

group in the conduct of its activities with certain clients or in

certain geographical regions.

BOURBON’s activities mainly involve the marine and shipping

sectors, which are highly regulated. The group is also subject to a

considerable number of environmental laws and regulations.

The regulatory framework applicable to marine activities are set by

the laws and decrees of the vessel’s operating flag country and of the

neighboring coast country.

The national rules are generally related to a set of conventions,

drafted under the auspices of the International Maritime Organization

(IMO), which has been given a mandate by the UN to deal with

subjects specific to maritime activity.

The main international standards are listed below:

3 the International Convention for the Safety of Life at Sea (SOLAS)

mainly contains the technical provisions to be observed for the

design, construction and fitting-out of vessels;

3 the Convention on Standards of Training, Certification and

Watchkeeping for Seafarers (STCW) lists the qualifications

required for crews;

3 the International Convention for the Prevention of Pollution from

Ships (MARPOL – Marine Pollution) lists all the factors concerning

the prevention of pollution, both from the vessel and its cargo;

3 the Convention on the International Regulations for Preventing

Collisions at Sea (COLREG – Collision Regulations) defines the

rules of navigation.

These conventions refer to codes and directives drawn up by the

IMO, supplemented by resolutions issued by specialized committees:

3 the ISM (International Safety Management) Code is central and

it defines the fundamentals for safety management for marine

shipowners and operators, on board the vessels and at offices

on shore;

3 the ISPS (International Ship and Port facility Security) Code

prescribes responsibilities to shipping companies and the

coasted countries regarding security on board and on shore;

3 rules for the transport of dangerous goods are primarily covered in

the IMDG (International Maritime Dangerous Goods) Code which

contains information on precautions to be taken for packing,

onboard stowing, handling, loading and unloading.

The domain of marine employment is also covered by conventions

drawn up by the International Labour Organization, such as the MLC

(Maritime Labour Convention) which came into effect in 2013.

The great majority of nations adhere to these conventions but they

sometimes incorporate their own specific regulations, particularly

for small vessels. Individual countries are responsible for applying

conventions and stopping infractions.

Controlling the implementation of the regulations and adherence to

them by shipping companies is generally delegated by governments to

independent organizations and classification societies. Their sphere

of influence covers the audit of organizations, monitoring construction

and periodic visits to vessels in operation. The main classification

societies are members of the IACS (International Association of

Classification Societies), which monitors the harmonization of their

rules and actions. Delegations of power to classification societies are

covered by formal agreements with individual countries.

BOURBON makes every effort to scrupulously adhere to the

prevailing regulations and it tries wherever possible to take initiatives

to improve its organization and methods in order to anticipate

the rigorous standards laid down by the authorities. BOURBON

constantly monitors the situation and keeps up-to-date regulatory

information at head office and on board the vessels.

It is clear that the requirements will become increasingly strict and

that this trend will continue. However, these changes are generally

predictable, as the authorities have allowed for an adaptation phase

that is compatible with the realities of the marine industry.

The changes may consist of:

3 new technical rules applicable to new vessels, especially as

regards air emissions;

3 restrictions on navigation in certain regions, principally Europe

and North America;

3 a tightening of controls and sanctions, especially in the above

regions;

3 the establishment of an environmental tax system, as already

applied in Norway.

The average age of BOURBON’s fleet is 9.7 years, which gives it an

advantage in responding to these changes.

Although BOURBON considers that these changes can largely be

predicted and wherever possible tries to anticipate new regulatory

requirements, tightening of regulations or their implementation would

be likely to lead to new operating conditions for BOURBON’s activities

and could lead to increased operating expenses, limitations on the

scope of its business with certain clients or in certain geographical

areas or, more generally speaking, may slow down its growth.

BOURBON cannot guarantee that significant and/or rapid changes

to current regulations would not, in the future, have a significantly

prejudicial effect on its business, financial position, results or outlook.

BOURBON’s activities may cause damage to people, property

or the environment.

This could also lead to it having to bear significant costs

where such events are not covered either by the contract or

by insurance.

The risks of an environmental or human disaster largely relate to the

presence of the vessel in an operational situation and the potential

consequences of accidents associated with the cargo or the voyage.

Although the accident rate has been cut by around half in the last

20 years, marine shipping is not risk-free. BOURBON applies the

regulations detailed above and has adopted a set of procedures,

charters and codes of conduct which cover practices on-board

the vessels.



As BOURBON is a service company, it is not directly responsible for

any manufacturing processes except for the operation of its marine

resources. BOURBON does, however, follow good marine practice

and complies with its clients’ demands whenever its vessels draw

near to offshore installations, port facilities or any other sensitive or

protected areas. In particular, BOURBON rigorously adheres to the

ISM Code as well as to industry standards including, in particular,

those defined by the IMCA (International Marine Contractors

Association), an association of which BOURBON is a member and

which is an umbrella body for companies active in offshore and

marine and subsea engineering.

Oil and gas clients have prepared an increasingly sophisticated

regulatory framework via the OCIMF (Oil Companies International

Marine Forum), which includes more than 80 oil and gas companies

worldwide, by implementing third-party ship inspections, including

the existing “vetting” on board tankers or supertankers.

BOURBON has continued developing its vessel operational

management system to continually improve how it meets the

requirements of the OCIMF (Oil Companies International Marine

Forum). BOURBON thus places the concerns of its clients at the

heart of its strategy.

BOURBON firmly believes that accidents can be avoided by

prevention and that it is possible to avoid pollution. Training

and exercises are designed to give personnel the best possible

preparation for emergencies.

Due respect by all BOURBON employees to best work practices and

procedures derived from the above principles is regularly verified via

internal audits.

BOURBON’s performance regarding the safety of individuals is

constantly monitored. According to a survey by the International

Marine Contractors Association (IMCA), whose members include

leading players in offshore oil and gas marine services, BOURBON

has one of the best safety records in the market. In 2018, BOURBON’s

total recordable incidents rate (TRIR) was 1.00 accident per million

hours worked.

BOURBON’s strategy in this area is described in section 6.1.3 of the

management report.

Improving and centralizing fleet maintenance management has

made it possible to roll out industrial maintenance, greatly reducing

technical unavailability, and thus the likelihood of emergency

situations arising which could lead to a collision or wreck.

Although it is not possible to completely nullify the impact of

transport activities on the environment, BOURBON makes every

effort to improve its record through technical solutions and by

acting to improve the attitudes of all those involved. The decision

to opt for the diesel-electric propulsion system on its vessels is

thus aimed at significantly reducing the consumption of fossil fuels,

and consequently, the level of polluting air emissions. BOURBON’s

strategy concerning the environment is described in section 6.3 of

the management report.

The activities of offshore services are governed by contracts

placing a general obligation of due care on BOURBON and shared

responsibility with the client.

This so-called “knock for knock” system is based on an agreement

between a supplier of resources such as BOURBON and its client,

under the terms of which each agrees to bear the cost of damages

that may be caused to its property and/or personnel during the

performance of the supply contract.

It is accompanied by a waiver of reciprocal recourse between the

parties, extended to their respective insurance companies.

This mechanism is essential in the Offshore activity, in particular by

enabling each of the operators to keep its risks in proportion to the

value of the assets it uses and/or owns as well as to its own financial

scope and consequently to limit the costs of the corresponding

insurance.

Despite the measures and mechanisms put in place, we cannot

discount the possibility that, in the future, claims made against

BOURBON could result in a significant level of liability for BOURBON.

BOURBON cannot guarantee that all the claims made against it or all

the losses that may be incurred will be effectively or sufficiently covered

by its insurance policies, this being to the detriment of BOURBON’s

reputation and image and having a significantly prejudicial effect on

its business, financial position, results and outlook.

Marine risk

Maritime piracy has been a major concern for all marine operators

for several years now and BOURBON has very rapidly put in place

a number of measures and collaborative arrangements in order to

assess this risk in its vessels’ operating and transit regions, all under

the control of the group ’s Safety Manager.

For vessels in operation, BOURBON applies a set of safety procedures

adapted to each oilfield, coordinating with the oil companies and

relevant authorities. In the Niger delta area, particularly Nigeria and

Cameroon, a dedicated reinforced strengthened safety mechanism

has been set up in order to ensure the best safety conditions for

employees and vessels.

For vessel transits in high-risk regions, BOURBON fully adheres to

the recommendations of the International Maritime Organization and

systematically adopts dedicated security measures such as “Piracy

– Best Management Practices” and adapts its methods according to

the particular transit region.

Thus, in the rare cases of its vessels transiting the Gulf of Aden

region, the area where it is currently most exposed to risk, BOURBON

has the support of the appropriate protection forces. BOURBON

is focusing on other high potential zones such as East Africa

(Mozambique, Tanzania, etc.), where adapted means of protection

are being studied.

BOURBON cannot, however, guarantee that the preventive measures

taken and its recourse to these protection forces will be sufficient, in

the future, to guarantee the safety of its activities and its employees,

which could have a negative impact on its business and its image.


MANAGEMENT REPORT

3

Risk factors

Part of BOURBON’s growth is in emerging countries, where

operational risks may include political, economic, social or

financial instability. BOURBON may encounter difficulties in

conducting its activities in such countries, which could have

an impact on its results.

Part of BOURBON’s international growth is in emerging countries

(African coasts, Asia, the Americas, etc.), where operational risks

may include political, economic, social or financial instability. It

operates primarily in conjunction with local partners for the sharing of

know-how and benefits, and aims to use as many local resources as

possible. More specifically, BOURBON’s human resources strategy

enables it to recruit, train and provide career paths for all locally

recruited employees and associates.

Using this country-specific approach, and with the help of its local

partners, BOURBON is able to identify itself as a local entity, thus

minimizing its operational risks and allowing a better understanding

of the risks and the local environment.

However, BOURBON cannot guarantee that it will be able to grow

and apply procedures, policies and practices enabling it to anticipate

and control all of these risks or ensure their efficient management. If it

does not succeed in doing so, its business, financial position, results

or outlook may be affected.

5.3 BOURBON LEGAL RISKS

The group carries out its activities in accordance with the laws of each

country in which it operates and attaches the utmost importance to

compliance with applicable regulations, in particular, anticorruption

regulations .

A judicial investigation was opened in Marseille after the former tax

manager of the Company was stopped at Marseille-Provence airport

in October 2012, on his return from Africa in possession of a sum

equivalent to €190,000.

This procedure notably concerns allegations of bribery of officials in

Cameroon, Equatorial Guinea and Nigeria, as part of tax audits of

local entities in 2011 and 2012.

The former tax manager, who was immediately dismissed, was

placed under investigation and charged with bribery of foreign

public officials, leading in April 2015 to the placing of the legal

entity BOURBON Corporation SA under investigation for the same

charges, with a surety of €1 million.

As part of this procedure, other executives and members of the

senior management of BOURBON at the time of the facts at issue

were placed under investigation.

At the closure of judicial investigation, BOURBON Corporation

SA has been sent by the examining magistrate to court for trial,

charged with corruption of foreign public officials, alongside the

aforementioned persons.

By a judgment dated March 18, 2019, the Marseille court, fi nding

that there had been irregularities in the investigation procedure,

decided to refer the case.

BOURBON Corporation SA strongly disputes the charges brought

against it; it recalls that is entitled to the presumption of innocence,

and is reserving its explanations for the court.

Furthermore, as of December 31, 2017, one of the group ’s

subsidiaries was involved in legal proceedings following a dispute

over a tax akin to an indirect tax on certain services invoiced for an

estimated total of €28 million in principal and €66 million in penalties

and default interest.

The claim by the local tax administration appeared to be groundless,

because it seemed to rely on an erroneous classification of the

services invoiced by the subsidiary, which the court of first instance

in the country in question had confirmed in its judgment rendered on

October 18, 2016, invalidating the adjustments notified by the local

tax administration.

The local tax administration had appealed the judgment before the

competent court of appeal.

By a judgment handed down on February 27, 2018, the appeal

court dismissed the claims of the administration and confirmed the

decision of the court of first instance canceling the adjustments.

The administration, even though it had a maximum of 30 business

days from the date of publication of the judgment to appeal the

decision before the competent court, did not appeal. The judgment

of February 27, 2018 handed down by the appeal court in favor

of the group and invalidating the adjustments thus became fi nal on

April 24, 2018.

Therefore, as of December 31, 2018, the group no longer has a

contingent liability in connection with this case.

Apart from the proceedings described above, proceedings related to

the suspension of debt servicing, litigation for which provisions have

already been recognized and/or those in which disclosure would be

contrary to its legitimate interests, there are no other governmental,

judicial or arbitration proceedings (including any pending or

threatened proceedings, to the Company’s knowledge) that are likely

to have or that have had in the last 12 months any material impact

on the group ’s financial position or profitability.

For each significant dispute, a provision has been established to

meet the estimated risk if the probability of occurrence of that risk is

considered to be high. Otherwise, no provision has been established.

5.4 ETHICAL AND NON-COMPLIANCE RISKS

Unethical behavior and behavior which infringes antifraud, corruption

or any other applicable legal provisions, is likely to expose BOURBON

or its employees to criminal and civil penalties. Such events may

damage the group ’s reputation and decrease the value of its shares.

The group ’s policy is to conduct its activities with strict adherence

to legal and ethical obligations as stated in the group ’s Compliance

and Ethics Policy.

In 2013, the group decided to strengthen its policies, procedures

and training with regard to ethics and compliance, especially

anticorruption. The group has put in place a dedicated compliance



program for all its entities. BOURBON’s compliance program is

closely monitored and regularly updated to improve its effectiveness

and to keep pace with regulatory change. It draws on the highest

international standards, such as the US Foreign Corrupt Practices

Act, the UK Bribery Act and the French law on transparency, the fi ght

against corruption and the modernization of economic life (Sapin II).

The main measures used in this regard are outlined in the risk

mapping part of the management report.

Because situations on the ground can be complex, BOURBON

employees and stakeholders may need support in the application or

interpretation of the Code of Conduct. BOURBON strengthened its

ethical approach by providing its employees and stakeholders with

an ethics alert line available 24/7 enabling anyone to report behavior

contrary to the BOURBON Code of Conduct.

5.5 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICY

The main risks to which the group is exposed are credit/counterparty

risks, liquidity risks and market risks. The Board of Directors has

reviewed and approved the management policies of each of these

risks. The policies are summarized below.

5.5.1 Credit/counterparty risk

The group ’s policy is to verify the financial health of all customers

seeking credit payment terms. Furthermore, the group continually

monitors client balances. The financial soundness of its clients enables

BOURBON to avoid the use of COFACE-type credit insurance.

Supermajor, major, national and independent oil companies account

for nearly 69% of consolidated revenue. Nevertheless, the current

crisis has impacted our customers, which has led to an increased

risk of recoverability for certain receivables from smaller customers.

The volume of business conducted with the top five clients

represented €281 million (44.3% of revenue) while the top ten clients

accounted for nearly 63.1% (€400 million).

A statement of anteriority of credits and other debtors is presented in

note 3.18.5. to the consolidated financial statements.

In 2018, the proportion of BOURBON’s revenue generated in

high- risk countries, such as Equatorial Guinea, Libya, Iran(1) or

Myanmar, was very marginal (less than 2% of total revenue).

Concerning the credit risk on the group ’s other financial assets, i.e.

cash and cash equivalents, available-for-sale financial assets and

certain derivative instruments, the group works only with top-ranking

banks, particularly with the major French banks. In addition, other

counterparty risks are assessed on a case-by-case basis as part of

long-term relationships maintained and encouraged by the group ,

especially in view of the effects from the current crisis on certain local

stakeholders to whom vendor loans were awarded during sales of

vessels in past years.

5.5.2 Liquidity risks

Financing comes under a Group policy implemented by the Finance

and Administration Department. This policy consists of financing

the group ’s needs through a combination of operating cash flows,

disposal of assets, bank borrowings and market transactions, and in

the context of the industry downturn, through a strategy of cash flow

preservation that led to redefining BOURBON’s financing platform for

2017 and the following years.

The agreements entered into in 2017 with the group ’s principal

fi nancial partners, described in detail in the notes to the 2016 and

2017 fi nancial statements, thus restructured the repayments of its

club deal loans, bilateral loans, finance leases, and short-term loans,

while also providing for a progressive increase in the loan margins

over the extended payment schedule, as well as the granting of

additional sureties. In consideration of the restructuring, the group

had agreed to a number of restrictions, in particular regarding its

indebtedness, cash flow, asset disposals, investments and the

dividend policy.

However, the expected recovery in the third quarter of 2017

did not occur, thus making obsolete the group ’s forecasts on

which these agreements had been based, and the unfavorable

market environment weighed heavily on the group ’s revenue and,

consequently, on its net income. The cash flows generated by

operations remain positive, although their circulation was not fully

unrestricted due to the group ’s legal structure and limitations relating

to some of its geographic locations. However, they are insufficient

to service its debt. Furthermore, and for the same reasons, at

December 31, 2017 the group was not able to comply with various

covenants defined in its credit documentation.

In this context, the group initiated new discussions with its lenders,

both in France and abroad, in order to balance the servicing of its

debts with the expected yet gradual recovery in the market and the

corresponding upturn in the group ’s performance. The group has

asked its lenders to formally suspend, the exercise of their rights

under the credit agreements, in particular their repayment.

As announced on July 10, 2018 a general waiver was fi nalized with

lessors and debt holders representing the majority of its debt, thus

allowing the group to withhold the payments of its loans and the

servicing of its debt. Aimed at protecting the group , this waiver

allows it to stay focused on its operational priorities and on the

implementation of its #BOURBONINMOTION strategic plan.

On November 2, 2018, without the confi rmation of the renewal of the

general waiver, the group announced that the presiding judge of the

Marseille Commercial Court had granted the opening of conciliation

procedures for 22 subsidiaries of BOURBON Corporation SA.

These procedures were opened to allow the group to actively

pursue, in an amicable framework, its search for all solutions for

its development as well as its discussions with its debt holders

and lessors.



(1) In the period excluding sanctions (prior to 4 November 2018).


MANAGEMENT REPORT

3

Risk factors



BOURBON confi rms that the discussions with its main fi nancial

partners and the active search for new fi nancing are ongoing, in

order to balance the servicing of its debt with its performance.

In this context, several offers under conditions notably due diligences

have been received by the group proposing in particular new fi nancing

and a debt reduction including for some of them, conversion of part

of this debt into equity.



advisors. March 13th, 2019, the Board of Directors carried out a

preliminary review of these propositions. BOURBON specifi es that

no decision or commitment has been made and that no exclusivity

has been granted to any of the fi nancial partners it is in discussion

with. The Company remains confi dent in its ability to fi nd such a

solution and will notify the market in due time according to regulation.

In accordance with IAS 1.69 d, as of December 31, 2018, the non-

current portion of the borrowings for which as of the closing date

the group does not have an unconditional right to defer payment for

a period longer than 12 months was reclassified in current liabilities

(see note 3.13 to the consolidated financial statements for details of

the reclassifications performed).

BOURBON’s gross financial debt amounted to €1,495 million,

including €45 million at more than one year.

(1) In the period excluding sanctions (prior to November 4, 2018).

The repayment schedule for the medium and long-term debt is

presented in note 3.13 to the consolidated financial statements. The

residual term of the long- and medium-term debt is four years and

eight months, before taking IAS 1 into account.

The following table shows the composition of long and medium-term debt as of December 31, 2018 (excl. accrued interest not yet due):

(in € millions)PORTION OF MEDIUM/LONG-TERM

DEBT UNDER ONE YEARMEDIUM/ LONG-TERM

DEBT TOTAL

CLUB DEAL loan – €320 million 32 - 32



SNC outsourced 65 - 65

Financing – Norway fleet 62 - 62

45 other bilateral loans 710 44 754

TOTAL 1,361 44 1,405

As of December 31, 2018, the group had cash assets of €217 million. Bank overdrafts and short-term credit lines have been drawn down in

the amount of €44 million due to the “unit-linked agreements” signed with two financial institutions allowing the group to combine available

balances in US with euro balances.

Non-discounted contractual flows on the outstanding balance of the net financial liabilities by maturity date, including interest flows and taking

into account the reclassifications performed pursuant to IAS 1, are as follows:

(in € millions)

AT DECEMBER 31, 2018

2019 2020 2021 2022 2023> 5

YEARS TOTAL

BALANCE SHEET TOTAL

Bonds - - - - - - -

Commercial paper - - - - - - -

Draws on credit facilities - - - - - -

Borrowings on finance leases 117.1 0.3 - - - - 117.5 117.5

Other bank loans 1,244.1 9.0 8.6 9.1 7.4 10.4 1,288.6 1,288.6

Accrued interest 44.7 - - - - - 44.7 44.7

Borrowings 1,406.0 9.4 8.6 9.1 7.4 10.4 1,450.8 1,450.8

Bank overdrafts and cash current accounts 43.9 - - - - - 43.9 43.9

Accrued interest - - - - - - - -

Cash and cash equivalents (217.1) - - - - - (217.1) (217.1)

Net cash (173.2) - - - - - (173.2) (173.2)

TOTAL NET FINANCIAL DEBT 1,232.8 9.4 8.6 9.1 7.4 10.4 1,277.6 1,277.6



(in € millions) 2019 2020 2021 2022 2023 > 5 YEARS TOTAL

Interest on finance lease borrowings 7.3 6.1 5.3 4.2 2.8 10.4 36.1

Interest on bonds 8.1 8.3 11.1 11.5 11.8 18.0 68.7

Interest on other bank borrowings 44.7 37.0 40.1 30.0 19.5 23.1 194.3

Future variable-rate interest flows were determined using the predicted rates of the indexes in question at year-end. Interest flows on bonds

takes into account interest adjustment clauses (See note 3.9 to the consolidated financial statements).

(in € millions)

AS OF DECEMBER 31, 2017

2018 2019 2020 2021 2022 > 5 YEARS TOTAL

BALANCE SHEET TOTAL

Bonds - - - - - - -



Borrowings on finance leases 45.3 12.6 7.9 3.8 4.4 - 74.1 74.1

Other bank loans 1,296.0 28.6 27.9 31.5 26.1 40.9 1,451.1 1,451.1


Borrowings 1,348.5 41.2 35.9 35.4 30.5 40.9 1,532.3 1,532.3




Net cash (167.2) - - - - - (167.2) (167.2)






Medium- and long-term borrowingsMedium- and long-term borrowings comprise mainly “club deal”

financings and bilateral loans.

The majority of these borrowings are backed by assets (vessels) held

as security (first-ranking mortgage or negative pledge). The vessels

are clearly identified when the loan contract is signed, details of which

appear in note 5.1 “Contractual obligations and other off-balance

sheet commitments” to the consolidated financial statements.

During the performance of the loan contract, for technical reasons,

BOURBON may have to adjust the list of vessels initially assigned

to the loan. Two options then arise – either partial redemption of

the loan or substitution with another vessel. Whichever is the case,

an amendment to the loan contract is signed to reflect the new

guarantees.

Between 2005 and 2015, BOURBON concluded four “club deal”

loans:

3 a €320 million “club deal” loan taken out in 2005 for which the

redemption phase began in April 2007, with an outstanding

balance of €32 million as of December 31, 2018;

3 a €450 million “club deal” loan taken out in the summer of 2007

for which the redemption phase began in January 2010, with an

outstanding balance of €166 million as of December 31, 2018;

3 a €318 million “club deal” loan taken out in July 2009 for which

the redemption phase began in 2011 and which was fully repaid

in July 2017;


redemption phase began in June 2016, with an outstanding

balance of €326 million as of December 31, 2018.

These three outstanding “club deal” loans are covered by the debt

rescheduling agreement signed on July 28, 2017. In accordance

with this agreement, the repayments for the club deal loans were

restructured progressively over the extended payment schedule.

In parallel, bilateral borrowings (in US dollars, euros and Norwegian

kroner) are regularly signed.

In many instances, contractual documentation includes compliance

with a debt/equity ratio. The documentation relating to the loans

affected by the restructuring agreement was modified to align the

ratios with the requirements of those agreements.


MANAGEMENT REPORT

3

Risk factors

Short-term lines of creditCash management is coordinated at the group ’s operating

headquarters. Financière Bourbon, a partnership organized as a cash

clearing house, offers its services to most of the group ’s operating

subsidiaries. These entities, under a cash agreement with Financière

Bourbon, receive active support in the management of their cash

flow, their foreign currency and interest rate risks, their operating

risks and their short and medium-term debt, in accordance with the

various laws in force locally.

At the beginning of 2017, the group had short-term credit lines of

€218.8 million with Financière BOURBON. Upon the signing of the

debt rescheduling agreement on July 28, 2017, these credit lines

were transformed into:

3 a renewable syndicated loan repayable by installments over the

long term, backed by assets worth €196.8 million. This new credit

was obtained by another Group subsidiary;

3 two lines of medium-term credit totaling €20 million repayable by

installments without any underlying assets;

3 a line of spot credit of €2 million repayable by installments.

The group has signed “combined account” agreements with two

banking establishments, allowing it to merge the available dollar

balances with overdrafts in euros.

BOURBON does not have a financial rating from a specialist agency.

5.5.3 Market risks

Market risks include the group ’s exposure to interest rate risks,

foreign exchange risks, risks on equities and risks on supplies.

Interest rate riskThe group ’s exposure to the risk of interest rate fluctuations is related

to the group ’s medium- and long-term variable rate financial debt.

BOURBON regularly monitors its exposure to interest rate risk. This

is coordinated and controlled centrally. It reports to the Finance and

Administration Department.

The group ’s policy consists of managing its interest rate expense

by using a combination of fixed-rate and variable-rate borrowing. In

order to optimize the overall financing cost, the group sets up interest

rate swaps under which it exchanges, at predetermined intervals, the

difference between the amount of fixed-rate interest and the amount

of variable-rate interest calculated on a predefined nominal amount

of borrowing.

These swaps are assigned to hedge the borrowings. As of

December 31, 2018, after taking into account interest rate swaps,

approximately 37% of the group ’s medium- and long-term debt had

been contracted at a fixed interest rate.

As of December 31, 2018, the interest rate swap contracts were on

the group ’s borrowings, transforming variable rates into fixed rates.

These contracts were entered into in euros (EUR), Norwegian kroner (NOK) and US dollars (USD); they are broken down by maturity date

as follows:

(in € millions)

OUTSTANDING AS OF DECEMBER 31, 2018 IN

FOREIGN CURRENCY

OUTSTANDING AS OF DECEMBER 31, 2018 IN EUROS MATURITY

Currencies

Fixed-rate borrowing swaps

EUR 13.4 13.4 06.28.2019

EUR 56.3 56.3 01.27.2020

EUR 6.5 6.5 12.31.2020

EUR 186.0 186.0 03.31.2021

EUR 2.6 2.6 07.29.2021

NOK 42.2 4.2 12.30.2021

USD 12.4 10.8 08.19.2019

USD 8.8 7.7 09.30.2019

TOTAL 288



The following table shows the group ’s net exposure to variable rates before and after risk management, based on the hedges in place and the

sensitivity of the group ’s income before taxes (related to changes in the fair value of monetary assets and liabilities) to a reasonable variation in

interest rates, with all other variables remaining constant:

(in € millions)

LESS THAN 1 YEAR 1 TO 2 YEARS

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

Cash - 217.1 - -

Term deposits - - - -

Loans and securities 3.5 - 1.8 -

Financial assets 3.5 217.1 1.8 -

Bank overdrafts and short-term lines - (43.9) - -

Deposits and securities received - - (0.5) -

Finance lease liabilities (113.7) (3.5) (0.3) -

Bank borrowings (104.0) (1,140.1) (3.8) (4.7)

Financial liabilities (217.7) (1,187.5) (4.6) (4.7)

Net position before hedging (214.1) (970.4) (2.8) (4.7)

Hedging

Net position after hedging

Assuming the position reached on December 31, 2018 to be constant over a year, a change in interest rates of 100 basis points (1%) would

therefore result in increasing or decreasing the cost of the group ’s financial debt by €7.1 million over one year.

(in € millions)

LESS THAN 1 YEAR 1 TO 2 YEARS

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

Cash - 243.6 - -

Term deposits - - - -

Loans and securities 40.3 - 3.8 -

Financial assets 40.3 243.6 3.8 -

Bank overdrafts and short-term lines - (76.4) - -

Deposits and securities received - - (1.6) -

Finance lease liabilities (41.8) (3.5) (12.6) -

Bank borrowings (112.7) (1,183.3) (15.2) (11.9)

Financial liabilities (154.6) (1,263.1) (29.4) (11.9)

Net position before hedging (114.2) (1,019.5) (25.6) (11.9)

Hedging

Net position after hedging




MANAGEMENT REPORT

3

Risk factors


2 TO 3 YEARS 3 TO 4 YEARS 4 TO 5 YEARS MORE THAN 5 YEARS TOTAL

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

- - - - - - - - - 217.1

- - - - - - - - - -

2.0 - 1.9 - 2.5 - 6.6 - 18.3 -

2.0 - 1.9 - 2.5 - 6.6 - 18.3 217.1

- - - - - - - - - (43.9)

- - - - - (0.4) - (0.9) -

- - - - - - - (114.0) (3.5)

(3.8) (4.8) (3.8) (5.3) (6.0) (1.4) (1.3) (8.7) (122.6) (1,165.1)

(3.8) (4.8) (3.8) (5.3) (6.0) (1.4) (1.7) (8.7) (237.5) (1,212.5)

(1.8) (4.8) (1.9) (5.3) (3.5) (1.4) 4.9 (8.7) (219.2) (995.3)

(287.5) 287.5

(506.7) (707.9)


2 TO 3 YEARS 3 TO 4 YEARS 4 TO 5 YEARS MORE THAN 5 YEARS TOTAL

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

- - - - - - - - - 243.6

- - - - - - - - - -

1.9 - 4.2 - 1.4 - 4.9 - 56.5 -

1.9 - 4.2 - 1.4 - 4.9 - 56.5 243.6

- - - - - - - - - (76.4)

- - - - - (0.4) - (1.9) -

(7.9) - (3.8) (4.4) - - - (70.6) (3.5)

(15.5) (12.4) (19.5) (12.0) (15.0) (11.1) (12.4) (28.2) (190.3) (1,258.8)

(23.5) (12.4) (23.4) (12.0) (19.4) (11.1) (12.7) (28.2) (262.8) (1,338.7)

(21.5) (12.4) (19.2) (12.0) (18.0) (11.1) (7.9) (28.2) (206.3) (1,095.1)

(400.2) 400.2

(606.6) (694.9)

Foreign exchange risk

Objectives

The group ’s policy is to reduce as far as possible the economic risk

related to foreign currency fluctuations over the medium term. The

group also tries to minimize the impact of the US dollar’s volatility on

annual operating income.

Cash flows from operating activities

The main foreign exchange risks on operations are related to

invoicing clients. BOURBON invoices a large portion (approx. 73%)

of its services in US dollars. The group has a natural foreign exchange

hedge as it pays its expenses in dollars (representing about 39% of

revenue). The policy is to maximize this natural hedge.

The residual risk is partially hedged in the short term by using forward

US dollar sales and/or currency puts. On the unhedged portion, and

over time, offshore oil and gas marine services are directly exposed

to foreign currency risks, particularly on the US dollar.



Long-term cash flows

Policy

For vessel acquisitions in foreign currencies, the policy is to partly

hedge the foreign exchange risk during the construction period by

setting up currency futures call options.

The policy is to finance these acquisitions in the currency in which the

corresponding charters will be paid by the customers. However, in

order to avoid accounting exchange differences in countries outside

the euro zone and the US dollar zone (particularly in Norway), the

entities finance their investments in their functional currency.

Current practice

As an exception, at the beginning of 2004, it was decided to

temporarily abandon this practice and convert the majority of

borrowings that were in US dollars at the time to euros. This was

done to recognize the unrealized foreign exchange gains booked

during previous fiscal years.

Since then, most of the new borrowings (outside Norway) have been

contracted in euros or US dollars. Where the euro/dollar exchange

rate allows, borrowings in euros to finance assets generating revenue

in US dollars will be converted to US dollars and future acquisitions

will again be financed in US dollars.

The following tables show the group ’s net exposure to changes in

foreign exchange rates:

3 on income: transaction risk;

3 on shareholders’ equity: currency translation risk.

a) Transaction riskAs of December 31, 2018, foreign exchange derivatives covered flows in US dollars (USD) and broke down as follows:

AS OF 12.31.2018

OUTSTANDING BALANCE

(in millions of currency) MATURITYAVERAGE

EXCHANGE RATE

Cross-currency swap

USD/EUR 8.0 06.30.2021 1.4146

The table below shows, as of December 31, 2018, the position of the group ’s monetary assets and liabilities (denominated in a different

currency from the entity’s functional currency) before and after management:

(in € millions) USD NOK EUR OTHER

Monetary assets 1,124.8 2.5 76.5 39.8

Monetary liabilities (740.0) (5.1) (125.2) (27.2)

Net position before management 384.8 (2.7) (48.7) 12.6

Hedges (7.0) - - -

Net position after management 377.8 (2.7) (48.7) 12.6

As of December 31, 2018, a 1% change in the euro exchange rate against all the currencies would represent a total impact at Group level of

€3.3 million, after hedges are taken into account.

It should be noted that currency futures hedges related to future transactions are not shown in this table since the hedged item does not yet

appear on the balance sheet.

b) Currency translation riskThe table below shows a breakdown by currency of consolidated shareholders’ equity for the years 2018 and 2017:

(in € millions) 12.31.2018 12.31.2017

Euro (EUR) 583.4 896.9

Brazilian real (BRL) (210.6) (204.5)

Mexican Peso (MXN) 79.4 74.0

Norwegian kroner (NOK) (101.4) (57.8)

US Dollar (USD) (151.4) (70.6)

Other 1.7 5.7

TOTAL 201.0 643.6

As of December 31, 2018, a 1% change in the exchange rates would represent an impact on consolidated shareholders’ equity of €0.8 million

(€2.1 million as of December 31, 2017).


MANAGEMENT REPORT

3

Risk factors

c) Equity risksAs of December 31, 2018, the group had no cash investments.

As stated in note 3.11 “Treasury shares” to the consolidated fi nancial

statements, BOURBON Corporation SA held 135,881 treasury

shares as of December 31, 2018. Treasury shares are presented as

a deduction from consolidated shareholders’ equity.

A 10% rise or fall in the share price of BOURBON Corporation SA

would result in a change in the market value of the treasury shares of

just under €0.05 million.

d) Supply price riskThe group ’s exposure to price risk is minimal.

The change in the price of raw materials does not constitute a risk of

significant increase in operating costs. Clients generally take direct

charge of the cost of fuel.

5.6 INSURANCE COVER FOR RISKS

Nature and extent of cover

For its marine activities, BOURBON has a comprehensive insurance

program for ordinary risks and war risks covering damage that could

be incurred by its fleet (“hull, machinery and equipment” insurance)

as well as its liabilities as a ship management company (“Protection

& Indemnity” or “P&I” insurance).

BOURBON supplements this insurance program with civil liability

insurance covering risks not directly related to its Marine activity,

through a “top-up” policy that comes into play for surpluses and

condition differences.

BOURBON has also taken out civil liability insurance for its

management.

BOURBON has a “pecuniary loss” insurance policy that comes into

play for condition differences and limits on its ordinary risks and war

risks, civil liability and P&I policies.

The levels of cover of these insurance policies have all been taken

at levels of guarantees and franchises appropriate to the risks of the

organization. BOURBON does not wish to disclose them for reasons

of confidentiality.

Since January 1, 2016, the group has retained part of the risk

of damage to the fleet through a captive reinsurance company

formed at the end of December 2015. This company, called

BOURBON Cap Ré and wholly owned by BOURBON, is based in

Luxembourg. Its management was entrusted to a captive manager

approved by the Luxembourg Insurance Commission. This captive

insurer underwrites high-frequency risks with a maximum annual

commitment of USD7.25 million in regular risks and USD2 million

in war risks. Since January 1, 2018, the risks have been transferred

to insurers beyond the fi rst two lines underwritten with insurers for

USD5.3 million in regular risks and the annual commitment of the

captive insurer, i.e. above a total of USD12.55 million for regular risks

and above USD2 million for war risks.

Insurance management

Subject to constraints in local legislation or due to the group ’s

organizational structure, insurance management is centralized,

which helps optimize coverage, both in terms of quality and value,

and provides greater clarity of insurance costs.

BOURBON uses leading international insurance companies to

insure its “hull, machinery and equipment” risk. BOURBON is also

a member of shipowners’ mutual insurers such as the Shipowners’

Club, Gard and Standard, which are all members of the International

Group of P&I Clubs, covering its civil liability as a shipowner.

The civil liability policy covering the non-marine activity is with Axa

Corporate Solutions and Helvetia Assurances SA.

Civil liability insurance for the senior management of BOURBON

Corporation SA is with AIG Europe Ltd.

The period of insurance coverage is generally 12 months. It should

be noted that some BOURBON policies contain an escape clause

allowing it to terminate the policy if Standard & Poor’s marks down

the insurer’s financial rating below a certain level.


MANAGEMENT REPORT3 Statement of non-fi nancial performance

6. STATEMENT OF NON-FINANCIAL PERFORMANCE

This section of the management report presents the social, societal

and environmental information for the fi scal year ended December 31,

2018, required under Article R. 225-105-1 of the French Commercial

Code, as amended by Order No. 2017-1180 and Implementing

Decree No. 2017-1265, transposing Directive 2014/95/EU of the

European Parliament. This year’s social and environmental reporting

takes a risk-based approach. The group ’s business model is

presented on page 17 of the Registration Document.

In 2005, the group developed a risk map in a bid to ensure that

wherever possible, the internal control system as a whole can

prevent any risks to which the group is exposed. In 2015, the group

redesigned its risk map to enable it to pinpoint the most significant

risks it might face. A wide range of potential risks were identified,

both at the group level and in terms of its operating activities,

including all CSR risks – social, environmental, societal, human

rights, anticorruption and tax evasion – resulting from BOURBON’s

business model. The risk factors are described in detail in section 5.

The main non-fi nancial risks addressed are: Employee engagement

and competence – Management of vessel maintenance – Compliance

with maritime standards (ISM, OSM) – Maritime transport safety

(potential accidents and pollution) – Maritime transport security

(piracy) – Personal safety – Ethics and compliance, including the fi ght

against corruption – Reputational risk due to poor communication –

Industrial disputes – Decline in customer satisfaction.

The inventoried risks are ranked based on their possible frequency

(from frequent to improbable) and their impact (negligible to

catastrophic), which would require an action plan to be implemented

immediately by a crisis unit. The risk map is updated whenever

necessary and at least once a year; this information is regularly

shared with the Internal Control and Risk Committee and the Audit

Committee of BOURBON (see Chapter 5, page 76 of the Registration

Document).

All social and environmental information are audited annually by an

independent third party. The relevant report can be found at the end

of this section (page 108).

6.1 SOCIAL INFORMATION

All social indicators presented in Chapters 6.1 and 6.2 are calculated

based on the workforce under contract at the end of December 2018,

except for the personnel flows, training and absenteeism indicators,

which take into account the entire workforce mobilized in 2018.

6.1.1 Employment

6.1.1.1 Composition and distribution of the workforceBOURBON’s workforce stabilized during 2018.

At December 31, 2018, the service was delivered by around 8,200(1)

people, of whom 6,712(2) were under contract, with 1,675 people

ashore and 5,037 people at sea. Between 2017 and 2018, the

group ’s combined contractual workforce shrank by 2%.

There are three main categories of personnel:

3 seagoing personnel (44% officers and 56% ratings);

3 specialized categories of onboard personnel (mainly crane

operators, engineers and ROV operators) who are involved in

hoisting operations, ROVs and managing onboard operations;

3 onshore personnel, of whom 20% are managerial staff.

3 DISTRIBUTION OF WORKFORCE BY AGE(3)

<=20 21 - 30

December 2017

31 - 40 41 - 50 51 - 60 > 60

December 2018

0.2% 0.3%

13%12%

39% 38%

32% 33%

15% 15%

1% 1%

At the end of 2018, the average age of BOURBON personnel was

41 years and 50% of BOURBON employees were aged 40 or under.

(1) This total workforce includes personnel under contract at the end of 2018, as well as seagoing personnel hired on a non-contractual basis (working rotating

shifts and due back on board).

(2) This total workforce includes personnel under contract at the end of 2018 (on a direct contract with a Group entity or with a recruitment or placement

agency).

(3) People aged 15-75, representing 99.9% of the headcount.


MANAGEMENT REPORT

3

Statement of non-fi nancial performance

3 DISTRIBUTION OF WORKFORCE BY GENDER

Women represent 8% of the group ’s total workforce and 1% of crews.

SPLIT WOMEN/MEN WORKFORCE WOMEN MEN

Management 10 0% 100%

Seagoing personnel 5,037 1% 99%

Onshore – all categories 1,675 29% 71%

Onshore – Managers 337 19% 81%

TOTAL GROUP WORKFORCE 6,712 8% 92%

3 DISTRIBUTION OF WORKFORCE BY GEOGRAPHICAL AREA AT 12.31.2018

12%Europe

15%Asia-Oceania

11%Americas

62%Africa

The share of the BOURBON workforce working in their country of

origin continues to grow, up from 64% to 65%.

6.1.1.2 Equal opportunities and fairnessThe monitoring of gender equality introduced in 2015 has revealed

that at BOURBON, like the marine sector in general, women are

underrepresented in technical, operational and customer- facing

roles. These are all careers in which the necessary skills and

experience are by and large obtained in seagoing and vessel

command roles, an area that still tends to be male-dominated. In

this context, BOURBON is concentrating its efforts on the support

functions.

In total, access to training and internal promotion enabled onshore

management positions held by women to reach 19%. Furthermore,

surveys and skills assessment methods for onshore personnel

help to identify gateways to these operational, technical and

customer- facing roles, as well as to managerial positions.

The work performed by BOURBON employees is largely unsuitable

for the employment and inclusion of people with disabilities (a fit for

duty certificate is required for seagoing personnel, and a significant

number of onshore jobs require employees to be able to go onboard

the vessels).

6.1.1.3 International recruitment policyIn 2018, BOURBON employed people from 84 different nationalities.

The operational subsidiaries, acting either on their own account or

as internal recruitment agencies, managed 73% of the workforce,

with 27% of personnel provided by external recruitment and

placement agencies.

Outside recruitment and sourcing companies are selected according

to criteria of compliance with international standards and BOURBON

standards. Internal sourcing and manning agencies meet the same

standards. Manning and sourcing agencies are audited in a yearly

program, which is defined in BOURBON’s quality system. The aim

of these audits is to ensure that selection, recruitment, training

and management processes meet BOURBON standards and that

these agencies meet international standards, including specific MLC

certification.

For onshore personnel, BOURBON is improving its recruitment

standards by including a skills assessment process and identifying

the training needs of all employees occupying new positions within

the group .

In 2018, the number of internal promotions recorded was 109 for

onshore personnel. This figure confirms the internal sourcing policy

in force aiming to capitalize on operational skills acquired within the

group in a context of workforce reduction.

6.1.1.4 Hiring and departuresThe analysis of changes in the workforce, covering all subsidiaries,

shows that the workforce decreased during 2018. The subsidiaries

recruited 374 personnel to onshore positions, while 400 personnel

from this same category left the group , including 86 due to dismissal

or mutually agreed employment termination, i.e. a decrease of 0.2%

for onshore personnel.

These subsidiaries also took on 1,997 seagoing or onboard

personnel, while in this category 2,128 people left the Company, 364

as a result of a dismissal or mutually agreed employment termination,

resulting in a decrease of 3% for seagoing or onboard personnel.

At December 31, 2018, the group retention rate for the workforce as

a whole, calculated over two years, was 89%, of which:

3 84% for onshore personnel;

3 87%(1) for seagoing officers.

6.1.1.5 CompensationIn a still-challenging economic climate, BOURBON has maintained

its pay freeze policy for the group ’s onshore personnel. Except

as required by law, no organization has implemented a collective

pay increase. To safeguard the group ’s expertise and know-how,

organizations have been instructed to focus on developing their

employees and encourage their progression in terms of classifi cation

and compensation. In 2018, a concerted effort was made to ensure

(1) All officers (deck & engine room) working on supply type vessels.



that employees could apply for vacancies in new organizations,

thereby facilitating the development of the group ’s internal resources.

For onshore personnel, 69% of subsidiaries must adhere to the

minima imposed by legislation and 75% have their own salary scales

in place.

For seagoing personnel, in accordance with national and

international regulations and the applicable company or collective

agreements, the subsidiaries – whose role is to recruit and manage

onboard personnel – continued their efforts to reduce salaries and/

or reorganize periods on board vessels to reduce the cost of crew

rotations.

For crews, compensation is established in each organization

according to the onboard role and vessel type. Fully 84% of

subsidiaries that employ seagoing personnel have an internal pay

scale in place.

Over the long term, BOURBON will continue its policy of local

compensation management, with each subsidiary being responsible

for compliance with the regulations, agreements and practices in

force in its area of activity.

The vast majority of variable short-term compensation plans

remain suspended in the subsidiaries. For the French companies,

profit- sharing agreements were dependent on the group ’s earnings,

which are not suffi cient at present to generate bonus payments.

The rate of coverage of onshore and seagoing personnel by private

medical insurance during 2018 was 79% for subsidiaries employing

seagoing personnel and 75% for subsidiaries employing onshore

personnel.

The changes in payroll for all Group employees are presented in

note 5.3 to the consolidated financial statements.

6.1.2 A policy to promote operational excellence

6.1.2.1 Organization of the Human Resources policyThe Human Resources policy, approved by the Management,

is implemented by the group ’s Human Resources Department.

It defi nes the guidelines for recruitment, compensation, training

and career management for all staff. Policies are then implemented

for BOURBON’s three main staff categories through the operating

subsidiaries that employ them.

The integrated computer system OCS (Onsoft Computer

Systems AS) manages the group ’s personnel (administrative

management) and crewing activity (administrative management,

planning, training, payroll). HORIZON, a complementary tool from

Talentsoft, maps the business and streamlines and documents

interactions and interviews on the basis of appraisals, training plans

and mobility prospects.

In total, the tools have enabled the integrated management of 93%

of the reported workforce (under contract and without contract), as

of December 31, 2018.

6.1.2.2 Development of collective competenceBOURBON continues to believe that excellence in service is possible

through the development of collectively competent and committed

teams. The systems for the evaluation of performance and individual

skills are designed to be applied worldwide across all personnel

categories.

The need to cut costs has forced the group to limit spending to

compulsory training (safety, ISO 9001, BOSIET, etc.) or training

that has been contractually agreed with clients, as well as training

accompanying the group ’s transformation process (project

management, Lean training). Nearly all training that does not meet

these criteria has been postponed indefinitely. In addition, after

introducing digital e-learning for onshore personnel, BOURBON

has completed the roll-out of this solution to seagoing personnel on

board supply type vessels. In 2019, the aim is to introduce e-learning

solutions for personnel on board crew boats. Internal skills transfer

also draws on a network of in-house trainers who have been

identified and trained in the approach.

The training of onshore personnel(1) totaled 8,412 hours in 2018,

including 20% in-house training and 80% external training (mainly

job training).

In 2018, the proportion of onshore e-learning increased to 21% of

the overall training effort.

For onshore personnel, job training made up 64% of this training and

mainly involved security and safety (evacuation, fire prevention) and

standards and regulations (ISM and ISPS, MLC, ISO 9001, etc.).

In 2018, the training courses that are mandatory under international

regulations (STCW, MLC) represented 54% of the training effort

for seagoing personnel, which stood at 74,177 hours. This effort

also includes training on the standards of the offshore industry and

standards established by BOURBON for its workforce. BOURBON’s

standards are especially focused on the training of newly recruited

crew boat personnel. Lastly, e-learning is continuing to be rolled out

and accounts for 4% of the offshore training effort.

6.1.2.3 Organization of work

6.1.2.3.1 Organization of work

Seagoing personnel and specialized onboard personnel work a shift

pattern that alternates between periods at sea and onshore rest

periods. These patterns vary according to the operating zone and

type of vessel, and depend on the company or collective agreements

in force. During onboard periods, the work of seagoing personnel

is organized in a way that respects the rest times required by the

conventions (STCW, MLC) and the regulations of flag authorities.

Vessel captains and onshore teams are responsible for ensuring

compliance with these regulations.

The organization of work and rest time of onshore personnel

depends on the legislative framework applicable and on the collective

agreements entered into at a sector specific or local entity level.

In 2018, 65% of subsidiaries reported that they referred to internal

rules and 43% to collective agreements for managing the working

time of their seagoing and/or onshore personnel.

(1) All mobilized onshore personnel, payroll & contracted.


MANAGEMENT REPORT

3


In 2018, 54% of the subsidiaries declared that they had adapted the

hours of their onshore personnel, notably with the use of teleworking

for 8% of the subsidiaries, part-time working for 19% of subsidiaries

and flexible hours for 30% of subsidiaries. Some technical functions

on the operational support bases require a continued presence.

The personnel in these roles work according to specific shift systems

alternating work and rest periods. During continuous working time,

daily rest periods are respected and weekly rest time caught up on.

The shift system was adopted by 11% of subsidiaries in 2018.

6.1.2.3.2 Professional relations, collective agreements and organization of social dialog

Compliance with the social and welfare protection rules applicable

in countries where BOURBON employs staff is the responsibility of

the management of each entity. The audits and training campaigns

carried out by the Compliance Department are designed to prevent,

detect and if necessary address any non-compliance.

In addition to rules arising from law, professional relations are

also governed by operational management standards, notably for

seagoing personnel. For onshore personnel, internal regulations

clarify the rights and duties of each person.

Across the group , organizations apply collective agreements

negotiated at national level, at branch level (Oil & Gas or Marine)

or internally. Internal agreements can cover a particular category of

employees (seagoing or onshore) or all employees of an organization.

A total of 71 agreements have been identifi ed across the group :

3 25 national agreements, 14 of which relate to seagoing personnel

and 11 to onshore personnel;

3 46 internal agreements, 27 of which relate to seagoing personnel

and 19 to onshore personnel.

In 2018, 9 new agreements or amendments to existing agreements

were signed, covering working hours, organization of work and

pay. These new agreements concern organizations in Nigeria,

the Democratic Republic of the Congo, Gabon, Italy and France.

In 2018, BOURBON elected a Director representing employees and

an alternate, in accordance with the legislation in force.

In matters of health, safety and working conditions, there are strict

standards and internal policies applicable to seagoing professions

and the Oil & Gas sector that govern this area. It is not necessary

therefore to establish additional agreements in HSE matters.

6.1.2.3.3 Absenteeism and occupational illnesses

In 2018, the absenteeism rate was assessed for all subsidiaries and

consolidated by category of personnel:

3 seagoing and specialized categories of onboard personnel;

3 onshore personnel.

For onshore personnel(1), absence due to sickness or occupational

accident was measured, as was the number of unexplained absences.

The observed rates were 1.84% for absence due to sickness or

accident, and 0.35% for unauthorized absences. To ensure that the

consolidated information was consistent, all subsidiaries calculated

their absenteeism rate using the same method. Overall, the

absenteeism rate recorded for onshore personnel was 2.5%.

For offshore personnel, the absenteeism rate was measured by

considering the following scope: personnel directly contracted

by Group subsidiaries under a permanent contract. The rate of

absenteeism for the group on this scope was 5.50%, for absence

due to sickness and accident combined.

When it comes to occupational illnesses and their offi cial recognition,

this varies considerably depending on the country and the staff

categories concerned (seagoing or onshore personnel). Regardless

of this, BOURBON was keen to extend its reporting to all subsidiaries

in 2018.

As part of the annual HR survey launched at the end of 2018, the

subsidiaries reported six cases(2) of occupational illnesses offi cially

recognized by the relevant authorities. In 2018, the total number

of days’ absence came to 563. Of these, four were due to lumbar,

articular and periarticular complaints, one was due to hearing loss

and one was due to a lung condition.

Alongside the campaigns implemented at Group level (e.g. the

“Safety Takes Me Home” campaign and use of personal protective

equipment (PPE)), the subsidiaries have developed local safety or

awareness campaigns both for onshore and seagoing personnel,

designed to prevent operational risks and the health problems that

could result (e.g. tropical diseases, correct movement and posture,

water quality, vaccination, etc.).

6.1.2.3.4 Compliance with the fundamental conventions of the International Labour Organization (ILO) and human rights

The MLC, Maritime Labour Convention, which was ratified within the

ILO in 2006, entered into force in August 2013.

This convention, which is a pillar of international maritime regulations

after STCW, MARPOL and SOLAS, is similar to a Seafarers

Charter. It sets minimum working standards onboard vessels of

over 500 UMS. It brings together over 60 existing international

conventions or regulations. All vessels must carry a maritime labor

certificate delivered by flag authorities, to prove that the convention

is complied with. This certificate is valid for five years. An interim audit

is organized every two and a half years.

As in previous years, a survey was carried out at the end of 2018

to ensure that all subsidiaries still comply with the fundamental

conventions of the ILO on freedom of association, non-discrimination,

elimination of forced or compulsory labor, and the effective abolition

of child labor.

(1) Onshore personnel directly contracted by one of the group subsidiaries (payroll).

(2) For one entity, the illness was reported in 2017 but was not recognized until 2018.



6.1.3 Focus on safety

Identifi ed as a major risk to its activity, operational safety is paramount

for BOURBON. The group strives to ensure that operations are safe,

efficient and reliable for clients, who themselves have increasingly

strict requirements to adhere to.

Safety at BOURBON includes safety of employees, that of the

clients and of all those who work at or for the group , as well as the

protection of assets and the environment. In 2018, approximately

2.7 million passengers were transported to and from offshore sites.

To better meet the increasingly stringent requirements of its

clients, BOURBON continues to implement its Operational Safety

Management (OSM) standard at all its subsidiaries, which is aligned

to the offshore industry program. This modern system integrates the

complete operations management chain, defining the responsibilities

and individual responsibilities required for safe, efficient operations.

BOURBON’s aim is to have zero incidents that could harm

personal health and safety. To do this, the group is constantly

developing tools and indicators to educate and raise awareness

on accident prevention and to encourage best practice. Thus, in

2018, BOURBON continued to develop its latest monthly accident

prevention tool called “Safety Post”. This accident prevention tool

is presented in the form of a one-page cartoon and tells of a real

incident that occurred in one of the group ’s places of work. These A4

sheets, distributed regularly to all operational bases and vessels in

the fleet, are in addition to the existing material made available in

recent years as part of the first, second and third “Safety Takes Me

Home” campaigns. In addition to these accident prevention tools,

BOURBON has developed e-learning training courses dedicated to

safety, such as the “Safety Group Induction” module or the “Pre-Task

Planning” module.

3 The objective was to raise the awareness of all employees so that

they adopt a responsible and proactive attitude.

According to data from the IMCA (International Marine Contractors

Association), which includes the main offshore oil and gas maritime

services players, BOURBON’s safety performance is very good.

3 Lost Time Injury Rate (LTIR): Frequency of accidents causing a

stoppage of work per million hours worked;

3 Total Recordable Incidents Rate (TRIR): Frequency of reported

accidents, including accidents with stoppage of work, injuries

requiring time off or physical rest (reassignment, reduced

hours, etc.), and injuries requiring appropriate medical care and

monitoring, but which do not require time off or stoppage of work.

This frequency is also expressed per million hours worked.

In 2018, the LTIR was 0.63, and the TRIR was 1.00.

For 2018, BOURBON recorded 19 Lost Time Injuries (LTI),

four Restricted Work Cases (RWC) and seven Medical Treatment

Cases (MTC). As a reminder:

3 LTIs are accidents resulting in injuries which do not have after

effects involving a temporary stoppage of work (Lost Work Cases

or LWC), with partial permanent aftereffects (Permanent Partial

Disability or PPD), with full aftereffects (Permanent Total Disability

or PTD), or fatalities (or FATs);

3 RWCs are cases where the injured person is able to continue

working but in an adapted or restricted form;

3 MTCs are cases where the injured person is able to resume

their work as normal, but the type of injury they have sustained

requires medical intervention as defined by oil industry rules.

In 2018, six cases of occupational illnesses were reported to the

group by the subsidiaries. BOURBON draws particular attention to

the risks posed by the malaria, Ebola and Zika viruses by publishing

educational material on its intranet.

6.1.4 Focus on security

6.1.4.1 Preventing maritime riskMaritime piracy has been a major concern for all maritime operators

for several years now. BOURBON has therefore put in place various

measures and collaborative arrangements to fully assess this risk

in its vessels’ operating and transit zones, overseen by the group ’s

Security Manager.

Based on the risk assessment, BOURBON applies:

3 general security measures common to all vessels in accordance

with the International Ship and Port Facility Security (ISPS) Code,

as well as establishing a “citadel” on board each vessel, as

recommended by the International Maritime Organization;

3 a set of procedures specifi c to BOURBON and adapted to

the operating zone, in view of the recommendations of the

International Maritime Organization, and specifi cally its Best

Management Practices. These measures may include having

private security guards on board;

3 additional protection measures put in place by oil companies

(clients) which are specifi c to the fi eld of operation, which may

include site protection and transit escort vessels.

In the Gulf of Guinea – the region most at risk of piracy in recent

times and the group ’s main operating zone – a specifi c permanent

arrangement has been put in place (in Nigeria). A Security Manager

manages this set-up, consisting of an onshore team and a team at

sea. Their mission is to monitor operations, crew preparation and

compliance with procedures by vessels and clients (site audits.) This

entails an anti-piracy training program for offi cers.

A security risk assessment is conducted for each operating site in

Nigeria.

Together these measures help to reduce risk exposure for the

group ’s crews and vessels.

6.1.4.2 Preventing onshore riskIn accordance with the group ’s security policy, BOURBON has also

set up an information, awareness-raising and training program for

employees moving or working abroad.


MANAGEMENT REPORT

3


This program is based on a variety of tools:

3 an online space for all employees on the group intranet to make

them aware of security-related issues;

3 a special e-learning module which is compulsory for all travelers

and which must be repeated every two years;

3 information pages for travelers with a “security passport” (country

advice) for high-risk areas;

3 a security handbook with traveler checklists and fact sheets on

what to do in the event of a terrorist attack;

3 a specifi c routine briefi ng for staff traveling to high-risk countries

such as Nigeria.

Lastly, subsidiaries based in high-risk areas must draw up a security

plan, including an evacuation procedure for local employees and

expatriates.

6.2 SOCIETAL INFORMATION

6.2.1 Involvement in the socio-economic development of countries and relationships with stakeholders

6.2.1.1 Local establishmentThis is a core value of BOURBON that generates a positive, and

responsible, economic and social impact in those countries where it

provides services. 65% of the workforce in a country are nationals,

up 1% from 2017. This figure rises to 79% for onshore positions.

Regional establishment(1) account for 76% of the group ’s workforce.

(1) Regional establishment: staff originating from the geographic region in which they work (Asia 81%, Americas 91%, Europe 97% and Africa 68%).

3 PERCENTAGE OF LOCAL WORKFORCE FOR EACH OPERATING ZONE

9

89.8%

85.2%

64.0%

37.8%

Local workforce



6.2.1.2 Partnerships/sponsorships in France and overseas

The mission of the BOURBON Foundation, under the aegis of the

Fondation de France, is to develop and sponsor general-interest

projects with direct links to education, training, health and local

development, in France and abroad. As the commitment to IECD in

Nigeria has come to an end, the Foundation’s Executive Committee

decided to:

Current projects:

3 Strengthening its engagement with the Baan Dek Foundation, its

longstanding partner in Thailand. This is primarily aimed at giving

Burmese migrants access to childcare and has been increasingly

successful. More than 1,450 migrant children from 57 different

communities have been able to join a public school program and

receive educational support on topics such as hygiene, health

and the environment;

3 Developing a new partnership in Kenya to provide care

(health, nutrition, mental wellbeing, etc.) and education to 21

children working at the Dandora dumpsite in Nairobi.

Finally, the open days held in 2018 showcasing the assistance,

salvage and pollution remediation tugs operated by the company

Les Abeilles along the French coast raised more than €21,000 which

will be shared between:

3 the Association Œuvres Sociales de la Marine (Brest);

3 the Association Œuvres Sociales de la Marine (Cherbourg);

3 the Caisse des Péris en Mer de Cherbourg (Cherbourg);

3 Recherche Contre la Mucoviscidose (Brest).

6.2.1.3 Relations with stakeholders and fair practiceBOURBON has identified its stakeholders as all people and

organizations able to influence or be influenced by the group ’s

decisions and activities. The group has maintained a close dialog with

its employees, clients and shareholders, i.e. its main stakeholders

over a period of some years (e.g. by providing a free phone number

for shareholders, asking clients to complete a satisfaction survey after

each contract, etc.). This close collaboration permitted BOURBON

to improve its global performance, particularly in committing itself to

continuous improvement through CSR with this method.

In its Code of conduct, BOURBON defines the rules that apply to all

Group employees and other stakeholders (suppliers, partners and

clients), ensuring that they work together to respect local cultures,

people, laws and ethics. The principles it contains show the way

forward for ethical conduct. A supplier Code of conduct sets out

the commitments that the group expects from its suppliers and

subcontractors, particularly regarding respect for fundamental rights

at work, health and safety, environmental protection, anti-corruption,

and promoting economic and social development. At the group level,

local procurement is favored as much as possible to build lasting

relationships with local suppliers and boost the local economy. The

Code of conduct is routinely included in contracts and is published

on BOURBON’s website.

6.2.1.3.1 Local purchases

BOURBON attaches particular importance to the impact of its

activities in the areas where it operates, especially with regard to

the social and economic aspects. As part of its overall strategy,

BOURBON is continuing to develop local partnerships by integrating

quality and international safety standards.

In 2018, local procurement accounted for around 58% of purchases

of parts and supplies (unchanged from the previous year) and

directly helped to support the local economy. The proportion of local

purchases developed as far as possible in the various geographical

zones where BOURBON operates.

This type of procurement mainly focuses on routine supplies and

services for vessel maintenance (engine oils, spare parts, services,

ship repair yards) and operations (catering and other services).

Prioritizing local procurement offers significant added value in terms

of response times and overall purchasing costs (including logistics).

6.2.1.3.2 Suppliers and subcontractors

In 2014, the group Purchasing function was completely reorganized

to improve international supplier management and to deploy tools

and processes common to all subsidiaries worldwide.

This enabled procedures and tools to be introduced to improve

monitoring of suppliers, with the implementation of purchasing

strategies by product category, supplier quality management and

performance measurement through regular assessments and risk

analysis. All of these processes factor in quality standards and ethical

issues.

BOURBON has defined a single scope for its suppliers and

subcontractors. This includes, in addition to the procurement of parts

and supplies, the following categories: fuel, classification societies,

flags, freight forwarders, telecommunications, travel agencies and

external manning agents. Of these, two categories (external manning

and ship repair yards) account for more than 13% and 10% of

purchases respectively. In terms of risk management, therefore, it is

essential that BOURBON prioritizes its actions with these suppliers:

3 firstly, external staffi ng agents: these subcontractors are closely

monitored since they manage a significant percentage of the

group ’s workforce. They comply with international standards and

with BOURBON’s standards (see section 6.1.1.3 on international

recruitment policy) and undergo annual internal audits;

3 secondly, ship repair yards: they perform maintenance on vessels

in the fleet, which are the group ’s major assets. The nature of

the work carried out by these subcontractors requires strict

safety management. Accordingly, HSE criteria are given a higher

weighting during annual appraisals.


MANAGEMENT REPORT

3


6.2.1.3.3 Challenges in tackling corruption

Unethical behavior and behavior which infringes anti-fraud,

corruption or any other applicable legal provisions, is likely to expose

BOURBON or its employees to criminal and civil penalties. Such

events may damage the group ’s reputation and decrease the value

of its shares. The group ’s policy is to conduct its activities with strict

adherence to legal and ethical obligations as stated in the group ’s

Compliance and Ethics Policy.

In 2013, the group decided to strengthen its policies, procedures

and training with regard to ethics and compliance, especially anti-

corruption. The group has put in place a dedicated compliance

program for all its entities. BOURBON’s compliance program is

closely monitored and regularly updated to improve its effectiveness

and to keep pace with regulatory change.

BOURBON’s compliance program is composed of seven pillars:

3 Tone at the Top: the General Management Committee has

undertaken to promote compliance and maintain a culture of

ethical decision-making within the group ;

3 risk assessment: by identifying all risks of non-compliance,

the tools, techniques and corrective measures necessary to

prevent these risks can be developed; the group ’s risk assessment

also includes corruption risk. Since 2015, the specifi c non-

compliance risk map has been updated at least once a year;

3 policies and procedures: the establishment and deployment of

specific guidelines ensures that adequate compliance processes

exist within the group ;

3 communication: all employees are kept regularly informed of the

program’s roll-out;

3 in 2015, the group also successfully launched an e-learning

compliance program aimed at all onshore and offshore

employees; this program continued during 2018;

3 coordination and monitoring: a centralized compliance function

is in operation and coordinates the group ’s entire compliance

program;

3 penalties: any infringement of the compliance rules is taken

extremely seriously and the appropriate penalties are imposed

where necessary.

In 2014, the group implemented a dedicated compliance organization

with 26 compliance managers across the group ’s subsidiaries and

which report to the group ’s compliance team.

BOURBON employees and stakeholders may need support on the

application or interpretation of the code of conduct. Since 2017,

BOURBON has strengthened its ethical approach by providing its

employees and stakeholders with an ethics alert line available 24/7

enabling anyone to report behavior contrary to the BOURBON code

of conduct.

Tackling corruption risk is also dependent on the control environment

within the group (detailed in note 4 of the Registration Document)

and the organization and implementation of internal control in the

context of accounting and fi nancial procedures, particularly with

regard to the segregation of duties.

6.2.1.3.4 Challenges in combating tax evasion

The group is committed to operating in accordance with the tax

regulations in force in all its host countries, including measures

designed to combat tax evasion and fraud.

For 2018, BOURBON paid €6.548 million in income tax in the

countries in which the group operates.

From a tax perspective, the risk review is carried out when the risk

map is updated (at least once a year), in conjunction with the group

Tax Department.

In accordance with its legal obligations, the group has been producing

a country-by-country reporting statement since 2018. This gives a

breakdown of earnings, taxes and activities by geographical area.

6.3 ENVIRONMENTAL INFORMATION

6.3.1 General environmental policy

Five subsidiaries of the group were certified ISO 14001. This was

due to a harmonized approach towards operational safety and

efficiency, with a whole section on the environment. The aim is for

all BOURBON entities to have a tool enabling them to measure and

improve their management systems, via a self-assessment based

on KPIs derived from industry best practice, both for onshore and

offshore operations.

An application to collect operational data (Operational Data

Application) has been installed on board supply and crew boats over

32 m. This application collects vessel operations daily, as well as

engine hours that are directly linked to diesel consumption. Fuel,

water, oil and waste consumption data are also collected daily.

This data is automatically shared internally with over 500 users

(Management and Captains/Head Mechanics) using dashboards

developed by the “Fuel Management” and “Business Intelligence”

teams. This information makes it possible to optimize consumption

and minimize the environmental impact of BOURBON’s maritime

activities.

Since the client remains the initiator for operations, the scope for

action may seem limited. Nevertheless, best practices have been

introduced on board vessels to optimize consumption, reduce

engine hours and lower emissions.

In 2018, crew training in good operational practices continued, the

aim being to minimize fuel consumption and therefore greenhouse

(1) OSM: Operational Safety Management – defined by the Oil Companies International Marine Forum (OCIMF).



gas emissions as much as possible. For example, captains are

automatically notified by email when best practice for efficient vessel

management has not been followed.

Finally, the reference officers provide onboard training in modules on

the BOURBON intranet. Reference officers and Internal Auditors also

stress the importance of the quality of reporting for data reliability.

All seagoing personnel have access to the various environmental

regulations applicable on their vessel. All these measures raise the

awareness of seagoing personnel on environmental protection.

The daily monitoring of consumption on vessels and monthly

monitoring on the rest of the fleet makes it possible to distinguish

consumption by vessels during chartering and non-chartering

periods, and also enables figures to be fed back on waste generation

and freshwater consumption. The recommendations made by

international bodies in this regard, particularly the International

Maritime Organization (IMO), have been respected.

The consumption of fuel (Marine Gas Oil) and lubricant oil in 2018

was 227,870 m3, and 2,464 m3 respectively.

The gross emissions for 2018 are presented in the table below:

(in metric tons) 2018 2017 2016

Emissions of CO2 919,739 1,002,705 1,158,888

Emissions of SOx 1,086 1,716 1,646

Emissions of NOx 14,144 22,423 25,390

Decree No. 2016-1138 on environmental information was published

as part of the implementation of Article 173-IV of the French energy

transition law. Accordingly, BOURBON has evaluated its indirect

emissions throughout the entire value chain, in addition to the direct

emissions already reported earlier in this document. This means that

the emissions including those upstream and downstream of the

group ’s activities have been taken into account in reference to the

Greenhouse Gas (GHG) Protocol. The objective of this protocol is to

standardize the fight against climate change on a global scale. It is

divided into three levels that correspond to specific emission scopes.

The tool provided by the GHG Protocol therefore calculates CO2

emissions based on financial data. In 2017, it gave a breakdown of

emissions by scope and by main emissions category, which were on

a similar scale in 2018:

3 DISTRIBUTION OF CO2 EMISSIONS BY SCOPE

Scope 3

29.59%

Scope 2

0.12%

Scope 1

70.82%

Scope 1: direct emissions relating to the business

Scope 2: indirect emissions relating to energy consumption

Scope 3: other indirect emissions

3 MAIN CATEGORY OF INDIRECT EMISSIONS

Purchase of goods

and services

Energy

(excl. Scopes 1 and 2)

Shipping of

merchandise

Business travel Employee travel

30%

59%

53,4 %

4%6%

1%

0%

10%

20%

30%

40%

50%

60%


MANAGEMENT REPORT

3


The most significant categories for emissions in scope 3 are:

3 category 3 “Energy”, which represents emissions associated with

energy not included in scopes 1 and 2 (extraction, production

and transportation of the energy sources used by BOURBON);

3 category 1 “Purchase of goods and services”, which represents

emissions associated with Group purchases (extraction,

production and transportation).

Currently, climate change has no impact on the activities of

BOURBON vessels. Depending on changes, emergency procedures

will be reviewed and updated.

To date, BOURBON’s accounts contain no significant provision that

represents an environmental risk. BOURBON’s position in this area is

described in section 5.2 of the management report.

Each vessel also has the “Emergency and Contingency Plan” on

Board which lists all the decontamination exercises done on board.

BOURBON requires each of its vessels to do at least four of these

decontamination exercises per year. The officers issue instructions

for each exercise.

6.3.2 Management of resources

BOURBON operates a fleet of modern vessels, for the most part

equipped with diesel-electric propulsion technology that significantly

reduces consumption and atmospheric emissions for offshore oil

and gas marine services. A dedicated Fuel Management team is

responsible for reporting, monitoring and analyzing the environmental

data and has designed ways to feed data back to the crews and

various land-based teams (HSE, operations, central functions).

The implementation of dashboards makes it possible to monitor

environmental indicators every month (Marine Gas Oil, lubricant oil,

waste, emissions etc.). This enables the group to adopt operational

behavior which is increasingly responsible.

The consumption of fresh water on board the vessels includes

water for sanitary use as well as water intended for rinsing vessel

equipment. It was 184,234 m3 across the whole fleet excluding

crew boats under 32 m. The consumption of bottled drinking water

has not been reported, and neither has the indirect consumption of

(electrical) energy by all the offices of the operational subsidiaries.

6.3.3 Pollution and waste management

As far as the prevention of environmental risks is concerned,

BOURBON applies national and international rules as outlined in

section 5.2 of the management report.

Special attention needs to be paid to polluting waste that is

accidentally discharged into the sea. In 2018, BOURBON did not

log a single major incident(1) such as to cause environmental harm.

The Bourbon Liberty 150, Bourbon Liberty 300, Bourbon Explorer

500, Bourbon Evolution 800, PX 105 and P 105 series meet the

Oil Recovery classification. This classification indicates that these

vessels can contain pollution and retrieve and store on board the

hydrocarbons responsible for this pollution.

BOURBON’s vessels are equipped with waste treatment systems

that are compliant with the international regulations in force, in

particular those of the IMO. The total volume of waste generated

in 2018 was 7,679 m3. The volume of used oil treated (2) amounted

to 2,465 m3 across the fleet, excluding Crew Boats under 32 m.

The waste generated and used oil discharged on land are processed

by approved companies.

The Bourbon Liberty 300, Bourbon Explorer 500, Bourbon Evolution,

P 105 and PX 105 series of vessels meet the requirements of the

Cleanship classifi cation. These vessels have been designed and

constructed to address the stringent requirements of protecting fuel

reserves, treating waste water and general waste, limiting discharges

into the water and the risk of water pollution as well as the impact

on biodiversity.

6.4 NOTE ON SOCIAL AND ENVIRONMENTAL REPORTING METHODOLOGY

6.4.1 External standards

The group draws on Article R. 225-105-1 of the French Commercial

Code, amended by Order No. 2017-1180 and Implementing Decree

No. 2017-1265, transposing Directive 2014/95/EU of the European

Parliament for the reporting and monitoring of social, environmental

and societal indicators.

6.4.2 Tools used

The Onsoft Computer Systems AS integrated information system

was used to collect and process the social data for 2018 sent by

the local entities. This information system was combined with the

decision-making information system Business Intelligence, and the

annual survey Human Resources - Crewing.

The environmental data are obtained from the Surfer Reporting

Application for Surfers below 32 m, while the Operational Data

Application (ODA), a daily reporting tool launched in 2014, covers

BOURBON’s fleet of supply vessels and Surfers above 32 m.

6.4.3 Social indicators

BOURBON’s social reporting is carried out over the fiscal year

(January to December). The scope of the social indicators includes

subsidiaries controlled operationally by the group and employing

staff, as well as three associate subsidiaries (Bourbon Gulf, Bourbon

Marine Services Manila Ltd, and Sonasurf (Angola)). The other

three associate subsidiaries (EPD Yangzhou, EPD Asia, Southern

Transformer and Magnetics) are not included within the scope of the

social indicators, as these subsidiaries are no longer trading.

(1) Major incident: release of more than 500 liters of products into the sea.

(2) The reported quantity of treated used oil does not include the quantity of used oil incinerated onboard.



Regional and local establishment are determined according to the

geographical assignment of employees and their nationality.

The reporting of training hours covers 95% of the onshore workforce

and 93% of the offshore workforce, excluding two organizations

(Naviera Bourbon Tamaulipas and Les Abeilles). In order to exclude

weekends, the following conservative approach was applied this

year: training courses lasting less than fi ve days were considered as

calendar days and, for training courses of more than fi ve days, only

the business days were considered.

The reporting of the absenteeism rate covers all directly contracted

onshore personnel (payroll), i.e. 85% of the onshore workforce,

in theory without excluding any subsidiaries. The reporting of the

absenteeism rate covers all directly contracted offshore personnel

(excluding the subsidiaries Naviera Bourbon Tamaulipas and

Les Abeilles) on a permanent contract (permanent contract payroll),

i.e. 25% of offshore workforce.

The reasons for absence included in the calculation of absenteeism

rate are: illness, accident, unauthorized absence, absence for

industrial reasons (strike, etc.). Unpaid leave is also included for

onshore personnel only.

Accidentology indicators (LTIR, TRIR) are calculated using the

OSHA’s (Occupational Safety and Health administration) benchmark.

Accidents giving rise to disembarkation for medical reasons are not

classified as LWC if the seafarer is able to resume work the day after

the accident. Work-related accidents recognized by the competent

national authorities are counted only if their characteristics are also

confirmed according to the rules defined by the standards of the

OCIMF.

Formula for calculating hours worked by offshore personnel:

for subsidiaries for which all activities of offshore personnel are

entered in OCS HR: Number of days of working activity of offshore

personnel * 24 hours of work per day.

For the other subsidiaries having offshore personnel: number of days

when the vessel is in the fleet* 24 hours of work per day x theoretical

average number of persons on board x 105%. The theoretical

average number of persons on board is defined in a table depending

on the vessel sub-type and status.

Formula for calculating the hours worked by onshore personnel:

8 hours of work per day x average workforce over the year, pro-rated

on a full-time/part-time basis, x number of theoretical days worked.

The number of theoretical days worked is defined in a table based

on the legislation and collective agreements in force in each country

where onshore personnel work. It excludes weekend days, national

holidays and annual leave.

In terms of occupational illnesses, the scope covers the entire Group,

i.e. 100% of the workforce at the end of the period.

6.4.4 Environmental indicators

The group ’s environmental performance has been followed on the

basis of relevant indicators with regard to its activities.

The indicators have been calculated on the following principles:

3 CO2: fuel consumption, with an applied mass coefficient of 3.206,

in compliance with circular MEPC/47111 of the International

Maritime Organization (OMI). Fuel consumption is reported using

the Surfer Reporting Application (SRA) and the Operational Data

Application (ODA) by seagoing personnel;

3 SOx emissions are calculated on the basis of fuel use and the

average sulfur rate;

3 NOx emissions are calculated on the basis of engine rating, hours

of machine operation, load factor and emission factor of each

engine;

3 the fuel density is reported by crew or, failing this, estimated using

the ratio 0.85 metric ton/m3.

6.4.5 Additional information on the application of the provisions of Article L. 225-102 of the French Commercial Code

Given the specific nature of its business, BOURBON does not

consider the following issues referred to in Article L. 225-102

of the French Commercial Code to be applicable, in view of their

irrelevance with regard to the group ’s operations: consumer health

and safety, consumption of raw materials, land use, noise pollution,

circular economy, food waste, tackling food poverty, animal welfare,

and responsible, fair and sustainable food.


MANAGEMENT REPORT

3

BOURBON Corporation SA and its shareholders

7. BOURBON CORPORATION SA AND ITS SHAREHOLDERS

7.1 SHARE CAPITAL AND SHAREHOLDER BASE

As at January 1, 2018, the first day of the fiscal year, the share capital

of BOURBON Corporation SA amounted to €49,227,780, divided

into 77,499,214 fully paid-up shares.

The share capital as at December 31, 2018 was €49,227,780,

divided into 77,499,214 shares of the same class and representing

95,414,800(1) theoretical voting rights (95,278,919 voting rights for

the Shareholders’ Meeting, the difference corresponding to the

number of shares held by the Company).

Therefore, the breakdown of the BOURBON Corporation SA shareholder base as at December 31, 2018 was as follows:

SHAREHOLDERNUMBER OF

SHARES % OF CAPITAL

NUMBER OF SHARES AND % OF THEORETICAL

VOTING RIGHTS***

NUMBER OF SHARES AND % OF ACTUAL VOTING

RIGHTS***

Jacques de Chateauvieux & related companies* 40,886,122 52.76% 41,177,031 43.16% 41,177,031 43.22%

Henri de Chateauvieux & related companies** 6,130,370 7.92% 12,259,236 12.85% 12,259,236 12.87%

Total Collectively 47,016,492 60.68% 53,436,267 56.00% 53,436,267 56.08%

Monnoyeur SA 4,398,813 5.68% 4,398,813 4.61% 4,398,813 4.62%

Treasury shares 135,881 0.18% 135,881 0.14% 0 0.00%

Employees 528,294 0.68% 528,294 0.55% 528,294 0.55%

Public 25,419,734 32.80% 36,915,545 38.69% 36,915,545 38.74%

TOTAL 77,499,214 100.00% 95,414,800 100.00% 95,278,919 100.00%

* Jacques de Chateauvieux & related companies = JACCAR Holdings + Cana Tera SCA + Jacques de Chateauvieux.

** Henri de Chateauvieux & related companies = Mach Invest SAS + Mach Invest International + Henri de Chateauvieux.

*** Application of Law No. 2014-384 of March 29, 2014 designed to recapture the real economy, known as the “Florange Law”, as of April 3, 2016:

registered shares held for more than two years receive double voting rights.

7.2 DIVIDENDS PAID FOR THE LAST THREE FISCAL YEARS

We remind you that the dividends distributed for the last three years were as follows:

NUMBER OF SHARES AT YEAR-END

NET DIVIDEND PER SHARE(1)

(in euros)

TOTAL AMOUNT DISTRIBUTED(2)

(in euros)

2015 71,606,331 1.00 71,204,986(3)

2016 76,342,603 0.25 18,972,748(4)

2017 77,499,214 0.00 0.00

(1) Dividend eligible for the 40% tax deduction applicable to individual (non-corporate) shareholders who are French tax residents, as provided for in

Article 158-3-2 of the French General Tax Code.

(2) Treasury shares do not carry entitlement to dividends.

(3) Of which €45,752,387 paid in shares.

(4) Of which €10,502,027 paid in shares.


MANAGEMENT REPORT3 BOURBON Corporation SA and its shareholders

7.3 TRANSACTIONS IN THE COMPANY’S SECURITIES

7.3.1 Share buyback program

Portion of the capital held by the Company and breakdown by objective for holding the Company’s treasury sharesAt December 31, 2018, the Company held 135,881 treasury shares, representing 0.18% of the capital.

REASON FOR HOLDING THE TREASURY SHARESNUMBER OF SHARES

HELD AT YEAR-ENDPURCHASE VALUE

(in € thousands)PAR VALUE

(in € thousands)

Stimulation of the market by an investment service provider 75,513 303 48

Covering stock options or other employee shareholding systems 60,368 729 38

External expansion operations None - -

Hedging securities giving access to the capital None - -

Cancelation None - -

TOTAL 135,881 1,032 86

Transactions made by the Company on treasury shares during the year, by acquisition, disposal or transferAt December 31, 2018, BOURBON Corporation held 135,881

shares, including 75,513 via CM-CIC Securities, an investment

service provider responsible for market stimulation under the AMAFI

charter, in the context of its management of the liquidity contract.

As part of this liquidity contract, 722,905 shares were thus acquired

at an average purchase price of €5.39, while 714,164 shares were

sold at an average price of €5.44. These transactions did not incur

any dealing costs. It is also noted that no derivative products were

used to conduct these transactions and that no put or call position

was open on December 31, 2018.

Description of the share buyback program proposed to the Combined Shareholders’ Meeting on June 28, 2019The Shareholders’ Meeting, ruling under the conditions of majority

and quorum required for Ordinary General Meetings and in the light of

the report of the Board of Directors, authorizes the Board for a period

of eighteen months, as provided for under Articles L. 225- 209 et

seq. of the French Commercial Code, to proceed with the purchase,

on one or more occasions and at any periods it chooses, of the

Company’s shares, within the limit of 5% of the overall number of

shares composing the share capital, this ceiling being adjusted where

necessary to take into account possible increases or reductions in

the capital in the course of the program.

This authorization terminates the previous authorization granted to

the Board by the Shareholders’ Meeting of May 30, 2018 in its 15th

ordinary resolution.

The shares may be purchased for any purpose permitted by law,

including:


BOURBON Corporation SA shares through an investment

service provider, operating within the scope of a liquidity contract

in accordance with the AMAFI Code of professional practice as

approved by the French Financial Markets Authority;

3 holding shares to cover stock option plans and/or bonus share

allotment plans (or similar plans), for the benefit of employees and/

or representatives of the group , and to allow allotments of shares

within the scope of a company or group savings plan (or similar

plan) or as part of employee participation in the results of the

Company and/or any other form of share allotment to employees

and/or corporate officers of the group ;

3 the possible canceling of the shares thus acquired, subject to

the authorization to be granted by the shareholders at this

Shareholders’ Meeting in its fourteenth extraordinary resolution.

These share purchases may be transacted by any means, including

acquisition of blocks of shares, at such times as the Board may

choose.



The maximum purchase price is fixed at €12 per share. In the

event of any transaction affecting the capital, notably stock





the transaction).

The ceiling for the transaction is thus fixed at €46,463,304.

The Shareholders’ Meeting grants full powers to the Board of




As at December 31, 2018, the latest parent company fi nancial

statements showed the Company had free reserves of €756,344

thousand.

By law, the amount of the program cannot be higher than this figure

until the closure of the parent company financial statements for the

current year.


MANAGEMENT REPORT

3

Report explaining the Board of Directors’ resolutions proposed to the combined shareholders’ meeting of June 28, 2019

At January 31, 2019, the breakdown by objective of the treasury shares held was as follows:

REASON FOR HOLDING THE TREASURY SHARES NUMBER OF SHARES HELD

Stimulation of the market by an investment service provider 74,041

Hedging stock options or other employee shareholding systems 60,368

External expansion operations None

Hedging securities giving access to the capital None

Cancelation None

TOTAL 134,409

7.3.2 Trading in the Company’s securities by the persons referred to in Article L. 621- 18-2 of the French Monetary and Financial Code

The Company has no knowledge of any transaction performed

during 2018 on the Company’s stock by the persons referred to in

Article L. 621-18-2 of the French Monetary and Financial Code.

7.3.3 Employee shareholding

As at December 31, 2018, through the employees’ mutual fund

“Bourbon Expansion”, 679 employee shareholders held a total of

528,294 shares, representing 0.68% of the share capital.

7.4 FACTORS THAT COULD HAVE AN IMPACT IN THE EVENT OF A PUBLIC OFFER

The factors that may have an impact in the event of a public

offer on the Company’s shares are set out in the Board of

Directors’ report on Corporate governance.

8. REPORT EXPLAINING THE BOARD OF DIRECTORS’ RESOLUTIONS PROPOSED TO THE COMBINED SHAREHOLDERS’ MEETING OF JUNE 28, 2019

8.1 APPROVAL OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018

The shareholders are asked to approve the parent company financial statements for the year ended December 31, 2018, together with the

consolidated financial statements for the year ended on that same date.

8.2 APPROPRIATION OF NET INCOME

The Board moves that the Meeting appropriate the net income for the period as follows:

Origin

Loss for the fi scal year €1,336,057.45

Retained earnings €30,000,000.00

Appropriation

Legal reserve €0



MANAGEMENT REPORT3 Report explaining the Board of Directors’ resolutions proposed to the combined shareholders’ meeting of June 28, 2019

8.3 RELATED PARTY AGREEMENTS

During the 2018 fiscal year, no new regulated agreement was

authorized by the Board of Directors. The Shareholders’ Meeting is

asked to take note of this.

In accordance with the law, the Board of Directors conducted the

annual review of agreements entered into and authorized in previous

years the performance of which continued during the year ended

December 31, 2018. These agreements are presented to the

Shareholders’ Meeting in the related Statutory Auditors’ special

report.

The Statutory Auditors’ special report on related party agreements

and commitments is available in the 2018 Registration Document.

8.4 DIRECTORS’ TERMS OF OFFICE

The terms of offi ce of Board members Wang Xiaowei,

Jacques d’Armand de Chateauvieux and Christian Lefèvre expire at

the end of this Shareholders’ Meeting. The Board, acting on the advice

of the Nominating, Compensation and Governance Committee, and

in view of their length of service on the Board and their knowledge of

the Company, recommends that the Shareholders’ Meeting proceed

with:

3 renewal of the term of offi ce of Wang Xiaowei as Director;

3 renewal of the terms of offi ce of Jacques d’Armand de

Chateauvieux and Christian Lefèvre as Directors.

The Directors’ biographies can be found in note 3.2.2 of the

management report in the 2018 Registration Document.

8.5 APPROVAL OF THE PRINCIPLES AND CRITERIA FOR DETERMINING, ALLOCATING AND GRANTING THE COMPONENTS OF EXECUTIVE DIRECTOR COMPENSATION (CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER)

In application of Article L. 225-37-2 of the French Commercial Code,

the Board proposes that you read the policy on the compensation

for Executive Directors and approve the principles and criteria for

determining, allocating and granting fixed, variable and exceptional

elements composing the total compensation and benefits of any

kind attributable to the Executive Directors (Chairman of the Board

of Directors and Chief Executive Offi cer) in respect of their offi ce, as

described in the report on corporate governance on pages 60 et

seq. of the Company’s 2018 Registration Document.

8.6 APPROVAL OF THE COMPONENTS OF COMPENSATION PAID OR GRANTED IN RESPECT OF THE FISCAL YEAR ENDED DECEMBER 31, 2018 TO JACQUES D’ARMAND DE CHÂTEAUVIEUX, CHAIRMAN OF THE BOARD OF DIRECTORS, GAËL BODÉNÈS, CHIEF EXECUTIVE OFFICER, AND ASTRID DE LANCRAU DE BRÉON, CHIEF FINANCIAL OFFICER

In application of Article L. 225-100 of the French Commercial

Code, we submit to your vote the fixed, variable and exceptional

components composing the total compensation and benefits of any

kind paid or granted in respect of the fiscal year ended December

31, 2018 to Jacques d’Armand de Châteauvieux, Chairman of the

Board of Directors, Gaël Bodénès, Chief Executive Offi cer, and Astrid

de Lancrau de Bréon, Chief Financial Officer until July 10, 2018.

For more information, please refer to the report on corporate

governance shown on pages 60 et seq. of the Company’s 2018


8.7 SHARE BUYBACK PROGRAM – CANCELLATION OF TREASURY SHARES

The Meeting is asked:

3 to authorize, for a period of 18 months, a new treasury share

buyback program limited to 5% of the share capital. The

maximum purchase price would be €12 per share, thus giving a

maximum total budget of €46,463,304.

These purchases may be made with a view to:


BOURBON Corporation SA shares through an investment service

provider, operating within the scope of a liquidity contract in

accordance with regulatory practice;

3 hold shares to cover stock option plans and/or bonus share


or representatives of the group , and to allow allotments of shares




and/or representatives of the group ;

3 the possible canceling of the shares thus acquired, subject to the

authorization to be granted by this Shareholders’ Meeting in its

fourteenth extraordinary resolution.



choose.




MANAGEMENT REPORT

3

Report explaining the Board of Directors’ resolutions proposed to the combined shareholders’ meeting of June 28, 2019

The Shareholders’ Meeting is further requested to authorize the

Board, in view of the reason for the cancellation, to cancel, as it sees

fit and on one or more occasions, subject to the limit of 10% of the

share capital in any given 24-month period, any or all of the shares

that the Company holds or may come to hold after the repurchases

made under its buyback program and to reduce the share capital

accordingly.

This cancellation authorization would be given for a period of 24

months from the date of the Shareholders’ Meeting.

8.8 DELEGATION OF FINANCIAL AUTHORITY

You are asked to vote on the renewal of the following delegations of

fi nancial authority and similar authorization:

Authorization for the Board of Directors to award existing and/or new bonus shares to salaried members of staff and/or certain corporate officers of the Company or of related companies.

We propose that you authorize the Board of Directors, for a period

of 38 months, to proceed, under Article L. 225- 197-1 of the French

Commercial Code, with the award of new bonus shares resulting

from a capital increase by incorporating reserves, premiums or

profi ts, or of existing shares.

The benefi ciaries of these awards could be:

3 salaried members of staff and/or corporate offi cers of the

Company or of related companies or groups (as defi ned by

Articles L. 225-197-1 and L. 225-197-2 of the French Commercial

Code) or certain categories thereof.

The total number of bonus shares awarded may not exceed 5% of

the share capital as of the date of the Board’s decision to award the

shares.

The total number of bonus shares that may be awarded to the

Company’s corporate offi cers may not exceed 1% of the share

capital within this overall limit. In addition, in the event of bonus

shares being awarded to corporate offi cers, the fi nal award of such

shares shall be subject to performance conditions.

The award of the shares to the benefi ciaries would become fi nal at

the end of a vesting period set by the Board of Directors, namely (i)

at the end of a one-year vesting period, the benefi ciaries then having

to retain said shares for a minimum period of one year from the fi nal

award of said shares, such period being decided by the Board, or (ii)

at the end of a vesting period of two or more years, the benefi ciaries

not then being subject to a lock-up period if the Board of Directors

should see fi t to waive this requirement.

However, the shares would become fully vested before the end

of the vesting period in the event of the benefi ciary’s invalidity,

corresponding to the classifi cation in the second or third categories

defi ned by Article L. 341-4 of the French Social Security Code.

The existing shares that may be awarded pursuant to this resolution

shall be acquired by the Company either in accordance with

Article L. 225-208 of the French Commercial Code or, where relevant,

as part of a share buyback program authorized pursuant to the

thirteenth ordinary resolution adopted by this Shareholders’ Meeting

under Article L. 225-209 of the French Commercial Code, or as part

of any share buyback program applicable prior or subsequent to the

adoption of this resolution.

This authorization would automatically entail the waiver of your

preferential subscription right for new shares issued by incorporating

reserves, premiums and profi ts.

Therefore, subject to the abovementioned limits, the Board of

Directors would be vested with all powers – which it may further

delegate – to establish the terms and conditions and, where

applicable, the criteria for the share award, identify the benefi ciaries

from among the persons meeting the abovementioned criteria and

decide on the number of shares to be awarded to each one, set

the vesting period and lock-up period, determine the impact on

the rights of the benefi ciaries of corporate actions or transactions

likely to affect the value of the shares to be awarded and executed

during the vesting and lock-up periods, if necessary formally

acknowledge the existence of suffi cient reserves and proceed

at each award with the transfer to a restricted reserve account of

the sums required for payment of the new shares to be awarded,

authorize the capital increase(s) by incorporating reserves, premiums

or profi ts, corresponding to the issuance of the new bonus shares

awarded, acquire the necessary shares under the share repurchase

program and allocate them to the share award plan, and in general

do whatever may be required under the applicable regulations to

implement this authorization.

Delegation of authority to the Board of Directors to increase the share capital by issuing ordinary shares and/or marketable securities convertible to equity, with cancellation of preferential subscription rights, for the benefit of members of a Company savings plan pursuant to Articles L. 3332-18 et seq. of the French Labor Code.

This resolution is put to a shareholder vote in accordance with

the provisions of Article L. 225-129-6 of the French Commercial

Code, according to which the Extraordinary Shareholders’ Meeting

is required to vote every three years on a resolution for a capital

increase under the conditions laid down in Articles L. 3332-18 et

seq. of the French Labor Code.

In connection with this delegation of authority, we propose that you

authorize the Board of Directors to increase the share capital on one

or more occasions by issuing ordinary shares or marketable securities

convertible to equity in the Company for the benefi t of members of

one or more company or group savings plans established by the

Company and/or its related French or foreign companies, pursuant

to the conditions set forth in Article L. 225-180 of the French

Commercial Code and Article L. 3344-1 of the French Labor Code.


MANAGEMENT REPORT3 Report explaining the Board of Directors’ resolutions proposed to the combined shareholders’ meeting of June 28, 2019

Pursuant to Article L. 3332-21 of the French Labor Code, the Board

of Directors may award the benefi ciaries, for no consideration, new

or existing shares or other securities convertible to equity in the

Company, in connection with (i) the employer contribution that might

be paid pursuant to the rules of company or group savings plans,

and/or (ii) if applicable, the discount.

In accordance with the law, the Shareholders’ Meeting would waive

the preferential subscription rights of shareholders.

The maximum nominal amount of capital increases carried out on the

basis of this authorization would be €5,000,000. Said amount would

be separate from any other limit envisaged in connection with the

delegation of authority for capital increases. Added to this amount,

if necessary, would be the additional value of ordinary shares issued

to preserve (as required by law and any contractual provisions

stipulating other cases of adjustment) the rights of holders of

marketable securities convertible to the Company’s equity securities.

This authorization would be valid for 26 months.

It is stipulated that, in accordance with Article L. 3332- 19 of the

French Labor Code, the price of the shares to be issued may not

be more than 20% (or 30%, if the lock-up period provided for by the

plan pursuant to Articles L. 3332-25 and L. 3332-26 of the French

Labor Code is 10 years or more) lower than the average opening

price of the 20 trading sessions preceding the Board’s decision

to proceed with the capital increase and issue the corresponding

shares, nor higher than such average.

Subject to the abovementioned limits, the Board of Directors would

have the necessary powers – which it may further delegate – to set

the terms and conditions of the issue(s), formally record the resulting

capital increases, amend the bylaws accordingly, deduct (on its own

initiative) the costs of capital increases from the amount of related

premiums and withdraw, from this amount, the necessary funds to

bring the legal reserve up to one-tenth of the new capital following

each increase, and, more generally, do whatever is required in

such matters.

8.9 REALIGNMENT OF THE COMPANY’S BYLAWS

It is moved that the Shareholders’ Meeting:

3 delegate to the Board of Directors the ability to align the Company’s

bylaws with legislative and regulatory provisions, subject to

ratification of such modifications by the next Extraordinary

General Meeting;

3 to align Article 11 of the Company’s bylaws “Rights and obligations

attached to shares – Indivisibility” with Article 787 B of the French

General Tax Code (applicable in the case of gifts subject to

usufruct, provided that the usufructuary’s voting rights are limited

by the bylaws to decisions concerning the allocation of profi ts);

amending section VII of said article accordingly, the remainder of

the article being unchanged, and this in order to best meet the

requirements of the tax administration in the event of division of

share ownership and application of the provisions relating to the

partial exemption provided for in that article (Dutreil agreement).

Our recommendation is that you approve the resolutions proposed

to this meeting.

The Board of Directors.


MANAGEMENT REPORT

3

Financial results of the parent company over the last fi ve years

FINANCIAL RESULTS OF THE PARENT COMPANY OVER THE LAST FIVE YEARS

Description 2018 2017 2016 2015 2014

Capital stock at year-end

Capital (in € thousands) 49,228 49,228 48,493 45,485 47,361

Number of ordinary shares outstanding 77,499,214 77,499,214 76,342,603 71,606,331 74,559,688

Number of outstanding preferred dividend shares

(without voting rights) - - - - -

Maximum number of future shares to be issued

- by conversion of bonds - - - - -

- by exercise of subscription rights and award of

bonus shares 764,000 793,700 3,542,909 3,925,650 6,193,275

Operation and net income for the period (in €

thousands)

Revenues excluding taxes - - - - -

Income before tax, employee profit-sharing and

amortization, depreciation and provisions (7,856) 38,100 22,295 53,114 50,593

Income tax (8,780) (29,337) (10,909) (11,980) (17,984)

Employee profit-sharing for the fiscal year - - - -

Income after tax, employee profit-sharing

and amortization, depreciation and provisions (1,336) 71,925 28,371 63,627 71,726

Distributed net income -(1) -(2) 18,979(3) 71,207 71,580(5)

Earnings per share (in €)

Income after tax, employee profit-sharing

but before amortization, depreciation and provisions (0.02) 0.87 0.43 0.91 0.92

Income after tax, employee profit-sharing and

amortization, depreciation and provisions (0.02) 0.93 0.37 0.89 0.96

Dividend per share 0.00(1) 0.00(2) 0.25(3) 1.00(4) 1.00(5)

Personnel

Average number of employees during the fiscal year 3 2 1 - -

Amounts paid in respect of employment benefits for

the fiscal year (social security, social welfare, etc.) 397 170 19 - -

(1) No distribution of dividends as proposed by the Board of Directors on March 13, 2019.

(2) No distribution of dividends as proposed by the Board of Directors on March 14, 2018.

(3) i.e. €0.25 per share as recommended by the Board of Directors on March 13, 2017, after deducting dividends attached to treasury shares.

(4) i.e. €1 per share as recommended by the Board of Directors on March 7, 2016 after deducting dividends attached to treasury shares.

(5) i.e. €1 per share as recommended by the Board of Directors on February 23, 2015, after deducting dividends attached to treasury shares.


MANAGEMENT REPORT3 Report of one of the Statutory Auditors, appointed as independent third party,

on the consolidated non-fi nancial statement published in the group management report

REPORT OF ONE OF THE STATUTORY AUDITORS, APPOINTED AS INDEPENDENT THIRD PARTY, ON THE CONSOLIDATED NON-FINANCIAL STATEMENT PUBLISHED IN THE GROUP MANAGEMENT REPORT

This is a free English translation of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English-

speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional standards

applicable in France.

For the year ended December 31, 2018

To the Shareholders,

In our capacity as Statutory Auditor of BOURBON Corporation, appointed as independent third party and accredited by COFRAC under

number 3-1048 (scope of accreditation available at www.cofrac.fr), we hereby report to you on the consolidated non fi nancial statement for the

year ended December 31, 2018 (hereinafter the “Statement”), presented in the group management report pursuant to the legal and regulatory

provisions of Articles L. 225 102-1, R. 225-105 and R. 225-105-1 of the French Commercial Code (Code de commerce).

COMPANY’S RESPONSIBILITY

The Board of Directors is responsible for preparing a Statement pursuant to legal and regulatory provisions, including a presentation of the

business model, a description of the main extra-fi nancial risks, a presentation of the policies implemented with respect to these risks as well

as the results of these policies, including key performance indicators. The Statement was prepared by applying the company’s procedures

(hereinafter the “Guidelines”), summarized in the Statement and available on the company’s website or on request from its headquarters.

INDEPENDENCE AND QUALITY CONTROL

Our independence is defi ned by Article L. 822-11-3 of the French Commercial Code and the French Code of Ethics for Statutory Auditors

(Code de déontologie). In addition, we have implemented a system of quality control including documented policies and procedures regarding

compliance with the ethical requirements, French professional standards and applicable legal and regulatory requirements.

RESPONSIBILITY OF THE STATUTORY AUDITOR APPOINTED AS INDEPENDENT THIRD PARTY

Based on our work, our responsibility is to express a limited assurance conclusion on:

3 the compliance of the Statement with Article R. 225-105 of the French Commercial Code;

3 the fairness of the information provided pursuant to part 3 of sections I and II of Article R. 225 105 of the French Commercial Code, i.e. the

outcomes of policies, including key performance indicators, and measures relating to the main risks, hereinafter the “Information.”

However, it is not our responsibility to provide any conclusion on:

3 the company’s compliance with other applicable legal and regulatory provisions, particularly with regard to the duty of vigilance, anti-

corruption and taxation;

3 the compliance of products and services with the applicable regulations.

NATURE AND SCOPE OF PROCEDURES

We performed our work in accordance with Articles A. 225 1 et seq. of the French Commercial Code defi ning the conditions under which

the independent third party performs its engagement and the professional guidance issued by the French Institute of Statutory Auditors

(Compagnie nationale des commissaires aux comptes) relating to this engagement and with ISAE 3000 (Assurance engagements other than

audits or reviews of historical fi nancial information).

We conducted procedures in order to assess the Statement’s compliance with regulatory provisions, and the fairness of the Information:

3 We familiarized ourselves with the Group’s business activity, the report on the main social and environmental risks relating to this activity

and the impacts thereof with regard to the respect for human rights and the fi ght against corruption and tax evasion, together with the

subsequent policies and their results.


MANAGEMENT REPORT

3

Report of one of the Statutory Auditors, appointed as independent third party,


3 We assessed the suitability of the Guidelines in terms of their relevance, completeness, reliability, neutrality and clarity, taking into account,

where appropriate, best practices within the sector;

3 We verifi ed that the Statement covers each category of information stipulated in section III of Article L. 225 102 1 governing social and

environmental affairs, the respect for human rights and the fi ght against corruption and tax evasion.

3 We verifi ed that the Statement includes an explanation justifying the absence of information required by paragraph 2 of section III of Article

L. 225-102-1.

3 We verifi ed that the Statement presents the business model and the main risks relating to the Group’s business activity, including, where

relevant and proportionate, the risks generated by its business relations, products or services as well as policies, measures and outcomes,

including key performance indicators.

3 We verifi ed that, when relevant to the main risks or policies presented, the Statement presents the information stipulated in section II of

Article R. 225-105.

3 We assessed the process of selecting and validating the main risks.

3 We inquired as to the existence of internal control and risk management procedures set up by the company.

3 We assessed the consistency of the results and key performance indicators used with regard to the main risks and policies presented.

3 We verifi ed that the Statement includes a clear and reasoned explanation justifying the absence of policy regarding one or more of these

risks.

3 We verifi ed that the Statement covers the consolidated scope, i.e. all companies within the consolidation scope in accordance with

Article L. 233-16, with the limits specifi ed in the Statement.

3 We assessed the collection process set up by the entity to ensure the completeness and fairness of the Information.

3 For the key performance indicators and other quantitative outcomes(1) that in our judgment were of most signifi cance, we carried out:

3 analytical procedures that consisted in verifying the correct consolidation of collected data as well as the consistency of changes thereto;

3 substantive tests, on a sampling basis, that consisted in verifying the proper application of defi nitions and procedures and reconciling

data with supporting documents. These procedures were conducted for a selection of contributing entities(2) represents 27% of the

headcount under contract.

3 We consulted documentary sources and conducted interviews to corroborate the qualitative information (measures and outcomes) that in

our judgment were of most signifi cance(3);

3 We assessed the overall consistency of the Statement in relation to our knowledge of the company.

We believe that the procedures we have performed, based on our professional judgment, are suffi cient to provide a basis for a limited

assurance conclusion; a higher level of assurance would have required us to carry out more extensive procedures.

MEANS AND RESOURCES

Our work engaged the skills of six people between December 2018 and April 2019.

To assist us in conducting our work, we referred to our corporate social responsibility and sustainable development experts. We conducted

around twenty interviews with people responsible for preparing the Statement.

(1) Social: Total Group workforce as at December 31, 2018 (staff under contract as well as seagoing personnel hired on a non-contractual basis working

rotating shifts and due back on board); Distribution of the workforce between internal agencies and external agencies; Number of hiring and departures by

category (onshore personnel / seagoing personnel); Number of training hours by category (onshore personnel / seagoing personnel); Absenteeism rate by

category (onshore personnel / offshore personnel); Percentage of subsidiaries with their own salary scales in place; Percentage of subsidiaries which have

their onshore and/or seagoing personnel covered by private medical insurance; Percentage of subsidiaries declaring as referring to collective agreements

for managing the working time; Percentage of subsidiaries who use part-time working; Percentage of subsidiaries proposing the use of teleworking;

Percentage of the subsidiaries declared that they had adapted the hours of their onshore personnel, notably with the use of teleworking and part-time ;

Number of agreements or amendments to existing agreements signed in 2018. Total Recordable Incidents Rate (TRIR); Lost Time Injury Rate (LTIR); Number

of occupational illnesses reported to the Group in 2018.

Societal: Percentage of local workforce for each operating zone; Percentage of local procurement in purchases of parts and supplies; Percentage of external

manning and ship repair yards in the whole group purchases.

(2) Bourbon Interoil Nigeria Limited (BINL) and Bourbon Offshore Surf (BOS)

(3) Focus on security


MANAGEMENT REPORT3 Report of one of the Statutory Auditors, appointed as independent third party,


CONCLUSION

The procedures for collecting and consolidating environmental data (in particular energy, air emissions and waste) are not suffi ciently

documented to ensure the completeness and reliability of the results and key performance indicators in this fi eld. We have not been able to

carry out suffi cient work on this information.

Based on our work, nothing has come to our attention that cause us to believe that the non-fi nancial statement does not comply with the

applicable regulatory provisions and that the Information, taken as a whole, is not fairly presented in accordance with the Guidelines.

Paris-La Défense, April 26th, 2019

One of the statutory auditors,

Deloitte & Associés

Christophe Perrau Julien Rivals

Partner Partner, Sustainability Services


CONSOLIDATED FINANCIAL STATEMENTS4

STATEMENT OF FINANCIAL POSITION 112

STATEMENT OF COMPREHENSIVE INCOME 113

STATEMENT OF CONSOLIDATED CASH FLOWS 115

STATEMENT OF CHANGES IN EQUITY 116

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 120

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS (YEAR ENDED DECEMBER 31, 2018) 189


CONSOLIDATED FINANCIAL STATEMENTS4 Statement of fi nancial position

STATEMENT OF FINANCIAL POSITION

(in € millions) NOTES 12.31.18 12.31.17

Goodwill 3.1 19.2 25.2

Intangible assets 3.2 11.8 13.2

Property, plant and equipment 3.3 1,638.2 1,923.2

Investments in affiliates under the equity method 3.4 23.7 19.9

Non-current financial assets 3.5 17.3 20.6

Deferred taxes 3.15 11.5 11.5

Total non-current assets 1,721.7 2,013.5

Inventories and work in progress 3.6 51.4 65.2

Trade and other receivables 3.7 335.9 347.6

Current financial assets 3.7 3.7 45.0

Other current assets 3.7 17.4 27.5

Cash and cash equivalents 3.8 217.1 243.6

Total current assets 625.5 728.9

Non-current assets held for sale 12.0 -

TOTAL ASSETS 2,359.2 2,742.4

Capital 3.9 49.2 49.2

Share premiums 100.8 100.8

Consolidated reserves, group share (including profi t for the year) (24.5) 421.3

Total shareholders’ equity, group share 125.5 571.3

Non-controlling interests 75.5 72.3

Total shareholders’ equity 201.0 643.6

Borrowings and financial liabilities 3.13 44.8 183.8

Employee benefi t obligations 3.12 15.2 15.0

Other provisions 3.12 62.3 69.4

Deferred taxes 3.15 22.8 22.8

Other non-current liabilities 8.7 15.7

Total non-current liabilities 153.7 306.8

Borrowings and financial liabilities (< one year) 3.13 1,406.0 1,348.5

Bank overdrafts and short-term lines 3.13 43.9 76.4

Provisions (< one year) 3.12 69.7 25.8

Trade and other payables 478.7 334.7

Tax liabilities 2.4 3.8

Other current liabilities 3.7 2.8

Total current liabilities 2,004.5 1,792.0

Liabilities directly associated with non-current assets classified as held for sale - -

Total liabilities 2,158.2 2,098.8

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2,359.2 2,742.4


CONSOLIDATED FINANCIAL STATEMENTS

4

Statement of comprehensive income

STATEMENT OF COMPREHENSIVE INCOME

(in € millions) NOTES 2018 2017

Revenues 4 633.9 793.6

Direct costs excluding bareboat leases 4 (395.9) (456.4)

General and administrative costs 4 (107.5) (97.2)

Bareboat leases 4 (148.3) (164.4)

Capital gains 4 1.3 (0.2)

EBITDA (16.5) 75.4

Increases and reversals of amortization, depreciation and provisions (228.6) (288.9)

Impairment (75.7) (196.8)

Capital gains on equity interests sold 0.1 -

Operating income (EBIT) (320.7) (410.3)

Share of results from affiliates under the equity method 3.4 0.5 3.7

Operating income (EBIT) after share of results from companies under equity method (320.2) (406.6)

Cost of net debt 3.14 (60.1) (54.6)

Other financial expenses and income 3.14 (56.5) (134.9)

Income from current operations before income tax (436.8) (596.1)

Income tax 3.16 (14.5) (12.8)

Net income before discontinued operations’ net income (451.3) (608.9)

Net income from discontinued operations/operations held for sale - -

NET INCOME (451.3) (608.9)

Group share (457.8) (576.3)

Non-controlling interests 6.5 (32.6)

Basic net earnings per share 5.2.1 (5.92) (7.47)

Diluted net earnings per share 5.2.2 (5.92) (7.45)

Net earnings per share – excluding income from discontinued operations/

operations held for sale 5.2.1 (5.92) (7.47)

Net diluted earnings per share – excluding income from discontinued

operations/operations held for sale 5.2.2 (5.92) (7.45)

Net dividend allocated to each share adjusted -(1) -

(1) Further to the proposal made by the Board of Directors’ Meeting of March 13, 2019.


CONSOLIDATED FINANCIAL STATEMENTS4 Statement of comprehensive income


Net income for the period (451.3) (608.9)

Other comprehensive income 9.5 (16.2)

Of which share of other comprehensive income from affiliates under

the equity method 0.2 (1.6)

Other components of comprehensive income that can be reclassified in theincome statement in subsequent periods

Change in the fixed assets revaluation reserve - -

Tax eff ect - -

Profits and losses from the currency translation of the financial statements

of foreign subsidiaries 9.2 (31.0)

Profits and losses from the revaluation of available-for-sale financial assets - -

Tax eff ect - -

Eff ective portion of gains and losses on cash flow hedge instruments 3.18.2 0.2 18.3

Tax eff ect - (3.7)

Other components of comprehensive income that cannot be reclassified in the income statement in subsequent periods

Actuarial diff erences 3.12 0.1 0.2

Tax eff ect - -

TOTAL COMPREHENSIVE INCOME (441.8) (625.1)

Of which group share (450.5) (588.6)

Of which portion made up of non-controlling interests 8.7 (36.5)



4

Statement of consolidated cash fl ows

STATEMENT OF CONSOLIDATED CASH FLOWS


Consolidated net income (451.3) (608.9)

Share of results from affiliates under the equity method 3.4 (0.5) (3.7)

Tax (expense)/income 3.16 14.5 12.8

Net amortization, depreciation and provisions 284.8 490.3

Gains and losses from changes in fair value 55.8 39.3

Calculated income and expenses related to stock-options and similar

benefits 3.10 - 1.3

Gains and losses on disposals (1.6) 0.3

Income tax paid (8.2) (13.0)

Dividends received from affiliates under the equity method 3.4 0.2 1.5

Restatement of non-cash rental expense 148.3 92.5

Other 1.5 27.4

Cash flows 43.5 39.7

Eff ect of changes in working capital 32.4 56.5

Dividends received (0.1) (0.1)

Cost of net debt 3.14 60.1 54.6

Cash flows from operating activities (A) 135.8 150.7

Acquisition of consolidated companies, net of cash acquired (0.1) -

Sale of consolidated companies, including cash transferred - -

Eff ect of other changes in the consolidation scope (0.2) -

Payments for property, plant and equipment and intangible assets 3.2 -3.3 (47.1) (47.1)

Proceeds from disposals of property, plant and equipment and intangible

assets 3.2 -3.3 13.5 24.2

Payments for acquisitions of long-term financial assets (0.1) (0.0)

Proceeds from disposal of long-term financial assets 0.3 0.1

Dividends received 0.1 0.1

Change in loans and advances granted 2.0 20.5

Cash flows from investing activities (B) (31.7) (2.3)

Capital increase 1.0 -

Capital repayment - -

Net sales (acquisition) of treasury shares (0.0) (0.2)

Proceeds from borrowings 3.13 52.0 269.2

Repayments of borrowings 3.13 (127.3) (175.1)

Issue of Perpetual Deeply Subordinated Notes 3.9 - -

Dividends paid to parent company shareholders - (8.5)


Net financial interest paid (17.8) (56.2)

Cash flows from financing activities (C) (95.5) 21.6

Impact from the change in exchange rates (D) 2.4 (11.0)

Eff ect of changes in accounting principles and other reclassifications (D) (5.0) 20.0

Change in net cash (A) + (B) + (C) + (D) 6.0 179.0

Cash at beginning of period 167.2 (11.8)

Cash at end of period* 173.2 167.2

CHANGE IN CASH 6.0 179.0* of which:

- marketable and other securities 3.8 - -

- cash and cash equivalents 3.8 217.1 243.6

- bank overdrafts 3.13 (43.9) (76.4)


CONSOLIDATED FINANCIAL STATEMENTS4 Statement of changes in equity

STATEMENT OF CHANGES IN EQUITY

(in € millions) NOTES

CAPITAL AND RELATED RESERVES

CAPITAL

SHARE PREMIUM AND RESERVES

RELATED TO SHARE CAPITAL

RECLASSIFICATION OF TREASURY

SHARES

PERPETUAL DEEPLY

SUBORDINATED NOTES

Shareholders’ equity as of January 1, 2018 49.2 100.8 (1.2) 118.5

IFRS 9 Impact - - - -

Shareholders’ equity as of January 1, 2018 (restated) 49.2 100.8 (1.2) 118.5

Net income for the period - - - -

Other components of comprehensive income (net of tax): - - - -

Cash flow hedge 3.18.2 - - - -

Employee benefi t obligations 3.12 - - - -

Profits and losses from the currency

translation of the financial statements of

foreign subsidiaries - - - -

Comprehensive income for the period - - - -

Capital increase 3.9 - - - -

Dividends paid in cash - - - -

Dividends paid in shares - - - -

Capital repayment - - - -

Issue of Perpetual Deeply Subordinated Notes - - - -

Recognition of share-based payments 3.10 - - - -

Reclassification of treasury shares 3.11 - - 0.2 -

Other changes - - - 3.9

Total transactions with shareholders - - 0.2 3.9

SHAREHOLDERS’ EQUITY AS OF DECEMBER 31, 2018 49.2 100.8 (1.0) 122.4

The “Other changes” line includes the impact of transactions with certain non-controlling interests (see note 2.2.3).



4

Statement of changes in equity

UNREALIZED OR DEFERRED PROFIT/LOSS

OTHER RESERVES

AND INCOME

TOTAL SHAREHOLDERS’

EQUITY, GROUP SHARE

SHAREHOLDERS ‘EQUITY MADE

UP OF NON-CONTROLLING

INTERESTS

TOTAL CONSOLIDATED

SHAREHOLDERS’ EQUITY

RELATED TO CURRENCY

TRANSLATION DIFFERENCES

RELATED TO NET

INVESTMENT IN FOREIGN

OPERATIONS

RELATED TO ACTUARIAL

DIFFERENCES

CHANGE IN THE FAIR

VALUE OF AVAILABLE-

FOR-SALE ASSETS

CHANGE IN FAIR VALUE

OF HEDGE DERIVATIVES

(58.3) (4.8) (3.5) - 2.2 368.4 571.3 72.3 643.6

- - - - - (2.9) (2.9) - (2.9)

(58.3) (4.8) (3.5) - 2.2 365.4 568.4 72.3 640.7

- - - - - (457.8) (457.8) 6.5 (451.3)

7.0 - 0.1 - 0.2 - 7.3 2.2 9.5

- - - - 0.2 - 0.2 - 0.2

- - 0.1 - - - 0.1 - 0.1

7.0 - - - - - 7.0 2.2 9.2

7.0 - 0.1 - 0.2 (457.8) (450.5) 8.7 (441.8)

- - - - - - - - -

- - - - - - - (3.8) (3.8)

- - - - - - - - -

- - - - - - - - -

- - - - - - - - -

- - - - - - - - -

- - - - - (0.2) (0.0) - (0.0)

- - - - (2.4) 6.2 7.7 (1.8) 5.9

- - - - - 6.0 7.7 (5.6) 2.1

(51.3) (4.8) (3.4) - - (86.4) 125.5 75.5 201.0


CONSOLIDATED FINANCIAL STATEMENTS4 Statement of changes in equity

(in € millions) NOTES

CAPITAL AND RELATED RESERVES

CAPITAL

SHARE PREMIUM AND RESERVES

RELATED TO SHARE CAPITAL

RECLASSIFICATION OF TREASURY

SHARES

PERPETUAL DEEPLY

SUBORDINATED NOTES

Shareholders’ equity as of January 1, 2017 48.5 88.7 (5.7) 118.5

Net income for the period - - - -

Other components of comprehensive income (net of tax): - - - -

Cash flow hedge (IAS 39) 3.18.2 - - - -

Employee benefi t obligations 3.12 - - - -

Profits and losses from the currency translation

of the financial statements of foreign

subsidiaries - - - -

Comprehensive income for the period - - - -

Capital increase 3.9 - - - -

Dividends paid in cash - - - -

Dividends paid in shares 0.7 9.8 - -

Capital repayment - - - -

Issue of Perpetual Deeply Subordinated Notes - - - -

Recognition of share-based payments 3.10 - - - -

Reclassification of treasury shares 3.11 - - 4.5 -

Other changes - 2.3 - -

Total transactions with shareholders 0.7 12.1 4.5 -

SHAREHOLDERS’ EQUITY AS OF DECEMBER 31, 2017 49.2 100.8 (1.2) 118.5

As decided by BOURBON’s Combined Shareholders’ Meeting on

May 23, 2017, the payment of the dividend to be paid for 2016,

set at €0.25 per share, could be received in cash or in new shares.

Shareholders could make their choice between June 8 and June 30,

2017, inclusive.

At the closure of the option period, the shareholders who have

elected to receive the payment of the dividend in shares represented

55.28% of BOURBON shares. 1,156,611 new shares were thus

issued, representing approximately 1.52% of the share capital and

0.91% of the Company’s voting rights on the basis of the share capital

and voting rights as of May 31, 2017. The settlement and delivery of

shares and their admission to trading on Euronext Paris occurred on

July 17, 2017, with immediate dividend rights. They held the same

rights and are subject to the same obligations as the already issued

ordinary shares and are entirely assimilated with the already issued

shares.

The final impact (after taking into account the treasury shares) on

BOURBON’s consolidated financial statements for the second half

of 2017 was as follows:

3 increase in capital stock by €0.7 million and share premiums by

€9.7 million;

3 payment in cash in the amount of €8.5 million.

The “Other changes” line includes the impact of transactions with

certain non-controlling interests (see note 2.2.3).



4

Statement of changes in equity

UNREALIZED OR DEFERRED PROFIT/LOSS

OTHER RESERVES

AND INCOME

TOTAL SHAREHOLDERS’

EQUITY, GROUP SHARE

SHAREHOLDERS ‘EQUITY MADE

UP OF NON-CONTROLLING

INTERESTS

TOTAL CONSOLIDATED

SHAREHOLDERS’ EQUITY

RELATED TO CURRENCY

TRANSLATION DIFFERENCES

RELATED TO NET

INVESTMENT IN FOREIGN

OPERATIONS

RELATED TO ACTUARIAL

DIFFERENCES

CHANGE IN THE FAIR

VALUE OF AVAILABLE-

FOR-SALE ASSETS

CHANGE IN FAIR VALUE

OF HEDGE DERIVATIVES

(31.3) (4.8) (3.7) - (10.7) 944.3 1,143.7 111.8 1,255.5

- - - - - (576.3) (576.3) (32.6) (608.9)

(27.0) - 0.2 - 14.5 - (12.3) (3.8) (16.2)

- - - - 14.5 - 14.5 0.1 14.6

- - 0.2 - - - 0.2 - 0.2

(27.0) - - - - - (27.0) (4.0) (31.0)

(27.0) - 0.2 - 14.5 (576.3) (588.6) (36.5) (625.1)

- - - - - - - - -

- - - - - (8.5) (8.5) (9.8) (18.3)

- - - - - (10.5) - - -

- - - - - - - - -

- - - - - - - - -

- - - - - 1.3 1.3 - 1.3

- - - - - (4.8) (0.2) - (0.2)

- - - - (1.5) 22.7 23.5 6.9 30.4

- - - - (1.5) 0.3 16.1 (3.0) 13.1

(58.3) (4.8) (3.5) - 2.2 368.4 571.3 72.3 643.6


CONSOLIDATED FINANCIAL STATEMENTS4 Notes to the consolidated fi nancial statements

1/ Accounting policies and methods 1211.1 General information 121

1.2 Basis of preparation of the consolidated

financial statements 121

1.3 Adoption of the new IFRS standards 122

1.4 Use of estimates and assumptions 126

1.5 Summary of accounting policies and methods 127

1.5.1 Foreign currency translation 127

1.5.2 Business combinations and goodwill 128

1.5.3 Negative goodwill 128

1.5.4 Intangible assets 128

1.5.5 Property, plant and equipment 128

1.5.6 Equity interests in associates and joint ventures 129

1.5.7 Non-derivative financial assets 129

1.5.8 Inventories and work in progress 130

1.5.9 Cash and cash equivalents 130

1.5.10 Non-current assets held for sale

and discontinued operations 130

1.5.11 Treasury shares 131

1.5.12 Provisions and contingent liabilities 131

1.5.13 Employee benefits 131

1.5.14 Financial liabilities 132

1.5.15 Finance leases 132

1.5.16 Revenue 132

1.5.17 Current income tax and deferred tax 133

1.5.18 Derivative instruments and hedge accounting 133

1.6 Translation of the financial statements

of foreign subsidiaries 134

2/ Significant information for the year ended December 31, 2018 134

2.1 Significant events over the period 134

2.2 Changes in the scope of consolidation 136

2.2.1 Newly consolidated companies 136

2.2.2 Deconsolidated companies 136

2.2.3 Transactions in non-controlling interests 136

3/ Notes to the consolidated financial statements 137

3.1 Goodwill 137

3.2 Intangible assets 141

3.3 Property, plant and equipment 142

3.4 Investments in affiliates under the equity method 146

3.4.1 Aggregate financial information 147

3.4.2 Commitments given or received for associated

or joint venture companies 147

3.4.3 Transactions with associates and joint ventures 147

3.5 Non-current FInancial assets 147

3.6 Inventories and work in progress 149

3.7 Trade and other receivables, current financial

assets and other current assets 149

3.8 Cash and cash equivalents 150

3.9 Shareholders’ equity 150

3.10 Stock subscription or purchase option plans 151

3.11 Treasury shares 152

3.12 Employee benefit obligations and other provisions 152

3.13 Gross financial liabilities 154

3.14 Financial Results 156

3.15 Deferred taxes 157

3.16 Income tax 157

3.17 Financial risk management objectives and policy 158

3.17.1 Credit/counterparty risk 158

3.17.2 Liquidity risks 158

3.17.3 Market risks 161

3.18 Financial instruments 165

3.18.1 Financial assets 165

3.18.2 Derivative financial instruments 168

3.18.3 Financial liabilities 169

3.18.4 Fair value of financial assets and liabilities 169

3.18.5 Management of the risks related to financial instruments 170

3.19 Contingent liabilities 170

4/ Operating segments 171

5/ Other information 1735.1 Contractual obligations and other off-balance

sheet commitments 173

5.1.1 Off-balance sheet commitments related to the g roup

scope of consolidation 173

5.1.2 Off-balance sheet commitments related to financing 173

5.1.3 Off-balance sheet commitments related to the g roup’s

operating activities 173

5.2 Net earnings per share 175

5.2.1 Basic net earnings per share 175

5.2.2 Diluted net earnings per share 175

5.3 Workforce and payroll 176

5.4 Significant events after the end of the reporting period 176

5.5 Related-party transactions 176

5.6 Executive compensation 177

5.6.1 Compensation paid to the Chairman and Chief

Executive Officer and the Executive Vice Presidents 177

5.6.2 Commitments of any kind made by the Company to

its Executive Directors 180

5.6.3 Stock options exercised during the year by each

Executive Director 180

5.7 Statutory Auditors’ fees 181

5.8 Scope of consolidation 182

5.8.1 List of BOURBON Corporation SA’s fully consolidated

companies 182

5.8.2 List of companies consolidated by BOURBON

Corporation SA using the equity method 187

6/ Financial Glossary 188

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



4

Accounting policies and methods

1/ Accounting policies and methods

1.1 GENERAL INFORMATION

The consolidated financial statements were approved by BOURBON

Corporation SA’s Board of Directors on March 13, 2019 and again

on April 25, 2019, to take into account events after the reporting

date. BOURBON Corporation SA is an incorporated company

registered in France, whose shares are listed for trading on Eurolist

Compartment B of Euronext Paris.

1.2 BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements include the financial

statements of BOURBON Corporation SA, its subsidiaries and

companies controlled by the g roup as of December 31 of each

year. The financial statements of the subsidiaries and companies

controlled by the g roup are prepared over the same reference period

as those of the parent company, on the basis of homogeneous

accounting policies.

Going concern

In accordance with IAS 1.25, when preparing financial statements,

management must assess the entity’s capacity to continue as a going

concern. When management is aware, in making its assessment,

of material uncertainties related to events or conditions that may

cast significant doubt upon the entity’s ability to continue as a going

concern, the entity shall disclose those uncertainties. In assessing

whether the going concern assumption is appropriate, management

takes into account all available information about the future, which is

at least, but is not limited to, 12 months from the end of the reporting

period. The degree of consideration depends on the facts in each

case.

BOURBON provides support services to the oil industry. In response

to the signifi cant decrease in the barrel price since the end of 2014

(Brent fell from US$99 in 2014 to less than US$40 at the end of 2015

and hit a low at US$27 in the fi rst quarter of 2016), oil companies

dramatically cut their exploration and production expenses (-25% on

a global scale in 2015 and -24% in 2016 - source: IFP Énergies

nouvelles). This cyclical downturn in the market thereby affected the

companies that provide services to oil companies. In the face of this

economic slowdown in oil activity and the very sharp price decreases

imposed by its customers, BOURBON was able to remain resilient

thanks to its targeted positioning and strong operational measures

(in particular, its cost control policy).

To manage this cyclical low point, the g roup had accordingly

conducted discussions in late 2016 with its fi nancial partners in order

to restructure its fi nancing for the coming years.

The agreements entered into in 2017 with the g roup’s principal






additional sureties. In consideration of the restructuring, the g roup



dividend policy.


did not occur, thus making obsolete the g roup’s forecasts on


market environment weighed heavily on the g roup’s revenue and,



unrestricted due to the g roup’s legal structure and limitations relating

to some of its geographic locations (see note 3.18). However, they

are insufficient to service its debt. Furthermore, and for the same

reasons, at December 31, 2017 the g roup was not able to comply

with various covenants defined in its credit documentation.

In this context, the g roup initiated new discussions with its lenders,



corresponding upturn in the g roup’s performance. The g roup has



As announced on July 10, 2018 a general waiver was fi nalized

with lessors and debt holders representing the majority of its debt,

thus allowing the g roup to withhold the payments of its loans and

the servicing of its debt. Aimed at protecting the g roup, this waiver



On November 2, 2018, in the absence of confi rmation of the renewal

of the general waiver, the g roup announced that the president of

the Marseille Commercial Court granted the opening of conciliation


These procedures were opened to allow the g roup to actively

pursue, in an amicable framework, its search for all solutions for its

development as well as its discussions with its main debt holders

and lessors.



the majority of the g roup’s debt, thus allowing it to suspend the


In accordance with IFRS standards, the g roup nevertheless had to

reflect, at closing, the payability of its debt by reclassifying it as a

current liability (see note 3.13).

BOURBON also confi rmed that the discussions with its main fi nancial

partners and the active search for new fi nancing are ongoing, in order

to balance the servicing of its debt with its performance.






CONSOLIDATED FINANCIAL STATEMENTS4 Accounting policies and methods


their fi nancial parameters, are being evaluated by the g roup and its

advisors. On March 13, 2019, the Board of Directors carried out a

preliminary review of these propositions. BOURBON specifi es that no

decision or commitment has been made and that no exclusivity has

been granted to any of the fi nancial partners it is in discussion with.

The company remains confi dent in its ability to fi nd such a solution

and will notify the market in due time according to regulation.

This situation raises a material uncertainty concerning the going

concern . The g roup has, however, prepared its consolidated fi nancial

statements at December 31, 2018 maintaining the going concern

assumption given:

3 the confi dence it has in the outcome of the discussions with its

lessors and debt holders, and the assumption that they will renew

the waivers during the negotiation period;

3 the active search for new fi nancial partners, which has resulted in

the receipt of several proposals subject to conditions;

3 the cash fl ow generated by the activity allowing the g roup to meet

its current operating needs over the next 12 months.

If these actions do not lead to concrete solutions, the Company/

Group might be unable to settle its debts and to realize its assets in

the normal course of its activities.

Statement of compliance

BOURBON Corporation SA’s consolidated financial statements

for the year ended December 31, 2018 have been prepared in

accordance with International Financial Reporting Standards (IFRS),

as adopted by the European Union.

The IFRS standard includes the IFRS, the International Accounting

Standards (IAS) and the interpretations of the International Financial

Reporting Interpretations Committee (IFRIC) and the Standing

Interpretations Committee (SIC).

The standards and interpretations used to prepare the consolidated

financial statements for the year ending December 31, 2018 are

those published in the Official Journal of the European Union, the

application of which was mandatory as of December 31, 2018.

Pursuant to Article 28 of European Regulation No. 809/2004 of April

29, 2004, the following information is included by reference:

3 the consolidated financial statements for the year ended

December 31, 2017 and the Statutory Auditors’ report on those

statements, provided in the Registration Document filed on April

25, 2018, with the Autorité des marchés financiers (on pages 105

to 183 and 184);

3 the consolidated financial statements for the year ended

December 31, 2016 and the Statutory Auditors’ report on those

statements, provided in the Registration Document filed on April

25, 2017, with the Autorité des marchés financiers (on pages 91

to 163 and 164).

Consolidated financial statements – Basis of preparation

The g roup’s consolidated financial statements have been prepared on

the historical cost basis, with the exception of derivative instruments

and available-for-sale financial assets, which are measured at fair

value. The consolidated financial statements are presented in millions

of euros.

The subsidiaries are consolidated from the effective date of

acquisition, which is the date on which the g roup obtains control,

until the date on which this control ceases to be exercised.

Non-controlling interests represent the share of profit or loss and net

assets which are not held by the g roup. They are presented in the

income statement and in shareholders’ equity on the consolidated

balance sheet separately from the g roup’s share of income/loss and

shareholders’ equity.

All intercompany balances and transactions as well as the income,

expenses and gains or losses included in the book value of assets

which come from internal transactions, are fully eliminated.

Pursuant to IAS 1, assets are presented as current assets on the

consolidated balance sheet when they meet one of the following

criteria:

3 the expected liquidation date is less than 12 months, or less than

the g roup’s normal business cycle;

3 they are essentially held for trading.

All other assets are classified as non-current assets.

Liabilities are presented as current liabilities on the consolidated

balance sheet when they meet one of the following criteria:

3 the expected settlement date is less than 12 months, or less than

the g roup’s normal business cycle;

3 they are essentially held for trading;

3 the g roup does not have an unconditional right to defer payment

for a period of at least 12 months after closing.

All other liabilities are classified as non-current liabilities.

1.3 ADOPTION OF THE NEW IFRS STANDARDS

The accounting policies applied as of December 31, 2018 are

identical to those of the previous fi scal year.

The application of standards and interpretations that have become

mandatory since January 1, 2017 has not had a significant impact

on the g roup’s financial statements.

In connection with the application of the rules on alternative

performance indicators (ESMA Guideline – AMF Position

No. 2015- 12), the g roup has included a financial glossary in its

disclosure since June 30, 2016. In this Registration Document, the

Financial Glossary is included in note 6 hereto.

The new IFRS standards, interpretations and amendments, as

adopted by the European Union for the fi scal years opened from

January 1, 2018 were applied, and included:

3 IFRS 15 “Revenue from contracts with customers”

This new mandatory standard effective as from January 1, 2018

has replaced the previous revenue related standards. It sets a

reference framework to determine whether income should be

recognized, when and in which amount. It replaces standards

IAS 18 “Revenue” and IAS 11 “Construction Contracts” and their

interpretations.

IFRS 15 defines revenue recognition according to a five-step

process:

i) identify the contract,

ii) identify the performance obligations,

iii) determine the transaction price,

iv) allocate the transaction price,

v) recognize revenue.



4


According to this model, revenue is recognized when a company

transfers control of goods or services to a client, in the amount

it expects to receive. Depending on the criteria, the revenue will

be recognized either over time, or at a given date, according to

the manner in which the control of the goods and services is

transferred to the client.

As previously indicated, the g roup adopted IFRS 15 using the

cumulative catch-up method, resulting in the fi rst-time application

of this standard as of the date on which it came into force -

January 1, 2018, with no restatement of the reported comparative

periods.

In practical terms, the g roup performed a review of its contractual

relations with customers, the amount of income recognized and

the frequency at which it was recognized under IFRS 15 and

came to the conclusion that the new standard had no effect on

the consolidated fi nancial statements.

Marine services that are part of our Marine & Logistics, Mobility

and Subsea activities (excluding turnkey projects) are structured

as vessel time chartering contracts that bill on the basis of daily

rates.

These services include the provision of the vessel and its crew

to the oil operator for a period of time agreed in advance.

These periods can vary from a few days to several years.

The standard terms of these contracts are set out in a sample

contract created by the BIMCO (Baltic and International Maritime

Council), which is commonly used in the industry. However,

the g roup also signs framework agreements with the oil majors

(Exxon, Chevron, Total, BP, etc.), through its role as a strategic

supplier to leading oil companies.

The main services of the Subsea activity are structured on

contracts that bill on the basis of daily rates - under one of the

following forms:

3 bareboat vessel chartering,

3 chartering a vessel with associated crew, crane operator,

catering services, remotely operated vehicles and operations

management.

These contracts are fully aligned with the fi ve-step process. Each

service and associated obligations are defi ned according to an

allocated price, income is recognized daily and refl ects the transfer

of the control to clients at the time the service is performed.

As such, in 2018, the g roup recognized approximately 93% of its

income over time, based on a day-rate, reflecting the transfer of

control to clients.

The Subsea activity also includes a still very moderate portion of

turnkey projects. These services are contracted on a fi xed- price

basis with a performance commitment and limitation of liability.

The revenue from those projects, which is spread over relatively

short term periods (less than six months), is recognized over time

through a stage of completion method, in particular via costs, in

accordance with the new IFRS 15.

In 2018, income from projects started and completed during the

period has therefore been fully recognized, corresponding to less

than 10% of the revenue of this business and less than 2% of

Group revenue for the year.

The distribution of revenue by geographical area and operational

segment is detailed as follows:

ADJUSTED REVENUES - 2018(in € millions)

TOTAL MARINE & LOGISTICS

OF WHICHTOTAL

MOBILITY

TOTAL SUBSEA

SERVICES OTHERADJUSTED

TOTALDEEP SHALLOW

Africa 151.0 89.1 61.9 160.4 66.4 3.9 381.7

Europe & Med./Middle East 92.4 53.7 38.7 5.9 33.2 4.9 136.4

American continent 78.8 60.2 18.6 13.9 1.6 0.2 94.5

Asia 35.1 14.8 20.3 7.5 32.4 2.0 77.0

3 IFRS 9 “Financial instruments”

IFRS 9 replaces IAS 39 “Financial instruments: recognition and

measurement”. When adopting it, the g roup did not restate the

comparative period information using the transitional method

described in section 7 of IFRS 9 but instead reported the

cumulative effect of its application in shareholders’ equity as of

January 1, 2018.

Classifi cation and measurement of fi nancial liabilities

For the g roup, the main potentially significant impacts of IFRS 9,

whose application became mandatory on January 1, 2018,

concerned the treatment of its debt restructuring, which was

agreed on July 28, 2017. This entered into the scope of the new

provisions for the recognition of restructured debts specified by

IFRS 9 and applicable retroactively.

However, since the adjusted debt was immediately due on

the closing date as of December 31, 2017, it was recognized

at par and is therefore not affected by the application of the

aforementioned provisions.

Effectively, the debt had been recognized by applying the

provisions of paragraph AG8 of IAS 39 - discounting of estimated

future cash fl ows from the debt at the original effective interest

rate - meaning an accounting treatment similar to the one required

by IFRS 9 in its paragraph B5.5.6.

In addition, the g roup classifi es derivative liabilities at fair

value through profi t or loss and all other fi nancial liabilities at

amortized cost.

At December 31, 2018, the implementation of IFRS 9 had no

effect on the classifi cation and measurement of fi nancial liabilities.

Classifi cation and measurement of fi nancial assets

In accordance with IFRS 9, the g roup classifi ed its fi nancial

assets according to their compliance with SPPI (Solely Payment

of Principal and Interest) stipulations and their business model.

A fi nancial asset is measured at amortized cost if both of the

following conditions are met and if not designated at fair value

through profi t or loss:

3 it is held within a business model whose objective is to hold it

in order to collect contractual cash fl ows (HTC: held to collect),



3 its contractual terms give rise on specifi ed dates to cash

fl ows that are solely payments of principal and interest on the

principal amount outstanding (SPPI).

A debt instrument is measured at fair value through other

comprehensive income if both of the following conditions are met

and if not designated at fair value through profi t or loss:

3 it is held within a business model whose objective is achieved

by both collecting contractual cash fl ows and selling the

fi nancial asset (HTCS: held to collect and sell),

3 its contractual terms give rise on specifi ed dates to cash

fl ows that are solely payments of principal and interest on the

principal amount outstanding (SPPI).

Non-consolidated equity interests are all recognized as of

December 31, 2018 at fair value through profi t or loss. However,

optionally, and if the equity interests are not held for trading,

the Group may choose a classifi cation at fair value through other

comprehensive income that is irrevocable. The gains or losses

realized on the sale of these interests are therefore not recycled in

the income statement.

All fi nancial assets that are not classifi ed at amortized cost or fair

value through other comprehensive income as described above,

are measured at fair value through profi t or loss.

Impairment of financial assets

The g roup now assesses expected credit losses from fi nancial

assets on a prospective basis whereas the loss allowance under

IAS 39 was based on the actual losses from receivables. IFRS 9

thus replaces the “incurred credit losses” model by the “expected

credit losses” model.

The calculation model for expected credit loss is determined

based on the ratings of the counterparties and their related

probability of default. Impairment is calculated for 12 months

given the non-deterioration of counterparty risk. When the credit

risk of a fi nancial asset at amortized cost increases signifi cantly,

the expected credit loss is calculated over the life of the asset.

The main fi nancial assets that are concerned by this new

impairment method are:

3 fi nancial assets measured at amortized cost,

3 debt instruments measured through other comprehensive

income,

3 guarantee commitments given if not measured at fair value

through profi t or loss,

3 operating and fi nance lease receivables,

3 contract assets.

The g roup applies the simplifi ed approach under IFRS 9 for

trade receivables, in which the expected credit loss is calculated

over their lifetime. This model enables a fi nal credit loss to be

determined for all trade receivables since their initial recognition.

Changes to the classifi cation and measurement of fi nancial

assets in the statement of fi nancial position are described one

by one below.

The main effect on the shareholders’ equity at opening

€(2.9) million corresponds to the measurement at fair value

through profi t or loss of certain loans which were recognized until

now at amortized cost. These no longer meet the SPPI criteria

as of the application date of IFRS 9 due to an option under the

issuer’s control.

(in € millions) 12.31.2017IAS 39

CLASSIFICATIONIFRS 9

CLASSIFICATIONCHANGE IN

MEASUREMENT 01.01.2018

Available-for-sale assets 0.1 Fair value

through

shareholders’

equity

Fair value

through profi t

or loss

- 0.1

Loans 16.1 Amortized cost Amortized cost - 16.1

Other receivables 4.3 Amortized cost Amortized cost - 4.3

Financial instruments measured at fair value 0.0 Fair value

through profi t or

loss

Fair value

through profi t

or loss

- 0.0

Non-current financial assets 20.6 - 20.6

Trade receivables 232.0 Amortized cost Amortized cost - 232.0

Other receivables 115.5 Amortized cost Amortized cost - 115.5

Trade and other receivables 347.6 - 347.6

Loans 21.6 Amortized cost Amortized cost - 21.6

Loans restated by IFRS 9 22.9 Amortized cost Fair value

through profi t

or loss

(2.9) 20.0

Financial instruments measured at fair value 0.4 Fair value

through profi t

or loss

Fair value

through profi t

or loss

- 0.4

Non-current financial assets 45.0 (2.9) 42.1

Other current assets from operating activities

27.5 Amortized cost Amortized cost

- 27.5

Cash and cash equivalents 243.6 Fair value through profi t

or loss

Fair value through profi t

or loss

- 243.6

TOTAL FINANCIAL ASSETS 684.2 (2.9) 681.3



4


The other applicable standards and interpretations that have

become mandatory since January 1, 2018 have not had a

significant impact on BOURBON’s consolidated financial

statements at December 31, 2018. They mainly concern:

3 amendments to IFRS 2 “Classifi cation and Measurement of

Share-based Payment Transactions”,

3 IFRIC 22 “Foreign Currency Transactions and Advance

Consideration”.

The g roup also decided not to opt for the early application of

the standards and interpretations for which application was not

mandatory as of January 1, 2018, namely:

3 IFRS 16 “Leases”,

3 IFRIC 23 “Uncertainty over Income Tax Treatments”,

3 amendments to IAS 19 “Plan Amendment, Curtailment or

Settlement”,

3 amendments to IFRS 9 “Prepayment Features with Negative

Compensation”,

3 amendments to IAS 28 “Investments in Associates and Joint

Ventures”,

3 annual improvements to IFRS, 2015-2017 cycle.

The impacts and practical consequences of the application of

these standards, amendments and interpretations are currently

being studied.

3 IFRS 16 “Leases”

This standard, published on January 13, 2016, fundamentally

changes the accounting method of leases contracts for the

lessees by introducing the notion of control in the use of the

underlying leased asset . It actually introcuces for the lessee a

single accounting model of leases on the balance sheet, without

distinguishing between operating leases, which are currently

recognized in expenses and off-balance sheet commitments, and

fi nance leases. The lessee will thereby recognize a “right-of-use”

asset, which corresponds to the right to use the underlying asset

and, a lease liability in respect of its obligation to pay the lease.

The application of IFRS 16, mandatory as of January 1, 2019,

will have a significant impact on the Group consolidated financial

statements:

3 on the balance sheet, with respect to the value of “right-of-

use” assets as well as the lease liability,

3 and on the income statement with respect to an improvement

in EBITDA through a decrease in rents and, on the other hand,

an increase in depreciation and fi nancial expenses.

In the frame of its activities , the g roup enters into contracts as a

lessee for the following main underlying assets:

3 vessels,

3 offi ces, logistics bases and other buildings,

3 vehicle fl eet,

3 IT equipment.

As such, the g roup analyzed these contracts in order to:

3 assess if they are, or contain, a lease according to IFRS 16: a

contract is, or contains, a lease if it provides the g roup with the

right to control the use of an identifi ed asset for a determined

period in return for payment,

3 determine the main assumptions used to evaluate the right of

use asset and the lease liability, particularly the lease term and

the discount rate used to measure the lease liability:

− the lease term corresponds to the non-cancellable period

during which the lessee has the right to use the underlying

asset, to which is added the renewal option or the termination

option that the g roup is reasonably certain to exercise (for

the renewal option) or not (for the termination option). The

probability of exercising (or not) an option with reasonable

certainty was determined by the type of contract, or on a case-

by-case basis based on contractual, fi nancial and regulatory

conditions, and the nature of the underlying asset,

− the discount rate used for measuring the lease liability is

the incremental borrowing rate of the lessee. The g roup

incremental borrowing rate is used for leases on vessels,

with BOURBON Corporation SA being the guarantor for all

of these contracts. Specifi c incremental borrowing rates are

determined for the other leases - when the implicit rates of

each of these leases were not able to be determined - taking

into account, for each lessee, the currency, country, and

maturity risks associated with each lease.

The g roup will apply IFRS 16 starting on January 1, 2019, opting

for the modifi ed retrospective transition method, which consists

in recognizing as of the fi rst date of application:

3 on the one hand the lease liability up to the present value of

the remaining payments, discounted at the date of transition,

3 and on the other hand, the right-of-use asset for an amount

equal to the lease liability, adjusted for the amount of any

prepaid or accrued lease payments at that date , as well as

for the estimated amount of dismantling or restoring costs,

especially those linked to the class maintenance obligations

within the vessel contracts .

In accordance with the modifi ed retrospective transition method,

no comparative restatement of prior fi nancial statements will

be carried out. Furthermore, the g roup will apply the pratical

expedients related to short-term leases, including leases whose

residual duration is less than or equal to 12 months following the

date of fi rst application, and those of low-value items .

As of December 31, 2018, the main leases concerned by the

application of this standard are related to 57 vessels. In the

frame of its discussions with its main fi nancial partners, including

its lessors, in France and abroad, the g roup suspended, during

the negotiation period, the payment of these lease payments.

This lease payment debt amounts to about 100 million dollars

(approximately 88 million euros), recognized in trade payables

as of December 31, 2018, and will be reclassifi ed in fi nancial

lease liability in January 1, 2019. Moreover, without taking into

account the negotiations in progress, the total amount due to

be paid by the g roup in respect of the leases on the 57 vessels

amounted, as of December 31, 2018, on an undiscounted basis,

to approximately US$1.255 billion.

In 2017 the g roup reached an agreement to reorganize lease

payments on the vessels covered by the sale and bareboat

chartering contracts concluded with ICBC Financing Leasing

in 2013 and 2014. This agreement provided for a reduction in

rental payments for the years 2016 to 2018, in consideration with

a two-year extension of the initial period of bareboat leases as

well as the more favorable commercial terms for ICBC Financial

Leasing. In accordance with IAS 17, bareboat charter expenses

remained to be recognized on a straight-line basis from the date

of renegotiation and for the remaining term of the contract.



As of December 31, 2018, the cumulative non-cash impact of the

bareboat charter expenses - recognized in shareholders’ equity,

Group share - following these negotiations and the required

straight-line accounting amounted to €(117) million. This amount

will therefore be reclassifi ed on January 1, 2019, the date of

application of IFRS 16, deducted from the right-of-use assets .

The total amounts due in respect of other leases for their residual

duration - about 140 contracts -, also on a non-discounted basis,

was approximately €11.1 million.

The consequences arising from the application of IFRS 16

on the fi nancial statements will depend on future economic

conditions, such as the borrowing interest rate of the g roup and

its subsidiaries, and the breakdown of the lease portfolio as of

January 1, 2019, and as such, the discussions in progress with

the main fi nancial partners, including the lessors.

As indicated, BOURBON confi rms that these discussions, as well

as the active search for new fi nancing, continues. Several offers

subject to conditions, notably due diligence, have been received

by the g roup, proposing in particular new fi nancing and a debt

reduction including, for some of them, conversion of part of this

debt into equity. At this stage, the terms and conditions of these

offers, including their fi nancial parameters, are being evaluated

by the g roup and its advisors. On March 13, 2019, the Board of

Directors carried out a preliminary review of these propositions.

BOURBON specifi es that no decision or commitment has been

made and that no exclusivity has been granted to any of the

fi nancial partners it is in discussion with.

At this stage, it still remains diffi cult to determine the discount

rate to use.

However, as an example, the preliminary impacts at +/-10%

on the fi nancial lease liability at January 1, 2019 according to

different discount rates are presented as follows:

IMPACT ESTIMATED AT +/-10% OF THE APPLICATION OF IFRS 16 ON JANUARY 1, 2019 ON THE LEASE LIABILITY ACCORDING TO THE DISCOUNT RATE

Discount rate 5% 8% 10% 12% 15%

Estimated fi nancial lease liability - in millions of euros (excluding debt related to unpaid rental payments of €88 million at the transition date) 855-1,045 785-960 745-910 710-865 660-805

Moreover, the uncertain outcome of the negotiations in progress with lessors, both concerning future economic conditions and the breakdown

of the lease portfolio, will have a signifi cant impact on the lease liability and right-of-use assets , which is at present diffi cult to assess .

1.4 USE OF ESTIMATES AND ASSUMPTIONS

Preparation of the financial statements in accordance with the

conceptual framework of the IFRS involves the use of estimates,

assumptions and assessments that affect the amounts presented

in those financial statements. These estimates are based on past

experience and on other factors considered to be reasonable given

the circumstances. As the assumptions and assessments used

and the circumstances existing on the date the statements are

established may prove to be different in reality, the future results

achieved may differ from the estimates used.

The principal assumptions concerning future events, and other

sources of uncertainty related to the use of estimates on the closing

date, changes in which during a year could generate a risk of a

change in the net book value of assets and liabilities, are presented

below.

Impairment test on goodwill and fixed assets

At least once a year, the g roup assesses whether it is necessary

to impair goodwill by using impairment tests (see note 1.5.2).

Those tests require an estimate of the recoverable value of the

cash-generating units (CGUs) to which the goodwill is allocated.

Recoverable value is defined as the higher of the useful value and

the fair value (net of disposal costs).

A CGU (cash-generating unit) is the smallest identifiable group of

assets whose continued use generates cash inflows that are largely

independent of cash inflows from other assets or groups of assets.

The determination of CGUs must be consistent with the way in which

management manages and controls the g roup’s activities and with

the level at which strategic decisions or asset acquisition/disposal

decisions are made.

Accordingly, BOURBON identified four distinct CGUs:

3 Marine & Logistics - DEEP for all of our deep offshore operations;

3 Marine & Logistics – SHALLOW for all of our Continental Offshore

operations;

3 Mobility for all of our personnel transport operations;

3 Subsea Services.

Our main assets, the vessels, are both geographically mobile and

interchangeable within a single CGU. For example, a vessel within a

CGU does not generate cash inflows that are largely independent of

the cash inflows of other vessels. As such, as defined by IAS 36.67,

the recoverable value can only be estimated at the CGU level.

Due to the large number of leased ships, the fair value of CGUs (net

of disposal costs) can no longer be determined solely on the basis

of the fair value of the vessels attached to these CGUs. As a result,

the recoverable value of the CGUs corresponds to their useful value.

Useful value, defined as discounted total future cash flows, is

determined based on the economic, business, and income

assumptions deemed by the g roup’s management to be the most

probable.

The expected future cash flows used to calculate the useful value of

each CGU are calculated based on the g roup’s five-year business

plans, prepared using adjusted financial data (see note 4 “Operating

segments”). The flows are discounted at a rate measured on the



4


basis of the average weighted cost of the capital determined for the

g roup. Analyses are then done to determine the sensitivity of the

values obtained to a variation in one or more of the assumptions in

the business plan. Since by its nature the “discounted cash flow”

method used to measure the value in use of the CGUs to which

the goodwill is allocated is uncertain, the actual future cash flows

can vary from the future cash flow projections used to determine the

value in use.

In accordance with IAS 36, the goodwill value must be tested at least

once a year, and systematically as soon as indications of impairment

appear.

In addition, fi nite intangible assets, as well as property, plant and

equipment, are subject to impairment tests as soon as an indication

of impairment is noted (see notes 1.5.4, 1.5.5 and 3.3), i.e., when

events or specifi c circumstances indicate a risk of impairment

of these assets. In order to conduct these tests, fi xed assets are

grouped into the same CGUs as were previously defi ned, and

their net book value is compared to the recoverable value of said

units. Recoverable value is defined as the higher of the useful value

(see previous section) and the fair value (net of disposal costs).

Retirement benefit obligations

The cost of defined benefit plans and other post-employment

medical coverage benefits is determined on the basis of actuarial

valuations. Those valuations are based on assumptions about

discount rates, salary increase rates, mortality rates, and the

probability of employment in the g roup at the time of retirement.

The method for calculating discount rates has remained unchanged

from previous years. The rates are calculated based on global indices

such as Reuters.

Because of the long-term nature of such plans, the uncertainty of

those estimates is significant. The net liabilities built up for these

benefits granted to employees as of December 31, 2018 were €14.7

million (€14.4 million in 2017). Further details are given in note 3.12.

Financial instruments measured at fair value

For most of the instruments traded over the counter, the valuation is

made using models that use observable market data. For example,

the fair value of interest rate swaps is generally determined using

rate curves based on the market interest rates observed on the

closing date. The fair value of buying forward exchange contracts

is calculated by reference to the current forward exchange rates for

contracts with similar maturities. The discounting future cash flows

method is used to value other financial instruments.

1.5 SUMMARY OF ACCOUNTING POLICIES AND METHODS

1.5.1 Foreign currency translation

The consolidated financial statements are disclosed in euros, which

is the functional and presentation currency of the parent company.

The functional currency of the foreign subsidiaries is generally the local

currency. If the majority of the transactions and costs are executed in

a different currency, that currency is used as the functional currency.

The accounts of subsidiaries with a functional currency different from

euro are translated by applying the closing rate method:

3 balance sheet items, with the exception of shareholders’ equity,

which is maintained at the historical rate, are converted at the

year-end exchange rate;

3 items on the income statement are translated at the average rate

for the period;

3 the currency translation adjustment is included in consolidated

shareholders’ equity and does not affect net income.

Foreign currency transactions made by the companies of the g roup

are initially booked in the functional currency at the exchange rate

prevailing on the date of the transaction. On the closing date,

monetary assets and liabilities denominated in foreign currencies are

translated into the functional currency at the exchange rate prevailing

on the closing date. All exchange differences are recognized in

the income statement, with the exception of those related to

borrowings in foreign currencies which constitute a hedge of the net

investment in a foreign entity. These differences are charged directly

to shareholders’ equity until the disposal of the investment; on that

date, they are recognized as income/loss.

Pursuant to IAS 21, goodwill is expressed in the functional currency

of the companies acquired and then translated at the closing rate

(IAS 21.47).

Monetary items receivable from or payable to a foreign business

for which settlement is neither planned nor likely to occur in the

foreseeable future is, in substance, a part of the entity’s net investment

in that foreign operation (IAS 21.15). Exchange differences arising

on a monetary item that forms part of a net investment in a foreign

business must be recognized in other comprehensive income

and reclassified from equity to profit or loss on disposal of the net

investment (IAS 21.48).

Hyperinflationary economiesThe hyperinflationary nature of an economy is defined by IAS 29.3 in

accordance with the following non-exhaustive characteristics:

3 the general population prefers to keep its wealth in non monetary

assets or in a relatively stable foreign currency. Amounts of local

currency held are immediately invested to maintain purchasing

power;

3 the general population regards monetary amounts not in terms

of the local currency but in terms of a relatively stable foreign

currency. Prices may be quoted in that currency;

3 sales and purchases on credit take place at prices that

compensate for the expected loss of purchasing power during

the credit period, even if the period is short;

3 interest rates, wages, and prices are linked to a price index;



3 the cumulative inflation rate over three years approaches,

or exceeds, 100%.

Moreover, under IAS 21.42 and IAS 21.43, when an entity’s functional

currency is the currency of a hyperinflationary economy, the following

treatment is applied:

3 initially, the entity’s financial statements for the year in progress

drawn up in its functional currency based on historical costs or

actual costs are restated in accordance with the principles of

IAS 29.8, i.e. by applying a general price index, so that they are

expressed in terms of the current measuring unit at the balance

sheet date;

3 comparative figures for the prior financial year are also restated

by applying a general price index, so that they are expressed in

terms of the current measuring unit at the balance sheet date;

3 the gain or loss on the net monetary position is included in net

income and is disclosed separately (IAS 29.9);

3 the entity’s financial statements, as restated above, are translated

at the closing rate, from the functional currency into the reporting

currency of the consolidated financial statements.

1.5.2 Business combinations and goodwill

Business combinations (revised IFRS 3) are recognized using the

purchase method. This method implies the recognition at fair value

of the identifiable assets (including intangible assets not previously

recognized) and identifiable liabilities (including contingent liabilities,

with the exception of future restructurings) of the companies

acquired.

The goodwill arising on a business combination is initially recognized

at cost, which represents the excess of the acquisition cost over the

g roup’s interest in the net fair value of the identifiable assets, liabilities

and contingent liabilities. After the initial recognition, goodwill is

measured at cost less accumulated impairment losses. For the

purpose of impairment tests, the goodwill acquired in a business

combination is, as of the acquisition date, allocated to each of the

g roup’s CGUs likely to benefit from the synergies of the business

combination.

Impairment tests are performed once there are indices of a loss of

value and at least once a year.

When subsidiaries are sold, the difference between the sale price

and the net asset sold plus accumulated currency translation

adjustments and the net value of the goodwill is recognized in the

income statement.

1.5.3 Negative goodwill

Negative goodwill represents the surplus between the g roup’s

interest in the fair value of the assets, liabilities and contingent

liabilities acquired over the acquisition cost, on the acquisition date.

It is booked directly as income/loss during the acquisition period.

1.5.4 Intangible assets

Intangible assets acquired separately are initially reported at cost. The

cost of an intangible asset acquired within a business combination

is its fair value on the acquisition date. After the initial accounting,

intangible assets are carried at cost less any accumulated

amortization and accumulated impairment losses.

The g roup assesses whether the useful life of an intangible asset is

finite or indefinite.

Intangible assets with a finite useful life are amortized over their

economic useful life and are subject to an impairment test when there

is an indication that the intangible asset is impaired. The amortization

period and amortization method an intangible asset with a finite useful

life are reviewed at least at the closing of each year. Any change in

the expected useful life or the expected rate of consumption of the

future economic benefits representing the asset is accounted for

by modifying the amortization period or method, as applicable and

such changes are treated as changes in estimates. The amortization

expense for intangible assets with a finite useful life is booked on the

income statement in the appropriate expense category depending

on the function of the intangible asset.

The amortization periods of the main intangible assets are:

3 software: 3 years;

3 leasehold rights, over the period of the concessions: 38 to

50 years.

1.5.5 Property, plant and equipment

Property, plant and equipment are booked at cost after deducting

accumulated depreciation and any accumulated impairment losses.

The residual values, useful lives and depreciation methods are

reviewed at each year-end and changed if necessary.

Vessels

A) Gross value

Property, plant and equipment consist primarily of vessels valued on

the date they are included in the g roup’s assets at cost, i.e. the cost

incurred to commission the asset for the projected use.

The cost of a tangible asset consists of the purchase price paid to a

third party (including customs duties and non-recoverable taxes, but

net of discounts and commercial rebates obtained from the supplier),

plus the following acquisition costs:

3 directly attributable costs incurred to bring the asset into working

order for the planned use;

3 installation costs;

3 mobilization costs to operating locations;

3 sea trial costs;

3 legal documentation costs;

3 professional fees (architects, engineers);

3 commissions;

3 costs for interim loans directly intended to finance the acquisition

of the asset.

A tangible asset may include several components with separate

life cycles or rates of depreciation. In this case, the main elements

of the asset are identified and recognized separately using the

component- based approach.



4


At BOURBON, each vessel consists of two components:

3 a vessel component;

3 an “overhaul” component, representing the cost of an overhaul.

An overhaul consists of maintenance operations performed at regular

intervals, based on a multi-year plan designed to meet classification

requirements, international conventions or regulations.

At the acquisition date, the value of the “vessel” component is the

total cost price of the asset minus the “overhaul” component; this

component is equal to the cost of the first overhaul of the vessel.

B) Depreciation

Depreciation is calculated on the basis of the gross value of the

component less its residual value.

Residual value is the expected selling price (less selling costs) which

the g roup would obtain today from the sale of this asset at the end

of its use by the g roup.

The depreciable amount of the “vessel” component is equal to its

gross value in the consolidated accounts less its residual value. As

the “overhaul” component has a zero residual value, its depreciable

amount corresponds only to its gross value in the consolidated

accounts.

Each component is then depreciated using the straight-line method

over its useful life.

Useful life is defined according to the expected utility of the asset for

BOURBON based on the use planned by the g roup.

The main useful lives of the “vessel” component used at BOURBON

are between 8 and 30 years.

The useful life of the “overhaul” component of a vessel depends on

the multi-year maintenance schedule for the vessel.

Moreover, if there are indications of impairment, an impairment test

is then performed on the asset or group of assets by comparing

its net book value with its recoverable value. The recoverable value

is generally determined with reference to a market valuation. Such

valuations are obtained from independent experts and reviewed by

the g roup’s management. When the recoverable value turns out to

be less than the net book value of the asset group, an impairment

is recognized.

Other property, plant and equipment (excluding vessels)Property, plant and equipment, other than the vessels and investment

property, are carried at cost as defined by IAS 16.16. These assets

consist of a single component.

The depreciable amount of other property, plant and equipment is

equal to their purchase price, their residual value being zero, with the

exception of certain buildings for which there is a residual value.

Other assets are depreciated using the straight-line method over

their useful life.

The main useful lives for property, plant and equipment, excluding

vessels, are as follows:

3 construction and buildings: between 8 and 40 years;

3 technical facilities: between 10 and 15 years;

3 other property, plant and equipment: between 2 and 10 years.

Investment propertiesThe investment properties held by the group are recognized in the

consolidated accounts at historical cost and depreciated using the

straight-line method over 40 years.

1.5.6 Equity interests in associates and joint ventures

Associates are companies over which the group exercises a

significant influence; partnerships that solely provide control of the

net assets of the Company are considered joint ventures. The group ’s

equity interests in its associates and joint ventures are recognized

using the equity method.

Investments in associates are recognized as assets on the balance

sheet for the part of shareholders’ equity they represent. The related

goodwill is included in the book value of the equity interest.

A liability is recognized for the companies with a negative net asset

and for which there exists a legal or implied obligation for the group .

Since these companies are directly and fully integrated in the group ’s

business activities, the net earnings of the associates are presented

on a separate line from the operating income.

1.5.7 Non-derivative financial assets

In accordance with IFRS 9, the group classifi es its fi nancial assets

according to their compliance with SPPI (Solely Payment of Principal

and Interest) stipulations and their business model.

A fi nancial asset is measured at amortized cost if both of the following

conditions are met and if not designated at fair value through profi t

or loss:

3 it is held within a business model whose objective is to hold it in

order to collect contractual cash fl ows (HTC: held to collect);

3 its contractual terms give rise on specifi ed dates to cash fl ows

that are solely payments of principal and interest on the principal

amount outstanding (SPPI).

A debt instrument is measured at fair value through other

comprehensive income if both of the following conditions are met

and if not designated at fair value through profi t or loss:

3 it is held within a business model whose objective is achieved by

both collecting contractual cash fl ows and selling the fi nancial

asset (HTCS: held to collect and sell);

3 its contractual terms give rise on specifi ed dates to cash fl ows

that are solely payments of principal and interest on the principal

amount outstanding (SPPI).

All fi nancial assets that are not classifi ed at amortized cost or fair

value through other comprehensive income as described above,

are measured at fair value through profi t or loss.

The group has not identifi ed fi nancial assets or liabilities that

meet the conditions for measurement at fair value through other

comprehensive income.



The group measures all of its non-consolidated investments in

shares at fair value. When the group chooses to use the option of a

classifi cation at fair value through other comprehensive income that

is irrevocable, the gains or losses from disposal are not recycled in

the income statement. The dividends related to these securities are

recognized in other fi nancial income.

At fi rst recognition, non-derivative fi nancial assets are measured

at fair value, plus, for assets not recognized at fair value, directly

chargeable transaction costs.

Non-derivative fi nancial assets are pulled out of the consolidated

fi nancial position statement at maturity or when the contractual rights

to their related cash fl ows are transferred, and practically all of the

risks and benefi ts that are inherent with the ownership of the asset

are transferred.

Financial assets at fair valueFor fi nancial assets at fair value that are actively traded on organized

fi nancial markets, fair value is determined by reference to the market

prices published on the closing date. For fi nancial assets for which

there is no active market, fair value is determined using valuation

techniques. Such valuation techniques include: using recent arm’s

length market transactions between knowledgeable and willing

parties, reference to the current fair value of another instrument that

is substantially the same, discounted cash flow analysis and option

pricing models. If applicable, fair value is assessed on the basis of

the proportion of shareholders’ equity held. The assessment may

also take into consideration the following parameters, to the extent

that they can be reliably measured:

3 potential unrealized gains, particularly property gains;

3 prospects for profitability.

Gains and losses, whether realized or unrealized, coming from

changes in fair value of fi nancial assets measured at fair value through

profi t or loss are immediately recognized in the income statement.

Gains and losses, whether realized or unrealized, coming from

changes in fair value of non-consolidated equity interests classifi ed

irrevocably on option as fi nancial assets at fair value through other

comprehensive income are recognized in other comprehensive

income and never impact the income statement.

Unrealized gains and losses coming from changes in fair value of other

fi nancial assets measured at fair value through other comprehensive

income are recorded in other comprehensive income. When the

fi nancial asset is sold, received or removed from the balance sheet

by another method or when there are objective indications that the

fi nancial asset has lost all or part of its value, the cumulative gains or

losses are recognized in profi t or loss .

Financial assets carried at amortized costLoans and receivables are measured at amortized cost according to

the effective interest rate method. The amortized cost is calculated

by taking into account any initial additional cost or discount, and

includes directly attributable commissions and transaction costs.

Gains and losses are recognized in profi t or loss when the loans

and receivables are derecognized or depreciated and through the

mechanism of amortized cost.

Impairment of financial assetsThe group measures the expected credit losses, on a prospective

basis, of its fi nancial assets at amortized cost and at fair value

through other comprehensive income excluding equity interests.

The calculation model for expected credit loss is determined based

on the ratings of the counterparties and their related probability

of default. Impairment is calculated for 12 months given the

non- deterioration of counterparty risk. When the credit risk of a

fi nancial asset at amortized cost increases signifi cantly, the expected

credit loss is calculated over the life of the asset.

The group applies the simplifi ed approach under IFRS 9 for trade

receivables, in which the expected credit loss is calculated over their

lifetime. This model enables a fi nal credit loss to be determined for

all trade receivables since their initial recognition. An impairment loss

is also recognized when objective indications are present that the

group will not be able to receive all of the sums due according to the

conditions of the original transaction: bankruptcy, notable cases of

insolvency, late payments more than six months in arrears, political

and economic risks in the country of residence of the debtor, etc.

1.5.8 Inventories and work in progress

Inventories are measured at the weighted-average cost method for

raw materials and at the production cost for work in progress and

finished goods.

When the production cost of finished goods is greater than the

selling price at the inventory date, impairment is recognized in order

to reduce the value of the inventories to their net realizable value.

1.5.9 Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and in banks,

short-term deposits and marketable securities. Cash and cash

equivalents are recorded at fair value.

1.5.10 Non-current assets held for sale and discontinued operations

Non-current assets held for salePursuant to IFRS 5, non-current assets (or disposal groups) and

the related liabilities are classified as “held for sale” if their carrying

amount will be recovered primarily through a sale transaction rather

than continuing use. This classification implies that the assets

(or disposal groups) intended for sale are available for immediate

sale, in their present condition, and that the sale is highly probable.

The highly probable nature of the sale is assessed according to the

following criteria: management has undertaken an asset (or asset

group) disposal plan and a program to find a buyer and finalize the

plan has been initiated. In addition, the assets must be actively

marketed for sale at a reasonable price in relation to their fair value.

The sale of the assets (or disposal group) is assumed to take place

within one year from the date of being classified as assets held

for sale.



4


Non-current assets (or disposal groups) intended to be sold and

classified as held for sale are measured at the lower of their previous

carrying amount and fair value less costs to sell. They are no longer

depreciated as of the date they are classified as assets held for sale.

Discontinued operationsA discontinued operation is an activity or a significant geographic

region for the group which is either being sold or classified as an

asset held for sale. The items of the income statement and the cash

flow statement for these discontinued operations or operations

being sold are presented on specific lines of the financial statements

for all periods presented. As a result, certain elements of the income

statement and the cash flow statement for the previous year are

restated in order to present comparative information for these

discontinued operations.

1.5.11 Treasury shares

When the group purchases its own equity instruments (treasury

shares), they are deducted from shareholders’ equity. No profit or

loss is booked in the income statement at the time of the purchase,

sale, issue or cancellation of the group ’s equity instruments.

1.5.12 Provisions and contingent liabilities

ProvisionsProvisions are recognized when the group has a present obligation

resulting from a past event, when it is probable that an outflow of

resources embodying economic benefits will be necessary to settle

the obligation, and when the amount of the obligation can be reliably

estimated.

If the effect of the time value of the money is significant, the provisions

are discounted on the basis of a pre-tax rate which reflects the risks

specific to the liability, if any. When the provision is discounted, the

increase in the provision related to the passage of time is recognized

as a finance expense.

Under certain operating leases, major periodic maintenance work of

the vessels has to be done by the group throughout the lease period.

In this case, with a current obligation of future outflow of resources

which can be reliably determined, the group has set aside provisions

for major maintenance, based on estimates of the future cost of said

maintenance.

Contingent liabilitiesContingent liabilities are the subject of a note to the financial

statements (see note 3.19). They correspond to:

3 a possible obligation that arises from past events and

whose existence will be confirmed only by the occurrence or

non- occurrence of one or more uncertain future events not wholly

within the control of the entity; or

3 a present obligation that arises from past events but is not

recognized because: i) it is not probable that an outflow of

resources embodying economic benefits will be required to

settle the obligation; or ii) the amount of the obligation cannot be

measured with sufficient reliability.

1.5.13 Employee benefits

Employee benefits include retirement indemnities, seniority awards,

incentives and profit-sharing.

Retirement benefit obligationsGroup employees receive retirement indemnities in addition to the

legal retirement benefits in effect in the countries in which they are

employed.

Pursuant to IAS 19 “Employee benefits”, retirement benefit obligations

are measured using the projected unit credit method. Under this

method, the valuation of the commitment takes into consideration

the pension rights that the employee will have acquired on the date of

his retirement. However, the commitment is allocated proportionately

between the employee’s seniority on the calculation date, taking into

account the ratio between the employee’s current seniority and his

seniority projected at retirement date.

These calculations include the following assumptions:

3 retirement age: legal age prevailing in each country;

3 average life expectancy: based on the mortality table applicable

to each country;

3 discount rate;

3 inflation rate;

3 turnover: established for each company using the average

turnover observed over the last five years;

3 assumptions on salary increases;

3 calculation of the rights based on collective agreements or

specific agreements in force in each entity/country.

Pursuant to IAS 19, the group recognizes its actuarial differences

directly in shareholders’ equity.

IncentivesIncentives are based on several types of criteria:

3 profitability criteria;

3 cost control criteria;

3 operational criteria such as the availability of vessels, the speed of

intervention and the reliability of operations;

3 the results for the relevant year in terms of personal safety.

Two calculations are currently used:

3 the first method incorporates a progressive incentive rate by

salary category. The amount of the incentive is then calculated

by applying the corresponding percentage to the annual payroll;

3 the second method consists in directly determining an overall

bonus by combining several criteria.

The amount thus calculated is then distributed uniformly according

to employment longevity, or by a combination of longevity and a

percentage of gross annual salary.

Profit sharingProfit sharing agreements are in place in all French subsidiaries in

accordance with current legislation.



Employee savings planMost French subsidiaries on French soil have implemented employee

savings plans such as the Plan d’Épargne Entreprise (Enterprise

Savings Plan) and the Plan d’Épargne Retraite Collectif (Collective

Retirement Savings Plan). Employees may use these to deposit their

incentives and profit sharing and, for certain subsidiaries, to bank

days in their work time savings account, subject to the statutory

limits. These employee savings plans are topped up by employer’s

contributions.

Stock option plansThe cost of equity-settled share-based payment transactions with

employees, granted after November 7, 2002, is measured at the fair

value of the equity instruments granted at the grant date using the

“Black & Scholes” model.

This cost is recognized as personnel expenses as a contra entry to

an equivalent increase in shareholders’ equity, using the straight-line

method over the vesting period. This period ends on the date on

which the employees obtain an unconditional right to the instruments

(“the rights acquisition date”).

The cumulative expense recorded for these transactions at the end

of each year until the rights acquisition date takes into account

the group ’s best estimate, on that date, of the number of equity

instruments that will be acquired.

When stock subscription options are exercised by their beneficiaries,

the shares issued on that occasion will be remitted to them.

The exercise price of the shares will be recognized as cash by

the counterparty of the shareholders’ equity. In the case of stock

purchase options, income from the sale at the time the options are

exercised will be recognized as shareholders’ equity.

Bonus sharesThe cost of equity-settled share-based payment transactions with

employees, granted after November 7, 2002, is measured at the fair

value of the equity instruments granted at the grant date.

This cost is recognized as personnel expenses as a contra entry to

an equivalent increase in shareholders’ equity, using the straight-line

method over the vesting period. This period ends on the date on

which the employees obtain an unconditional right to the instruments

(“the rights acquisition date”).

1.5.14 Financial liabilities

Financial liabilities include borrowings and financial debts, trade

payables, derivative instruments and other current and non-current

liabilities.

All borrowings are initially recorded at fair value less directly

chargeable transaction costs.

After initial recognition, interest-bearing loans are measured at

amortized cost, using the effective interest rate method.

Profits and losses are recorded on the income statement when the

debts are derecognized, and through the amortized cost mechanism.

Derivative instruments are carried at their fair value at the closing

date. The accounting methods for derivative instruments are

described in note 1.5.18.

1.5.15 Finance leases

Assets held under finance leases are recognized as assets of the

group , i.e. when in substance, the contract grants to the group

most of the risks and benefits related to the asset. These assets

are measured at the fair value or, if lower, at the present value of

the minimum lease payments. The asset is depreciated using the

group ’s depreciation methods as defined in note 1.5.5.

1.5.16 Revenue

Revenue is recognized according to IFRS 15 “Revenue from

Contracts with Customers” which defi nes the framework for

recognizing revenue based on a fi ve-step process:

i) identify the contract;

ii) identify the performance obligations;

iii) determine the transaction price;

iv) allocate the transaction price;

v) recognize revenue.

According to this model, revenue is recognized when a company

transfers control of goods or services to a client, in the amount it

expects to receive. Depending on the criteria, revenue will either be

recognized over time representing the Company’s performance, or

at a given date when control of the goods or services is transferred

to the client.

Maritime services are governed by vessel time chartering contracts

according to which the service is billed on the basis of daily rates.

These services include the provision of the vessel and its crew to the

oil operator for a period of time agreed in advance. These periods

can vary from a few days to several years.

The standard terms of these contracts are set out in a sample

contract created by the BIMCO (Baltic and International Maritime

Council), which is commonly used in the industry. However, the

group also signs framework agreements with the oil majors (Exxon,

Chevron, Total, BP, etc.), through its role as a strategic supplier to

leading oil companies.

The main Subsea Services are also governed by contracts based on

daily rates. Therefore, the service is contracted as follows:

3 bareboat vessel chartering;

3 chartering a vessel with associated crew, crane operator,

catering services, remotely operated vehicles and operations

management.

These contracts are fully aligned with the fi ve-step process. Each

service and associated obligations are defi ned according to an

allocated price, income is recognized daily and refl ects the transfer

of the control to clients at the time the service is performed.

The Subsea business also has a number of turnkey projects. These

services are contracted on a fi xed- price basis with a performance

commitment and limitation of liability. The revenue from these

projects, which is spread over relatively short periods (less than six



4


months), is recognized over time through a stage of completion

method, in particular via costs.

1.5.17 Current income tax and deferred tax

The income tax expense for the year includes:

3 the current income tax expense less tax deductions and tax

credits actually used;

3 deferred tax, booked in the consolidated financial statements

based on the tax situation of each company and/or based on the

tax consolidation scope for the companies concerned.

Deferred taxes result from:

3 temporary differences between taxable profit and accounting

profit;

3 consolidation restatements and eliminations; and

3 tax loss carryforwards, which are likely to be recovered in the

future.

These taxes are calculated and adjusted using the balance sheet

liability method in its broadest sense. Deferred tax assets and

liabilities are not discounted.

Deferred tax and current income tax relating to items booked directly

as shareholders’ equity are recognized as shareholders’ equity and

not in the income statement.

1.5.18 Derivative instruments and hedge accounting

The group uses derivative instruments such as forward exchange

contracts, interest rate swaps, cross currency swaps and exchange

options to manage its exposure to movements in interest rates and

foreign exchange rates. These derivative instruments are initially

recognized at fair value on the date on which the contracts take effect

and are subsequently measured at fair value. Derivative instruments

are booked as assets when the fair value is positive and as liabilities

when the fair value is negative.

All gains and losses from changes in the fair value of the derivative

instruments which are not classified as hedging instruments are

recognized directly in the income statement for the year.

The fair value of buying forward exchange contracts is calculated by

reference to the current forward exchange rates for contracts with

similar maturities. The fair value of interest rate swaps is generally

determined using rate curves based on the market interest rates

observed on the closing date.

For the purposes of hedge accounting, hedges are classified as:

3 fair value hedges when they hedge the exposure to changes in the

fair value of a recognized asset or liability, or a firm commitment

(except for the exchange risk);

3 cash flow hedges when they hedge the exposure to variability in

cash fl ows that is attributable either to a specific risk associated

with a recognized asset or liability, or to a highly probable forecast

transaction or to the exchange risk on a firm commitment;

3 hedges of a net investment in a foreign operation.

The hedge on the foreign currency risk of a firm commitment is

recognized as a cash flow hedge.

At inception of a hedge relationship, the group formally designates and

documents the hedge relationship to which the group wants to apply

the hedge accounting and the objective desired for risk management

hedge strategy. The documentation includes the identification of

the hedging instrument, the item or transaction hedged, the nature

of the risk being hedged, sources of ineffectiveness, and how the

group will assess compliance with the effectiveness criteria defi ned

by the standard. The group also ensures that the item hedged and

the hedging instrument are eligible for hedge accounting. At the

start of and throughout the life of the hedging relationship, the group

verifi es compliance with the effectiveness criteria defi ned by IFRS 9.

Specifi cally, this involves ensuring the existence of an economic

relationship between the hedging of the item and that there is not

a predominant credit risk in changes in values that result from this

economic relationship.

The hedging instruments that meet the strict criteria for hedge

accounting are recognized as follows:

Fair value hedgesFair value hedges are hedges on the group ’s exposure to changes

in the fair value of a recognized asset or liability or an unrecognized

firm commitment, or an identified portion of such financial assets or

liabilities, which is attributable to a specific risk and which can affect

the result for fair value hedges. The gain or loss on the hedged item

attributable to the hedged risk adjusts the carrying amount of the

item hedged, the hedging instrument is remeasured at fair value, and

the resulting gains and losses are recognized for the two items on

the income statement.

When an unrecognized firm commitment is designated as a hedged

item, the subsequent cumulative change in the fair value of the firm

commitment attributable to the hedged risk is accounted for as an

asset or a liability, and the corresponding profit or loss is recognized

on the income statement. The changes in the fair value of the hedging

instrument are also accounted for as income/loss. The group ceases

to use hedge accounting, and therefore ceases to reassess the

item being hedged at fair value, if the hedging instrument reaches

maturity or is sold, terminated or exercised, or if the hedge no longer

meets the criteria for hedge accounting.

Lastly, for fi rm currency derivatives, the group only considers

changes in fair value of forwards linked to changes in the spot

foreign exchange rate as hedging instruments. The changes in value

of forwards related to forward points are excluded from the hedging

relationship, and are recognized either in fi nancial profi t or loss, or

in other comprehensive income, the choice being made for each

instrument.

Cash flow hedgeA cash flow hedge is a hedge on the exposure to changes in cash

flow attributable to a specific risk associated with a recognized asset

or liability or with a highly probably planned transaction, which can

affect the results. The profit or loss corresponding to the effective

part of the hedging instrument is recognized directly as shareholders’

equity whereas the ineffective part is recognized as income/loss.


CONSOLIDATED FINANCIAL STATEMENTS4 Significant information for the year ended December 31, 2018

2/ Significant information for the year ended December 31, 2018

2.1 SIGNIFICANT EVENTS OVER THE PERIOD

On February 12, 2018, the Board of Directors of BOURBON

Corporation approved the new strategic action plan,

#BOURBONINMOTION that began at the end of 2017. This plan

should help the group in terms of competitiveness and the new

demands of its clients in a market environment that has been

challenging to all players in the Oil & Gas industry. BOURBON’s

goal is to accelerate its transformation in order to be ready for the

expected recovery.

The fi rst plan based on three priorities was widened in order to cover

the fi nancial aspect. It represents a total investment of €75 million

over three years.

This plan is now based on four priorities:

3 better serve clients through development of its business model

to include more integrated services, and the reorganization of

the group ’s activities into three standalone companies: Bourbon

Marine & Logistics, Bourbon Mobility, and Bourbon Subsea

Services. These three companies are now implementing their

own strategies. A Chief Executive Offi cer was appointed to

each of these entities in 2018, as well as a management team.

Their objectives: to deliver profi table growth through:


which won its fi rst contract in an exploration campaign, as

well as several chartering contracts that include performance

bonuses linked to fuel economy,

1.6 TRANSLATION OF THE FINANCIAL STATEMENTS OF FOREIGN SUBSIDIARIES

The exchange rates used are as follows:

CURRENCIESAVERAGE RATE

FOR 2018CLOSING RATE AS

OF 12.31.2018CLOSING RATE

AS OF 12.31.2017

AON Angolan Kwanza 297.4556 353.3550 198.9927

AUD Australian Dollar 1.5797 1.6220 1.5346

BRL Brazilian Real 4.3085 4.4363 3.9669

CHF Swiss Franc 1.1550 1.1269 1.1702

CNY Chinese Yuan 7.8081 7.8751 7.8044

INR Indian Rupee 80.7332 79.7298 76.6055

MXP Mexican Peso 22.7054 22.4921 23.6612

MYR Malaysian Ringgit 4.7634 4.7317 4.8536

NGN Nigerian Naira 428.7035 418.2950 432.6480

NOK Norwegian krone 9.5975 9.9483 9.8403

QAR Qatari Riyal 4.3288 4.1695 4.3592

RON New Romanian Leu 4.6540 4.6635 4.6585

RUB Russian Ruble 74.0416 79.7153 69.3920

SGD Singapore Dollar 1.5926 1.5591 1.6024

TRY Turkish Lira 5.7077 6.0588 4.5464

UAH Ukrainian Hryvnia 32.3915 32.0027 33.7266

USD American Dollar 1.1810 1.1450 1.1993

XAF CFA Franc 655.9570 655.9570 655.9570

The amounts recognized directly in shareholders’ equity shall be

recognized in profit or loss in the same period or periods during

which the hedged item affects profit or loss (for example, for assets

that are hedged, at the rate of the amortization made).

If the hedging instrument reaches maturity, is sold, terminated or

exercised without being replaced or renewed, or if the hedging no

longer corresponds to the hedging criteria, the amounts previously

recognized as shareholders’ equity are maintained as such until the

execution of the planned transaction. If the transaction is no longer

planned, this amount is recognized as profi t or loss .



4

Significant information for the year ended December 31, 2018




platform,


Subsea Services. Bourbon Subsea Services installed the

fi rst fl oating wind turbine for the Kincardine offshore wind

farm in Scotland in 2018, and won a turnkey contract for

the installation of the Windfl oat Atlantic fl oating wind farm in


The three new standalone companies have privileged market

access through numerous existing partnerships in the main

countries where BOURBON currently operates;

3 capitalize on digital transformation by connecting the fl eet of

vessels to stand out, improve operational excellence, and reduce

costs. With the help of the Smart Shipping program that is currently

being deployed, by 2022, the Bourbon Marine & Logistics fl eet

of 133 modern Supply vessels (called the Smart Fleet) will be

connected. This program is structured around four main projects:

automating dynamic positioning systems, simplifying on-board

processes, optimizing maintenance, and land-based as well as

remote operational support. The investments carried out will

result in a 25% sustainable reduction in vessel operating costs. It

will rely on technological partnerships such as those entered into

with Kongsberg in 2017 or Bureau Veritas in 2018. At the end of

2018, BOURBON had already converted its fi rst vessels to Smart

Shipping, and will step up the conversions in 2019;





3 accompanying the growth of the group ’s culture,


The group is committed to optimizing its fi nancial operations,

including the creation of shared service centers for the three

standalone companies that are newly created. BOURBON is also

working on optimizing its cash fl ow, reducing its general costs, and

disposal of non-strategic assets.

Within the traditional fl eet of Bourbon Marine & Logistics’ 65 vessels,

41 of the oldest cannot be connected (designated as “non-smart

fl eet”), so were then labeled for sale “as-is where-is” at the current

market price. This planned sale of 41 fully-owned vessels generated

an impairment charge of €(167.2) million in the 2017 financial

statements. During fi scal year 2018, 8 non-smart vessels were sold

for a price close to the estimated fair value, generating a gain of €0.5

million.

As part of this Group strategy, it was decided to sell 7 vessels

from specialty segments that were considered as non-stategic for

the group . These vessels were also to be sold “as is where is” and

according to the same process, and an impairment expense of

€(29.6) million was recognized in this respect in 2017. For fi scal year

2018, 2 vessels were sold, also at a price close to their estimated fair

value, but did not generate any gain or loss for the period.

At December 31, 2018, after a review of the vessels concerned,

the group still held 30 non-smart vessels, as well as 11 other

vessels considered non-strategic. The fair values of these vessels

were remeasured at December 31, 2018, leading to a recognition

of additional impairments for the fi scal year of €(26.2) million

(see note 3.3).

Regarding the group ’s fi nancial restructuring, on March 15, 2018,

BOURBON announced that it had initiated discussions with its main

financial partners, both in France and abroad, in order to balance the

servicing of its debt with the expected gradual market recovery and

the corresponding upturn in the group ’s performance.

On April 20, 2018, the General Meeting of holders of Perpetual Deeply

Subordinated Fixed- to Floating-rate Notes issued by BOURBON

Corporation SA (TSSDIs) authorized Bourbon Corporation SA to

postpone payment of interest due for an amount of about €3.867

million, due on April 24, 2018, to April 24, 2019. The interest carried

interest from October 24, 2018 (included) until April 24, 2019

(excluded) at the rate applicable to the TSSDIs.

On July 10, 2018, BOURBON announced that a general waiver was

fi nalized with lessors and debt holders representing the majority of its

debt, thus allowing the group to withhold the payments of its loans

and the servicing of its debt.

This general waiver demonstrates the motivation of all stakeholders

to reach an appropriate restructuring of the debt, while preserving

cash and operating within a secured legal framework. It allows

BOURBON to stay focused on its operational priorities and on the

implementation of its strategic plan, #BOURBONINMOTION.


of the general waiver, the group announced that the president of



In November 2018, BOURBON also confi rmed that it was actively

engaged in discussions with its debt holders, and seeking new

fi nancing to ensure its development and the implementation of its

strategic plan; the terms of this possible new fi nancing, including

amounts and structures (debt instruments / capital instruments) was

not yet determined.





















CONSOLIDATED FINANCIAL STATEMENTS4 Significant information for the year ended December 31, 2018

The deconsolidation of the special purpose company had a positive

impact on income of €9.8 million.

This deconsolidation also brought about the end of elimination of an

intercompany loan from a subsidiary of the group with this special

purpose company for €28.2 million (including accrued interest

not due). This loan was fully impaired in view of the discussions

in progress. Furthermore, an additional provision for risks and

contingencies for €25 million was recognized at December 31, 2018,

based on the best information available, taking into consideration the

discussions still in progress.

The total net impact on income of €(43.4) million was recognized in

fi nancial profi t or loss.

2.2.3 Transactions in non-controlling interests

BOURBON completed transactions for the acquisition of certain

non-controlling interests during 2018. In accordance with IFRS 10,

their impact was recognized under consolidated reserves, as these

transactions had no effect on the control exercised by BOURBON

over those companies, and hence they did not entail any changes in

the way those companies are consolidated.

The impact on shareholders’ equity, group share at December 31, 2018 was as follows:

(in € millions)

Acquisition price of the shares 0.3

Restated portion acquired 4.0

IMPACT ON SHAREHOLDERS’ EQUITY, GROUP SHARE ACQUISITION OF NON-CONTROLLING INTERESTS (3.7)

The group did not dispose of any non-controlling interests in 2018.

2.2 CHANGES IN THE SCOPE OF CONSOLIDATION

2.2.1 Newly consolidated companies

Two companies were created and as such entered into the scope of consolidation during the 2018 fi scal year, with a negligible impact on the

consolidated fi nancial statements. One is fully consolidated, and the other is consolidated under the equity method.

The list of the consolidated companies is provided in note 5.8.

2.2.2 Deconsolidated companies

In the fi rst half of 2018, the group completed the disposal of a non-strategic company. The non-material effect was recognized through profi t

or loss.

(in € millions)

Share transfer price -

Percentage of group sold (0.1)

IMPACT ON SHAREHOLDERS’ EQUITY, GROUP SHARE 0.1

Furthermore, over the second half of 2018, the group lost control of a special purpose company that, up to that point, was fully consolidated.

This loss of control is part of the suspension of the servicing of the debt.

The impact on the group ’s fi nancial statements at December 31, 2018 is as follows.

(in € millions)IMPACT OF THE

LOSS OF CONTROL LOAN IMPAIRMENT

PROVISIONS FOR RISKS AND

CONTINGENCIES TOTAL IMPACT

Property, plant and equipment (66.2) (66.2)

Loans 28.2 (28.2) -

Trade and other receivables (5.1) (5.1)

Cash and cash equivalents (5.0) (5.0)

TOTAL ASSETS (48.1) (28.2) - (76.4)

Shareholders’ equity - Impact on profi t and loss 9.8 (28.2) (25.0) (43.4)

Provisions for risks and contingencies 25.0 25.0

Bank and other loans (58.0) (58.0)

Trade and other payables (0.0) (0.0)

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (48.1) (28.2) - (76.4)



4

Notes to the consolidated financial statements

3/ Notes to the consolidated financial statements

3.1 GOODWILL

As of December 31, 2018, the net balance of goodwill totaled €19.2 million, broken down as follows:

(in € millions) GROSS IMPAIRMENTS NET

01.01.2017 33.5 (8.2) 25.2

Acquisitions - - -

Disposals - - -

Impairments - - -

Currency translation adjustment - - -

Change in consolidation scope - - -

Reclassification and other changes - - -

12.31.2017 33.5 (8.2) 25.2

Acquisitions - - -

Disposals - - -

Impairments - (6.1) (6.1)

Currency translation adjustment - - -

Change in consolidation scope - - -

Reclassification and other changes - - -

12.31.2018 33.5 (14.3) 19.2

Allocation of goodwill by CGU was as follows:

(in € millions) 12.31.2017 IMPAIRMENT 12.31.2018

Marine & Logistics – DEEP - - -

Marine & Logistics – SHALLOW 6.1 (6.1) -

Mobility - - -

Subsea Services 19.2 - 19.2

Other

TOTAL 25.2 (6.1) 19.2

The accounting method is detailed in note 1.5.2.

In accordance with IAS 36, the goodwill value must be tested at least

once a year, and systematically as soon as indications of impairment

appear.

At December 31, 2018, conditions on the offshore oil and gas

sector of the market were still diffi cult, resulting in an indication of

impairment according to IAS 36, paragraph 12 (d).

The group conducted an impairment test on each cash-generating

unit (CGU). The recoverable value of each CGU used for testing

corresponds to the going concern value, defined as total discounted

future cash fl ows .

Going concern values are determined using economic assumptions

and forecasts of activity and results deemed by the group ’s

Management to be the most probable. The principal assumptions

and forecasts are presented below:

3 five-year business plan covering the 2019-2023 period for each

of the CGUs, prepared on the basis of adjusted financial data;

3 use of normative cash fl ows beyond 2023; the weight of the

discounted standardized cash fl ows represents approximately

95% of total going concern value;

3 perpetual growth rate of 2.5% (taking into account the regions of

the world in which the group does business and that have fairly

high inflation rates);

3 discount rate of 10.3%, determined by an independent third party

and considered as reflecting the group ’s weighted average cost

of capital (WACC); based in particular on a risk-free rate of 0.9%,

a market risk premium of 6.6% and a specific risk premium that

includes the group ’s exposure to geopolitical risks and the risk

relating to achievement of the forecasts in the business plan.

This 5% risk premium is up by two points compared to December

31, 2017;

3 exchange rate (business plan and normative cash fl ows ):

€1 = US$ 1.15.

Over the past four years, BOURBON has gone through the Oil &

Gas industry’s worst crisis since the early 1980’s, with a 30 to 40%

contraction in offshore oil and gas services that started suddenly in

2015 following the collapse in Brent oil prices. This market contraction

severely hit companies that provide services to the oil companies.


CONSOLIDATED FINANCIAL STATEMENTS4 Notes to the consolidated financial statements

After four years of drastic reductions, the Oil & Gas Majors have

started to increase their investment commitments again, mainly

focusing on Deepwater offshore drilling campaigns and maintenance

activities for Shallow water offshore fi elds in particular. This recovery

is already noted for demand for OSVs in several market segments

and in several regions. Nevertheless, it will only be sustainable if the

market manages to transform and if the main players in offshore Oil &

Gas services fi nd fi nancial solutions for reactivating the most modern

vessels.

The activity forecasts used in the business plan are based,

in particular, on the assumptions that the price per barrel of Brent

will stabilize around US$60 in 2019, reaching US$70 in 2020, with

a possible shortfall in supply relative to demand (predicted by the

International Energy Agency – IEA) following oil companies’ historic

reduction in exploration and production investments since mid-2014.

Recovery of activity should at fi rst start with a gradual rise, but

slower than initially expected, in current 2019 usage rates, while the

increase in daily rates should not come about until 2021, depending

on the rhythm at which the global fl eet of OSVs will balance out.

The business plan reviewed at the end of 2018 thereby refl ects

the recovery, which is slower than in the initial model for the

2019- 2023 period, with rather low prices, and fi erce competition

requiring a strong commercial position together with the disposal of

non- strategic assets.

More specifi cally, the Deepwater offshore and Shallow water offshore

segments should show a slower upturn due to vessel overcapacity,

affecting these commodity segments, particularly in terms of pricing.

The Mobility segment should hold up relatively well, as crew boats

are a less expensive and safer alternative to helicopters, whereas the

Subsea segment should continue to diversify by expanding its range

of activities (“turnkey” projects, ROV construction support, diving,

floatel, and well stimulation) and geographic presence.

Ultimately, the business plan takes into account the

#BOURBONINMOTION strategic plan announced by BOURBON

on February 13, 2018, which aims to respond to a market that is

demanding increasingly efficient optimization of costs. In particular,

the Smart Shipping program should make it possible to reduce

operating costs by connecting modern vessels. The savings

generated are expected to produce their full effect around 2020-2021

in the Deepwater Offshore and Shallow Water Offshore segments,

which have become commodity segments and where the reduction

in operating costs has become a key component in competitiveness.

The result of the value in use assessment is set forth below:

(in € millions) GOODWILL

ECONOMIC ASSETS AS OF 12.31.2018 INCLUDING

GOODWILL***

ESTIMATED VALUE IN USE

EXCESS OF ESTIMATED VALUE IN USE OVER THE VALUE* OF ASSETS

INCLUDING GOODWILL**

Marine & Logistics - DEEP - 549.9 521.4 (28.5)

Marine & Logistics - SHALLOW 6.1 542.3 521.2 (21.1)

Mobility - 194.2 532.5 338.3

Subsea Services 19.2 346.1 551.6 205.5

* Adjusted data: operating joint ventures over which the group exercises joint control are fully consolidated.

** Economic assets = goodwill, intangible assets, property, plant and equipment, and working capital requirement, excluding vessels planned to be sold in

the relatively short term and for which individual impairment allowances have been recognized (see note 3.3).

Taken together, these value in use assessments led to recognizing

the following impairment losses:

3 on the Marine & Logistics - DEEP CGU for €(28.5) million;

3 on the Marine & Logistics - SHALLOW CGU for €(21.1) million.

In accordance with IAS 36 (IAS 36.104 s.), the impairment loss must

be allocated in the following order:

3 reduction in the book value of goodwill allocated to the CGU

(or group of CGUs);

3 then allocation to other assets prorata to the book value of each

asset of the CGU, while taking care that the impairment loss does

not reduce the book value of an asset below the higher of its fair

value less disposal costs (if determinable), and its going concern

value (if determinable), or zero.

The amount of loss that could not be allocated to an asset due

to these limits must be split, prorata, between the other assets of

the CGU. In the event that these limits do not apply, because the

fair value less disposal costs and the going concern value cannot

be individually determined for each asset, the impairment loss is

arbitrarily allocated to assets, other than goodwill, prorata to their

book value.

As a result, in the consolidated fi nancial statements as of December

31, 2018, the impairment loss was allocated as follows:

3 Marine & Logistics - DEEP CGU: allocation to property, plant and

equipment, on isolated assets, up to their fair value, for €(28.5)

million;

3 Marine & Logistics - SHALLOW CGU:

3 Goodwill for €(6.1) million, which fully impairs the goodwill

allocated to the SHALLOW CGU,

3 Property, plant and equipment of specifi c assets, within the

limit of their fair value, in the amount of €(15.0) million.



4


The amount of provisions for impairment for assets excluding goodwill is presented in note 3.3 on property, plant and equipment.

The results of the sensitivity analyses performed on individual changes to the assumptions used are presented below and represent the

impacts as compared with the estimated going concern values presented in the previous table:

(in € millions)

IMPACT ON THE CGUS’ VALUE IN USE

0.5 PT DECREASE IN THE DISCOUNT

RATE

0.5 PT INCREASE IN THE DISCOUNT

RATE

0.5 PT DECREASE IN THE GROWTH

RATE

0.5 PT INCREASE IN THE GROWTH

RATE

10% DECREASE IN CASH FLOWS

10% INCREASE IN CASH FLOWS

Marine & Logistics - DEEP 47.1 (41.2) (30.9) 35.1 (52.1) 52.1

Marine & Logistics - SHALLOW 56.0 (49.0) (42.2) 48.0 (52.1) 52.1

Mobility 36.4 (32.0) (26.5) 30.2 (53.2) 53.2

Subsea Services 49.3 (43.2) (36.8) 41.8 (55.2) 55.2

Taking into account the individual changes to the assumptions used, the estimated excess amount of value in use over the value of the assets

of each CGU would be:

(in € millions)

EXCESS AMOUNT OF VALUE IN USE OF ECONOMIC ASSETS


RATE


RATE

0.5 PT DECREASE IN THE GROWTH

RATE

0.5 PT INCREASE IN THE GROWTH

RATE

10% DECREASE IN CASH FLOWS

10% INCREASE IN CASH FLOWS

Marine & Logistics - DEEP 18.6 (69.7) (59.4) 6.7 (80.6) 23.7

Marine & Logistics - SHALLOW 34.9 (70.1) (63.3) 26.9 (73.2) 31.0

Mobility 374.7 306.3 311.8 368.5 285.1 391.6

Subsea Services 254.8 162.3 168.7 247.3 150.3 260.7

Under each scenario, the individual rates according to which an impairment would have to be recorded are the following:

MARINE & LOGISTICS - DEEP

MARINE & LOGISTICS

- SHALLOW MOBILITY SUBSEA

Discount rate of: n/a n/a 23.6% 13.5%

Growth rate of: n/a n/a

no impairment even in the event

of a growth rate of zero

Decrease in cash fl ows of: n/a n/a 63.5% 37.3%

Moreover, the 2019-2023 business plan and normative cash fl ows were established on the basis of an EUR/USD exchange rate of 1.15. The

table below shows the impact of an exchange rate fluctuation of +/-5 cents on these estimated values in use:

(in € millions)


EUR/USD RATE: - 5 CTS, I.E. €1 = US$1.10

EUR/USD RATE: +5 CTS, I.E. €1 = US$1.20

Marine & Logistics - DEEP 67.5 (59.1)

Marine & Logistics - SHALLOW 62.1 (57.3)

Mobility 64.8 (59.5)

Subsea Services 67.9 (62.4)

Taking into account these EUR/USD exchange rate fluctuations, the excess amount of the estimated value in use of the assets of each CGU

would be as follows:

(in € millions)


EUR/USD RATE: - 5 CTS, I.E. €1 = US$1.10

EUR/USD RATE: +5 CTS, I.E. €1 = US$1.20

Marine & Logistics - DEEP 39.0 (87.6)

Marine & Logistics - SHALLOW 41.0 (78.4)

Mobility 403.1 278.8

Subsea Services 273.4 143.1



Lastly, the following tables present the sensitivity analyses obtained when combining several assumptions:

EUR/USD exchange rate (2019-2023 business plan and normative cash fl ows) and discount rate:

(in € millions)



RATE AND EXCHANGE RATE

OF €1 = US$1.10



OF €1 = US$1.20



OF €1 = US$1.10



OF €1 = US$1.20

Marine & Logistics - DEEP 119.2 (16.2) 22.1 (96.6)

Marine & Logistics - SHALLOW 123.0 (5.7) 8.8 (102.3)

Mobility 105.3 (27.0) 29.1 (88.2)

Subsea Services 122.4 (17.7) 20.2 (101.5)

(in € millions)




OF €1 = US$1.10



OF €1 = US$1.20



OF €1 = US$1.10



OF €1 = US$1.20

Marine & Logistics - DEEP 90.8 (44.7) (6.3) (125.1)

Marine & Logistics - SHALLOW 101.9 (26.8) (12.3) (123.4)

Mobility 443.6 311.3 367.4 250.1

Subsea Services 327.9 187.8 225.7 104.0

Perpetual growth rate and discount rate:

(in € millions)


0.5 PT DECREASE IN THE DISCOUNT RATE AND 0.5 PT

DECREASE IN THE GROWTH RATE

0.5 PT DECREASE IN THE DISCOUNT RATE AND 0.5 PT INCREASE IN THE

GROWTH RATE


RATE AND 0.5 PT DECREASE IN THE

GROWTH RATE


RATE AND 0.5 PT INCREASE IN THE

GROWTH RATE

Marine & Logistics - DEEP 11.2 88.2 (68.1) (11.0)

Marine & Logistics - SHALLOW 7.4 111.8 (85.9) (7.3)

Mobility 5.9 71.3 (55.3) (5.8)

Subsea Services 7.0 97.9 (75.4) (6.9)

(in € millions)


0.5 PT DECREASE IN THE DISCOUNT RATE AND 0.5 PT

DECREASE IN THE GROWTH RATE

0.5 PT DECREASE IN THE DISCOUNT RATE AND 0.5 PT INCREASE IN THE

GROWTH RATE


RATE AND 0.5 PT DECREASE IN THE

GROWTH RATE


RATE AND 0.5 PT INCREASE IN THE

GROWTH RATE

Marine & Logistics - DEEP (17.2) 59.8 (96.5) (39.4)

Marine & Logistics - SHALLOW (13.7) 90.7 (107.0) (28.4)

Mobility 344.2 409.7 283.1 332.5

Subsea Services 212.5 303.4 130.1 198.6



4


3.2 INTANGIBLE ASSETS

Intangible assets can be analyzed as follows:

(in € millions) GROSSGROSS AMORTIZATION

AND IMPAIRMENT NET

01.01.2017 44.3 (30.4) 14.0

Acquisitions 2.5 (2.3) 0.2

Disposals (1.9) 1.9 (0.0)

Change in scope - - -

Currency translation adjustment (1.4) 0.4 (0.9)

Reclassification and other changes (0.3) 0.3 (0.0)

IFRS 5 reclassification* - - -

12.31.2017 43.2 (30.0) 13.2

Acquisitions 1.2 (2.8) (1.6)

Disposals (0.0) 0.0 -


Currency translation adjustment 0.4 (0.2) 0.3



12.31.2018 44.7 (32.9) 11.8

* Reclassification of discontinued operations / operations held for sale.

The change in the gross value of the intangible assets is as follows:

(in € millions)R&D

COSTSCONCESSIONS AND PATENTS

BUSINESS GOODWILL

OTHER INTANGIBLE ASSETS

INTANGIBLE ASSETS IN PROGRESS TOTAL

01.01.2017 0.1 27.8 - 14.2 2.3 44.3

Acquisitions - 0.0 - 0.3 2.1 2.5

Disposals - (1.8) - (0.2) - (1.9)

Change in scope - - - - -

Currency translation adjustment - (0.0) (0.1) (1.3) - (1.4)

Reclassification and other changes - 3.7 1.0 (1.4) (3.6) (0.3)

IFRS 5 reclassification* - - - - - -

12.31.2017 0.1 29.7 0.9 11.6 0.9 43.2

Acquisitions - 0.4 - 0.1 0.8 1.2

Disposals - - - (0.0) - (0.0)

Change in scope - - - - -

Currency translation adjustment - 0.0 0.0 0.4 - 0.4

Reclassification and other changes - 0.4 - 0.6 (1.1) (0.1)


12.31.2018 0.1 30.4 1.0 12.6 0.6 44.7




Amortizations and impairments of intangible assets break down as follows:

(in € millions)R&D

COSTSCONCESSIONS AND PATENTS

BUSINESS GOODWILL

OTHER INTANGIBLE ASSETS

INTANGIBLE ASSETS IN PROGRESS TOTAL

01.01.2017 (0.1) (24.0) - (6.0) (0.3) (30.4)

Acquisitions - (2.1) - (0.2) - (2.3)

Impairments - - -

Disposals - 1.8 - 0.2 - 1.9

Change in scope - - - - - -

Currency translation adjustment - 0.0 0.1 0.4 - 0.4

Reclassification and other changes - (0.1) (1.0) 1.1 0.3 0.3


12.31.2017 (0.1) (24.4) (0.9) (4.6) - (30.0)

Provisions for amortization - (2.4) - (0.4) - (2.8)

Impairments - - - - - -

Disposals - - - 0.0 - 0.0


Currency translation adjustment - (0.0) (0.0) (0.1) - (0.2)

Reclassification and other changes - - - 0.0 - 0.0


12.31.2018 (0.1) (26.8) (1.0) (5.0) - (32.9)


3.3 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment was worth €1,638.2 million as of December 31, 2018, and broke down as follows:

(in € millions) GROSS

DEPRECIATION, AMORTIZATION

AND PROVISIONS NET

01.01.2017 4,084.9 (1,647.3) 2,437.6

Acquisitions 65.6 (444.7) (379.1)

Disposals (122.7) 75.7 (47.1)


Currency translation adjustment (161.5) 74.6 (86.9)



12.31.2017 3,862.3 (1,939.0) 1,923.2

Acquisitions 72.2 (262.0) (189.9)

Disposals (200.4) 161.1 (39.4)

Change in scope (78.4) 12.1 (66.3)

Currency translation adjustment 34.2 (11.8) 22.4

Reclassification and other changes (1.1) 1.2 0.1

IFRS 5 reclassification* (71.3) 59.4 (12.0)

12.31.2018 3,617.4 (1,979.2) 1,638.2




4


Details of gross property, plant and equipment:

(in € millions) LAND BUILDINGSINVESTMENT

PROPERTIESTECHNICAL

FACILITIES

VESSELS, OVERHAUL AND

CAPITAL EXPENDITURES

ON LEASED VESSELS

OTHER PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

IN PROGRESS TOTAL

01.01.2017 1.6 42.3 0.7 11.3 3,938.0 10.2 80.8 4,084.9

Acquisitions - 0.0 - 0.3 36.9 0.3 28.1 65.6

Disposals - (0.7) - (0.4) (97.1) (0.3) (24.2) (122.7)

Change in

scope - - - - - - - -

Currency

translation

adjustment (0.1) (3.9) - (0.5) (153.6) (0.7) (2.7) (161.5)

Reclassification

and other

changes - (0.1) - 0.2 0.3 0.1 (4.5) (3.9)

IFRS 5

reclassification* - - - - - - -

12.31.2017 1.6 37.7 0.7 10.8 3,724.5 9.5 77.4 3,862.3

Acquisitions - 0.2 - 0.1 34.8 0.3 36.7 72.2

Disposals - (0.3) - (0.1) (173.7) (0.1) (26.3) (200.4)

Change in

scope - - - - (78.4) (0.0) - (78.4)

Currency

translation

adjustment 0.0 1.4 - 0.2 31.5 0.2 0.9 34.2

Reclassification

and other

changes 0.4 1.1 - 0.0 3.0 (0.0) (5.6) (1.1)

IFRS 5

reclassification* - - - - (71.3) - - (71.3)

12.31.2018 2.0 40.1 0.7 11.1 3,470.5 9.9 83.2 3,617.4




3 Details of depreciation and impairment on property, plant and equipment

(in € millions) LAND BUILDINGSINVESTMENT

PROPERTIESTECHNICAL

FACILITIES

VESSELS, OVERHAUL AND

CAPITAL EXPENDITURES ON

LEASED VESSELS

OTHER PROPERTY,

PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

IN PROGRESS TOTAL

01.01.2017 - (18.1) - (8.7) (1,601.8) (8.8) (9.8) (1,647.3)

Provisions for

amortization - (2.7) - (0.8) (243.7) (0.7) (0.0) (247.8)

Impairments - - (196.0) (0.8) (196.8)

Disposals - 0.7 - 0.4 74.3 0.3 - 75.7

Change in

scope - - - - - -

Currency

translation

adjustment - 1.5 - 0.3 72.1 0.7 - 74.6

Reclassification

and other

changes - 0.0 - 0.2 (0.1) 0.1 2.6 2.7

IFRS 5

reclassification* - - - - -

12.31.2017 - (18.5) - (8.7) (1,895.3) (8.5) (8.0) (1,939.0)

Provisions for

amortization - (2.3) - (0.7) (187.8) (0.6) (1.1) (192.4)

Impairments - - - - (69.5) - (0.1) (69.7)

Disposals - 0.3 - 0.1 160.6 0.1 0.0 161.1

Change in

scope - - - 12.1 0.0 - 12.1

Currency

translation

adjustment - (0.7) - (0.2) (10.8) (0.2) - (11.8)

Reclassification

and other

changes - (0.0) - - 0.4 0.1 0.7 1.2

IFRS 5

reclassification* - - - - 59.4 - - 59.4

12.31.2018 - (21.2) - (9.5) (1,930.9) (9.1) (8.5) (1,979.2)


As of December 31, 2017, impairment had been recognized for 41

vessels that cannot be connected (termed the “non-smart fleet”),

as well as for seven other specialized vessels. The impairments

recognized for the year amounted to a total of €(196.8) million. These

vessels were intended to be sold “as is where is” at the current market

price as part of the #BOURBONINMOTION strategic plan. As these

vessels are no longer part of their respective CGUs at December 31;

2017, they were tested individually.

In accordance with IAS 36, the recoverable amount of an asset or

cash- generating unit is defined as the higher of its fair value less

disposal costs, and its useful value. Since the cash fl ows generated by

the ongoing use of these vessels until their disposal were insignificant,

the group had opted for measurement on the basis of fair value less

disposal costs (these costs being considered as insignificant by

management), pursuant in particular to IAS 36.21.

The provisions of IFRS 13 were also applied to determine this fair value

less disposal costs. The group based itself in particular on offers and

estimates transmitted by independent shipbrokers considering that

these stacked vessels are being sold simultaneously “as is where

is”, and based on their being offered for sale at the same time, with

transaction and reactivation costs payable by the purchasers.

At December 31, 2018, after review of the relevant vessels, the group

still holds 30 non-smart vessels. Out of the fl eet of 41 non-smart

vessels initially identifi ed, 8 were sold during the fi scal year at a price

close to the estimated fair values, generating a gain of €0.5 million.

3 AHTS vessels were also reintegrated into the active fl eet and to the

Deep CGU due to a new commercial outlook. Out of the 30 non-smart

vessels, the group also decided in fi scal year 2018 to scrap 8 of them,

leading to recording a fair value for these vessels of zero.

As well, the group has 11 vessels that it considers non-strategic at

December 31, 2018. Out of the initial fl eet of 7 vessels, 2 non- strategic

vessels were sold at a price close to their estimated fair value, but did

not generate any gain or loss for the period. Furthermore, the group

decided in the 2018 fi scal year to sell another 6 specifi c vessels. These

vessels therefore were pulled out of their CGUs and tested individually.

The fair values of these vessels were therefore remeasured at

December 31, 2018 according to the same principles as applied in

2017, leading to a recognition of additional impairments of €(26.2)

million for fi scal year 2018. Once again, in order to preserve its

legitimate interests in the prospect of future transactions, the group

does not want to disclose the values of the impaired vessels.



4


These assets are still not, as a group, classifi ed as non-current assets

held for sale in accordance with IFRS 5 in the fi nancial statements for

the year ended December 31, 2018.

To this end, the fi ve following criteria must be met, no later than on

the closing date:

i) available for immediate sale;

ii) the sale is highly probable (sale plan initiated and decided by the

appropriate management level, including the launch of an active

disposal program at a reasonable price, etc.);

iii) sale expected to take place within one year;

iv) low likelihood that the plan will be significantly changed or

withdrawn;

v) book value of the assets mainly recovered through their sale,

rather than continuous use.

However, as of December 31, 2018 , the criterion of immediate

availability of all vessels was not met, as some vessels had been

pledged to secure fi nancing; and / or the schedule for the sale of

these vessels could exceed the maximum period of one year.

However, the group did identify 3 non-smart vessels and 2 other

non-strategic vessels which met all the criteria on the closing date.

These were therefore reclassifi ed to non-current assets held for sale

in the fi nancial statements as of December 31, 2018 for a total book

value of €12 million.

In addition, as described in note 3.1 on Goodwill, impairment losses

on vessels (isolated assets) up to the limit of their fair value were

recognized at December 31, 2018:

3 on vessels belonging to the Marine & Logistics - DEEP CGU, for

a total of €(28.5) million;

3 on vessels belonging to the Marine & Logistics - SHALLOW CGU,

for a total of €(15.0) million.

Property, plant and equipment presented above include assets held under finance leases which break down as follows:

3 Details of gross property, plant and equipment held under finance leases:

(in € millions) LAND BUILDINGSTECHNICAL

FACILITIESVESSELS AND

MAINTENANCE

OTHER PROPERTY, PLANT AND EQUIPMENT TOTAL

01.01.2017 - - - 109.2 - 109.2

Acquisitions - - - 0.6 - 0.6

Disposals - - - - - -


Currency translation

adjustment - - - (0.1) - (0.1)

Reclassification and other

changes - - - 17.4 - 17.4

12.31.2017 - - - 127.0 - 127.0

Acquisitions - - - 3.5 - 3.5

Disposals - - - (3.3) - (3.3)



adjustment - - - (0.0) - (0.0)


changes - - - - - -

12.31.2018 - - - 127.2 - 127.2

Financial liabilities related to fixed assets under finance lease arrangements correspond to the discounted value of the minimum payments for

the lease. The amounts of the financial liabilities as well as their due dates are presented in note 3.13.



3 Details of depreciation and impairment on property, plant and equipment under finance leases:

(in € millions) LAND BUILDINGSTECHNICAL

FACILITIESVESSELS AND

MAINTENANCE

OTHER PROPERTY, PLANT AND EQUIPMENT TOTAL

01.01.2017 - - - (31.9) - (31.9)

Provisions for amortization - - - (9.5) - (9.5)

Disposals - - - - - -

Impairment - - - - - -



adjustment - - - 0.0 - 0.0


changes - - - 3.5 - 3.5

12.31.2017 - - - (37.8) - (37.8)

Provisions for amortization - - - (10.4) - (10.4)

Disposals - - - 3.3 - 3.3

Impairment - - - - - -



adjustment - - - 0.0 - 0.0


changes - - - - - -

12.31.2018 - - - (44.9) - (44.9)

3.4 INVESTMENTS IN AFFILIATES UNDER THE EQUITY METHOD

The interests in affiliates under the equity method include associates over which the Company has a significant influence as well as jointly

controlled joint ventures.

As of December 31, 2018, investments in affi liates amounted to €23.7 million.

(in € millions)

INVESTMENTS IN AFFILIATES UNDER THE

EQUITY METHOD

01.01.2017 14.8

Share of net income 2.0

Dividends paid (0.2)

Change in consolidation scope and other 5.1

Currency translation adjustment (1.8)

12.31.2017 19.9

Share of net income 1.9

Dividends paid (0.2)

Change in consolidation scope and other 2.5

Currency translation adjustment (0.3)

12.31.2018 23.7

As of December 31, 2018, investments in affiliates under the equity

method mainly consisted of equity interests held in joint ventures.

It should be noted that, in accordance with revised IAS 28, the Group

recognized a liability for the companies showing a negative net

asset and for which there exists a legal or implied obligation for the

group . Liabilities thus recorded as of December 31, 2018 totaled

€1.2 million.

The share in income (loss) of affiliates under the equity method shown

in the statement of comprehensive income includes the provision for

the negative net assets recognized at December 31, 2018 (see note

3.12).

Moreover, as of this date, there are no unrecognized liabilities

associated with interests in companies consolidated by the equity

method.



4


3.4.1 Aggregate financial information

The main financial items of the companies consolidated by the equity method are presented below (figures indicated at 100%, unless otherwise

indicated); as well as individual data for the most significant company:

(in € millions) 12.31.2018

OF WHICH SONASURF

ANGOLA

OF WHICH IAS 29

IMPACT 12.31.2017

OF WHICH SONASURF

ANGOLA

OF WHICH IAS 29

IMPACT

Non-current assets 80.0 9.0 4.9 86.3 14.4 6.9

Current assets 78.1 42.7 0.4 81.9 51.2 0.9

Total assets 158.1 51.8 5.3 168.2 65.6 7.8

Non-current liabilities 77.8 (1.1) 3.7 79.0 9.3 5.5

Current liabilities 80.3 52.9 1.6 88.3 55.5 2.3

Total liabilities 158.1 51.8 5.3 167.3 64.7 7.8

Revenues 119.5 49.2 4.2 145.5 70.8 5.5

Net income 2.4 (6.6) 1.6 7.9 1.5 2.3

Other comprehensive income: share of

affiliates under the equity method 0.2 ns ns (1.8) ns ns

The principal subsidiary consolidated using the equity method is

Sonasurf Angola, a 50% held operating joint venture under joint

control. Note that Angola was recognized as hyperinflationary as

from 2017. Accordingly, the financial statements of Sonasurf Angola

were consolidated on the basis of IAS 29, of which the full impact is

detailed in the table above.

The list of companies recognized according to the equity method

can be found in note 5.8.2.

3.4.2 Commitments given or received for associated or joint venture companies

At December 31, 2018, loans guaranteed by mortgages or pledges

of equipment or securities totaled €27.3 million, as against €32.1

million at December 31, 2017. The total value of pledged assets was

€55 million.

3.4.3 Transactions with associates and joint ventures

The financial statements include certain commercial transactions between the group and its associates and joint ventures. The main

transactions were the following:

(in € millions) 12.31.2018 12.31.2017

Revenues 29.5 41.9

Direct costs (6.7) (12.2)

Trade receivables 53.4 47.0

Trade payables 30.6 30.0

3.5 NON-CURRENT FINANCIAL ASSETS

The non-current portion of the financial assets is detailed below:

(in € millions) 12.31.2018 12.31.2017

Equity interests in non-consolidated companies 0.1 0.1

Receivables from non-consolidated companies - -

Loans and securities 14.8 16.1

Financial assets at fair value - -

Other non-current financial assets 2.4 4.3

Derivative fi nancial instruments 0.0 0.0

TOTAL 17.3 20.6

Loans and securities mainly include vendor loans associated with certain vessel disposals.

A loan with a consolidated special purpose company of which the group lost control at the end of 2018 was recognized as a fi nancial asset at

amortized cost for €27.7 million, then fully impaired.



The following tables show the change in the gross values and impairment losses for equity interests in non-consolidated companies, loans and

guarantees as well as the financial assets at fair value.

3 Change in gross values:

(in € millions)

EQUITY INTERESTS IN NON-CONSOLIDATED

COMPANIES

OTHER RECEIVABLES FROM NON-

CONSOLIDATED COMPANIES

LOANS, GUARANTEES

FINANCIAL ASSETS AT FAIR VALUE TOTAL

01.01.2017 0.2 - 160.9 0.1 161.3

Acquisitions - - 5.3 - 5.3

Disposals - - (5.4) (0.1) (5.5)

Change in consolidation scope - - - -

Currency translation adjustment - - (1.7) - (1.7)

Reclassification and other changes - - (133.7) - (133.7)

12.31.2017 0.2 - 25.4 (0.0) 25.6

Acquisitions - - 3.7 - 3.7

Disposals (0.0) - (2.2) - (2.2)

Changes in fair value - - - - -

Change in consolidation scope 0.1 - 27.7 - 27.8

Currency translation adjustment - - 0.3 - 0.3

Reclassification and other changes - - (8.2) - (8.2)

12.31.2018 0.3 - 46.6 (0.0) 47.0

3 Change in impairments:

(in € millions)

EQUITY INTERESTS IN NON-CONSOLIDATED

COMPANIES

OTHER RECEIVABLES FROM NON-


LOANS, GUARANTEES

FINANCIAL ASSETS AT FAIR VALUE TOTAL

01.01.2017 (0.2) - (0.0) - (0.2)

Net provisions - - (9.4) - (9.4)

Disposals - - - - -

Change in consolidation scope - - - - -

Currency translation adjustment - - 0.2 - 0.2

Reclassification and other changes - - - - -

12.31.2017 (0.2) - (9.2) - (9.4)

Net provisions - - (27.2) - (27.2)

Disposals - - - - -

Change in consolidation scope (0.1) - - - (0.1)

Currency translation adjustment - - (0.1) - (0.1)

Reclassification and other changes - - 4.7 - 4.7

12.31.2018 (0.3) - (31.9) - (32.1)

Derivative instruments are outlined in note 3.18.



4


3.6 INVENTORIES AND WORK IN PROGRESS

With a net value of €51.4 million as of December 31, 2018, inventories and work in progress broke down as follows:

3 Gross Values

(in € millions) 12.31.2018 12.31.2017

Gross Values

Raw materials and supplies 61.3 69.1

Work in progress 1.3 1.2

Finished and intermediate products 0.0 0.0

Merchandise - -

TOTAL 62.6 70.3

3 Impairments

(in € millions) 12.31.2018 12.31.2017

Impairments

Raw materials and supplies (11.2) (5.1)

Work in progress - -

Finished and intermediate products - -

Merchandise - -

TOTAL (11.2) (5.1)

The provision of €(11.2) million recognized at December 31,

2018 is still partly linked to the new strategy and the decision to

sell vessels considered as “non-smart”. Spare parts linked to this

fl eet were impaired for €(1.2) million. It also includes a provision for

over-stocked spare parts and intended for sale for a total amount of

€(7.0) million related to their market value. Lastly, obsolete parts were

fully provisioned for €(2.1) million.

3.7 TRADE AND OTHER RECEIVABLES, CURRENT FINANCIAL ASSETS AND OTHER CURRENT ASSETS

Receivables with maturity of under one year are classified as current assets.

The current portion of the financial assets is detailed below:

(in € millions)

12.31.2018 01.01.2018 - IFRS 9 IMPACT 12.31.2017

GROSS IMPAIRMENTS NET GROSS IMPAIRMENTS NET GROSS IMPAIRMENTS NET

Trade and other receivables 363.2 (27.3) 335.9 382.1 (34.5) 347.6 382.1 (34.5) 347.6

Current financial assets 17.3 (13.7) 3.7 60.5 (18.5) 42.1 63.5 (18.5) 45.0

Other current assets 17.4 - 17.4 27.5 - 27.5 27.5 - 27.5

TOTAL 397.9 (40.9) 357.0 470.1 (53.0) 417.1 473.0 (53.0) 420.0

Current financial assets and the other current assets break down as follows:

(in € millions) 12.31.2018 01.01.2018 IFRS 9 IMPACT 12.31.2017

Loans and securities 3.5 17.4 (22.9) 40.3

Accrued interest on loans and receivables 0.0 4.2 - 4.2

Financial assets at fair value through profit and loss - 20.0 20.0 -

Derivative fi nancial instruments 0.1 0.4 - 0.4

TOTAL CURRENT FINANCIAL ASSETS 3.7 42.1 (2.9) 45.0

State, Income tax 3.5 10.8 - 10.8

Prepaid expenses 13.9 16.7 - 16.7

TOTAL OTHER CURRENT ASSETS 17.4 27.5 - 27.5

Derivative instruments are presented in note 3.18.



3.8 CASH AND CASH EQUIVALENTS

The group ’s cash includes an “available portion”, a “reserved” portion

and a “blocked” potion.

“Available” cash can be used at any time by the group to meet

its operating needs - as the servicing of the debt and the lease

payments are currently suspended.

“Reserved” cash is located in certain geographical areas and is not

entirely available due to local fi nancing agreements, which restrict

the movements of said cash to local requirements and limit the

distribution of dividends toward the group .

“Blocked” cash corresponds to the cash of certain consolidated

special purpose companies. These companies, which hold

BOURBON vessels operating solely for the group , are fully

consolidated, in accordance with IFRS 10, in the group ’s

consolidated fi nancial statements. The cash of these companies is

ultimately attributable to the group once the latter buys back the

non-controlling interests in said companies.

Cash and cash equivalents break down as follows:

(in € millions) 12.31.2018 12.31.2017

Marketable securities (0.0) (0.0)

Other investments - -

Accrued interest 0.2 0.2

C ash and cash equivalents 216.9 243.5

TOTAL 217.1 243.6

This cash must be assumed to be net, taking into account the €43.9 million in bank overdrafts at December 31, 2018.

(in € millions) 12.31.2018 12.31.2017

“Available” cash 166.0 175.3

“Reserved” cash 32.0 45.9

“Blocked” cash 19.1 22.5

Bank overdrafts and short-term lines (43.9) (76.4)

NET CASH 173.2 167.2

3.9 SHAREHOLDERS’ EQUITY

Share Capital

As of December 31, 2018, the share capital stood at €49,227,780

and was made up of 77,499,214 fully paid-up shares with a par

value rounded to €0.64.

Other equity capital: issuance of Perpetual Deeply Subordinated Notes

During the first half of 2014, BOURBON Corporation performed

its first bond issue of €100 million in the form of Perpetual Deeply

Subordinated Notes (TSSDI). These perpetual securities give

BOURBON Corporation SA the right to repay them at par starting in

October 2017. They bore a coupon payable every six months at a

fixed rate of 4.70% for the first three years.

At the end of the first three years, the loan is repayable at par solely

at the group ’s initiative. In the event of non-repayment at that time,

the coupon will be stepped up as follows:

3 years 4 to 6: “Reset 3-year Midswap Fixed Interest Rate”

+650 bps;

3 years 7 to 9: “Reset 3-year Midswap Fixed Interest Rate”

+850 bps;

3 years 10 and after: Floating Interest Rate 3-mth Euribor

+1,050 bps.

From year 10, the coupon will be payable on a quarterly basis instead

of a half-year basis.

The clauses that trigger payment of the coupons are as follows:

3 dividend payment on equity securities;

3 purchase of equity securities;

3 purchase or redemptions of any parity securities.

The payment of interest remains optional in all other cases. In the

event of non-payment of interest, the interest is capitalized. Unpaid,

capitalized interest becomes payable:

3 on the date of the next coupon payment;

3 in the event that the loan is repaid;

3 in the event of a court-ordered liquidation (whether or not

voluntary) of the issuer.

Early repayment clauses were deemed “not genuine” within the

meaning of IAS 32.

In April 2015, BOURBON Corporation decided to increase the

amount of its Perpetual Deeply Subordinated Notes (TSSDI) issue

by €20 million, in the form of a contribution of fungible securities.

This new issue was also fully recognized in equity under IFRS, since

it meets the criteria for classification as an equity instrument defined

by IAS 32.



4


Holders of Perpetual Deeply Subordinated Notes (TSSDIs) were

called to a General Meeting on April 20, 2018. BOURBON sought and

obtained the approval of the General Meeting of holders of TSSDIs to

defer by one year the next interest payment date under the TSSDIs

for an approximate amount of €3.9 million due on April 24, 2018

to April 24, 2019, which shall bear interest from October 24, 2018

(included) to April 24, 2019 (excluded) at the rate applicable to the

TSSDIs. This interest, amounting to €3.9 million, was incorporated

into shareholders’ equity.

As of December 31, 2018, accrued interest not due amounted to

€5.4 million.

Non-controlling interests

The non-controlling interests stood at €75.5 million as of December 31, 2018.

(in € millions) 2018 2017

At January 1 72.3 111.8

Profit (loss) for the period: portion made up of non-controlling interests 6.5 (32.6)


Portion of non-controlling interests in other comprehensive income: 2.2 (3.8)

Cash flow hedge - 0.1

Employee benefi t obligations - -

Profits and losses from the currency translation of the financial statements of foreign

subsidiaries 2.2 (4.0)

Eff ect of changes in the percentage interest in consolidated affiliates (1.8) 6.9

At December 31 75.5 72.3

3.10 STOCK SUBSCRIPTION OR PURCHASE OPTION PLANS

BOURBON Corporation SA issued 11 stock option subscription or purchase plans, one of which was in force on December 31, 2018,

representing 637,000 stock options at that date. The valuation and accounting methods for these stock option plans are shown in detail in

note 1.5.13, and their main characteristics are shown in the table below:

DECEMBER 2013

Date of authorization by the Combined General Meeting June 1, 2011

Date of authorization by the Board of Directors December 2, 2013

Number of stock options authorized 1,037,000

Total number of allotted stock options adjusted as at 12.31.2018 637,000

Number of beneficiaries 68

Start date December 2017

Expiration date December 2019

Subscription price in euros adjusted as at 12.31.2017 €19.68

Subscription price in euros (before adjustment) €19.68

Price per share:

Price per share on the grant date (before adjustment) €19.11

Fair value of options:

Fair value of the options with no original market condition (before adjustment) €3.09

Fair value of the options with original market condition (before adjustment) €2.67

Risk-free interest rate 0.82%

Dividend yield 4.1%

Volatility 31.57%

Contractual acquisition period 4 years

No expense was recorded for the fi scal year for this stock option plan (compared to €(0.1) million in 2017).



3.11 TREASURY SHARES

The treasury shares held by the group on the closing date were deducted from consolidated shareholders’ equity. The cumulative impact at the

end of 2018 was €(1.0) million, as compared with €( 1.2) million as of December 31, 2017. The number of BOURBON Corporation SA treasury

shares as of December 31, 2018 was 135,881 after final allocation to the bonus share plan.

3.12 EMPLOYEE BENEFIT OBLIGATIONS AND OTHER PROVISIONS

Provisions can be analyzed as follows:

(in € millions)

EMPLOYEE BENEFIT

OBLIGATIONSBUSINESS

RISKSTAX

AUDITSOTHER TAX

RISKS

OTHER PROVISIONS FOR

RISKS AND CONTINGENCIES

PROVISIONS FOR MAJOR

MAINTENANCE TOTAL

01.01.2017 16.7 4.5 13.9 8.9 11.2 64.5 119.8

of which current portion 1.9 - - - - 29.0 30.9

Provisions for the year 1.8 0.1 2.5 0.9 1.8 12.9 20.0

Used during the year (1.3) (0.8) (0.8) (0.6) (2.6) (6.4) (12.5)

Unused amount reversed (0.6) (0.3) (0.1) (0.2) (3.5) (7.6) (12.2)

Change in consolidation

scope - - - - - - -


adjustment (0.0) (0.4) - (0.7) (0.3) (2.0) (3.3)


changes 0.3 - - - (1.8) - (1.5)

12.31.2017 16.9 3.1 15.5 8.4 4.8 61.5 110.2

of which current portion 1.8 - - - - 23.9 25.8

Provisions for the year 2.1 0.2 3.9 0.4 33.3 14.3 54.2

Used during the year (1.1) (0.1) (0.0) (0.4) (0.2) (7.9) (9.7)

Unused amount reversed (1.2) (0.0) (0.5) (0.4) (1.0) (4.4) (7.5)

Change in consolidation

scope - - - - - - -


adjustment 0.0 (0.2) - (0.1) (0.4) 0.4 (0.4)


changes 0.4 - - - - - 0.4

12.31.2018 17.1 3.0 18.9 7.9 36.4 63.7 147.1

of which current portion 2.0 - - - 25.0 42.7 69.7

The change in provisions for major maintenance comes notably from

the review and optimization of the plans to overhaul leased vessels.

The utilizations correspond to the major classifi cation maintenance

that actually took place.

A provision of €25 million was also made following the loss of control

of a consolidated special purpose company.

It should be noted that the short-term portion (current portion) of the

provisions is reported in the statement of financial position on the line

“Provisions – current portion”.



4


Employee benefit obligations

Employee benefit obligations include the provision for retirement benefit obligations and the provision for long-service awards.

Retirement benefit obligationsThe table below shows the main assumptions used in valuing retirement benefit commitments:

3 5-YEAR VALUATION ASSUMPTIONS:

2018 2017 2016 2015 2014

Discount rate 1.55% 1.55% 1.45% 2.00% 1.50%

Inflation rate

2% in most cases, except for certain countries where a diff erent rate was

used to take into account the local economic conditions.

Salary increase

Inclusion of an average salary increase rate based on the salary policy

within the various companies concerned.

Turnover Turnover rate determined for each entity.

The change in the provision for pensions is as follows:

(in € millions) 12.31.2018 12.31.2017

Present value of the obligation at the beginning of the year 14.4 14.3

Current service cost 0.8 0.9

Interest cost 0.2 0.2

Retirement indemnities paid (1.1) (1.3)

Actuarial (gains)/losses 0.4 0.3

Past service cost - -

Currency translation adjustment 0.0 (0.0)

Reclassifications - -

Eff ects of changes in consolidation scope and changes in consolidation method - -

Present value of the obligation at closing 14.7 14.4

o/w less than 1 year 2.0 1.8

The current service cost is the present value of benefit attributed to the current year (cost of one additional year of work).

Interest cost is the increase in the present value of the obligation resulting from the fact that it is one year closer to the date of payment of the

benefits. It represents the cost of one year of non-discounting.

The items recognized in the income statement over 2018 for retirement benefit obligations were:

(in € millions) 12.31.2018 12.31.2017

Current service cost (0.8) (0.9)

Past service cost - -

Interest cost (0.2) (0.2)

TOTAL EXPENSES RELATED TO RETIREMENT OBLIGATIONS (1.0) (1.1)



3.13 GROSS FINANCIAL LIABILITIES

For this note, see also point 3.17.2 Liquidity risks.

On March 8, 2017, BOURBON announced the restructuring of the

majority of its financial indebtedness, amounting to €910.8 million, of

which the major characteristics are the following:

The agreement entered into with the group ’s principal financial

partners, described in detail in the notes to the 2016 and 2017

financial statements, thus restructured the repayments of its club

deal loans, its bilateral loans, its finance leases, and its short- term

loans, while also providing for a progressive increase in the loan

margins over the extended payment schedule, as well as the granting

of additional sureties.

In consideration of the restructuring, the group had agreed to a

number of restrictions, in particular regarding its indebtedness, cash

flow, asset disposals, investments and the dividend policy.

On July 28, 2017, the conditions precedent for the implementation

of the debt rescheduling agreement were met and BOURBON

confirmed the restructuring of its debt.

However, the expected recovery in the third quarter of 2017 did

not occur, thus making obsolete the group ’s forecasts on which

the March negotiation had been based, and the unfavorable


consequently, on its net income. The cash fl ows generated by



to some of its geographic locations. However, they are insufficient to

service its debt.

Furthermore, and for the same reasons, as of 31 December 2017,

the group was not able to comply with various covenants defined

in its credit documentation, which could have allowed the relevant

banks to demand immediate repayment of their loans.

In this context, the group decided to undertake new discussions

with its lenders, both in France and abroad, in order to balance

the servicing of its debts with the expected gradual recovery in the

market and the corresponding upturn in the group ’s performance.

The group had asked its lenders to formally suspend the exercise of

their rights under the credit agreements, in particular their repayment.

This situation required the Company, as of December 31, 2017,

in accordance with IFRS standards, to reflect the payability of its debt

by reclassifying it as a short-term liability, even though its lenders had

not requested repayment. The impact of this reclassifi cation detailed

in the 2017 Registration Document amounted to €1,120.5 million.







In consideration of the restructuring, the group is subject to a number

of restrictions, in particular regarding its indebtedness, cash, asset

disposals, Group investments and the dividend policy.




procedures for 22 subsidiaries of BOURBON Corporation SA. These

procedures were opened to allow the group to actively pursue, in an

amicable framework, its search for all solutions for its development

as well as its discussions with its debt holders and lessors.





As of December 31, 2018, the group examined all of its existing

loans at that date in view of the situation of each of these loans:

3 loans under renegotiation covered by standstill agreements;

3 other loans under renegotiation, whose repayments are

suspended or in cross-default;

3 review of the contractual clauses of other loans, in particular

cross-default or similar clauses.

Following this review, and in accordance with IAS 1.69 d, the non-

current portion of the loans for which the group did not have an

unconditional right as of the fi nancial statement closing date to defer

payment for more than 12 months were classifi ed in current liabilities.

This lack of an unconditional right as of the closing date was

noted for loans undergoing renegotiation and covered by standstill

agreements. In accordance with IAS 1.75, since the grace period

had a duration of less than 12 months following the closing date,

the non-current portion of these loans was reclassifi ed in current

liabilities in the amount of €856.2 million as of December 31, 2018.

In addition, €135.4 million was reclassifi ed to the current portion of

the other borrowings undergoing renegotiation, whose payments

are suspended or in cross-default and whose early repayment could

have been requested.

A review of the cross-default and similar clauses in the other loan

agreements showed that the theoretical application of such clauses

could lead to acceleration of the amounts due as of December 31,

2018. None of these clauses had been triggered as of the closing

date. The long-term portion of the loans subject to this theoretical

payability totaled €60.6 million as of December 31, 2018.

In addition, in accordance with IAS 1 (IAS 1.135B), the group points

out that it did not comply with all of its equity covenants (adjusted

gearing ratio defined under the debt rescheduling agreement: Net

debt/Shareholders’ equity) for the 2018 fiscal year.



4


In accordance with IFRS 7.18, the details of the reclassifications are presented below:

NATURE OF THE LOAN

BEFORE RECLASSIFICATION AFTER RECLASSIFICATION

BALANCE AS OF DECEMBER 31, 2018

OF WHICH

CURRENT

PORTION

OF WHICH

NON-CURRENT

PORTION

IMPACT OF RECLASSIFICATION

ON CURRENT LIABILITIES

OF WHICH

CURRENT

PORTION

OF WHICH

NON-CURRENT

PORTION

Loans under renegotiation covered by standstill agreements with a duration of less than 12 months following the closing date:

CLUB DEAL – €320M 32.0 19.2 12.8 12.8 32.0 -

CLUB DEAL – €340M 326.0 22.4 303.6 303.6 326.0 -

CLUB DEAL – €450M 166.1 24.4 141.8 141.8 166.1 -

Bilateral borrowings 498.1 100.0 398.1 398.1 498.1 -

Loans under renegotiation whose payments are suspended or in “cross-default”:


Borrowings containing cross-default or similar clauses:


TOTAL 1,355.5 303.3 1,052.2 1,052.2 1,355.5 -

Gross financial liabilities (€1,494.7 million as of December 31, 2018) appear on the balance sheet under “Borrowings and financial liabilities”,

“Borrowings and financial liabilities (portion less than one year)”, and “Bank overdrafts and short-term lines”.

a) Analysis by maturity

The maturities on the gross financial liabilities are as follows:

(in € millions) 12.31.2018 12.31.2017

Bank overdrafts and short-term lines 43.9 76.4

Debt < 1 year 1,406.0 1,348.5

Debt between 1 and 5 years 34.4 143.0

Debt > 5 years 10.4 40.9

TOTAL 1,494.7 1,608.8

Of which:

Finance lease liabilities 117.5 74.1

Debt < 1 year 117.1 45.3

Debt between 1 and 5 years 0.3 28.8

Debt > 5 years 0.0 0.0

The significant balance of financial liabilities due in less than one year results essentially from the reclassification into short-term of the loans

for which, as of the closing date, the group does not have an unconditional right to defer payment of the liabilities for at least 12 months after

the current fiscal year (IAS 1.69 d).

b) Analysis by interest rate

Gross financial liabilities break down as follows:

(in € millions) 12.31.2018 12.31.2017

Fixed rate or swapped-to-fixed rate 525.0 663.0

Bank overdrafts (fixed or swapped-to-fixed rate) - -

Variable rate 881.1 862.1

Bank overdrafts (variable rate) 43.9 76.4

TOTAL BORROWINGS AND BANK LOANS 1,450.0 1,601.5

Accrued interest 44.7 7.3

TOTAL FINANCIAL DEBT 1,494.7 1,608.8



c) Analysis by currency

As of December 31, 2018, gross debt excluding accrued interest breaks down as follows:

(in € millions) 12.31.2018 12.31.2017

EUR – Euro 1,154.5 1,249.2

USD – US Dollar 275.8 328.3

NOK – Norwegian krone 19.7 24.0

TOTAL (EXCLUDING ACCRUED INTEREST) 1,450.0 1,601.5

d) Change in the debt, by type

(in € millions) 12.31.2017

CASH NON-CASH

12.31.2018ISSUEREDEMP-

TIONSAMORTIZED

COST

IMPACT OF FOREIGN

CURRENCY FLUCTUATIONS

CHANGE IN CONSOLIDATION

SCOPERECLASSIFI-

CATIONS

Financial Debt 1,451.1 2.0 (120.1) 0.1 11.8 (56.8) 0.5 1,288.6

Finance lease liabilities 74.1 50.0 (7.2) 0.6 0.0 117.5

Bank overdrafts 76.4 (32.5) 43.9

TOTAL BORROWINGS AND BANK LOANS 1,601.5 52.0 (159.8) 0.7 11.8 (56.8) 0.5 1,450.0

e) Debt secured by collateral

As of December 31, 2018, bank borrowings secured by mortgages,

pledges of equipment or marketable securities represented a total of

€1,230.5 million.

The assets pledged are primarily vessels. These mortgages were

recorded with the Bureau des Hypothèques (Mortgage Registry)

between 2002 and 2018 for a total value of €5,522.1 million.

3.14 FINANCIAL RESULTS

Financial income/(loss) breaks down as follows:

(in € millions) 12.31.2018 12.31.2017

Cost of net debt (60.1) (54.6)

- Cost of gross debt (65.2) (61.0)

- Income from cash and cash equivalents 5.1 6.5

Other financial expenses and income (56.5) (134.9)

- Net foreign exchange income/(loss) 9.2 (82.9)

- Other financial expenses (77.6) (41.9)

- Other financial income 13.9 17.9

- Net allocations to financial assets and provisions (1.9) (28.0)



4


Cost of net debt equals all interest expenses and income generated by the elements composing the financial debt during the year.

The other fi nancial income and expenses includes realized and unrealized foreign exchange gains and losses, fair value of derivatives, fair value

of assets through profi t or loss, as well as the net impact of the deconsolidation of a special purpose company, which was up to that point

consolidated, following the loss of its control .

The other financial income and expenses as of December 31, 2018 are broken down below:

(in € millions) 12.31.2018

Other financial income and expenses (56.5)

- Net foreign exchange income/(loss) 9.2

of which unrealized foreign exchange gains/(losses) 9.8

- Other financial expenses (77.6)

of which the net impact related to deconsolidation of a special purpose company following loss of controlling

interest (43.4)

of which fair value of assets measured at fair value through profi t and loss (21.9)

of which fair value of derivative instruments (8.5)

- Other financial income 13.9

of which fair value of assets measured at fair value through profi t and loss 0.0

of which fair value of derivative instruments 13.1

- Net allocations to financial assets and provisions (1.9)

3.15 DEFERRED TAXES

As of December 31, the balances for deferred tax assets and liabilities were as follows:

(in € millions) 12.31.2018 12.31.2017

Deferred tax assets 11.5 11.5

Deferred tax liabilities (22.8) (22.8)

Net deferred tax (11.3) (11.3)

3 ANALYSIS OF DEFERRED TAXES

(in € millions) 12.31.2018 12.31.2017

Deferred tax assets 11.5 11.5

Retirement benefit obligations 0.0 0.0

Consolidation restatements 2.5 2.4

Restatements of depreciation and amortization 7.3 7.3

Other temporary diff erences 1.7 1.8

Deferred tax liabilities (22.8) (22.8)

Consolidation restatements (4.9) (4.0)

Restatements of depreciation and amortization (0.5) (0.3)

Other temporary diff erences (17.4) (18.4)

At December 31, 2018, in light of the tax position of the companies concerned, no deferred tax assets were recognized on the tax losses,

which amounted to €839.3 million.

3.16 INCOME TAX

(in € millions) 12.31.2018 12.31.2017

Current income tax (15.3) (13.4)

Deferred taxes 0.8 0.6

Tax (expense)/income (14.5) (12.8)



As of December 31, 2018, the theoretical corporate income tax of €144.7 million was calculated by applying the prevailing tax rate in France

to income before tax, the share in income/loss of affiliates under the equity method, net gains on equity interests sold and net income from

discontinued operations:

(in € millions) 12.31.2018 12.31.2017

Consolidated net income before tax, net income of companies under the equity method,

capital gains on equity interests sold, and net income from discontinued operations: (437.4) (599.8)

French domestic income tax prevailing as of 12.31.2018:

33.33% 145.8 199.9

3.30% (1.0) (0.5)

Theoretical income tax 144.7 199.4

Income tax expense (14.5) (12.8)

DIFFERENCE (159.2) (212.2)

The difference between the tax recognized and the theoretical tax is as follows:

(in € millions) 12.31.2018 12.31.2017

Companies not liable for corporate income tax (companies subject to tonnage tax, foreign

companies not liable for taxation) (107.2) (112.8)

Loss-making companies (tax consolidated and non-tax consolidated companies and foreign

companies) (66.6) (65.8)

Diff erence in tax rate 9.9 (1.7)

Other diff erences 4.7 (31.9)

TOTAL (159.2) (212.2)

3.17 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICY

The main risks to which the group is exposed are credit/counterparty

risks, liquidity risks and market risks. The Board of Directors has

reviewed and approved the management policies of each of these

risks. The policies are summarized below.

3.17.1 Credit/counterparty risk

The group ’s policy is to verify the financial health of all customers

seeking credit payment terms. Furthermore, the group continually

monitors client balances. The financial soundness of its clients enables

BOURBON to avoid the use of COFACE-type credit insurance.

Supermajor, major, national and independent oil companies account

for nearly 69% of consolidated revenue. Nevertheless, the current

crisis has impacted our customers, which has led to an increased

risk of recoverability for certain receivables from smaller customers.

The volume of business conducted with the top five clients

represented €281 million (44.3% of consolidated revenue) while the

top ten clients accounted for 63.1% (€400 million).

A statement of anteriority of trade and other receivables is presented

in note 3.18.5.

In 2018, the proportion of BOURBON’s revenue generated in

high- risk countries, such as Equatorial Guinea, Libya, Iran(1) or

Myanmar, was very marginal (less than 2% of total revenue).

Concerning the credit risk on the group ’s other financial assets, i.e.

cash and cash equivalents, available-for-sale financial assets and

certain derivative instruments, the group works only with top-ranking

banks, particularly with the major french banks. In addition, other

counterparty risks are assessed on a case-by-case basis as part of

long-term relationships maintained and encouraged by the group ,

especially in view of the effects from the current crisis on certain local

stakeholders to whom vendor loans were awarded during sales of

vessels in past years.

3.17.2 Liquidity risks

Financing comes under a Group policy implemented by the Finance

and Administration Department. This policy consists of financing

the group ’s needs through a combination of operating cash flows,

disposal of assets, bank borrowings and market transactions, and in

the context of the industry downturn, through a strategy of cash flow

preservation that led to redefining BOURBON’s financing platform for

2017 and the following years.

The agreements entered into in 2017 with the group ’s principal






additional sureties. In consideration of the restructuring, the group



dividend policy.

(1) In the period excluding sanctions (prior to November 4, 2018).



4



did not occur, thus making obsolete the group ’s forecasts on






to some of its geographic locations. However, they are insufficient

to service its debt. Furthermore, and for the same reasons, at

December 31, 2017 the group was not able to comply with various

covenants defined in its credit documentation.

In this context, the group initiated new discussions with its lenders,



corresponding upturn in the group ’s performance. The group has












procedures for 22 subsidiaries of BOURBON Corporation SA. These

procedures were opened to allow the group to actively pursue, in an

amicable framework, its search for all solutions for its development

as well as its discussions with its debt holders and lessors.




















In accordance with IAS 1.69 d, as of December 31, 2018: the

non- current portion of the borrowings for which as of the closing date

the group does not have an unconditional right to defer payment for

a period longer than 12 months was reclassified in current liabilities

(see note 3.13 the details of the reclassifications performed).

BOURBON’s gross financial debt amounted to €1,495 million,

including €45 million at more than one year.

The repayment schedule for the medium and long-term debt is

presented in note 3.13 to the consolidated financial statements. The

residual term of the long- and medium-term debt is four years and

eight months, before taking IAS 1 into account.

The following table shows the composition of long and medium-term debt as of December 31, 2018 (excl. accrued interest not yet due):

(in € millions)PORTION OF MEDIUM/LONG-TERM

DEBT UNDER ONE YEAR MEDIUM/ LONG-TERM DEBT TOTAL




SNC outsourced 65 - 65

Financing – Norway fleet 62 - 62

45 other bilateral loans 710 44 754

TOTAL 1,361 44 1,405

The group had cash assets of €217 million as of December 31, 2018. Bank overdrafts and short-term credit lines have been drawn down in

the amount of €44 million due to the “unit-linked agreements” signed with two financial institutions allowing the group to combine available

balances in US with euro balances.



Non-discounted contractual flows on the outstanding balance of the net financial liabilities by maturity date, including interest flows and taking

into account the reclassifications performed pursuant to IAS 1, are as follows:



BALANCE SHEET TOTAL

Bonds - - - - - - -



Borrowings on finance leases 117.1 0.3 - - - - 117.5 117.5

Other bank loans 1,244.1 9.0 8.6 9.1 7.4 10.4 1,288.6 1,288.6


Borrowings 1,406.0 9.4 8.6 9.1 7.4 10.4 1,450.8 1,450.8


Accrued interest - - - - - - - 0.0


Net cash (173.2) - - - - - (173.2) (173.2)






Future variable-rate interest flows were determined using the predicted rates of the indexes in question at year-end. Interest flows on bonds

takes into account interest adjustment clauses (See note 3.9).

(in € millions)


2018 2019 2020 2021 2022> 5

YEARS TOTAL

BALANCE SHEET TOTAL

Bonds - - - - - - -



Borrowings on finance leases 45.3 12.6 7.9 3.8 4.4 - 74.1 74.1

Other bank loans 1,296.0 28.6 27.9 31.5 26.1 40.9 1,451.1 1,451.1


Borrowings 1,348.5 41.2 35.9 35.4 30.5 40.9 1,532.3 1,532.3




Net cash (167.2) - - - - - (167.2) (167.2)








4


Medium- and long-term borrowingsMedium- and long-term borrowings comprise mainly “club deal”

financings and bilateral loans.

The majority of these borrowings are backed by assets (vessels) held

as security (first-ranking mortgage or negative pledge). The vessels

are clearly identified when the loan contract is signed, details of which

appear in note 5.1 “Contractual obligations and other off- balance

sheet commitments”. During the performance of the loan contract,

for technical reasons, BOURBON may have to adjust the list of

vessels initially assigned to the loan. Two options then arise – either

partial redemption of the loan or substitution with another vessel.

Whichever is the case, an amendment to the loan contract is signed

to reflect the new guarantees.

Between 2005 and 2015, BOURBON concluded four “club deal”

loans:


redemption phase began in April 2007, with an outstanding

balance of €32 million as of December 31, 2018;

3 a €450 million “club deal” loan taken out in the summer of 2007

for which the redemption phase began in January 2010, with an

outstanding balance of €166 million as of December 31, 2018;

3 a €318 million “club deal” loan taken out in July 2009 for which

the redemption phase began in 2011 and which was fully repaid

in July 2017;


redemption phase began in June 2016, with an outstanding

balance of €326 million as of December 31, 2018.

These three outstanding “club deal” loans are covered by the debt

rescheduling agreement signed on July 28, 2017. In accordance

with this agreement, the repayments for the club deal loans were

restructured progressively over the extended payment schedule.

In parallel, bilateral borrowings (in US dollars, euros and Norwegian

kroner) are regularly signed.

In many instances, contractual documentation includes compliance

with a debt/equity ratio. The documentation relating to the loans

affected by the restructuring agreement was modified to align the

ratios with the requirements of those agreements.

Short-term lines of creditCash management is coordinated at the group ’s operating

headquarters. Financière Bourbon, a partnership organized as a cash

clearing house, offers its services to most of the group ’s operating

subsidiaries. These entities, under a cash agreement with Financière

Bourbon, receive active support in the management of their cash

flow, their foreign currency and interest rate risks, their operating

risks and their short and medium-term debt, in accordance with the

various laws in force locally.

At the beginning of 2017, the group had short-term credit lines of

€218.8 million with Financière BOURBON. Upon the signing of the

debt rescheduling agreement on July 28, 2017, these credit lines

were transformed into:

3 a renewable syndicated loan repayable by installments over the

long term, backed by assets worth €196.8 million. This new credit

was obtained by another Group subsidiary;

3 two lines of medium-term credit totaling €20 million repayable by

installments without any underlying assets;

3 a line of spot credit of €2 million repayable by installments.

The group has signed “combined account” agreements with two

banking establishments, allowing it to merge the available dollar

balances with overdrafts in euros.

BOURBON does not have a financial rating from a specialist agency.

3.17.3 Market risks

Market risks include the group ’s exposure to interest rate risks,

foreign exchange risks, risks on equities and risks on supplies.

Interest rate riskThe group ’s exposure to the risk of interest rate fluctuations is related

to the group ’s medium- and long-term variable rate financial debt.

BOURBON regularly monitors its exposure to interest rate risk.

This is coordinated and controlled centrally. It reports to the Finance

and Administration Department.

The group ’s policy consists of managing its interest rate expense

by using a combination of fixed-rate and variable-rate borrowing.

In order to optimize the overall financing cost, the group sets up

interest rate swaps under which it exchanges, at pre-determined

intervals, the difference between the amount of fixed-rate interest

and the amount of variable-rate interest calculated on a pre-defined

nominal amount of borrowing.

These swaps are assigned to hedge the borrowings. As of

December 31, 2018, after taking into account interest rate swaps,

approximately 37% of the group ’s medium- and long-term debt had

been contracted at a fixed interest rate.



As of December 31, 2018, the interest rate swap contracts were on the group ’s borrowings, transforming variable rates into fixed rates. These

contracts were entered into in euros (EUR), Norwegian kroner (NOK) and US dollars (USD); they are broken down by maturity date as follows:

(in € millions)

OUTSTANDING AS OF DECEMBER 31, 2018 IN FOREIGN

CURRENCY

OUTSTANDING AS OF DECEMBER 31,

2018 IN EUROS MATURITY

Currencies

Fixed-rate borrowing swaps

EUR 13.4 13.4 06.28.2019

EUR 56.3 56.3 01.27.2020

EUR 6.5 6.5 12.31.2020

EUR 186.0 186.0 03.31.2021

EUR 2.6 2.6 07.29.2021

NOK 42.2 4.2 12.30.2021

USD 12.4 10.8 08.19.2019

USD 8.8 7.7 09.30.2019

TOTAL 288

The following table shows the group ’s net exposure to variable rates before and after risk management, based on the hedges in place and the

sensitivity of the group ’s income before taxes (related to changes in the fair value of monetary assets and liabilities) to a reasonable variation in

interest rates, with all other variables remaining constant:

(in € millions)


LESS THAN 1 YEAR 1 TO 2 YEARS 2 TO 3 YEARS 3 TO 4 YEARS 4 TO 5 YEARSMORE THAN

5 YEARS TOTAL

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

Cash - 217.1 - - - - - - - - - - - 217.1

Term deposits - - - - - - - - - - - - - -

Loans and

securities 3.5 - 1.8 - 2.0 - 1.9 - 2.5 - 6.6 - 18.3 -

Financial assets 3.5 217.1 1.8 - 2.0 - 1.9 - 2.5 - 6.6 - 18.3 217.1

Bank overdrafts

and short-term

lines - (43.9) - - - - - - - - - - - (43.9)

Deposits and

securities

received - - (0.5) - - - - - - (0.4) - (0.9) -

Finance lease

liabilities (113.7) (3.5) (0.3) - - - - - - - - (114.0) (3.5)

Bank borrowings (104.0) (1,140.1) (3.8) (4.7) (3.8) (4.8) (3.8) (5.3) (6.0) (1.4) (1.3) (8.7) (122.6) (1,165.1)

Financial liabilities (217.7) (1,187.5) (4.6) (4.7) (3.8) (4.8) (3.8) (5.3) (6.0) (1.4) (1.7) (8.7) (237.5) (1,212.5)

Net position before hedging (214.1) (970.4) (2.8) (4.7) (1.8) (4.8) (1.9) (5.3) (3.5) (1.4) 4.9 (8.7) (219.2) (995.3)

Hedging (287.5) 287.5

Net position after hedging (506.7) (707.9)





4


(in € millions)


LESS THAN 1 YEAR 1 TO 2 YEARS 2 TO 3 YEARS 3 TO 4 YEARS 4 TO 5 YEARSMORE THAN

5 YEARS TOTAL

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

FIXED RATE

VARIABLE RATE

Cash - 243.6 - - - - - - - - - - - 243.6

Term deposits - - - - - - - - - - - - - -

Loans and

securities 40.3 - 3.8 - 1.9 - 4.2 - 1.4 - 4.9 - 56.5 -

Financial assets 40.3 243.6 3.8 - 1.9 - 4.2 - 1.4 - 4.9 - 56.5 243.6

Bank overdrafts

and short-term

lines - (76.4) - - - - - - - - - - - (76.4)

Deposits and

securities

received - - (1.6) - - - - - - (0.4) - (1.9) -

Finance lease

liabilities (41.8) (3.5) (12.6) - (7.9) - (3.8) (4.4) - - - (70.6) (3.5)

Bank

borrowings (112.7) (1, 183.3) (15.2) (11.9) (15.5) (12.4) (19.5) (12.0) (15.0) (11.1) (12.4) (28.2) (190.3) (1, 258.8)

Financial liabilities (154.6) (1, 263.1) (29.4) (11.9) (23.5) (12.4) (23.4) (12.0) (19.4) (11.1) (12.7) (28.2) (262.8) (1, 338.7)

Net position before hedging (114.2) (1, 019.5) (25.6) (11.9) (21.5) (12.4) (19.2) (12.0) (18.0) (11.1) (7.9) (28.2) (206.3) (1, 095.1)

Hedging (400.2) 400.2

Net position after hedging (606.6) (694.9)

Assuming the position reached on December 31, 2017 to be

constant over a year, a change in interest rates of 100 basis points

(1%) would therefore result in increasing or decreasing the cost of the

group ’s financial debt by €6.9 million over one year.

Foreign exchange risk

Objectives

The group ’s policy is to reduce as far as possible the economic

risk related to foreign currency fluctuations over the medium term.

The Group also tries to minimize the impact of the US dollar’s volatility

on annual operating income.

Cash flows from operating activities

The main foreign exchange risks on operations are related to

invoicing clients. BOURBON invoices a large portion (approx. 73%)

of its services in US dollars. The group has a natural foreign exchange

hedge as it pays its expenses in dollars (representing about 39% of

revenue). The policy is to maximize this natural hedge.

The residual risk is partially hedged in the short term by using forward

US dollar sales and/or currency puts. On the unhedged portion, and

over time, offshore oil and gas marine services are directly exposed

to foreign currency risks, particularly on the US dollar.

Long-term cash flows

Policy

For vessel acquisitions in foreign currencies, the policy is to partly

hedge the foreign exchange risk during the construction period by

setting up currency futures call options.

The policy is to finance these acquisitions in the currency in which

the corresponding charters will be paid by the customers. However,

in order to avoid accounting exchange differences in countries

outside the euro zone and the US dollar zone (particularly in Norway),

the entities finance their investments in their functional currency.

Current practice

As an exception, at the beginning of 2004, it was decided to

temporarily abandon this practice and convert the majority of

borrowings that were in US dollars at the time to euros. This was

done to recognize the unrealized foreign exchange gains booked

during previous fiscal years.



Since then, most of the new borrowings (outside Norway) have been

contracted in euros or US dollars. Where the euro/dollar exchange

rate allows, borrowings in euros to finance assets generating revenue

in US dollars will be converted to US dollars and future acquisitions

will again be financed in US dollars.

The following tables show the group ’s net exposure to changes in

foreign exchange rates:

3 on income: transaction risk;

3 on shareholders’ equity: currency translation risk.

a) Transaction riskAs of December 31, 2018, foreign exchange derivatives covered flows in US dollars (USD) and broke down as follows:

AS OF 12.31.2018OUTSTANDING BALANCE

(in millions of currency) MATURITYAVERAGE

EXCHANGE RATE

Cross-currency swap

USD/EUR 8.0 06.30.2021 1,4146

The table below shows, as of December 31, 2018, the position of the group ’s monetary assets and liabilities (denominated in a different

currency from the entity’s functional currency) before and after management:

(in € millions) USD NOK EUR OTHER

Monetary assets 1,124.8 2.5 76.5 39.8

Monetary liabilities (740.0) (5.1) (125.2) (27.2)

Net position before management 384.8 (2.7) (48.7) 12.6

Hedges (7.0) - - -

Net position after management 377.8 (2.7) (48.7) 12.6

As of December 31, 2018, a 1% change in the euro exchange rate

against all the currencies would represent a total impact at Group

level of €3.3 million, after hedges are taken into account.

It should be noted that currency futures hedges related to future

transactions are not shown in this table since the hedged item does

not yet appear on the balance sheet.

b) Currency translation riskThe table below shows a breakdown by currency of consolidated shareholders’ equity for the years 2018 and 2017:

(in € millions) 12.31.2018 12.31.2017

Euro (EUR) 583.4 896.9

Brazilian real (BRL) (210.6) (204.5)

Mexican Peso (MXN) 79.4 74.0

Norwegian kroner (NOK) (101.4) (57.8)

US Dollar (USD) (151.4) (70.6)

Other 1.7 5.7

TOTAL 201.0 643.6

As of December 31, 2018, a 1% change in the exchange rates would represent an impact on consolidated shareholders’ equity of €0.8 million

(€2.1 million as of December 31, 2017).



4


c) Equity risksAs of December 31, 2018, the group had no cash investments.

As indicated in note 3.11 “Treasury Shares”, BOURBON Corporation

SA held 135,881 treasury shares as of December 31, 2018. Treasury

shares are presented as a deduction from consolidated shareholders’

equity.

A 10% rise or fall in the share price of BOURBON Corporation SA

would result in a change in the market value of the treasury shares of

just under €0.05 million.

d) Supply price riskThe group ’s exposure to price risk is minimal.

The change in the price of raw materials does not constitute a risk of

significant increase in operating costs. Clients generally take direct

charge of the cost of fuel.

3.18 FINANCIAL INSTRUMENTS

3.18.1 Financial assets

As of December 31, 2018 and December 31, 2017, financial assets were as follows:

(in € millions)

12.31.2018

EQUITY INTERESTS IN NON-


FINANCIAL ASSETS AT FAIR VALUE

THROUGH PROFIT OR

LOSSLOANS AND

RECEIVABLES

FINANCIAL INSTRUMENTS MEASURED AT

FAIR VALUECASH AND CASH

EQUIVALENTS BALANCE

SHEET TOTAL

Non-current financial assets 0.1 - 17.2 0.0 - 17.3

Trade and other receivables - - 335.9 - - 335.9

Current financial assets - - 3.5 0.1 - 3.7

Other current assets - - 17.4 - - 17.4

Cash and cash equivalents - - - - 217.1 217.1

TOTAL 0.1 - 374.1 0.1 217.1 591.4

(in € millions)

01.01.2018 - IFRS 9 IMPACT




THROUGH PROFIT OR

LOSSLOANS AND

RECEIVABLES



EQUIVALENTS BALANCE

SHEET TOTAL



Current financial assets - 20.0 21.6 0.4 - 42.1



TOTAL 0.1 20.0 417.1 0.5 243.6 681.3

(in € millions)

12.31.2017




THROUGH PROFIT OR

LOSSLOANS AND

RECEIVABLES



EQUIVALENTS BALANCE

SHEET TOTAL



Current financial assets - - 44.5 0.4 - 45.0



TOTAL 0.1 - 440.0 0.5 243.6 684.2



A summary table of the fi nancial assets held by the group :

(in € millions) 12.31.2017IAS 39

CLASSIFICATIONIFRS 9

CLASSIFICATIONCHANGE IN

MEASUREMENT 01.01.2018 12.31.2018

Available-for-sale assets 0.1

Fair value

through

shareholders’

equity

Fair value

through profi t

or loss - 0.1 0.1

Loans 16.1 Amortized cost Amortized cost - 16.1 14.8

Other receivables 4.3 Amortized cost Amortized cost - 4.3 2.4

Financial instruments

measured at fair value 0.0

Fair value

through profi t

or loss

Fair value

through profi t

or loss - 0.0 0.0

Non-current financial assets 20.6 - 20.6 17.3

Trade receivables 232.0 Amortized cost Amortized cost - 232.0 209.9

Other receivables 115.5 Amortized cost Amortized cost - 115.5 126.0

Trade and other receivables 347.6 - 347.6 335.9

Loans 21.6 Amortized cost Amortized cost - 21.6 3.5

Loans restated by IFRS 9 22.9 Amortized cost

Fair value

through profi t

or loss (2.9) 20.0 -

Financial instruments

measured at fair value 0.4

Fair value

through profi t

or loss

Fair value

through profi t

or loss - 0.4 0.1

Non-current financial assets 45.0 (2.9) 42.1 3.7

Other current assets from operating activities 27.5

Amortized cost

Amortized cost - 27.5 17.4

Cash and cash equivalents 243.6


or loss


or loss - 243.6 217.1

TOTAL FINANCIAL ASSETS 684.2 (2.9) 681.3 591.4

a) Equity interests in non-consolidated companies

(in € millions)

12.31.2018

DIVIDENDS

SUBSEQUENT VALUATION

INCOME FROM SALE REPAYMENT

CHANGES IN FAIR VALUE

CURRENCY TRANSLATION ADJUSTMENT

VALUATION ALLOWANCE

Shareholders’ equity - - - - - -

Income/loss 0.1 - - - 0.3 -

TOTAL 0.1 - - - 0.3 -

Non-consolidated equity interests held by the group amount to €0.1 million as of December 31, 2018. The profits and losses recorded in

income for equity interests in non-consolidated companies held for sale represented €0.4 million in 2018, of which €0.3 million in income from

sale of interests (€0.1 million in 2017).



4


b) Financial assets at fair value through profit or loss

(in € millions)

12.31.2018

IFRS 9 IMPACT AT OPENING DIVIDENDS


INCOME FROM SALE REPAYMENT

CHANGES IN FAIR VALUE


VALUATION ALLOWANCE

Shareholders’ equity (2.9) - - 0.5 - - -

Income/loss - (21.9) - - - -

TOTAL (2.9) - (21.9) 0.5 - - -

Financial assets at fair value through profi t or loss for the group are made up of vendor loans.

c) Loans and receivables at amortized costLoans and receivables at amortized costs can be analyzed as follows:

(in € millions)

12.31.2018 12.31.2017

GROSSVALUATION

ALLOWANCE NET GROSSVALUATION

ALLOWANCE NET

Loans and receivables at amortized

cost 83.7 (45.5) 38.2 110.9 (18.5) 92.4

Trade and other receivables 363.2 (27.3) 335.9 382.1 (34.5) 347.6

TOTAL 446.9 (72.8) 374.1 493.0 (53.0) 440.0

Loans and receivables mainly include vendor loans associated with

certain vessel disposals.

A loan with a consolidated special purpose company of which

the group lost control was recognized as a fi nancial asset at

amortized cost for €28.2 million (including accrued interest not due),

then fully impaired.

Profits and losses recorded in equity and in profi t and loss on loans and receivables at amortized cost were as follows:

(in € millions)

12.31.2018

INTEREST SUBSEQUENT VALUATIONINCOME FROM

SALE


VALUATION ALLOWANCE

Shareholders’ equity - 0.2 - -

Income/loss 1.6 - (30.1) -

TOTAL 1.6 0.2 (30.1) -

In 2018, the impairment recognized corresponds mainly to the loan to the deconsolidated special purpose company. Proceeds from interest

and residual impairment correspond mainly to vendor loans associated with certain vessel disposals.

(in € millions)

12.31.2017

INTEREST


INCOME FROM SALE


VALUATION ALLOWANCE

Shareholders’ equity - (4.8) - -

Income/loss 1.9 - (24.0) -

TOTAL 1.9 (4.8) (24.0) -

In 2017, proceeds from interest and impairment recorded relate primarily to payment for the vendor loans associated with certain vessel

disposals.

d) Cash and cash equivalentsCash and cash equivalents totaled €217.1 million as of December 31, 2018 versus €243.6 million as of December 31, 2017.

The policy for managing financial risks is presented in note 3.17. The cash and cash equivalents item is presented in note 3.8.



3.18.2 Derivative financial instruments

The fair value of the derivative financial instruments as of December 31, 2018 and December 31, 2017 breaks down as follows:

Financial assets

(in € millions)

12.31.2018 12.31.2017

CURRENT NON-CURRENT TOTAL TOTAL

Derivative instruments to hedge debt 0.1 0.0 0.1 0.0

Derivative instruments to hedge revenue in foreign

currencies and other - - - 0.4

TOTAL 0.1 0.0 0.1 0.5

Financial liabilities

(in € millions)

12.31.2018 12.31.2017


Derivative instruments to hedge debt 0.3 4.2 4.4 9.4

Derivative instruments to hedge foreign currency

and other risks 2.0 3.0 5.0 5.0

TOTAL 2.3 7.2 9.4 14.4

Hedging the interest rate riskAs of December 31, 2018 and December 31, 2017, the group held

different swap contracts to cover changes in the rates on its variable

rate borrowings. The swap contracts swap are used to hedge the

rate risk for firm commitments. The terms of these agreements

had initially been negotiated to coincide with the terms of the firm

commitments.

In 2017, these interest rate swaps were attached to borrowings

whose future flows were no longer expected, resulting in the

elimination of the item hedged and the disqualification of these

hedging instruments. The change in the fair value of these

instruments was then recognized in net income. The same applied

to the stock previously recognized in other comprehensive income,

now reclassifi ed through profi t or loss in the amount of €(6.6) million.

In 2018, the change in fair value of these instruments was recognized

as a gain in the income statement for €5 million.

Hedging the foreign exchange riskAt December 31, 2018, the group had no foreign exchange hedges

in place. As soon as the conditions for their set-up are met, new

forward currency contracts will be negotiated to coincide with the

terms of the firm commitments.

For 2018, the change in fair value of the derivative instruments booked directly under consolidated reserves (group and non-controlling

interests) represented a net unrealized deferred tax impact of €0.2 million, broken down as follows:


Change in fair value of hedge derivatives 0.2 18.3

of which:

forward purchases and sales on hulls / revenue - 3.3

interest rate swaps and others 0.2 15.0

Eff ect of deferred taxation - (3.7)

NET IMPACT 0.2 14.6

The derivative instruments are put in place in accordance with the group ’s risk management policy and are analyzed in note 3.17.



4


3.18.3 Financial liabilities

As of December 31, 2018 and December 31, 2017, financial liabilities broke down as follows:

(in € millions)

12.31.2018 12.31.2017


Financial debt 1,449.9 44.8 1,494.7 1,608.8

Derivative fi nancial instruments 2.3 7.2 9.4 14.4

Trade and other payables 478.7 0.3 479.0 335.5

Other liabilities 3.9 1.2 5.1 7.0

TOTAL 1,934.7 53.5 1,988.2 1,965.8

a) Financial debtThe financial debt is analyzed in note 3.13. It broke down as follows as of December 31, 2018 and December 31, 2017:

(in € millions)

12.31.2018 12.31.2017


Bonds - - - -

Commercial paper - - - -

Draws on credit facilities - - - -

Borrowings on finance leases 117.1 0.3 117.5 74.1

Other bank loans 1,244.1 44.5 1,288.6 1,451.1

Accrued interest 44.7 - 44.7 7.2

Total borrowings 1,406.0 44.8 1,450.8 1,532.3

Bank overdrafts and short-term lines 43.9 - 43.9 76.4

Accrued interest - - - 0.0

TOTAL FINANCIAL DEBT 1,449.9 44.8 1,494.7 1,608.8

As of December 31, 2018, accrued interest not due includes €5.4 million of accrued interest for the bond issue (see note 3.9).

b) Derivative fi nancial instrumentsDerivative financial instruments recognized as liabilities on the balance sheet are presented in note 3.18.2.

c) Trade and other payables

(in € millions) 12.31.2018 12.31.2017

Trade payables 337.8 198.3

Debt on non-current assets 0.0 -

Social security liabilities 38.7 42.6

Tax liabilities 88.6 81.9

Other liabilities 13.5 11.9

Deferred income 1.4 2.3

TOTAL 480.1 337.0

The balance sheet value of all these debts represents a good approximation of their fair value.

3.18.4 Fair value of financial assets and liabilities

The method for valuing financial assets and liabilities is detailed in notes 1.5.7 to 1.5.18.



3.18.5 Management of the risks related to financial instruments

The group ’s risk management policy is presented in note 3.17.

a) Credit riskOutstanding non-impaired receivables broke down as follows as of December 31, 2018 and December 31, 2017:

(in € millions)

12.31.2018

ASSETS OUTSTANDING AT YEAR-END

ASSETS IMPAIRED

ASSETS NOT IMPAIRED OR

OUTSTANDING TOTAL< 30 DAYS31-60 DAYS

61-90 DAYS > 90 DAYS TOTAL

Loans and receivables at

amortized cost - - - - - 45.5 38.2 83.7

Trade and other receivables 10.2 6.1 5.6 31.2 53.1 27.3 282.9 363.2

TOTAL 10.2 6.1 5.6 31.2 53.1 72.8 321.0 446.9

(in € millions)

12.31.2017

ASSETS OUTSTANDING AT YEAR-END

ASSETS IMPAIRED

ASSETS NOT IMPAIRED OR

OUTSTANDING TOTAL< 30 DAYS31-60 DAYS

61-90 DAYS > 90 DAYS TOTAL

Loans and receivables at

amortized cost - - - - - 18.5 92.4 110.9

Trade and other receivables 17.0 9.5 2.7 58.7 87.9 34.5 259.7 382.1

TOTAL 17.0 9.5 2.7 58.7 87.9 53.0 352.1 493.0

b) Liquidity riskThe group ’s exposure to liquidity risk is analyzed in note 3.17.

c) Market riskThe group ’s exposure to market risk is analyzed in note 3.17.

3.19 CONTINGENT LIABILITIES

As of December 31, 2017, pursuant to the provisions of IAS 37

on “Provisions, contingent liabilities and contingent assets, it had

been noted that one of the group ’s subsidiaries was involved in

legal proceedings following a dispute regarding a duty similar to an

indirect tax on certain invoiced services, for a total amount estimated

at the time at €28 million in principal and €66 million in penalties and

default interest.

In the management’s opinion, to the best of its knowledge of the

matter and of the local legal and tax environment, and supported by

the opinion of its counsel, this was a contingent liability for which the

likelihood of a significant payout was slight.

The claim by the local tax administration appeared to be groundless,

because it seemed to rely on an erroneous classification of the

services invoiced by the subsidiary, which the court of first instance

in the country in question had confirmed in its judgment rendered on

October 18, 2016, invalidating the adjustments notified by the local

tax administration.

The local tax administration had appealed the judgment before the

competent court of appeal.

By a judgment handed down on February 27, 2018, the appeal

court dismissed the claims of the administration and confirmed the

decision of the court of first instance canceling the adjustments.

The administration, even though it had a maximum of 30 business

days from the date of publication of the ruling to appeal the decision

before the competent court, did not appeal.

The judgment of February 27, 2018 handed down by the appeal

court in favor of the group and invalidating the adjustments became

fi nal on April 24, 2018.

Therefore, as of December 31, 2018, the group no longer has a

contingent liability in connection with this case.

Legal risks are described in “Legal Risks” in the Registration

Document, in note 5.3 of the management report.



4

Operating segments

4/ Operating segments

The business segment fi nancial information is presented by

activity and by Segment based on the internal reporting system

and shows internal segment information used by the principal

operating decision maker to manage and measure the performance

of BOURBON (IFRS 8). The principles of the internal reporting do

not refl ect the application of the consolidation standards IFRS 10,

11, 12, IAS 27 (amended) and IAS 28 (amended). Internal reporting

(and thus adjusted financial information) records the performance of

operational joint ventures in which the group has joint control by the

full consolidation method. Furthermore, internal reporting (and again

the adjusted fi nancial information) does not take into account IAS 29

(Financial Reporting in Hyperinfl ationary Economies), applicable for

the fi rst time in 2017 (retroactively from January, 1) to an operational

joint venture in Angola.

The operating segments as presented for purposes of providing

segment information are as follows: “Marine & Logistics”, “Mobility”,

and “Subsea Services”. In turn, the “Marine & Logistics” segment is

broken down into “Deep” and “Shallow”.

Income and expenses that cannot be charged to the operating

segments are classified as “Other”.

The capital employed as presented in the segment information

includes the following items:

3 goodwill;

3 the consolidated net book value of the vessels;

3 installments on vessels under construction;

3 other intangible assets and property, plant and equipment;

3 non-current financial instruments (assets and liabilities);

3 long-term financial assets (mainly loans);

3 working capital, which includes current assets (with the exception

of cash and cash equivalents) as well as current liabilities (with the

exception of borrowings and bank loans and provisions).

Commercial transactions between segments are established on a

market basis, with terms and conditions identical to those in effect

for supplying goods and services to customers outside the group .

The segment information for 2018 is as follows:

(in € millions)

TOTAL MARINE &

LOGISTICS

OF WHICH

TOTAL MOBILITY

TOTAL SUBSEA

SERVICES OTHER

ADJUSTED TOTAL BY

ACTIVITY/ SEGMENT ADJUSTMENTS

TOTAL CONSOLIDATEDDEEP SHALLOW

Revenues 357.3 217.7 139.6 187.7 133.6 10.9 689.5 55.6 633.9

Direct costs (excluding

bareboat leases) (224.2) (126.8) (97.4) (124.0) (77.8) (5.7) (431.8) (35.9) (395.9)

General and

administrative costs (59.7) (36.4) (23.3) (31.4) (22.3) (1.6) (115.1) (7.6) (107.5)

EBITDAR* excluding capital gains 73.3 54.5 18.9 32.3 33.4 3.6 142.7 12.2 130.5

Bareboat leases (104.6) (49.8) (54.8) - (43.7) - (148.3) 0.0 (148.3)

Capital gains 0.6 - 0.6 0.9 (0.3) - 1.3 (0.0) 1.3

Gross operating income (EBITDA) (30.6) 4.7 (35.2) 33.2 (10.5) 3.6 (4.3) 12.2 (16.5)

EBIT (224.2) nc nc (33.8) (54.4) (1.6) (313.9) 6.3 (320.2)

Goodwill - - - - 19.2 - 19.2 - 19.2

Vessels 1 083.0 nc nc 211.9 299.8 - 1,594.7 55.1 1,539.6

Installments on vessels

under construction 11.2 nc nc 0.4 48.8 60.3 0.0 60.3

Other non-current

assets and liabilities 17.2 nc nc 24.6 9.0 19.3 70.1 (15.0) 85.1

Working capital (46.0) nc nc (24.2) (17.2) (0.2) (87.6) (8.6) (79.0)

Capital employed 1,065.3 nc nc 212.7 359.6 19.2 1,656.7 31.6 1,625.1

Capital employed excluding installments on vessels under construction 1,054.1 nc nc 212.3 310.8 19.2 1,596.4 31.6 1,564.8

Capital employed related to non-current assets held for sale and liabilities associated with non-current assets held for sale 12.0 nc nc - - - 12.0 - 12.0

* EBITDA excl. bareboat leases.


CONSOLIDATED FINANCIAL STATEMENTS4 Operating segments

The segment information for 2017 was as follows:

(in € millions)

TOTAL MARINE &

LOGISTICS

OF WHICH

TOTAL MOBILITY

TOTAL SUBSEA

SERVICES OTHER

ADJUSTED TOTAL BY

ACTIVITY/ SEGMENT ADJUSTMENTS

TOTAL CONSOLIDATEDDEEP SHALLOW

Revenues 411.2 256.9 154.2 216.3 220.1 13.1 860.6 67.0 793.6

Direct costs (excluding

bareboat leases) (253.0) (151.4) (101.6) (133.5) (106.3) (6.7) (499.6) (43.2) (456.4)

General and

administrative costs (51.9) (32.5) (19.5) (27.3) (27.8) (1.6) (108.7) (11.5) (97.2)

EBITDAR* excluding capital gains 106.2 73.1 33.2 55.4 86.0 4.7 252.4 12.3 240.0

Bareboat leases (119.0) (61.7) (57.2) - (45.4) - (164.4) (0.0) (164.4)

Capital gains (0.4) - (0.4) 0.1 - 0.1 (0.2) (0.0) (0.2)

Gross operating income (EBITDA) (13.2) 11.3 (24.5) 55.5 40.6 4.9 87.8 12.3 75.4

EBIT (358.1) nc nc (16.4) (27.6) (1.8) (403.9) 2.7 (406.6)

Goodwill 6.1 - 6.1 - 19.2 - 25.2 - 25.2

Vessels 1,289.0 nc nc 257.4 337.9 0.0 1,884.3 55.0 1,829.3

Installments on vessels

under construction 10.3 nc nc 0.1 48.0 - 58.4 0.2 58.2

Other non-current assets

and liabilities 49.6 nc nc 16.2 21.0 21.0 107.8 (7.8) 115.6

Working capital 44.5 nc nc 23.4 23.8 (0.1) 91.6 (10.3) 102.0

Capital employed 1,399.5 nc nc 297.1 449.9 20.8 2,167.4 37.1 2,130.3

Capital employed excluding installments on vessels under construction 1,389.2 nc nc 297.0 401.9 20.8 2,109.0 36.8 2,072.1

Capital employed related to non-current assets held for sale and liabilities associated with non-current assets held for sale - nc nc - - - - - -

* EBITDA excl. bareboat leases.

The breakdown of BOURBON’s revenue by geographical region for 2018 and 2017 was as follows:

(in € millions) 2018 ADJUSTED 2017 ADJUSTED

Africa 381.7 497.7

Europe & Med./Middle East 136.4 123.0

American continent 94.5 147.6

Asia 77.0 92.3



4

Other information

5/ Other information

5.1 CONTRACTUAL OBLIGATIONS AND OTHER OFF-BALANCE SHEET COMMITMENTS

5.1.1 Off-balance sheet commitments related to the group scope of consolidation

(in € millions) 12.31.2018 12.31.2017

Commitments given 0.5 3.4

TOTAL COMMITMENTS GIVEN 0.5 3.4

5.1.2 Off-balance sheet commitments related to financing

Guarantees relating to medium- and long-term debt

(in € millions) 12.31.2018 12.31.2017

Commitments given

Mortgages and pledges on loans (equipment or marketable securities used as collateral) 1,230.5 1,382.0

Parent company guarantees given on behalf of Group entities 1,371.8 1,240.0

TOTAL COMMITMENTS GIVEN 2,602.3 2,622.0

Commitments received - 67.0

TOTAL COMMITMENTS RECEIVED - 67.0

In connection with certain restructured “club deal” and bilateral

financings and syndicated loans, the companies that own

BOURBON’s vessels consented to mortgages on some of their

vessels in favor of the lending institutions concerned to guarantee

the repayment of said loans.

As of December 31, 2018, although the total amount of mortgages

recorded with the appropriate authorities stood at €5,522.1 million,

the total amount that may be called was limited to the remaining

capital effectively owed by the group for the loans guaranteed by

these mortgages and personal pledges, i.e. €1,230.5 million.

The mortgage is released when the loan guaranteeing it is repaid

in full.

Parent company guarantees were given on behalf of Group entities

for €1,371.8 million.

5.1.3 Off-balance sheet commitments related to the group ’s operating activities

a) Operating activities

(in € millions) 12.31.2018 12.31.2017

Commitments given

Commitments given related to the performance of client contracts 19.7 12.7

Commitments given related to obligations towards the government 16.5 39.5

Commitments given related to the performance of supplier contracts 7.8 7.5

Other guarantees given 2.0 2.5

TOTAL COMMITMENTS GIVEN 45.9 62.2

Commitments received

Installment return guarantees 8.3 7.7

Other guarantees received - 12.5

TOTAL COMMITMENTS RECEIVED 8.3 20.2


CONSOLIDATED FINANCIAL STATEMENTS4 Other information

i. Commitments given

In the competitive bidding process in which the group participates,

some clients ask the bidders to submit a bid guarantee with their bid

to protect them if the call for bids is withdrawn. The validity period

of this kind of guarantee usually varies between 6 and 12 months.

If the contract is signed, the client may ask the bidder selected

to protect it by setting up a performance guarantee valid for the

duration of the contract, for a fixed or unspecified amount. As of

December 31, 2018, all such guarantees given by the group totaled

€19.7 million.

The group issues commitments to the customs authorities of some

countries in order to guarantee payment of the fees applicable to the

vessels operating in those countries. Deposits were also made so

that certain procedures could be initiated with administrative bodies.

As of December 31, 2018, all such guarantees given by the group

totaled €16.5 million.

ii. Commitments received

In connection with orders placed with different shipyards, the

group receives installment return guarantees which guarantee it

the reimbursement of all installments made during the construction

period in the event the project is interrupted.

These guarantees are issued either by the banks or by holding

companies and totaled €8.3 million as of December 31, 2018.

b) Contractual obligationsContractual obligations are as follows:

AS OF 12.31.2018(in € millions) TOTAL

PAYMENTS DUE BY PERIOD

< 1 YEAR 1 TO 5 YEARS > 5 YEARS

Finance leases 117.5 117.1 0.3 -

Operating leases (vessels) 1,184.5 266.0 668.8 249.7

Other operating leases 11.1 5.5 5.2 0.5

Balance payable on orders for vessels under construction 89.4 89.4 - -

TOTAL 1,402.5 478.0 674.3 250.1

In connection with this financing, the group conducted finance lease

operations under which the parent company of the entity signing the

finance lease agreement guaranteed payment of the rents. The debt

associated with these transactions amounted to €117.5 million as of

December 31, 2018.

As part of the sale and bareboat lease operations, the parent company

of the entity that signed the bareboat lease, or the group ’s holding

company, guaranteed payment of the leases. The commitment

connected with these transactions amounted to €1,184.5 million,

taking into account the unpaid rent payments over 2018.

The commitment relating to other operating leases was €11.1 million.

For the various orders placed with shipyards, the total amount of

the installments remaining due while the vessels were being built

amounted to €89.4 million as of December 31, 2018. Discussions are

in progress with the shipyards concerning the delivery of the vessels.



4

Other information

5.2 NET EARNINGS PER SHARE

5.2.1 Basic net earnings per share

The determination of the weighted average number of ordinary shares outstanding during each period is presented below:

12.31.2018 12.31.2017

Weighted average number of shares over the period 77,499,214 77,499,214

Weighted average number of treasury shares held over the period (125,256) (400,539)

Weighted average number of shares outstanding during the period 77,373,958 77,098,675

The weighted average number of shares outstanding in 2018 and 2017 takes into account the weighted average number of stock options

exercised during each period, as the case may be.

For each period presented, the basic earnings per share were determined as follows:

12.31.2018 12.31.2017

Weighted average number of shares used to calculate the basic net earnings per share 77,373,958 77,098,675

Net income (in € millions)

Consolidated, group share (457.8) (576.3)

Consolidated, group share – excluding income from discontinued operations / operations held

for sale (457.8) (576.3)

Net income from discontinued operations / operations held for sale - group share - -

Basic net earnings per share (in €)



for sale (5.92) (7.47)


5.2.2 Diluted net earnings per share

Pursuant to IAS 33, the number of shares used to calculate diluted

earnings per share takes into account the diluting effect of the

exercise of stock options (stock subscription and stock purchase

options), determined on the basis of the “share buyback” method.

It also includes the shares whose issue is conditional. The weighted

average number of shares used to calculate net earnings per share

is, therefore, increased by dilutive potential ordinary shares.

Diluted net earnings per share are established as follows:

Number of potential shares:

12.31.2018 12.31.2017

Weighted average number of shares outstanding during the period 77,373,958 77,098,675

Weighted average number of shares, the issue of which is conditional during the period - 292,600

Weighted average number of dilutive stock options during the period - -

Weighted average number of potential shares 77,373,958 77,391,275

In accordance with IAS 33, the determination of diluted net earnings

per share for 2017 did not take into account the stock option plans

authorized by the Board of Directors, as the options had an anti-

dilution effect.

Moreover, the determination of diluted net earnings per share for

2018 excludes all such share subscription or purchase option plans

authorized by the Board of Directors, as they retained their anti-

dilution effect.



Diluted net earnings per share:

12.31.2018 12.31.2017

Weighted average number of shares used to calculate diluted net earnings per share 77,373,958 77,391,275

Net income (in € millions)



for sale (457.8) (576.3)


Diluted net earnings per share (in €)



for sale (5.92) (7.45)


5.3 WORKFORCE AND PAYROLL

The group ’s workforce was as follows:

(workforce) 2018 2017

Onshore personnel 1,424 1,456

Seagoing personnel 3,471 3,755

- Officers 1,934 1,960

- Crews and other 1,537 1,795

TOTAL 4,895 5,211

The group ’s personnel costs were:


Personnel costs 263.7 225.3

5.4 SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD



the majority of the group ’s debt, thus allowing it to suspend

the payments of its loans and debt. This waiver allows it to stay

focused on its operational priorities and the implementation of its

#BOURBONINMOTION strategic plan, thanks to a preserved cash

situation within a secured framework.

On April 17, 2019, the General Meeting of TSSDI holders authorized





payment amounting to €3.867 million due on April 24, 2018 for the



October 24, 2017 (included) to April 24, 2018 (excluded) will be paid


April 2018 Interest will accrue interest, from the Date of Payment

of Interest, October 24, 2018 (included) and until July 24, 2019

(excluded) at the rate applicable to the TSSDIs, on the Interest



July 24, 2019.

5.5 RELATED-PARTY TRANSACTIONS

Relations with the Sinopacific Group

Mr. Jacques d’Armand de Chateauvieux, Chairman of the

BOURBON Corporation SA Board of Directors, indirectly holds,

via Cana Tera S.C.A, and its subsidiary JACCAR Holdings SAS, a

minority equity interest in Sinopacifi c Shipbuilding Group Co. Ltd., a

naval construction company, of which he is also a Director.

At December 31, 2018, as well as December 31, 2017 and December

31, 2016, current orders related to two vessels and amounted to

US$72.4 million.

Relations with an executive

In December 2014, BOURBON Corporation signed a

non- competition agreement with Mr. Laurent Renard, Executive Vice

President Finance and Administration at BOURBON Corporation

who had decided to retire, with the intent of preserving the legitimate

interests of the Company and its subsidiaries. This agreement, which

took effect on January 1, 2015, involves the payment in installments

of a sum of €300,000 to take place at the latest on January 31,

2016, January 31, 2017 and January 31, 2018. In 2018, a third and

fi nal amount of €110,000 gross was paid.



4

Other information

Relations with JACCAR Holdings

A cash management agreement was signed between BOURBON

Corporation SA (via one of its subsidiaries) and JACCAR Holdings

SAS (Shareholder Company of BOURBON Corporation SA).

As of December 31, 2018, the amount of the advance including

interest granted to BOURBON was €16.9 million.

5.6 EXECUTIVE COMPENSATION

5.6.1 Compensation paid to the Chairman and Chief Executive Officer and the Executive Vice Presidents

5.6.1.1 Compensation paid to the Chairman and Chief Executive Offi cer

For the 2018 fiscal year




components of Jacques d’Armand de Chateauvieux’s compensation

in respect of the 2018 fiscal year would be as follows:

3 fi xed annual compensation unchanged at €144,000;

3 variable compensation, which remains entirely linked to the

Company’s performance, corresponding to 1% of surplus net

income (group share) for the fi scal year in question and capped at

70% of the fixed compensation;


With respect to variable compensation, the Board of Directors

did not follow the recommendation of the AFEP-MEDEF Code,

which provides that variable compensation must be subject to the

achievement of specific objectives, but instead granted variable

compensation with terms similar to the compensation terms of the

other shareholders (that is to say, a percentage of net income where

it is positive). This decision was based on the fact that the objectives

set for the two other corporate officers, linked to quantitative and

qualitative performance criteria, cannot apply to the Chairman and

CEO, who is the Company’s principal shareholder.


from the Company.

The Board, having prepared the Company’s financial statements,

noted that net income (group share) was negative. Therefore,

no variable compensation will be paid to Jacques d’Armand de

Chateauvieux for fiscal year 2018.

5.6.1.2 Compensation of the Chief Executive Offi cer





components of the compensation paid to Gaël Bodénès in respect

of the 2018 fiscal year would be as follows:


3 for the variable compensation, at its meeting on March 14, 2018,

the Board of Directors decided on a calculation procedure based

on the fi xed compensation; the variable compensation can be

up to 50% of fi xed compensation if the targets are met, and up

to 70% if the targets are exceeded. Targets are reviewed and

set each year by the Board of Directors on the proposal of the

Nominating, Compensation and Governance Committee and

aligned with the targets linked to the group ’s strategic priorities.

The degree to which each objective must be achieved is

precise and progressive, but is not made public for reasons of

confidentiality.

As the Chief Executive Offi cer is in office at December 31, 2018, he

is also allocated unemployment insurance for senior executives and

a company car.

On the basis of the objectives defined at the meeting of

March 14, 2018, the Board of Directors, having heard the opinion

of the members of the Nominating, Compensation, and Governance






June 28, 2019.

5.6.1.3 Compensation paid to the Chairman of the Board of Directors


The BOURBON Corporation SA Board of Directors, at its meeting

held on April 10, 2018, on the proposal of the Nominating,

Compensation and Governance Committee, decided on the

compensation components payable to Jacques d’Armand de

Chateauvieux, in respect of his term as Chairman of the Board of

Directors for the 2018 fi scal year:


3 Directors’ fees paid by BOURBON Corporation SA. Jacques

d’Armand de Chateauvieux receives no other commitments from

the Company.

This fixed compensation is re-examined annually by the Nominating,

Compensation and Governance Committee.

5.6.1.4 Compensation of the Executive Vice Presidents





components of the compensation paid to Gaël Bodénès and Astrid

de Lancrau de Bréon in respect of the 2018 fiscal year would be as

follows:

3 for Gaël Bodénès: fi xed annual compensation of €280,260;

3 for Astrid de Lancrau de Bréon: fi xed annual compensation of

€240,000;

3 for the variable portion, several years ago the Board of Directors

defined a calculation procedure based on fixed compensation;

variable compensation can reach 50% of fixed compensation if

the objectives are achieved, and up to 70% if the objectives are

exceeded. Targets are reviewed and set each year by the Board

of Directors on the proposal of the Nominating, Compensation

and Governance Committee and aligned with the targets linked

to the group ’s strategic priorities. The degree to which each

objective must be achieved is precise and progressive, but is not

made public for reasons of confidentiality.



3 ACHIEVEMENT OF OBJECTIVES FOR FISCAL YEAR 2018

GAËL BODÉNÈS, CHIEF OPERATING OFFICER THEN CHIEF EXECUTIVE OFFICER TARGET % % GRANTED


- Target for EBITDA excl. capital gains 20% Not achieved

- Objective for Days Sales Outstanding (DSO) 20% Achieved


- Target for average fleet utilization rate 20% Not achieved

- Target for Group TRIR 20% Not achieved


TOTAL 100% 30%

ASTRID DE LANCRAU DE BRÉON, CHIEF FINANCIAL OFFICER TARGET % % GRANTED


- Target for EBITDA excl. capital gains 20% Not achieved

- Objective for Days Sales Outstanding (DSO) 20% Achieved


- Target for average fleet utilization rate 20% Not achieved

- Target for Group TRIR 20% Not achieved


TOTAL 100% 10%

5.6.1.5 Summary table of the compensation, stock options, and shares granted to each Executive Director in offi ce as of December 31, 2018 (in euros)

JACQUES D’ARMAND DE CHATEAUVIEUX, CHAIRMAN AND CHIEF EXECUTIVE OFFICER

FISCAL YEAR 2017

FISCAL YEAR 2018

Compensation due for the fi scal year (detailed in table 5.6.1.7) 174,000 182,000


Value of stock options awarded during the year (detailed in 5.6.3) - -

Value of performance shares awarded during the year - -

TOTAL 174,000 182,000

GAËL BODÉNÈS, EXECUTIVE VICE PRESIDENT

FISCAL YEAR 2017

FISCAL YEAR 2018

Compensation due for the fi scal year (detailed in table 5.6.1.7) 408,512 340,971




TOTAL 408,512 340,971

In respect of his term of offi ce as Chief Operating Offi cer, Gaël

Bodénès was allocated unemployment insurance for senior

executives and a company car. Astrid de Lancrau de Bréon was

entitled to unemployment insurance for senior executives until the

end of her term of offi ce, i.e. until July 10, 2018.

On the basis of the objectives defined at the meeting of March

14, 2018, the Board of Directors, having heard the opinion of the

members of the Nominating, Compensation, and Governance






June 28, 2019.



4

Other information

5.6.1.6 Summary table of the compensation, stock options and shares granted to each Executive Director whose term of offi ce ended in 2018 (in euros)

ASTRID DE LANCRAU DE BRÉON,CHIEF FINANCIAL OFFICER (UNTIL 07.10.2018)

FISCAL YEAR 2017

FISCAL YEAR 2018

Compensation due for the year (detailed in table 5.6.1.8) 283,508 133,415




TOTAL 283,508 133,415

5.6.1.7 Summary table of the compensation of each Executive Director in offi ce at December 31, 2018 (in euros)

JACQUES D’ARMAND DE CHATEAUVIEUX, CHAIRMAN AND CHIEF EXECUTIVE OFFICER


DUE FOR THE YEAR

PAID OVER THE YEAR

DUE FOR THE YEAR

PAID OVER THE YEAR

Fixed compensation 144,000 144,000 144,000 144,000

Variable compensation(1) - - 0 -



Directors’ fees(2) 30,000 30,000 38,000 32,000

Benefits in kind - - - -

TOTAL 174,000 174,000 182,000 176,000


(2) The amount due may vary depending on the number of Board Meetings held between Shareholders’ Meetings.

GAËL BODÉNÈS, EXECUTIVE VICE PRESIDENT


DUE FOR THE YEAR

PAID OVER THE YEAR

DUE FOR THE YEAR

PAID OVER THE YEAR


Variable compensation(1) 63,662 26,500 42,039 63,662



Directors’ fees for terms of office served in the group - - - -

Benefits in kind(2) 18,513 18,513 18,672 18,672

TOTAL 408,512 371,350 340,971 362,594


(2) Company car + unemployment insurance for senior executives.




5.6.1.8 Summary table of compensation for each Executive Directors whose term of offi ce ended in 2018 (in euros)

ASTRID DE LANCRAU DE BRÉON, CHIEF FINANCIAL OFFICER (UNTIL 07.10.2018)


DUE FOR THE YEAR

PAID OVER THE YEAR

DUE FOR THE YEAR

PAID OVER THE YEAR


Variable compensation(1) 52,800 - 6,323 52,800



Directors’ fees - 29,000 - -

Benefits in kind(2) 4,247 4,247 640 640

TOTAL 283,508 259,708 133,415 179,892


(2) Company car.


5.6.2 Commitments of any kind made by the Company to its Executive Directors

Executive Directors aff ected by

the AFEP-MEDEF recommendation

EMPLOYMENT CONTRACT

SUPPLEMENTARY PENSION SCHEME

INDEMNITY OR BENEFITS PAYABLE OR POTENTIALLY

PAYABLE DUE TO TERMINATION OR

CHANGE OF FUNCTION

INDEMNITY PAYABLE UNDER A NON-

COMPETE CLAUSE

YES NO YES NO YES NO YES NO

Jacques d’Armand de Chateauvieux(1)

Chairman and Chief Executive Offi cer


End of term of office: Shareholders’ Meeting

called to approve the financial statements

for the year ended 12.31.2018 x x x x

Gaël Bodénès(2)

Executive Vice President


End of term of office: Shareholders’ Meeting

called to approve the financial statements

for the year ended 12.31.2018 (3) x x x

(1) Jacques D’Armand de Chateauvieux has been Chairman of the Board since March 14, 2018. His term of office will end following the Shareholders’

Meeting called to approve the financial statements for the fiscal year ending on 12.31.2018.

(2) Gaël Bodénès has been Chief Executive Officer since March 14, 2018 and his term of office will end following the Shareholders’ Meeting called to

approve the financial statements of the fiscal year ending on 12.31.2018.

(3) Gaël Bodénès has a contract of employment with the EIG Bourbon Management, which has been suspended by the Board, deeming that his corporate

term of offi ce was an extension of the salaried duties that he has been performing since he joined the group in 2002; ending it would have deprived him

of the rights attached to his length of service. The Chief Executive Offi cer does not benefi t from any special indemnifi cation clause in the event of

departure.

5.6.3 Stock options exercised during the year by each Executive Director

No subscription or purchase stock options were granted or exercised in 2018.



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Other information

5.7 STATUTORY AUDITORS’ FEES

DELOITTE EURAAUDIT C.R.C.

STATUTORY AUDITORS’ FEES FOR FISCAL YEAR 2018

STATUTORY AUDITORS (DELOITTE & ASSOCIÉS) NETWORK

STATUTORY AUDITORS (EURAAUDIT C.R.C.) NETWORK

(in € thousands) AMOUNT % AMOUNT % AMOUNT % AMOUNT %

Certification of separate and consolidated financial statements and half-year review

- Entity 104 29% n/a 65 48% n/a

- Controlled entities(1) 227 62% 550 100% 71 52% - 0%

Subtotal A 331 91% 550 100% 136 100% - 0%

Services other than the certifi cation of the fi nancial statements required by legislation and regulations

- Entity - 0% n/a - 0% n/a

- Controlled entities(1) - 0% - 0% - 0% - 0%

Subtotal B - 0% - 0% - 0% - 0%

Services other than the certifi cation of fi nancial statements supplied at the entity’s request(2)

- Entity 33 9% n/a - 0% n/a

- Controlled entities(1) - 0% 3 0% - 0% - 0%

Subtotal C 33 9% 3 0% - 0% - 0%

Subtotal D = B + C 33 9% 3 0% - 0% - 0%

TOTAL E = A + D 364 100% 552 100% 136 100% - 0%

(1) The entities taken into account are the fully consolidated subsidiaries and jointly controlled entities when the fees are recognized in the consolidated

income statement.

(2) The services provided are the auditing of the consolidated human resource, environmental and societal information of BOURBON Corporation SA

following the appointment of Deloitte & Associés as independent third party, and various legal and tax-related services provided by the Deloitte

network.



5.8 SCOPE OF CONSOLIDATION

5.8.1 List of BOURBON Corporation SA’s fully consolidated companies

% CONTROL OF CAPITAL HELD DIRECTLY OR INDIRECTLY

% INTEREST IN CAPITAL HELD DIRECTLY OR INDIRECTLY

COUNTRY2018 2017 2018 2017

BOURBON Corporation SA Parent Company Parent Company

France

(Marseille)

Aequo Animo Shipping Navegação Lda 100,00 100,00 100,00 100,00

Portugal

(Madeira)

Aries Marine pte.Ltd (formerly Marine Network

Asia pte.Ltd) 90,00 90,00 90,00 90,00 Singapore

Bahtera Sri Kandi Asset Ltd (formerly Bourbon

Labuan Asset) 100,00 100,00 49,00 49,00 Malaysia

Bahtera Sri Kandi Marine SDN.BHD (formerly

Bourbon Off shore Mitra SDN.BHD) 100,00 100,00 49,00 49,00 Malaysia

Bahtera Sri Kandi Off shore Ltd (formerly Bourbon

Off shore Labuan Ltd) 100,00 100,00 49,00 49,00 Malaysia

BAOS Holding Ltd 50,00 50,00 50,00 50,00 Cyprus

BAOS Provider Ltd 50,00 50,00 50,00 50,00 Cyprus

BON Crewing AS 100,00 100,00 100,00 100,00 Norway

BON Management AS 100,00 100,00 100,00 100,00 Norway

Bourbon AD6 100,00 100,00 100,00 100,00 France

Bourbon Asia Asset pte Ltd 100,00 100,00 100,00 100,00 Singapore

Bourbon Assets Singapore pte Ltd 100,00 100,00 100,00 100,00 Singapore

Bourbon Baltic Ltd Liability Company 100,00 100,00 100,00 100,00 Russia

Bourbon Black Sea 100,00 100,00 100,00 100,00 Romania

Bourbon Brazil Participações 100,00 100,00 100,00 100,00 Brazil

Bourbon Cap RE 100,00 100,00 100,00 100,00 Luxembourg

Bourbon Capital (1) 100,00 (1) 100,00 Luxembourg

Bourbon Capital Holdings USA 100,00 100,00 100,00 100,00

United

States

Bourbon China Group Ltd 100,00 100,00 100,00 100,00 China

Bourbon Cormorant Lease SAS 100,00 100,00 0,00 0,00 France

Bourbon Docking and Sourcing DMCEST (formerly

Bourbon Sourcing DMCEST) 100,00 100,00 100,00 100,00

United Arab

Emirates

Bourbon East Asia pte Ltd 90,00 90,00 90,00 90,00 Singapore

Bourbon Far East pte Ltd 100,00 100,00 100,00 100,00 Singapore

Bourbon Gabon SA 60,00 60,00 60,00 60,00 Gabon

Bourbon Gaia Supply 100,00 100,00 100,00 100,00 France

Bourbon Ghana International 49,00 49,00 49,00 49,00 France

Bourbon Ghana Ltd 49,00 49,00 49,00 49,00 Ghana

Bourbon International Mobility SA 100,00 100,00 100,00 100,00 Switzerland

Bourbon Interoil Nigeria Ltd 40,00 40,00 40,00 40,00 Nigeria

Bourbon Logistics (formerly Bourbon AD4) 100,00 100,00 100,00 100,00 France

Bourbon Logistic Nigeria Limited 100,00 100,00 100,00 100,00 Nigeria

Bourbon Logistics Indonesia 100,00 100,00 95,00 95,00 Indonesia

Bourbon Management (formerly CFG) 100,00 100,00 100,00 100,00 France

Bourbon Marine & Logistics (formerly Bourbon

Off shore) 100,00 100,00 100,00 100,00 France

Bourbon Marine Services Austral 100,00 100,00 100,00 100,00 Mauritius

Bourbon Marine Services Greenmar 100,00 100,00 100,00 100,00 Mauritius

Bourbon Maritime (formerly Compagnie Chambon) 100,00 100,00 100,00 100,00 France



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COUNTRY2018 2017 2018 2017

Bourbon Mauritius 100,00 100,00 100,00 100,00 Mauritius

Bourbon Mobility (formerly Bourbon AD5) 100,00 100,00 100,00 100,00 France

Bourbon Mobility Holding (eh Nikolas, formerly Setaf) 100,00 100,00 100,00 100,00 France

Bourbon Off shore Asia pte Ltd 90,00 90,00 90,00 90,00 Singapore

Bourbon Off shore Craft 100,00 100,00 100,00 100,00 France

Bourbon Off shore Craft TT (formerly Cemtaf,

formerly Tribor) 100,00 100,00 100,00 100,00 France

Bourbon Off shore DNT (formerly DNT Off shore) 100,00 100,00 100,00 100,00 Italy

Bourbon Off shore Gaia 100,00 100,00 100,00 100,00 France

Bourbon Off shore Greenmar 100,00 100,00 100,00 100,00 Switzerland

Bourbon Off shore Gulf 60,00 60,00 60,00 60,00 Bahrain

Bourbon Off shore India Private Ltd 100,00 100,00 100,00 100,00 India

Bourbon Off shore Interoil Shipping-Navegação Lda 55,00 55,00 55,00 55,00

Portugal

(Madeira)

Bourbon Off shore Marine Services

(formerly Bourbon AD3) 100,00 100,00 100,00 100,00 France

Bourbon Off shore Maritima (formerly Delba Maritima

Navegação) 100,00 100,00 100,00 100,00 Brazil

Bourbon Off shore MMI 100,00 100,00 100,00 100,00

United Arab

Emirates

Bourbon Off shore Norway AS 100,00 100,00 100,00 100,00 Norway

Bourbon Off shore Pacifi c pty Ltd 100,00 100,00 100,00 100,00 Australia

Bourbon Off shore Surf 100,00 100,00 100,00 100,00 France

Bourbon Off shore Triangle 51,00 51,00 51,00 51,00 Egypt

Bourbon Off shore Trinidad Ltd 100,00 100,00 100,00 100,00 Trinidad

Bourbon Off shore Ukraine (formerly Bourbon Marine

Services Ukraine) 100,00 80,00 100,00 80,00 Ukraine

Bourbon PS 100,00 100,00 100,00 100,00 France

Bourbon Salvage investments 100,00 100,00 100,00 100,00 France

Bourbon Services Luxembourg SARL 100,00 100,00 100,00 100,00 Luxembourg

Bourbon Ships AS 100,00 100,00 100,00 100,00 Norway

Bourbon Sourcing and Trading pte Ltd (formerly

Bourbon Training Center Asia pte Ltd) 100,00 100,00 100,00 100,00 Singapore

Bourbon Subsea PS (formerly Bourbon AD1) 100,00 100,00 100,00 100,00 France

Bourbon Subsea Services 100,00 100,00 100,00 100,00 France

Bourbon Subsea Services Asia pte Ltd (formerly

Bourbon Off shore DNT Asia pte Ltd) 100,00 100,00 100,00 100,00 Singapore

Bourbon Subsea Services Investments 100,00 100,00 100,00 100,00 France

Bourbon SUN III (formerly Bourbon AD2) 100,00 100,00 100,00 100,00 France

Bourbon Supply Asia pte Ltd 100,00 100,00 100,00 100,00 Singapore

Bourbon Supply Investissements 100,00 100,00 100,00 100,00 France

Bourbon Tern Lease SAS 100,00 100,00 0,00 0,00 France

Bourbon Training Center & Simulator pte Ltd (1) 100,00 (1) 100,00 Singapore

Buana Jasa Bahari pte Ltd 100,00 100,00 100,00 100,00 Singapore

BUMI Subsea Asia pte Ltd 70,00 70,00 70,00 70,00 Singapore

BUMI Subsea Labuan Limited 100,00 100,00 100,00 100,00 Malaysia

BUMI Subsea Solutions SDN.BHD 49,00 49,00 49,00 49,00 Malaysia

Caroline 20 100,00 100,00 100,00 100,00 France

Caroline 21 100,00 100,00 100,00 100,00 France

Caroline 22 100,00 100,00 100,00 100,00 France

Caroline 23 100,00 100,00 100,00 100,00 France





COUNTRY2018 2017 2018 2017

Caroline 63 SAS 0,00 100,00 0,00 0,00 France

Caroline 8 SAS 100,00 100,00 100,00 100,00 France

Cusack 100,00 100,00 100,00 100,00 Uruguay

Delba Operadora de Apoio Maritimo 100,00 100,00 100,00 100,00 Brazil

Elbuque-Shipping LDA (1) 100,00 (1) 51,00

Portugal

(Madeira)

Financière Bourbon 100,00 100,00 100,00 100,00 France

Grena-Navegação LDA (1) 100,00 (1) 100,00

Portugal

(Madeira)

Holland Propeller Services B.V 100,00 100,00 60,00 60,00 Netherlands

Inebolu Petroleum Marine Services Ltd Company (1) 100,00 (1) 100,00 Turkey

Inspares 0,00 100,00 0,00 100,00

United Arab

Emirates

Jade-Navegação LDA (1) 100,00 (1) 100,00

Portugal

(Madeira)

Lastro-Companhia Internacional de Navegação LDA 100,00 100,00 100,00 100,00

Portugal

(Madeira)

Latin quarter-Serviços Maritimos Internacionais LDA 100,00 100,00 51,00 51,00

Portugal

(Madeira)

Les Abeilles 100,00 100,00 100,00 100,00 France

Mastshipping-Shipping LDA 100,00 100,00 51,00 51,00

Portugal

(Madeira)

Navegaceano- Shipping LDA (1) 100,00 (1) 51,00

Portugal

(Madeira)

Navegacion Costa Fuera 49,00 49,00 49,00 49,00 Mexico

Naviera Bourbon Tamaulipas 49,00 49,00 49,00 49,00 Mexico

Oceanteam Bourbon 101 AS 50,00 50,00 50,00 50,00 Norway

Onix Participaçoes e Investimentos, Sociedade

Unipessoal Lda 100,00 100,00 100,00 100,00

Portugal

(Madeira)

Opsealog 60,00 60,00 60,00 60,00 France

Perestania 100,00 100,00 100,00 100,00 France

Placements Provence Languedoc 100,00 100,00 100,00 100,00 France

PSV Support 49,00 49,00 49,00 49,00

United

States

PT Surf Marine Indonesia 100,00 100,00 49,00 49,00 Indonesia

Servicios y Apoyos Maritimos 49,00 49,00 49,00 49,00 Mexico

SGSP International 100,00 100,00 100,00 51,00 France

Sigma Shipping Services Ltd 100,00 0,00 70,00 0,00 Nigeria

SNC AHTS 1 100,00 100,00 100,00 100,00 France

SNC Altair 100,00 100,00 100,00 100,00 France

SNC B.P.S. (formerly TBN 9) 100,00 100,00 100,00 100,00 France

SNC B.S.P.S. (formerly TBN 11) 100,00 100,00 100,00 100,00 France

SNC Bourbon Alienor (formerly B.L. 230) 100,00 100,00 100,00 100,00 France

SNC Bourbon Amilcar 100,00 100,00 100,00 100,00 France

SNC Bourbon Arcadie (formerly B.L. 201) (1) 100,00 (1) 100,00 France

SNC Bourbon Auroch 100,00 100,00 100,00 100,00 France

SNC Bourbon Bison 100,00 100,00 100,00 100,00 France

SNC Bourbon CE Fulmar 100,00 100,00 0,00 0,00 France

SNC Bourbon CE Gannet 100,00 100,00 0,00 0,00 France

SNC Bourbon CE Grebe 100,00 100,00 0,00 0,00 France

SNC Bourbon CE Petrel 100,00 100,00 0,00 0,00 France



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Other information



COUNTRY2018 2017 2018 2017

SNC Bourbon Diamond (1) 100,00 (1) 100,00 France

SNC Bourbon Enterprise 100,00 100,00 100,00 100,00 France

SNC Bourbon Evolution 802 100,00 100,00 100,00 100,00 France

SNC Bourbon Evolution 803 100,00 100,00 100,00 100,00 France

SNC Bourbon Explorer 516 (formerly SNC TBN 8) 100,00 100,00 100,00 100,00 France

SNC Bourbon Explorer 518 (formerly SNC TBN 10) 100,00 100,00 100,00 100,00 France

SNC Bourbon Explorer 519 (formerly Surfer 2013) 100,00 100,00 100,00 100,00 France

SNC Bourbon Hamelin (1) 100,00 (1) 100,00 France

SNC Bourbon Herald 100,00 100,00 100,00 100,00 France

SNC Bourbon Himalaya (1) 100,00 (1) 100,00 France

SNC Bourbon Liberty 226 (1) 100,00 (1) 100,00 France



SNC Bourbon Liberty 226 100,00 100,00 100,00 100,00 France














SNC Bourbon Liberty 235 (formerly B.L. 122) 100,00 100,00 100,00 100,00 France










SNC Bourbon Liberty 251 (formerly SNC Bourbon

Artabaze) 100,00 100,00 100,00 100,00 France



SNC Bourbon Liberty 305 (formerly TBN 3) 100,00 100,00 100,00 100,00 France

SNC Bourbon Liberty 306 (formerly TBN 4) 100,00 100,00 100,00 100,00 France

SNC Bourbon Liberty 308 (formerly TBN 2

formerly 303) 100,00 100,00 100,00 100,00 France

SNC Bourbon Liberty 313 (formerly TBN 5

formerly 307) 100,00 100,00 100,00 100,00 France

SNC Bourbon Pearl (1) 100,00 (1) 100,00 France

SNC Bourbon Ruby (1) 100,00 (1) 100,00 France





COUNTRY2018 2017 2018 2017

SNC Bourbon Sapphire (1) 100,00 (1) 100,00 France

SNC Bourbon Sirocco (formerly TBN 6) 100,00 100,00 100,00 100,00 France

SNC Bourbon Supporter (1) 100,00 (1) 100,00 France

SNC Bourbon Yack 100,00 100,00 100,00 100,00 France

SNC Endeavor 100,00 100,00 100,00 100,00 France

SNC Liberty 201 100,00 100,00 100,00 100,00 France





SNC Liberty CE 121 100,00 100,00 100,00 100,00 France








SNC Surfer 2009 (1) 100,00 (1) 100,00 France

SNC Surfer 2009 TT (1) 100,00 (1) 100,00 France

SNC Surfer 2010 100,00 100,00 100,00 100,00 France

SNC Surfer 2011 (formerly SURFER 2010 TT) 100,00 100,00 100,00 100,00 France

SNC Surfer 2012 100,00 100,00 100,00 100,00 France

SNC Surfer 3603 (formerly TBN 1) 100,00 100,00 100,00 100,00 France

SNC TBN 12 100,00 100,00 100,00 100,00 France

SNC TBN 13 100,00 100,00 100,00 100,00 France

Sonasurf Internacional-Shipping LDA 51,00 51,00 51,00 51,00

Portugal

(Madeira)

Sonasurf Unipessoal Lda (formerly Sonasurf Jersey

Ltd) (1) 100,00 (1) 51,00

Portugal

(Madeira)

Sopade (Sté participation développement SAS) (1) 100,00 (1) 100,00 France

Toesa 100,00 100,00 100,00 100,00 Uruguay

(1) Liquidations/Dissolutions.



4

Other information

5.8.2 List of companies consolidated by BOURBON Corporation SA using the equity method



COUNTRY2018 2017 2018 2017

Bourbon Gulf 49,00 49,00 49,00 49,00 Qatar

Copremar 20,00 20,00 20,00 20,00 Congo

EPD China Group, Ltd (formerly EPD (Yangzhou)

Electronic Power Design, Co, Ltd) 50,00 50,00 50,00 50,00 China

EPD Asia Group Ltd 50,00 50,00 50,00 50,00

United

States

EPD Horizon pte Ltd 50,00 50,00 50,00 50,00 Singapore

EPD Singapore Services pte Ltd 50,00 50,00 50,00 50,00 Singapore

Jackson Off shore LLC 0,00 24,50 0,00 24,50

United

States

Oceanteam Bourbon 4 AS 50,00 50,00 50,00 50,00 Norway

Oceanteam Bourbon Investments AS (formerly

Oceanteam Bourbon Spares & Equipments AS) 50,00 50,00 50,00 50,00 Norway

Sonasurf (Angola) - Companhia de serviços

Maritimos, LDA 50,00 50,00 50,00 50,00 Angola

Southern Transformers & Magnetics LLC 50,00 50,00 50,00 50,00

United

States

ENHL Bourbon Lda 51,00 0,00 51,00 0,00 Mozambique


CONSOLIDATED FINANCIAL STATEMENTS4 Financial Glossary

6/ Financial Glossary

Adjusted data: internal reporting (and thus adjusted fi nancial

information) records the performance of operational joint ventures in

which the group has joint control by the full consolidation method.

The adjusted financial information is presented by activity and by

Segment based on the internal reporting system and internal

segment information used by the principal operating decision-maker

to manage and measure the performance of BOURBON (IFRS 8).

Furthermore, internal reporting (and again the adjusted fi nancial

information) does not take into account IAS 29 (Financial Reporting

in Hyperinfl ationary Economies), applicable for the fi rst time in 2017

(retroactively from January 1) to an operational joint venture in Angola.

EBITDAR: revenue less direct operating costs (except bareboat

charters) and general and administrative costs.

EBITDA: EBITDAR less bareboat charters.

EBIT: EBITDA after depreciation, amortization and provisions and

capital gains on equity interests sold, but excluding share of net

income of companies under the equity method.

Operating income (EBIT) after share of results from

companies under the equity method: EBIT after share of net

income of companies under the equity method.

Capital invested (or employed): includes (i) shareholders’ equity,

(ii) provisions (including net deferred tax), (iii) net debt; it is also

defi ned as the sum (i) of net non-current assets (including advances

on fi xed assets), (ii) working capital requirements, and (iii) net assets

held for sale.

Average capital employed excl. advances: is understood as the

average of the capital employed at the beginning of the period and

end of the period, excluding advances on fi xed assets.

Free cash fl ow: net cash fl ows from operating activities after

inclusion of incoming payments and disbursements related to

acquisitions and sales of property, plant and equipment and

intangible assets.



4

Statutory auditors’ report on the consolidated fi nancial statements (Year ended December 31, 2018)

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS (YEAR ENDED DECEMBER 31, 2018)

This is a translation into English of the statutory auditors’ report on the consolidated fi nancial statements of the Company issued in French and

it is provided solely for the convenience of English speaking users.

This statutory auditors’ report includes information required by European regulation and French law, such as information about the appointment

of the statutory auditors or verifi cation of the management report and other documents provided to shareholders.

This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable

in France.

To the Bourbon Corporation Annual General Meeting,

Opinion

In compliance with the engagement entrusted to us by your Annual General Meetings, we have audited the accompanying consolidated

fi nancial statements of Bourbon Corporation for the year ended December 31, 2018.

In our opinion, the consolidated fi nancial statements give a true and fair view of the assets and liabilities and of the fi nancial position of

the Group as of December 31, 2018 and of the results of its operations for the year then ended in accordance with International Financial

Reporting Standards as adopted by the European Union.

The audit opinion expressed above is consistent with our report to the Audit Committee.

Basis for Opinion

Audit Framework

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained

is suffi cient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the “Statutory Auditors’ Responsibilities for the Audit of the Consolidated

Financial Statements” section of our report.

Independence

We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2018 to the date

of our report and specifi cally we did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No. 537/2014

or in the French Code of Ethics (code de déontologie) for statutory auditors.

Material uncertainty surrounding going concern

We draw attention to Note 1.2 to the consolidated fi nancial statements which describes the material uncertainty resulting from events or

conditions that may cast signifi cant doubt on the Company’s ability to continue as a going concern. Our opinion is not modifi ed in respect of

this matter.

Emphasis of matter

We draw attention to Note 1.3 to the consolidated fi nancial statements which describes the change in accounting method resulting from the

application of IFRS 9 and IFRS 15 that came into effect on January 1, 2018. Our opinion is not modifi ed in respect of this matter.

Justification of Assessments - Key Audit Matters

In accordance with the requirements of Articles L.823-9 and R.823-7 of the French Commercial Code (code de commerce) relating to the

justifi cation of our assessments, and in addition to the matter described in the “Material uncertainty surrounding going concern” section, we

inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most signifi cance in

our audit of the consolidated fi nancial statements of the current period, as well as how we addressed those risks.

These matters were addressed in the context of our audit of the consolidated fi nancial statements as a whole, and in forming our opinion

thereon. We do not provide a separate opinion on specifi c items of the consolidated fi nancial statements.


CONSOLIDATED FINANCIAL STATEMENTS4 Statutory auditors’ report on the consolidated fi nancial statements (Year ended December 31, 2018)

RECOVERABLE AMOUNT OF PROPERTY, PLANT AND EQUIPMENT

(Notes 1.4 – Impairment test fi xed assets, 1.5.5 and 3.3 – Property, plant and equipment and 3.1 - Goodwill to the consolidated fi nancial statements)

Key audit matter Our audit approach

Due to its marine services activity, the Group’s property, plant and

equipment mainly comprises ships. It represented a net amount of

€1,638 million as of December 31, 2018 for total assets of €2,359

million.

Property, plant and equipment is subject to impairment testing where

there is an indication of loss in value, i.e. when specifi c events or

circumstances indicate a risk of impairment for these assets.

As of December 31, 2018, diffi cult conditions in the Oil & Gas market

represented an indication of impairment pursuant to IAS 36 –

Impairment of assets.

In this context, the recoverable amount of the ships was determined

using the methods described in the notes to the consolidated fi nancial

statements and mainly by distinguishing between ships to be sold

under the strategic action plan #BOURBONINMOTION (see Note 2.1

to the consolidated fi nancial statements), and the remaining fl eet:

- For each of the 30 old ships that cannot be digitally connected as well

as the 11 other targeted ships (removed from their respective CGUs

for individual testing), decommissioned and to be sold within two

years in their existing state, the recoverable amount is equal to fair

value less costs to sell; on this basis, an impairment loss of €26.2

million was recognized as of December 31, 2018 (see Note 3.3 to the

consolidated fi nancial statements).

- iFor the other ships, the recoverable amount corresponds to their

value in use, calculated for the cash-generating units (CGU) to which

they relate, using discounted expected future cash fl ows; an

impairment loss of €28.5 million was recognized for ships in the

Marine & Logistics – Deep CGU and an impairment loss of €15 million

was recognized for ships in the Marine & Logistics – Shallow CGU

(see Note 3.1 to the consolidated fi nancial statements).

We considered the valuation of this property, plant and equipment to be

a key audit matter due to:

- its weight on the Group’s balance sheet, as well as the size of the

impairment recognized during the year, which signifi cantly impacts the

Group’s performance;

- the indications of impairment existing as of December 31, 2018,

- the material judgments made by management to determine the

assumptions and estimates underlying the calculation of the

recoverable amounts in a cyclical and uncertain market environment.

Regarding the ships measured at fair value less costs to sell, we:

- verifi ed the compliance of the methodology adopted by the Company

as described in the notes to the consolidated fi nancial statements,

with prevailing accounting standards,

- assessed the robustness of the fair value determination process by

comparing, for the ships sold in 2018, the valuations adopted as of

December 31, 2017 with the selling prices,

- reconciled the ship fair values adopted for the impairment calculations

with the valuations obtained from independent shipping brokers,

- verifi ed the resulting impairment calculations.

For the other ships, tested at CGU level, we carried out a critical review

of the main parameters taken into account by Group management

when estimating the recoverable amounts of the various CGUs and in

particular:

- reconciled the data underlying the net carrying amount of the tested

CGUs with the consolidated fi nancial statements,

- assessed the quality of the 2019 budget preparation process and the

reasonableness of the forecasts included in the 2020-2023 business

plan compared to the economic and fi nancial context in which the

Group operates and market outlooks,

- assessed the reasonableness of the perpetual growth rate adopted

given the countries in which the Group operates,

- analyzed the relevance of the discount rate used with regard to the

rate calculated by a renowned independent expert, those used by the

analysts who monitor the Group and our own estimated rate

determined with the assistance of our valuation specialists,

- tested the calculations performed by the Company, for the recoverable

amounts and the assessments of sensitivity to changes in the main

assumptions used, as described in Note 3.1 to the consolidated

fi nancial statements.

Finally, we verifi ed the appropriateness of the disclosures in Notes 3.1

and 3.3 to the consolidated fi nancial statements with regard to IAS 36.

Specific verifications

As required by law and regulations, we have also verifi ed in accordance with professional standards applicable in France the information

pertaining to the Group presented in the Board of Directors’ management report.

We have no matters to report as to its fair presentation and its consistency with the consolidated fi nancial statements.

We attest that the consolidated non-fi nancial performance statement required by Article L. 225-102-1 of the French Commercial Code (code

de commerce) is included in the Group information presented in the management report. Pursuant to Article L. 823-10 of this Code, we have

not verifi ed the fair presentation or consistency of the information contained in this statement with the consolidated fi nancial statements. A

report will be issued on this information by an independent third-party.



4

Statutory auditors’ report on the consolidated fi nancial statements (Year ended December 31, 2018)

Report on Other Legal and Regulatory Requirements

Appointment of the Statutory Auditors

Deloitte & Associés and EuraAudit C.R.C were respectively appointed as the statutory auditors of Bourbon Corporation at the Annual General

Meetings of June 7, 2005 and May 30, 2002.

As of December 31, 2018, Deloitte & Associés and EuraAudit C.R.C were in the 14th and 16th years of total uninterrupted engagement,

respectively.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated fi nancial statements in accordance with International

Financial Reporting Standards as adopted by the European Union, and for such internal control as management determines is necessary to

enable the preparation of consolidated fi nancial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated fi nancial statements, management is responsible for assessing the Company’s ability to continue as a going

concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to

liquidate the Company or to cease operations.

The Audit Committee is responsible for monitoring the fi nancial reporting process and the effectiveness of internal control and risk management

systems and, where applicable, its internal audit, regarding the accounting and fi nancial reporting procedures.

The consolidated fi nancial statements were approved by the Board of Directors.

Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Objectives and audit approach

Our role is to issue a report on the consolidated fi nancial statements. Our objective is to obtain reasonable assurance about whether the

consolidated fi nancial statements as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected

to infl uence the economic decisions of users taken on the basis of these consolidated fi nancial statements.

As specifi ed in Article L.823-10-1 of the French Commercial Code, our statutory audit does not include assurance on the viability of the

Company or the quality of management of the Company’s affairs.

As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional

judgment throughout the audit and furthermore:

3 Identifi es and assesses the risks of material misstatement of the consolidated fi nancial statements, whether due to fraud or error, designs

and performs audit procedures responsive to those risks, and obtains audit evidence considered to be suffi cient and appropriate to provide

a basis for his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as

fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

3 Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,

but not for the purpose of expressing an opinion on the effectiveness of internal control;

3 Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made

by management in the consolidated fi nancial statements;

3 Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,

whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Company’s ability to continue

as a going concern. This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or

conditions may cause the Company to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty

exists, there is a requirement to draw attention in the audit report to the related disclosures in the consolidated fi nancial statements or, if

such disclosures are not provided or inadequate, to modify the opinion expressed therein;

3 Evaluates the overall presentation of the consolidated fi nancial statements and assesses whether these statements represent the underlying

transactions and events in a manner that achieves fair presentation;

3 Obtains suffi cient appropriate audit evidence regarding the fi nancial information of the entities or business activities within the Group

to express an opinion on the consolidated fi nancial statements. The statutory auditor is responsible for the direction, supervision and

performance of the audit of the consolidated fi nancial statements and for the opinion expressed on these consolidated fi nancial statements.


CONSOLIDATED FINANCIAL STATEMENTS4 Statutory auditors’ report on the consolidated fi nancial statements (Year ended December 31, 2018)

Report to the Audit Committee

We submit a report to the Audit Committee which includes, in particular, a description of the scope of the audit and the audit program

implemented, as well as the results of our audit. We also report, if any, signifi cant defi ciencies in internal control regarding the accounting and

fi nancial reporting procedures that we have identifi ed.

Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were of most signifi cance in

the audit of the consolidated fi nancial statements of the current period and which are therefore the key audit matters that we are required to

describe in this report.

We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014, confi rming our

independence within the meaning of the rules applicable in France such as they are set in particular by Articles L.822-10 to L.822-14 of the

French Commercial Code and in the French Code of Ethics for statutory auditors. Where appropriate, we discuss with the Audit Committee

the risks that may reasonably be thought to bear on our independence, and the related safeguards.

Lyon and Marseille, April 26, 2019

The Statutory Auditors

EuraAudit C.R.C.

Cabinet Rousseau Consultants


Jean-Marc Rousseau Christophe Perrau


5PARENT COMPANY FINANCIAL STATEMENTS

PARENT COMPANY BALANCE SHEET – BOURBON CORPORATION SA 194

INCOME STATEMENT OF THE PARENT COMPANY BOURBON CORPORATION SA 196

NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS 197

STATUTORY AUDITORS’ REPORT ON THE ANNUAL FINANCIAL STATEMENTS (YEAR ENDED DECEMBER 31, 2018) 212

STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS 215


PARENT COMPANY FINANCIAL STATEMENTS5 Parent company balance sheet – BOURBON Corporation SA

PARENT COMPANY BALANCE SHEET – BOURBON CORPORATION SA

ASSETS(in € thousands)

12.31.2018 12.31.2017

GROSS

DEPRECIATION, AMORTIZATION

AND PROVISIONS NET NET

I. FIXED ASSETS

Intangible assets

Other intangible assets 1 - 1 1

Property, plant and equipment

Land - - - -

Buildings - - - -

Other property, plant and equipment - - - -

Property, plant and equipment in progress - - - -

Long-term financial assets

Equity interests 42,419 8 42,411 42,499

Receivables from non-consolidated companies - - - -

Loans - - - -

TOTAL I 42,419 8 42,412 42,500

II. CURRENT ASSETS

Inventories

In progress - - - -

Advances and installments on orders 4 - 4 -

Accounts receivables

Trade and other receivables - - - -

Other receivables 922,477 - 922,477 904,011

Other

Marketable securities 1,032 - 1,032 1,191

cash and cash equivalents 219 - 219 204

Prepaid expenses 31 - 31 30

TOTAL II 923,764 - 923,764 905,437

Unrealized foreign exchange losses 0 - 0 -

TOTAL ASSETS 966,183 8 966,175 947,937


PARENT COMPANY FINANCIAL STATEMENTS

5

Parent company balance sheet – BOURBON Corporation SA

LIABILITIES(in € thousands) 12.31.2018 12.31.2017

I. SHAREHOLDERS’ EQUITY

Share Capital 49,228 49,228

Share premium 100,788 100,788

Legal reserve 7,878 7,878

Regulated reserves 15,395 15,395

Other reserves 610,150 431,443

Retained earnings 30,000 136,783

Profit (loss) for the period (1,336) 71,925

Investment subsidies

Income from issues of equity securities 123,650 119,723

TOTAL I 935,753 933,163

II. PROVISIONS FOR RISKS AND CONTINGENCIES

For risks 757 729

For contingencies 536 536

TOTAL II 1,293 1,265

III. LIABILITIES

Bank borrowings - -

Other borrowings and financial liabilities 5,429 1,440

Trade and other payables 2,539 1,138

Tax and social security liabilities 299 303

Payables on fi xed assets - -

Other liabilities 20,862 10,629

Deferred income - -

TOTAL III 29,129 13,509

Unrealized foreign exchange gains - -

TOTAL LIABILITIES 966,175 947,937


PARENT COMPANY FINANCIAL STATEMENTS5 Income statement of the parent company BOURBON Corporation SA

INCOME STATEMENT OF THE PARENT COMPANY BOURBON CORPORATION SA

(in € thousands) 2018 2017

I. OPERATING INCOMEIncome from services - -

REVENUES - -Reversals of provisions (and amortizations), expense transfers 151 262

Other income 0 0

TOTAL I 152 262II. OPERATING EXPENSESOther purchases and external expenses 3,907 3,090

Taxes and similar levies 1,051 484

Wages & salaries 1,199 419

Social security contributions 401 4,628

Provisions for amortization - -

Provisions for current assets - -

Provisions for risks and contingencies - -

Other expenses 680 429

TOTAL II 7,238 9,050OPERATING INCOME/LOSS (7,086) (8,788)III. FINANCIAL INCOMEFinancial income from investments 4,952 54,506

Income from other securities and fixed asset receivables - -

Other interest receivable and similar income 520 1,113

Reversals of provisions and expense transfers - -

Foreign exchange gains - 1

Net income from sale of securities - -

TOTAL III 5,472 55,620IV. FINANCIAL EXPENSESDepreciation allowance and provisions - 0

Interest and similar expenses 8,341 6,032

Foreign exchange losses - 0

Net loss from sale of securities - -

TOTAL IV 8,341 6,032FINANCIAL PROFIT/LOSS (2,869) 49,588INCOME FROM CURRENT OPERATIONS (9,955) 40,800V. NON-RECURRING INCOMEIncome from management operations - -

Income from capital transactions 360 154

Reversals of provisions and expense transfers - 4,570

TOTAL V 360 4,725VI. NON-RECURRING EXPENSESExpenses on management operations - 8

Expenses on capital transactions 494 2,589

Amortization, depreciation and provisions 28 340

TOTAL VI 522 2,936NON-RECURRING INCOME (161) 1,789VII. INCOME TAX (8,780) (29,337)Total income 5,984 60,607

Total expenses 7,320 (11,319)

PROFIT (LOSS) FOR THE PERIOD (1,336) 71,925



5


NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

Notes to the balance sheet before appropriation of earnings for the

fi scal year ended December 31, 2018, showing a total of €966,175

thousand and to the income statement for the fi scal year, presented

in the form of a list and showing a loss of €1,336 thousand.

The fi scal year covered a period of 12 months from January 1, 2018

to December 31, 2018.

The notes and tables presented below form an integral part of the

annual fi nancial statements.

The annual fi nancial statements were approved by the Board of

Directors on March 13, 2019 and again on April 25, 2019, to take

into account events after the reporting date.

1/ Accounting policies and methods

The annual fi nancial statements for the fi scal year ended December

31, 2018 have been prepared and presented in accordance with the

provisions of the French Commercial Code, the Accounting Decree

of November 29, 1983, respecting the principle of prudence and

independence of fi scal years and assuming a going concern basis.

BOURBON provides support services to the oil industry. In response

to the signifi cant decrease in the barrel price since the end of 2014

(Brent fell from US$99 in 2014 to less than US$40 at the end of

2015 and hit a low at under US$27 in the fi rst quarter of 2016),

oil companies dramatically cut their exploration and production

expenses (-25% on a global scale in 2015 and -24% in 2016 - source:

IFP Énergies nouvelles). This cyclical downturn in the market thereby

affected the companies that provide services to oil companies.

In the face of this economic slowdown in oil activity and the very

sharp price decreases imposed by its customers, BOURBON was

able to remain resilient thanks to its targeted positioning and strong

operational measures (in particular, its cost control policy).

To manage this cyclical low point, the g roup had accordingly

conducted discussions in late 2016 with its fi nancial partners in order

to restructure its fi nancing for the coming years.

The agreements entered into in 2017 with the g roup’s principal



club deal loans, bilateral loans, fi nance leases, and short-term loans,



additional sureties. In consideration of the restructuring, the g roup


indebtedness, cash fl ow, asset disposals, investments and the

dividend policy.

However, the expected recovery in the third quarter of 2017 did not

occur, thus making obsolete the g roup’s forecasts on which these

agreements had been based, and the unfavorable market environment

weighed heavily on the g roup’s revenue and, consequently, on

its net income. The cash fl ows generated by operations remain

positive, although their circulation was not fully unrestricted due

to the g roup’s legal structure and limitations relating to some of its

geographic locations. However, they are insuffi cient to service its

debt. Furthermore, and for the same reasons, at December 31, 2017

the g roup was not able to comply with various covenants defi ned in

its credit documentation.

In this context, the g roup initiated new discussions with its lenders,



corresponding upturn in the g roup’s performance. The g roup has



As announced on July 10, 2018 a general waiver was fi nalized

with lessors and debt holders representing the majority of its debt,

thus allowing the g roup to withhold the payments of its loans and

the servicing of its debt. Aimed at protecting the g roup, this waiver



On November 2, 2018, in the absence of confi rmation that the

general waiver would be renewed, the g roup announced that

the president of the Marseille Commercial Court had granted the

opening of conciliation procedures for 22 subsidiaries of BOURBON

Corporation SA. These procedures were opened to allow the g roup

to actively pursue, in an amicable framework, its search for all

solutions for its development as well as its discussions with its main

debt holders and lessors.



the majority of the g roup’s debt, thus allowing it to suspend the

payments of its leases and debt.

In accordance with IFRS, at closing the g roup nevertheless had to

reflect the payability of its consolidated debt by reclassifying it for the

short term as a current liability (see note 3.13 to the consolidated

fi nancial statements).


partners and the active search for new fi nancing are ongoing,

in order to balance the servicing of its debt with its performance.






PARENT COMPANY FINANCIAL STATEMENTS5 Shareholders’ equity


their fi nancial parameters, are being evaluated by the g roup and its

advisors.

On March 13, 2019, the Board of Directors carried out a preliminary

review of these propositions. BOURBON specifi es that no decision

or commitment has been made and that no exclusivity has been

granted to any of the fi nancial partners it is in discussion with.

The Company remains confi dent in its ability to fi nd such a solution


This situation raises a material uncertainty concerning the going

concern . The g roup has, however, prepared its parent company

fi nancial statements to December 31, 2018 maintaining the going

concern assumption, given:

3 the confi dence it has in the outcome of the discussions with its

lessors and debt holders, and the assumption that they will renew

the waivers during the negotiation period;

3 the active search for new fi nancial partners, which has resulted in

the receipt of several proposals subject to conditions;

3 the cash fl ow generated by the activity allowing the g roup to meet

its current operating needs over the next 12 months.

If these actions do not lead to concrete solutions, the Company/

Group might be unable to settle its debts and to realize its assets in

the normal course of its activities.

The presentation of the annual fi nancial statements takes into

account the provisions of ANC Regulation 2016-07 relating to the

French General Accounting Plan.

The method used when stating the value of items in the fi nancial

statements is the historical cost method.

2/ Shareholders’ equity

2.1 SHARE CAPITAL STRUCTURE

As at December 31, 2018, BOURBON Corporation SA’s share capital, totaling €49,227,780.19, was divided into 77,499,214 shares.

The change in the share capital was as follows:

NUMBER OF SHARES

€ THOUSANDS

Share capital at December 31, 2007 55,461,302 35,229

Capital increase by issuance of bonus shares through the capitalization of paid-in capital (one bonus

share for ten existing shares held) following the Combined Shareholders’ Meeting of June 3, 2009 5,546,130 3,523

Options exercised between January 1, 2009 and June 3, 2009 33,880 22

Capital increase through the capitalization of paid-in capital following the granting of bonus shares

to employees on November 2, 2009 76,824 49

Options exercised between June 3, 2009 and December 31, 2009 69,090 44

Options exercised between January 1, 2010 and March 31, 2010 34,775 22



Options exercised between April 1, 2010 and December 31, 2010 309,081 197

Options exercised between January 1, 2011 and June 1, 2011 24,269 16


share for ten existing shares held) following the Combined Shareholders’ Meeting of June 1, 2011 6,155,681 3,910



Options exercised between June 1, 2011 and November 2, 2011 22,756 14


share for ten existing shares) following the Combined Shareholders’ Meeting of May 28, 2013 6,778,153 4,305

February 23, 2015 Board of Directors’ decision to cancel treasury shares via a capital reduction on

May 4, 2015 (2,953,357) (1,876)

Capital increase resulting from the distribution of shares in payment of the 2015 dividend, following

the Combined Shareholders’ Meeting of May 26, 2016 4,736,272 3,008

Capital increase resulting from the distribution of shares in payment of the 2016 dividend, following

the Combined Shareholders’ Meeting of May 23, 2017 1,156,611 735

Share capital at December 31, 2018 77,499,214 49,227



5

Shareholders’ equity

Following the decision taken by the Extraordinary General Meeting

on June 3, 2009, the share capital was increased by €3,522,922

from €35,229,221 to €38,752,142 through the capitalization of a

portion of the paid-in capital. This capital increase was completed by

the issuance of 5 new shares allotted to shareholders in the ratio of

one new share for ten existing shares.

The options exercised in 2009 resulted in the issuance of 102,970

shares and a capital increase of €65,407. The excess subscription

price over the par value was recognized as a share premium in the

amount of €1,728,930.

On November 2, 2009, the issuance of bonus shares to beneficiary

employees meeting the criteria used by the Board of Directors of

August 27, 2007 led to a capital increase of €48,799 through the

capitalization of a portion of the paid-in capital. This capital increase

was completed by the issuance of 76,824 new shares.




amount of €7,255,299.


on June 1, 2011, the share capital was increased by €3,910,110



the issuance of 6,155,681 new shares allotted to shareholders in the

ratio of one new share for ten existing shares.




amount of €1,051,361.

On November 2, 2011, the issuance of bonus shares to benefi ciary

employees meeting the criteria used by the Board of Directors of

August 27, 2007 led to a capital increase of €29,400 through the

capitalization of a portion of the paid-in capital. This capital increase

was completed by the issuance of 46,284 new shares.


on May 28, 2013, the share capital was increased by €4,305,507



the issuance of 6,778,153 new shares allotted to shareholders in the

ratio of one new share for ten existing shares.

Following the Board’s decision of February 23, 2015 to cancel

treasury shares, the capital was reduced by €1,875,983 from

€47,360,852 to €45,484,599 and the difference between the overall

purchase cost of buying the canceled treasury shares and their par

value was charged against the item “Other reserves”.

Following the decision of the Combined Shareholders’ Meeting of

May 26, 2016 and the payment of the portion of the 2015 dividend

in new Company shares on July 18, 2016, the share capital was

increased by €3,008,497 to €48,493,097 by incorporation of a

portion of the “issuance premiums” account, through the issuance

of 4,736,272 new shares.

Following the decision of the Combined Shareholders’ Meeting

of May 23, 2017, and the payment of some of the 2016 dividend

as new Company shares on July 17, 2017, the share capital was

increased by €734,683 to €49,227,780.19 through the issuance of

1,156,611 new shares.

CLASS OF SECURITIES

NUMBER OF SECURITIES

AT YEAR-ENDISSUED DURING

THE YEAR

REIMBURSED DURING THE

YEAR

Ordinary shares 77,499,214 - -

3 NUMBER OF SHARES OUTSTANDING BETWEEN THE OPENING DATE AND THE CLOSING DATE

CLASS OF SECURITIES 01.01.2018 INCREASES DECREASES 12.31.2018

Number of shares 77,499,214 - - 77,499,214

Number of treasury shares (127,140) (722,906) 714,165 (135,881)

TOTAL 77,372,074 (722,906) 714,165 77,363,333


PARENT COMPANY FINANCIAL STATEMENTS5 Stock subscription or purchase option plans

3 NUMBER OF SHARES WITH VOTING RIGHTS ON DECEMBER 31, 2018

Number of shares outstanding 77,499,214

Of which number of treasury shares with no voting rights 135,881

Number of shares with voting rights 77,363,333

2.2 CHANGES IN SHAREHOLDERS’ EQUITY

(in € thousands)SHARE

CAPITALSHARE

PREMIUMS

RESERVES AND RETAINED

EARNINGS

PROFIT (LOSS) FOR THE

PERIOD TOTAL

Balance as of December 31, 2017 prior to the appropriation of income 49,228 100,788 591,498 71,925 813,440

Capital increase - - -

Appropriation of 2017 income 71,925 (71,925) -

Dividends paid - -

Profit (loss) for the period (1,336) (1,336)

Other changes -

BALANCE AS OF DECEMBER 31, 2018 PRIOR TO THE APPROPRIATION OF INCOME 49,228 100,788 663,425 (1,336) 812,103

3/ Stock subscription or purchase option plans

BOURBON Corporation SA issued 11 stock option subscription or purchase plans, one of which was in force on December 31, 2018,

representing 637,000 stock options at that date. Its main features are shown in the table below:

DECEMBER 2013

Date of authorization by the Combined Shareholders’ Meeting June 1, 2011

Date of authorization by the Board of Directors December 2, 2013

Number of stock options authorized 1,037,000

Total number of allotted stock options adjusted as at 12.31.2018 637,000

Number of beneficiaries 68

Start date December 2017

Expiration date December 2019

Subscription price in euros adjusted as at 12.31.2018 €19.68

Subscription price in euros (before adjustment) €19.68



5

Gross long-term financial assets

4/ Other equity capital

As at December 31, 2018, the bond issues totaled €123,650

thousand, including €3,927 thousand in capitalized interest.

These perpetual securities give BOURBON Corporation SA the right

to repay them at par starting in October 2017. They provide the right

to a semiannual fi xed rate coupon at 4.70% for the fi rst three years,

a coupon that will be mandatory if dividends are paid. At the end

of the first three years, the loan will be repayable at par solely at

BOURBON’s initiative. In the event of non-repayment at that time,

the coupon will be stepped up as follows:

3 years 4 to 6: “Reset 3-year Midswap Fixed Interest Rate” +650

BPS;

3 years 7 to 9: “Reset 3-year Midswap Fixed Interest Rate” +850

BPS;

3 years 10 and after: Floating Interest Rate 3-mth Euribor +1,050

BPS.

Following year 10, the coupon will be payable on a quarterly basis

instead of a half-year basis.

The clauses that trigger payment of the coupons are as follows:

3 dividend payment on equity securities;

3 purchase of equity securities;

3 purchase or redemptions of any parity securities.

The payment of interest remains optional in all other cases. In

the event of non-payment of interest, the interest is capitalized.

Unpaid, capitalized interest becomes payable:

3 on the date of the next coupon payment;

3 in the event that the loan is repaid;

3 in the event of a court-ordered liquidation (whether or not

voluntary) of the issuer.

At December 31, 2018, €5.4 million had been reported as accrued

interest not due, corresponding to the share of interest for the period

running from October 24, 2018 to April 24, 2019, payable in the fi rst

half of 2019, and the interest for the period running from October

23, 2017 to April 23, 2018, the payment of which was postponed to

April 24, 2019, which also bears interest, in line with the terms and

conditions outlined below.

Holders of Perpetual Deeply Subordinated Notes (TSSDI) were called

to the General Meeting of April 20, 2018. BOURBON sought and

obtained the approval of the General Meeting of holders of TSSDIs to

defer by one year the next interest payment date under the TSSDIs

for an approximate amount of €3.9 million due on April 24, 2018

on April 24, 2019, which shall bear interest from October 24, 2018

(included) to April 24, 2019 (excluded) at the rate applicable to the

TSSDIs (see note 20).

5/ Gross long-term financial assets

Equity interests were valued at their purchase price (historical cost

method), excluding the costs incurred in their acquisition.

At year-end, the inventory value of the shares is based on the

percentage of equity held, adjusted to take any unrealized gains or

losses into account. For corporate securities listed on a regulated

market, the inventory value applied corresponds to the average

price over the last month. The inventory value of securities in foreign

currency is converted at the exchange rate on the closing date.

Where necessary, the gross value of the securities was adjusted to

this inventory value by applying a provision.

Where a portion of a set of securities conferring the same rights is

sold, the entry value of the sold portion is estimated using the “FIFO”

method (fi rst in, fi rst out).

The change in gross long-term financial assets can be analyzed as follows:

(in € thousands) 12.31.2017 INCREASES DECREASES 12.31.2018

Equity interests 42,507 - (88) 42,419

Receivables from non-consolidated companies - - - -

TOTAL 42,507 - (88) 42,419

The decreases during the fi scal year correspond to the dissolution in 2018 of two inactive companies.


PARENT COMPANY FINANCIAL STATEMENTS5 Provisions

6/ Provisions

A provision is recognized where there exists an obligation towards a third party and it is likely or certain that this obligation will result in an

outfl ow of resources in favor of that third party without receiving at least an equivalent value in exchange. Provisions are calculated in the

amount corresponding to the best estimation of the outfl ow of resources needed to extinguish the liability.

(in € thousands) 12.31.2018 INCREASES DECREASES 12.31.2017

Provisions for risks and contingencies:

Provisions for guarantee of liabilities on sales of investments - - - -

Provisions for foreign exchange losses (0) - (0) -

Provisions for taxes(1) 536 - - 536

Other provisions for risks and contingencies(1) (2) 757 28 - 729

Subtotal 1,293 28 (0) 1,265

Provisions for impairment:

Equity interests 8 - - 8

Accounts receivables - - - -

Current accounts - - - -

Marketable securities - - - -

Subtotal 8 - - 8

TOTAL 1,301 28 (0) 1,273

Of which allowances and reversals:

- from operating activities - -

- financial - -

- non-recurring 28 -

(1) The €536 thousand provision for taxes in the parent company fi nancial statements to December 31, 2017 was maintained. An associated provision for

late payment interest of €28 thousand has been booked in the 2018 fi scal year.

(2) As of December 31, 2018, 60,368 treasury shares had not been granted. The risk provision, recognized in the event that these securities are canceled,

for €729 thousand at December 31, 2017, was not reversed during the 2018 fi scal year.

7/ Receivables and liabilities

Receivables and liabilities were valued at their par value. Provisions for impairment of receivables were recognized to compensate for any risks

of non-recovery.

(in € thousands) GROSS AMOUNTLESS THAN

1 YEARMORE THAN

1 YEAR

Accounts receivable:

Other trade receivables

Personnel and other payables 5 5 -

Income tax(1) 1,866 1,866 -

Value added tax(2) 1,637 1,637 -

Group and associates(3) 918,857 918,857 -

Sundry receivables 113 113 -

Prepaid expenses 31 31 -

TOTAL 922,508 922,508 -

(1) Tax receivables are for the research tax credits (CIR - 2016 and 2017 fi scal years) and the competitiveness and employment tax credit (CICE) (2015 to

2018 fi scal years) to be received by the parent company.

(2) The g roup has opted for a consolidated VAT payment regime as of January 1, 2018, combining BOURBON Corporation SA and four other companies.

Therefore the VAT receivables mainly correspond to a consolidated VAT credit for which repayment has been requested.

(3) “Group and associates” receivables mainly refer to current account advances in the amount of €899 million.



5

Advances to executives

(in € thousands) GROSS AMOUNTLESS THAN 1

YEARONE TO FIVE

YEARSMORE THAN 5

YEARS

Liabilities:

Bank borrowings(1)

- falling due less than one year after contracted - - - -

- falling due more than one year after contracted - - - -

Borrowings and other financial liabilities 5,429 5,429 - -

Trade and other payables 2,539 2,539 - -

Social security & other social welfare bodies 170 170 - -

Income tax 115 115

Other taxes and similar payments 14 14 - -

Debt on non-current assets - - - -

Group and associates 20,230 20,230 - -

Other liabilities 632 632 - -

TOTAL 29,129 29,129 - -

Footnote(1):

- Loans taken out - - - -

- Loans repaid - - - -

8/ Advances to executives

Pursuant to Articles L. 225-43 and L. 223-21 of the French Commercial Code, no advances or loans were awarded to executives of

the Company.

However, a permanent advance of €4,500 was granted to the Chief Executive Offi cer to cover business costs incurred in the Company’s

interest.


PARENT COMPANY FINANCIAL STATEMENTS5 Marketable securities

9/ Marketable securities

Marketable securities at December 31, 2018 correspond solely to

treasury shares.

With respect to other marketable securities, a provision for

impairment is recorded where the acquisition cost of the shares is

greater than the average stock price for the month of December.

CM CIC Securities is responsible for managing the liquidity contract,

in accordance with the “AMAFI charter” (73,513 shares at December

31, 2018).

The statement of treasury shares held at the end of the year is as follows:

(in € thousands)

NUMBER OF SHARES AS OF

12.31.2017INCREASE IN FISCAL YEAR

REDUCTION IN FISCAL YEAR

NUMBER SHARES AS OF

12.31.2018GROSS

VALUES IMPAIRMENTS NET

VALUES

Out of liquidity contract 60,368 - - 60,368 729 (729) -

Liquidity contract 66,772 722,906 (714,165) 75,513 303 303

TOTAL 127,140 722,906 (714,165) 135,881 1,032 (729) 303

The marketable securities arising out of the KEPLER-CHEVREUX contract are the subject of a provision for risk of €729 thousand (see note 6

“Provisions”).

Based on the share price at December 31, 2018, which was €3.43, the total value of treasury shares held amounted to €466 thousand.

10/ Cash and cash equivalents

Cash held in banks was valued at its par value, i.e. €219 thousand.

11/ Deferred income and expenses

(in € thousands) 12.31.2018 12.31.2017

Prepaid expenses 31 30

Deferred income - -

TOTAL 31 30

Prepaid expenses are related to the handling costs of a CM CIC Securities account and those of a stock exchange law assistance agreement.

They must be recognized under the operating result.

12/ Currency translation diff erences on receivables and liabilities in foreign currencies

Receivables and liabilities in foreign currencies were converted and recognized in euros based on the latest known exchange rate. As of

December 31, 2018, unrealized foreign exchange gains and losses were insignifi cant.



5

Executive compensation

13/ Factors impacting several balance sheet items

13.1 ASSETS

(in € thousands) 12.31.2018 12.31.2017

Prepayments and accrued income: - -

Operating activities

Financial transactions -

Commercial paper

Related parties: 961,276 946,518

Equity interests 42,419 42,507

Receivables from non-consolidated companies - -

Loans - -

Trade and other receivables - -

Other receivables(1) 918,857 904,011

TOTAL 961,276 946,518

(1) “Other receivables” mainly refer to current account advances in the amount of €899 million.

13.2 LIABILITIES

(in € thousands) 12.31.2018 12.31.2017

Accruals and deferred income: - -

Operating activities - -

Financial transactions - -

Notes payable - -

Related parties: 22,361 10,447

Borrowings and other financial liabilities - -

Trade and other payables 2,131 794

Group and associates 20,230 9,653

TOTAL 22,361 10,447

14/ Executive compensation

The members of the Board of Directors, including its Chairman and

the members of the Nominating, Compensation and Governance

Committee and Audit Committee, together received €387,000 in

Directors’ fees in 2018 for performing their duties.

The Chairman of the Board of Directors received €144,000 and

€32,000 in Directors’ fees, in respect of his mandate.

Gaël Bodénès, Chief Executive Offi cer, received €362,594 in respect

of his corporate offi ce and benefi ts in kind.

Astrid de Lancrau de Bréon, Executive Vice President, received

€179,892 in respect of her corporate offi ce (from January 1 to July

10, 2018) and benefi ts in kind.


PARENT COMPANY FINANCIAL STATEMENTS5 Details of non-recurring income and expenses

15/ Details of non-recurring income and expenses


Non-recurring expenses 522 2,936

From management operations - 8

From capital transactions 494 2,589

Net book value of equity interests sold 88 -

Share buybacks 368 389

Penalties following tax audits - -

Other 37 2,200

Non-recurring amortization, depreciation and provisions 28 340

Provisions for taxes - -

Other provisions for risks and contingencies 28 340

Non-recurring income 360 4,725

From management operations - -

From capital transactions 360 154

Income from sale of equity investments 40 -

Share buybacks 198 88

Other 122 66

Reversals of provisions and expense transfers - 4,570

Tax provision reversal - -

Reversal of provision for guarantee of liabilities - -

Reversal of risk provision - 4,570

16/ Related parties


Financial expenses - 2

Financial income(1) 5,472 55,619

(1) Most fi nancial income reported during the 2018 fi scal year corresponds to interests on current account advances in the amount of €4,588 thousand.

For 2017, this income corresponded mainly to income from investments (dividends) for €54,496 thousand, and interest on current account advances.



5

Income tax

17/ Income tax

DISTRIBUTION (in € thousands)INCOME

BEFORE TAX TAX DUENET INCOME

AFTER TAX

Income from current operations (9,955) - (9,955)

Short-term non-recurring income (161) - (161)

Long-term non-recurring income - - -

Income tax following tax adjustments - - -

Tax on dividends - - -

Tax grouping surplus - 8,780 8,780

ACCOUNTING INCOME (10,116) 8,780 (1,336)

Income from current operations was subject to tax disallowances

(non-deductible expenses on income from current operations)

and deductions (non-taxable proceeds on income from current

operations) in order to determine a tax base at the statutory-rate.

The same method was used to determine the taxable long-term

non-recurring income and the corresponding tax.

The tax grouping surplus in fi scal year 2018 was €8,780 thousand,

including tax credits of €389 thousand (CICE).

As at December 31, 2018 BOURBON Corporation SA had tax loss

carryforwards of €27,909 thousand and tax deficits related to tax

consolidation that can be carried forward of €677,507 thousand.

BOURBON Corporation opted to use the French tax consolidation

scheme from January 1, 1998. The scope of consolidation as of

December 31, 2018 consisted of the following companies:

BOURBON Corporation SA – BOURBON Maritime – Placements

Provence Languedoc – Bourbon Offshore Surf – Les Abeilles –

Bourbon Mobility Holding (formerly St Nikolas) – BOURBON Supply

Investissements – Bourbon Marine & Logistics (formerly BOURBON

Offshore) – BOURBON Offshore Craft TT (formerly CEMTAF) –

BOURBON Offshore Craft – BOURBON Salvage Investments –

BOURBON Offshore Gaia – BOURBON Gaia Supply – Bourbon

Subsea Services – Bourbon Subsea Services Investments –

BOURBON PS – BOURBON Subsea PS – BOURBON Sun III (formerly

BOURBON AD2) – BOURBON Offshore Marine Services (formerly

BOURBON AD3) – BOURBON Logistics (formerly BOURBON

AD4) – SNC AHTS1 – SNC Liberty 201 – SNC Liberty 204 – SNC

Liberty 212 – SNC Liberty 233 – SNC Liberty 234 – SAS Caroline

8 – SNC Altair – SAS Caroline 20 – SAS Caroline 21 – SAS Caroline

22 – SAS Caroline 23 – Bourbon Mobility (formerly BOURBON AD5)

– BOURBON AD6.

The taxation agreement stipulates that the tax charge is borne by the

subsidiary, as is the case in the absence of tax consolidation. The tax

saving related to the deficit, kept by BOURBON Corporation SA, is

treated as an immediate gain.


PARENT COMPANY FINANCIAL STATEMENTS5 Increase and reduction in future tax liability

19/ Off -balance sheet commitments

In relation to bareboat lease transactions , BOURBON Corporation SA provided guarantees on behalf of its subsidiaries for €1,083 million.

BOURBON Corporation SA is also guarantor for certain loans in the amount of €721 million.

18/ Increase and reduction in future tax liability

(in € thousands) 12.31.2018 12.31.2017

Increase

Unrealized foreign exchange losses 0 -

TOTAL 0 -

Reduction

Contribution to age and disability pensions - -

Provisions (foreign exchange losses) (0) -

Provisions for risks and contingencies 1,293 1,265

Tax income from partnerships 3,869 364

Unrealized foreign exchange gains - -

TOTAL 5,162 1,629



5

Events after the reporting period

20/ Events after the reporting period

On January 3, 2019, BOURBON announces having renewed the

general waiver with its leasers and debt holders representing the

majority of the group’s debt, thus allowing it to suspend the payment

of its loans and debt. This waiver allows it to stay focused on its

operational priorities, while pursuing its search for all solutions

capable of adapting its fi nancing to its performance, in a secured

framework.

On April 17, 2019, the General Meeting of “TSSDI” holders authorized





payment amounting to €3,867 million due on April 24, 2018 for the



October 24, 2017 (inclusive) to April 24, 2018 (exclusive) will be paid


April 2018 Interest will attract interest, as of the Date of Payment

of Interest, October 24, 2018 (inclusive) and until July 24, 2019

(exclusive) at the rate applicable to the TSSDIs, on the Interest



July 24, 2019.


PARENT COMPANY FINANCIAL STATEMENTS5 Subsidiaries and equity interests

21/ Subsidiaries and equity interests

(in € thousands)

FORMSHARE

CAPITALEQUITY OTHER THAN

CAPITAL % OWNED

Detailed information on subsidiaries and equity interests whose inventory value exceeds 1% of BOURBON Corporation SA’s share capital

A − Subsidiaries (more than 50% owned by BOURBON Corporation SA)

Bourbon Maritime – France SASU 3,049 365,921 100

Financière Bourbon – France SNC 626 319 52

B − Equity interests (10% to 50% of capital held by BOURBON Corporation SA)

Information regarding the other subsidiaries and equity interests

A − Subsidiaries (more than 50% owned by BOURBON Corporation SA)

1. French subsidiaries - - - -

2. Foreign subsidiaries - - - -

B − Equity interests (10% to 50% of capital held by BOURBON Corporation SA)

1. French subsidiaries - - - -

2. Foreign subsidiaries - - - -

N.B.: for foreign companies, the share capital and shareholders’ equity are converted at the closing rate, while the result and revenues are converted at the average rate.



5

Subsidiaries and equity interests

EQUITY INTERESTS BOOK VALUE

INCOME/LOSS FROM THE

LAST FISCAL YEAR

LOANS AND ADVANCES GRANTED

BY BOURBON CORPORATION SA

SECURITIES AND ENDORSEMENTS

GIVEN BY BOURBON

CORPORATION

PRE-TAX REVENUES FROM THE LAST

FISCAL YEAR

DIVIDENDS RECEIVED BY

BOURBON CORPORATION SA

GROSS PROVISIONS Net

41,722 - 41,722 13,361 100,237 - 1,291 -

646 - 646 7,463 - - - -

0 0 0 - 0 0 - 0

0 0 0 - 0 0 - 0

3 0 3 - 0 0 - 0

48 8 40 - 0 0 - 0


PARENT COMPANY FINANCIAL STATEMENTS5 Statutory Auditors’ report on the annual fi nancial statements (year ended December 31, 2018)

STATUTORY AUDITORS’ REPORT ON THE ANNUAL FINANCIAL STATEMENTS (YEAR ENDED DECEMBER 31, 2018)

This is a translation into English of the statutory auditors’ report on the fi nancial statements of the Company issued in French and it is provided

solely for the convenience of English speaking users.

This statutory auditors’ report includes information required by European regulation and French law, such as information about the appointment

of the statutory auditors or verifi cation of the management report and other documents provided to shareholders.


in France.

To the Bourbon Corporation Annual General Meeting,

OpinionIn compliance with the engagement entrusted to us by your Annual General Meetings, we have audited the accompanying fi nancial statements

of Bourbon Corporation for the year ended December 31, 2018.

In our opinion, the fi nancial statements give a true and fair view of the assets and liabilities and of the fi nancial position of the Company as of

December 31, 2018 and of the results of its operations for the year then ended in accordance with French accounting principles.

The audit opinion expressed above is consistent with our report to the Audit Committee.

Basis for Opinion

Audit Framework

We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we have obtained

is suffi cient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the “Statutory Auditors’ Responsibilities for the Audit of the Financial

Statements” section of our report.

Independence

We conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2018 to the date

of our report and specifi cally we did not provide any prohibited non-audit services referred to in Article 5(1) of Regulation (EU) No. 537/2014

or in the French Code of ethics (code de déontologie) for statutory auditors.

Material uncertainty surrounding going concernWe draw attention to Note 1 to the fi nancial statements, Accounting policies and methods, which describes the material uncertainty resulting

from events or conditions that may cast signifi cant doubt on the Company’s ability to continue as a going concern. Our opinion is not modifi ed

in respect of this matter.

Justification of Assessments - Key Audit MattersIn accordance with the requirements of Articles L.823-9 and R.823-7 of the French Commercial Code (code de commerce) relating to the

justifi cation of our assessments, and in addition to the matter described in the “Material uncertainty surrounding going concern” section, we

inform you of the key audit matters relating to risks of material misstatement that, in our professional judgment, were of most signifi cance in

our audit of the fi nancial statements of the current period, as well as how we addressed those risks.

We ascertained that there were no key audit matters to be communicated in our report.

Specific verificationsWe have also performed, in accordance with professional standards applicable in France, the specifi c verifi cations required by French law and

regulations.

Information given in the management report and other documents provided to shareholders with respect to the fi nancial position and the

fi nancial statements

We have no observations as to the consistency with the fi nancial statements of the information given in the Board of Directors’ management

report and in the other documents provided to shareholders with respect to the fi nancial position and the fi nancial statements.

We attest to the fair presentation and consistency with the fi nancial statements of the payment period disclosures required by Article D. 441-4

of the French Commercial Code (code de commerce).



5

Statutory Auditors’ report on the annual fi nancial statements (year ended December 31, 2018)

We attest that the non-fi nancial performance statement required by Article L. 225-102-1 of the French Commercial Code (code de commerce)

is included in the management report. Pursuant to Article L. 823-10 of this Code, we have not verifi ed the fair presentation or consistency of

the information contained in this statement with the fi nancial statements.

Corporate governance information

We attest that the Board of Directors’ report on corporate governance contains the information required by Articles L.225-37-3 and L.225-37-4

of the French Commercial Code.

Concerning the information given in accordance with the requirements of Article L.225-37-3 of the French Commercial Code relating to

remunerations and benefi ts received by the directors and any other commitments made in their favor, we have verifi ed its consistency with the

fi nancial statements, or with the underlying information used to prepare these fi nancial statements and, where applicable, with the information

obtained by your Company from controlling and controlled companies. Based on this work, we attest the accuracy and fair presentation of

this information.

Concerning the information relating to items your Company considers likely to have an impact in the event of a public tender offer or public

exchange offer, provided pursuant to Article L.225-37-5 of the French Commercial Code, we have verifi ed its compliance with the source

documents communicated to us.

Based on this work, we have no comments to make on this information.

Other information

In accordance with French law, we have verifi ed that the required information concerning the identity of shareholders and holders of voting

rights has been properly disclosed in the management report.

Report on Other Legal and Regulatory Requirements

Appointment of the Statutory Auditors

Deloitte & Associés and EuraAudit C.R.C were respectively appointed as the statutory auditors of Bourbon Corporation at the Annual General

Meetings of June 7, 2005 and May 30, 2002.

As of December 31, 2018, Deloitte & Associés and EuraAudit C.R.C were in the 14th and 16th years of total uninterrupted engagement,

respectively.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the fi nancial statements in accordance with French accounting

principles, and for such internal control as management determines is necessary to enable the preparation of fi nancial statements that are free

from material misstatement, whether due to fraud or error.

In preparing the fi nancial statements, management is responsible for assessing the Company’s ability to continue as a going concern,

disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is expected to liquidate

the Company or to cease operations.

The Audit Committee is responsible for monitoring the fi nancial reporting process and the effectiveness of internal control and risk management

systems and, where applicable, its internal audit, regarding the accounting and fi nancial reporting procedures.

The fi nancial statements were approved by the Board of Directors.

Statutory Auditors’ Responsibilities for the Audit of the Financial Statements

Objectives and audit approach

Our role is to issue a report on the fi nancial statements. Our objective is to obtain reasonable assurance about whether the fi nancial statements

as a whole are free from material misstatement. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit

conducted in accordance with professional standards will always detect a material misstatement when it exists. Misstatements can arise from

fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to infl uence the economic

decisions of users taken on the basis of these fi nancial statements.

As specifi ed in Article L.823-10-1 of the French Commercial Code, our statutory audit does not include assurance on the viability of the

Company or the quality of management of the Company’s affairs.

As part of an audit conducted in accordance with professional standards applicable in France, the statutory auditor exercises professional

judgment throughout the audit and furthermore:

3 Identifi es and assesses the risks of material misstatement of the fi nancial statements, whether due to fraud or error, designs and performs

audit procedures responsive to those risks, and obtains audit evidence considered to be suffi cient and appropriate to provide a basis for

his opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may

involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

3 Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances,

but not for the purpose of expressing an opinion on the effectiveness of internal control;


PARENT COMPANY FINANCIAL STATEMENTS5 Statutory Auditors’ report on the annual fi nancial statements (year ended December 31, 2018)

3 Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made

by management in the fi nancial statements;

3 Assesses the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained,

whether a material uncertainty exists related to events or conditions that may cast signifi cant doubt on the Company’s ability to continue

as a going concern. This assessment is based on the audit evidence obtained up to the date of his audit report. However, future events or

conditions may cause the Company to cease to continue as a going concern. If the statutory auditor concludes that a material uncertainty

exists, there is a requirement to draw attention in the audit report to the related disclosures in the fi nancial statements or, if such disclosures

are not provided or inadequate, to modify the opinion expressed therein;

3 Evaluates the overall presentation of the fi nancial statements and assesses whether these statements represent the underlying transactions

and events in a manner that achieves fair presentation;

3 Obtains suffi cient appropriate audit evidence regarding the fi nancial information of the entities or business activities within the Group to

express an opinion on the fi nancial statements. The statutory auditor is responsible for the direction, supervision and performance of the

audit of the fi nancial statements and for the opinion expressed on these fi nancial statements.

Report to the Audit Committee

We submit a report to the Audit Committee which includes in particular a description of the scope of the audit and the audit program

implemented, as well as the results of our audit. We also report, if any, signifi cant defi ciencies in internal control regarding the accounting and

fi nancial reporting procedures that we have identifi ed.

Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were of most signifi cance

in the audit of the fi nancial statements of the current period and which are therefore the key audit matters that we are required to describe in

this report.

We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014, confi rming our

independence within the meaning of the rules applicable in France such as they are set in particular by Articles L.822-10 to L.822-14 of the

French Commercial Code and in the French Code of Ethics for statutory auditors. Where appropriate, we discuss with the Audit Committee

the risks that may reasonably be thought to bear on our independence, and the related safeguards.



EuraAudit C.R.C.






5

Statutory Auditors’ special report on regulated agreements and commitments

STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS

This is a free translation into English of the Statutory Auditors’ special report on regulated agreements and commitments issued in the French

language and is provided solely for the convenience of English speaking readers. This report on regulated agreements and commitments

should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France. It

should be understood that the agreements and commitments reported on are only those provided by the French Commercial Code and that

the report does not apply to those related party transactions described in IAS 24 or other equivalent accounting standards.

Shareholders’ Meeting held to approve the fi nancial statements for the year ended December 31, 2018


In our capacity as Statutory Auditors of your Company, we hereby report to you on regulated agreements and commitments.

The terms of our engagement require us to communicate to you, based on information provided to us, the principal terms and conditions of

those agreements and commitments brought to our attention or which we may have discovered during the course of our audit, as well as the

reasons justifying that such agreements and commitments are in the Company’s interest, without expressing an opinion on their usefulness

and appropriateness or identifying other such agreements and commitments, if any. It is your responsibility, pursuant to Article R. 225-31 of

the French Commercial Code (Code de commerce), to assess the interest involved in respect of the conclusion of these agreements and

commitments for the purpose of approving them.

Our role is also to provide you with the information stipulated in Article R. 225-31 of the French Commercial Code relating to the implementation

during the past year of agreements and commitments previously approved by the Shareholders’ Meeting, if any.

We conducted the procedures that we deemed necessary in accordance with the professional guidelines of the French National Institute

of Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this engagement. These procedures consisted in

agreeing the information provided to us with the relevant source documents.

AGREEMENTS AND COMMITMENTS SUBMITTED TO THE APPROVAL OF THE SHAREHOLDERS’ MEETING

Agreements and commitments authorised during the year

We hereby inform you that we have not been advised of any agreement or commitment authorised during the year to be submitted to the

approval of the Shareholders’ Meeting pursuant to Article L. 225-38 of the French Commercial Code.

AGREEMENTS AND COMMITMENTS PREVIOUSLY APPROVED BY THE SHAREHOLDERS’ MEETING

Agreements and commitments approved in prior years

a) with continuing eff ect during the year Pursuant to Article R. 225-30 of the French Commercial Code, we have been informed that the following agreements and commitments,

previously approved by Shareholders’ Meetings of prior years, have remained in force during the year.

With Mr. Laurent Renard, Executive Vice President and Chief Financial Offi cer of BOURBON

Nature and purpose: Considering Mr. Laurent Renard’s seniority within BOURBON, the strategic positions he held for over 10 years and his

extensive knowledge of BOURBON’s business, strategy and outlook and the fi nancial, economic, commercial and technical information to

which he had access, as well as his privileged relations with customers, a non-compete undertaking relating to the termination of a manager’s

duties upon retirement was concluded in order to preserve the legal interests of BOURBON and the Group’s subsidiaries.

Parties concerned: Mr. Laurent Renard, Executive Vice President and Chief Financial Offi cer of BOURBON until December 31, 2014.

Terms and conditions during the year: Under the 3-year agreement signed by the Company with Mr. Laurent Renard in December 2014 and

effective as of January 1, 2015, a series of payments totalling €300,000 (compensation in the form of a salary) shall be made on January 31,

2016, January 31, 2017 and January 31, 2018 at the latest. Thus, a gross payment of €110,000 was made in this respect in 2018.

b) without eff ect during the year 1. With SINOPACIFIC Group companies

With ZHEJIANG SHIPBUILDING Co, Ltd

Nature and purpose: Ship orders placed with ZHEJIANG SHIPBUILDING Co, Ltd, with advances on construction contracts.


PARENT COMPANY FINANCIAL STATEMENTS5 Statutory Auditors’ special report on regulated agreements and commitments

Parties concerned at the signature date: Mr. Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer of BOURBON and

partner in SINOPACIFIC.

Terms and conditions during the year, unchanged compared to December31, 2015, December 31, 2016 and December 31, 2017: As at

December 31, 2018, orders in progress concerned one ship for an amount of $46.8 million. On the same date, these orders resulted in

the payment of advances totalling $39.1 million, covered for up to $36.5 million by advance payment guarantees granted by SINOPACIFIC

SHIPBUILDING.

With CROWN HERA, Ltd and ZHEJIANG SHIPBUILDING Co, Ltd

Ship orders with ZHEJIANG SHIPBUILDING Co, Ltd via CROWN HERA, Ltd under the framework agreement signed between BOURBON

OFFSHORE (BOURBON subsidiary) and CROWNSHIP, Ltd and ZHEJIANG SHIPBUILDING Co, Ltd involving 62 ships to be delivered between

2012 and 2014.

Nature and purpose: Order for eight PSV offshore ships (SPP 35 design)

Parties concerned at the signature date: Mr. Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer of BOURBON and

director of SINOPACIFIC and Mrs. Lan Vo, director of BOURBON and of SINOPACIFIC.

Terms and conditions during the year, unchanged compared to December 31, 2015, December 31, 2016 and December 31, 2016: The order

totalled $204.8 million and is subject to the terms of the framework agreement signed on June 25, 2010. It replaces the initially planned order

of 20 SPU 1000s. As at December 31, 2018, orders in progress concerned one ship for an amount of $25.6 million and resulted in the payment

of advances totalling $6.5 million, not covered by advance payment guarantees.



EuraAudit C.R.C.





6OTHER LEGAL AND FINANCIAL INFORMATION

GENERAL INFORMATION ABOUT BOURBON CORPORATION SA AND ITS SHARE CAPITAL 218

TRADEMARKS, LICENSES, PATENTS, PROPERTY, PLANT AND EQUIPMENT 232

AGENDA FOR THE COMBINED SHAREHOLDERS’ MEETING OF JUNE 28, 2019 235

DRAFT RESOLUTIONS FOR THE COMBINED GENERAL MEETING OF JUNE 28, 2019 236

STATUTORY AUDITORS’ REPORT ON THE SHARE CAPITAL REDUCTION 241

STATUTORY AUDITORS’ REPORT ON THE AUTHORIZATION TO GRANT FREE SHARES (EXISTING OR TO BE ISSUED) 242

STATUTORY AUDITORS’ REPORT ON THE SHARE CAPITAL INCREASE RESERVED FOR MEMBERS OF A COMPANY SAVINGS PLAN 243

PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE AUDIT OF THE FINANCIAL STATEMENTS 244

CROSS REFERENCE TABLES 245


OTHER LEGAL AND FINANCIAL INFORMATION6 General information about BOURBON Corporation SA and its share capital

GENERAL INFORMATION ABOUT BOURBON CORPORATION SA AND ITS SHARE CAPITAL

1. INFORMATION REGARDING THE COMPANY

Corporate name: BOURBON Corporation SA.

Registered with the Marseille Trade Register under number 310 879

499.

Date of incorporation of the Company: December 2, 1948.

Duration: the Company was incorporated for 99 years and expires

on December 2, 2066 except if dissolved early or extended

(harmonization of the bylaws pursuant to the law of July 24, 1966,

Extraordinary General Meeting of January 19, 1966).

Registered office address and phone number: 148, rue Sainte –

13007 Marseille – France. Tel.: +33 (0)4 91 13 08 00

Legal form and law applicable to BOURBON Corporation SA:

Incorporated company (Société anonyme) with a Board of Directors

governed by the French Commercial Code. BOURBON Corporation

SA is a French company.

Consultation of documents and information about the Company:

the Company’s bylaws, financial statements and reports, as well

as the minutes of Shareholders’ Meetings may be consulted at the

registered office referred to above.

Company website: http://www.bourbonoffshore.com

1.1 CORPORATE PURPOSE (ARTICLE 2 OF THE BYLAWS)

The purpose of the Company is:

3 the creation, ownership, acquisition, sale, lease, development,

operation, management, rental, control, organization and

financing of all industrial, commercial, agricultural, real estate or

other types of property, companies or businesses;

3 the acquisition of equity interests and the management of

interests related to any and all marine business activities, either

directly or indirectly;

3 the manufacture, packaging, import, export, commission,

representation, transit, deposit and shipping of any and all

products, merchandise, items and commodities of any kind of

any origin;

3 the acquisition, purchase, operation, sale or licensing of all

patents and manufacturing trademarks;

3 the acquisition of an interest through contribution, merger,

participation, subscription of shares, units or bonds or in any other

manner, in all businesses or companies related directly to the aim

of the Company and in general in all businesses, companies or

work that may attract clients to its Corporate activity or stimulate

operations in which they would have an interest; and

3 in a general sense, all industrial, commercial, financial, agricultural,

real estate and capital transactions that may relate directly to the

aim of the Company, the various elements of which are specified

above.

1.2 CORPORATE FISCAL YEAR (ARTICLE 22 OF THE BYLAWS)

It starts on January 1 and ends on December 31 of each year.

1.3 APPOINTMENT OF DIRECTORS, WITH THE EXCEPTION OF DIRECTORS REPRESENTING EMPLOYEES (ARTICLES 12 AND 13 OF THE BYLAWS)

The Company is governed by a Board of Directors with a minimum

of three members and a maximum of 18 members, subject to

exceptions provided for by law in the event of a merger.

I – During the life of the Company, Directors are appointed by the

Ordinary General Meeting.

However, in the event of a merger or a demerger, they may be

appointed by the Extraordinary General Meeting. Their term of office

lasts for three years. It ends after the Ordinary General Meeting ruling

on the financial statements for the year ended, which is held in the

year in which the term of the said Director expires.

The retirement age of a Director is set at 70 (seventy).

Any exiting Director is eligible for reappointment provided he or she

can meet the conditions of this Article. Directors may be dismissed

and replaced at any time by the Ordinary General Meeting. Any

appointment made in violation of the foregoing provisions shall be

null and void, except for appointments made on a temporary basis.

II – Directors may be individuals or legal entities.

In the latter case, when appointed, the legal entity is required to

appoint a permanent representative who is subject to the same

conditions and requirements and who assumes the same civil and

criminal responsibilities as if he were a Director in his own name,

without prejudice to the joint and several liability of the legal entity

represented by him. The permanent representative of a legal entity

appointed as Director shall be subject to the same age requirement

applied to individual Directors.

The term of the permanent representative appointed by the legal

entity serving as Director shall be given for the duration of the term

of the legal entity.


OTHER LEGAL AND FINANCIAL INFORMATION

6

General information about BOURBON Corporation SA and its share capital

III – An employee of the Company may be appointed as Director

only if his or her employment contract corresponds to an actual

job. He shall not lose the benefit of such employment contract.

The number of employee Directors may not exceed one third of the

Directors in office.

IV – In the event of a vacancy owing to death or to the resignation

of one or more Directors, the Board of Directors may, between two

Shareholders’ Meetings, make appointments on a temporary basis. If

the number of Directors falls below the legal minimum, the remaining

Directors must immediately convene the Ordinary General Meeting in

order to fill the vacancies on the Board.

Temporary appointments made by the Board shall be subject to

ratification by the next Ordinary General Meeting. Failing ratification,

the deliberations and acts carried out previously by the Board shall

remain valid nonetheless.

If the Board neglects making the required appointments or convening

the meeting, then any interested party may ask the Chief Judge of

the Commercial Court, ruling on request, to appoint a representative

in charge of convening the Shareholders’ Meeting so that such

appointments may be made or ratified as the case may be.

V – Every Director must own 300 shares in the Company. If this

is not the case on the date of his appointment or at any time in

the course of his terms of office, he shall be considered as having

automatically resigned if he fails to remedy the situation within a

period of six months.

1.4 DIRECTORS REPRESENTING EMPLOYEES (ARTICLE 13 BIS OF THE BYLAWS)

Pursuant to Article L. 225-27-1 of the French Commercial Code, the

Board of Directors shall also include at least one Director representing

the g roup’s employees.

The number of Board members elected by employees amounts

to two if the number of Board members appointed according to

the provisions of Articles L. 225-17 and L. 225-18 of the French

Commercial Code exceeds twelve, and one if that number is twelve

or less.

If the number of Board members appointed by the Shareholders’

Meeting exceeds twelve, a second Director representing employees

shall be appointed in accordance with the provisions below, within

six months following the new Director’s co-optation by the Board or

appointment by the Shareholders’ Meeting.

If the number of Directors appointed by the Annual Shareholders’

Meeting drops down to twelve or fewer, the duration of the term

of office of any of the employee representatives on the Board shall

remain unchanged.

The term of office of a Director representing employees is set at three

years. This term of office may be renewed.

If a Director’s seat becomes vacant for any reason whatsoever,

the vacant seat shall be filled in accordance with the provisions of


As an exception to the rule laid down in Article 13 of these

bylaws for Directors appointed by the Shareholders’ Meeting,

Directors representing employees are not required to own a minimum

number of shares.

Directors representing employees are appointed following an

election, including by electronic means ensuring confidentiality of the

vote, by the employees of the Company and its directly and indirectly

held subsidiaries whose corporate offices are in France.

1.5 ORGANIZATION AND DELIBERATIONS OF THE BOARD (ARTICLE 14 OF THE BYLAWS)

I − ChairmanThe Board of Directors shall elect a Chairman from among its

members. The Chairman must be an individual for the appointment

to be valid. It determines the Chairman’s compensation.

The Chairman of the Board of Directors must be under 70 (seventy)

years of age.

If the Chairman reaches that age while in office, he or she shall be

deemed to have resigned automatically and a new Chairman shall be

appointed as provided for in the first article.

The Chairman is appointed for a term that may not exceed his or her

term as a Director. The Chairman may be reelected. The Chairman

may be removed at any time by the Board of Directors. In the event

of the temporary unavailability or death of the Chairman, the Board

of Directors may delegate a Director to serve as chair.

In the event of temporary unavailability, this delegation is for a limited

time; it is renewable. In the event of death, it remains in effect until

election of the new Chairman.

II − Board meetingsThe Board of Directors meets as often as required by the interests of

the Company, upon notice given by the Chairman. Furthermore, if the

Board has not met for more than two months, Directors constituting

at least one-third of the members of the Board may request that the

Chairman call a meeting with a particular agenda.

The Chief Executive Officer may also ask the Chairman to call a

meeting of the Board of Directors with a particular agenda.

The Board shall meet at the head office or at any other location in

the same city, and is chaired by its Chairman or, if the Chairman

is unavailable, by a member appointed by the Board to chair it. It

may meet in any other location with the approval of the majority of

the Directors.



A register shall be kept and signed by the Directors participating in

the meeting.

In accordance with legal and regulatory provisions, meetings of the

Board of Directors may be held by video conference or any other

means of telecommunication. Internal rules defined by the Board of

Directors determine the practical procedures to be followed in using

such means.

III − Quorum and majorityThe Board of Directors may validly deliberate only if at least one-half

of its members are present. Decisions are made by the majority of

members present or represented. In the event of a tie, the Chairman

will have the casting vote.

In accordance with legal and regulatory provisions, Directors who

participate in meetings by video conference or any other means

of telecommunication shall be deemed present for purposes of

calculating quorum and majority.

IV − RepresentationAny Director may give a proxy to another Director by letter, fax, email,

or telegram to represent them at a meeting.

At a given meeting, each Director may hold only one proxy received

pursuant to the paragraph above.

These provisions shall apply to the permanent representative of a

legal entity appointed as Director.

V − Confidentiality obligationThe Directors and any other persons called to attend Board meetings

are bound by a confidentiality obligation with respect to confidential

information designated as such by the Chairman of the Board.

VI − Minutes of meetingsMeetings of the Board of Directors shall be recorded in minutes

prepared in a special register with numbered and initialed pages, and

kept at the head office in accordance with regulatory requirements.

Meeting minutes shall indicate the names of the Directors present,

excused, or absent. The minutes shall state the presence or absence

of persons called to the meeting of the Board of Directors pursuant

to law, and the presence of any other person having attended all

or part of the meeting. Minutes shall be signed by the meeting’s

Chairman and at least one other Director. In the event that the

meeting Chairman is unavailable, minutes may be signed by at least

two Directors.

Copies or extracts of meeting minutes are validly certified by the

Chairman of the Board of Directors, the Chief Executive Officer,

a Director temporarily serving as Chairman, or an agent appointed

for such purpose. If the Company is in liquidation, copies or extracts

may be validly signed by a single liquidator. Production of a copy

or extract of meeting minutes is sufficient to prove the number of

Directors and their presence or representation at the meeting.

1.6 POWERS OF THE BOARD OF DIRECTORS (ARTICLE 15 OF THE BYLAWS)

I − GeneralThe Board of Directors determines the Company’s goals and

supervises their implementation.

Subject to the powers expressly granted to the Shareholders’

Meeting and within the limit of the corporate purpose, the Board of

Directors is responsible for all questions concerning the Company’s

functioning and, by voting, decides matters concerning it.

With regard to third parties, the Company is bound even by acts of

the Board of Directors that are not within the corporate purpose,

unless it proves that the third party knew that the act was not within

such purpose or that it could not have been unaware of that fact in

light of the circumstances; however, mere publication of the bylaws

shall not suffice to constitute such proof.

The Board of Directors shall conduct such audits and verifications

as it deems useful.

Each Director must receive the necessary information to carry out his

or her mission and may obtain all documents he or she deems useful

from senior management.

II − Organization of the work of the Board of DirectorsThe Chairman organizes and directs the work of the Board of

Directors, provides the Shareholders’ Meeting with a report on such

work, and carries out its decisions. He or she supervises the proper

functioning of the Company’s administrative bodies and ensures, in

particular, that the Directors are in a position to perform their mission.

1.7 MANAGEMENT (ARTICLE 16 OF THE BYLAWS)

I − General organizationIn accordance with the law, the Company is managed under its own

responsibility either by the Chairman of the Board of Directors or by

another individual appointed by the Board and bearing the title of

Chief Executive Officer.

The choice between these two management methods shall be made

by the Board of Directors, which must so inform the shareholders

and third parties as provided for by regulations.



6


Decisions by the Board of Directors with respect to choosing a

management method shall be made by vote of the majority of the

Directors present or represented.

A change in the management method does not require modification

of the bylaws.

II − Chief Executive Offi cer

1. Appointment - Removal

Depending on the choice made by the Board of Directors in

accordance with § I above, the Company shall be managed either by

the Chairman or by an individual appointed by the Board of Directors

and bearing the title of Chief Executive Officer.

Where the Board of Directors chooses to separate the positions

of Chairman and Chief Executive Officer, it shall appoint a Chief

Executive Officer, set the length of his or her term, determine his or

her compensation, and, if applicable, his or her limits and powers.

The Chief Executive Officer must be less than 70 (seventy) years old.

If the Chief Executive Officer reaches that age in office, he or she

shall be deemed to have resigned automatically and a new Chief

Executive Officer shall be appointed.

The Chief Executive Officer may be removed at any time by the Board

of Directors. Where the Chief Executive Officer is not the Chairman of

the Board of Directors, his or her removal may give rise to damages

if the removal is not for good cause.

2. Powers

The Chief Executive Officer shall have the broadest powers to act

in all circumstances in the name of the Company. He or she shall

exercise such powers within the limit of the corporate purpose

and subject to those powers that the law expressly grants to the

Shareholders’ Meeting or to the Board of Directors.

The Chief Executive Officer represents the Company in its relations

with third parties. The Company shall be bound even by acts of the

Chief Executive Officer that are not within the scope of the corporate

purpose, unless it proves that the third party knew that the act was

not within such corporate purpose or could not have been aware of

that fact in light of the circumstances. Mere publication of the bylaws

shall not suffice to constitute such proof.

III − Executive Vice PresidentsUpon the proposal of the Chief Executive Officer, whether such

position is held by the Chairman of the Board of Directors or by

another person, the Board of Directors may appoint one or more

individuals to assist the Chief Executive Officer, which individuals

shall bear the title of Executive Vice President.

The maximum number of such Executive Vice Presidents shall be

five.

The Board of Directors, by mutual agreement with the Chief Executive

Officer, shall determine the extent and term of the powers granted to

the Executive Vice Presidents.

Vis-à-vis third parties, the Executive Vice Presidents shall have the

same powers as the Chief Executive Officer.

The Board of Directors shall determine the compensation of the

Executive Vice Presidents.

In the event of the departure or unavailability of the Chief Executive

Officer, the Executive Vice Presidents shall retain their positions and

powers until appointment of a new Chief Executive Officer, unless the

Board of Directors shall decide otherwise.

1.8 ADVISORS (ARTICLE 18 OF THE BYLAWS)

A college of advisors may be instituted, composed of a maximum

of two advisors and appointed by the Board of Directors for a three-

year term.

It assists the Board of Directors in carrying out its duties and

participates in Board meetings in an advisory and non-voting

capacity.

1.9 SHAREHOLDERS’ MEETINGS (ARTICLE 19 OF THE BYLAWS)

Shareholders’ Meetings shall be called and shall deliberate under

the conditions set by law and regulations. They shall be held in any

location specified in the meeting notice.

Any shareholder, however many shares he or she owns, may

participate in the meetings in person or by proxy, provided they give

proof of identity and proof of ownership of their shares, either in

registered form or in bearer form where held in a bearer securities

trading account held by a certified intermediary, no later than the

second business day preceding the meeting at midnight Paris time.

Account registration or entry of shares in the bearer share accounts

kept by the authorized intermediary must be evidenced by an

attendance certificate issued by the latter and appended to the

postal voting form or the proxy form or to the application for an

admittance card.

Once a shareholder has already cast his postal vote, sent off a proxy

form or applied for an admission card or certificate of participation, he

may no longer choose another method of participation in a meeting.

In the absence of the Chairman and failing any mandatory provisions

to the contrary, the meeting is chaired by the Director specially

delegated by the Board. If there is no appointed Director, the meeting

elects a Chairman.

1.10 OWNERSHIP THRESHOLDS

The bylaws do not stipulate specific requirements for ownership

thresholds.



1.11 APPROPRIATION AND DISTRIBUTION OF NET INCOME (ARTICLES 24 AND 25 OF THE BYLAWS)

The income statement summarizing income and expenses for

the year shows the profit or loss for the year after deduction of

depreciation, amortization and provisions.

At least 5% of the earnings for the year minus any prior losses shall

be used to fund the legal reserve. This withdrawal shall cease to be

mandatory when the legal reserve fund equals one tenth of the share

capital; it shall resume when the legal reserve falls below one tenth of

the capital for any reason.

Distributable earnings consist of the profit for the year less prior

losses and sums placed in reserve as required by law and the

bylaws, plus any retained earnings.

The Shareholders’ Meeting may withdraw from these earnings any

sums it deems appropriate to be carried forward to the following

year or to be placed in one or more general or special reserves, the

use of or allocation to which to be determined by it. The balance, if

any, is divided among all shares. Dividends are first taken from the

distributable earnings for the year.

The Shareholders’ Meeting may also decide to distribute sums taken

from the reserves at its disposal, and must expressly note the reserve

items from which these sums are taken.

Excluding the case of a capital reduction, no distribution may be

made to shareholders when the shareholders’ equity is or would

become, after any distribution, less than the amount of the capital

plus reserves which may not be distributed under the law or bylaws.

The revaluation reserve may not be distributed. It may be capitalized

in whole or in part.

The loss, if any, is carried forward after approval of the financial

statements by the shareholders and is charged against the profits

from subsequent years until it is extinguished.

The Shareholders’ Meeting has the option of granting to each

shareholder for all or part of the dividend paid out an option between

payment of the dividend in shares, subject to the legal conditions,

or in cash.

The procedures for payment of the dividends in cash shall be set by

the Shareholders’ Meeting or by the Board of Directors.

Cash dividends must be paid within a maximum period of nine

months after the close of the fiscal year unless this deadline is

extended by court order.

However, when a balance sheet prepared during or at the end of the

year and certified by a Statutory Auditor shows that the Company

has earned a profit since the end of the previous year and after

the required depreciation, amortization and provisions, and after

deduction of any prior losses and sums to be placed in reserve as

required by the law or bylaws, interim dividends may be paid before

approval of the financial statements for the year. The amount of such

dividends may not exceed the amount of the profit as shown.

A request for payment of the dividend in shares must be made

within a time period set by the meeting, which may not exceed three

months from the date of the meeting.

No dividends may be claimed back from shareholders, unless

distribution was performed in violation of legal provisions and the

Company deems that beneficiaries were aware of the irregular nature

of this distribution at the time, or could not have been aware thereof,

given the circumstances. Where applicable, refund claims are limited

to three years after the payment of these dividends.

Any dividends not claimed within five years of their release for

payment are lapsed.

The Ordinary General Meeting may, on the recommendation of the

Board of Directors, decide that the dividend shall be paid in kind.

Any shareholder who can prove, at the end of a period, that they have

held registered shares for at least two years and that they continue to

hold them on the date the dividend for the relevant fi scal year is paid,

will receive an increased dividend on these shares, equal to 10% of

the dividend paid on the other shares, including if the dividend is paid

in new shares; this increased dividend will be rounded down to the

nearest cent if required.

Moreover, any shareholder who proves, as of the end of a fiscal

year, that his or her shares have been registered for at least two

years and who maintains the shares in registered form through the

completion date of a capital increase by incorporation of reserves,

profits, or premiums, through the issuance of bonus shares, benefits

from an increase in the number of bonus shares distributed equal to

10%, such number being rounded to the closest lower number in the

event of fractional shares.

The new shares thus created shall be assimilated with the old shares

on which they are based for purposes of calculating increased

dividend rights and grants.

The number of shares eligible for these increases may not exceed,

for a given shareholder, 0.5% of the share capital as of the dividend

payment date.

In the case of a dividend payment in shares or of a distribution of

bonus shares, all of such shares shall be immediately assimilated

with the shares previously held by the shareholder for the purposes

of the increased dividend or distribution of bonus shares. However, if

there are fractional shares:

3 in the event of an option to pay dividends in shares, a shareholder

satisfying the legal conditions may pay the balance in cash to

obtain an additional share;

3 in the case of a grant of bonus shares, rights forming fractional

shares due to the increase shall not be negotiable, and the

corresponding shares shall be sold, with the proceeds of the sale

being allocated to the holders of such rights no later than 30 days

following the date on which the number of whole shares granted

to them is registered in their account.



6


1.12 PURCHASE BY THE COMPANY OF ITS OWN SHARES

(see Management report – section 7.3.1 “Share buyback program”).

1.13 MODIFICATION OF SHAREHOLDER RIGHTS

The rights of shareholders as provided for in the Company’s bylaws

may be modified only by the Extraordinary General Meeting of

Shareholders.

1.14 CHANGE OF CONTROL

There are no provisions in the bylaws that could have the effect of

delaying, deferring, or preventing a change of control of the issuer.

1.15 FORM OF SHARES (EXTRACT FROM ARTICLES 9 AND 9 BIS OF THE BYLAWS)

Shareholders may choose to hold their shares in registered or bearer

form. They give rise to registration in account pursuant to the terms

and conditions provided for by laws and regulations.

The Company has the right, pursuant to applicable laws and

regulations, to ask the central depositary at any time, at its own

expense, for the name and date of birth, or, in the case of legal

entities, the Company name and date of incorporation, as well as the

nationality, postal address and e-mail address (if any) of the holders

of securities giving current or future rights to vote at Shareholders’

Meetings, as well as the number of securities held by each such

person and, if applicable, the restrictions applicable to such shares.

1.16 INDIVISIBILITY OF SHARES – RIGHTS AND OBLIGATIONS ATTACHED TO SHARES (EXTRACT FROM ARTICLE 11 OF THE BYLAWS)

The shares are indivisible as regards the Company.

Subject to the provisions of Article 25 of the bylaws on the increased

dividend, each share carries entitlement, in the net income and in the

corporate assets, to a portion in line with the share of the capital it

represents.

In the absence of an agreement to the contrary notified to the

Company, beneficial owners (usufruitiers) of shares validly represent

bare owners (nus propriétaires) vis-à-vis the Company. However, the

voting right at Extraordinary General Meetings belongs to the bare

owner.

By way of exception to the above, where the beneficial owner and/

or the bare owner benefit, with respect to their shares, from the

provisions on partial exemption provided for by Article 787B of the

French General Tax Code and they so state on the account in which

their rights are recorded, the voting right belongs to the beneficial

owner for decisions concerning the appropriation of net income and

to the bare owner for all other decisions.

1.17 DOUBLE VOTING RIGHTS

All fully paid-up shares for which proof is provided that they have

been registered to the same shareholder for two years receive

double voting rights in accordance with law 2014-384 of March 29,

2014, known as the “Florange law”, which introduced, as of April 3,

2016, the principle of double voting rights on shares in French listed

companies held for at least two years.

In accordance with the law, any share converted into bearer form

or with respect to which ownership is transferred loses the double

voting right, except in the case of transfer by inheritance, liquidation

of community property between spouses, or in vivos gift to a spouse

or relative in the direct line of succession, or of transfer due to a

merger or spinoff of the shareholder company holding the shares

with double voting rights.

1.18 LIMITATIONS ON VOTING RIGHTS

There are no limitations on voting rights.



1.19 PARENT COMPANY-SUBSIDIARY RELATIONS

BOURBON Corporation SA is a holding company; the financial flows with its subsidiaries correspond mainly to the dividends paid by the latter.

As at December 31, 2018, the figures for the parent company, BOURBON Corporation SA, and its main subsidiaries are listed below:

CONSOLIDATED AMOUNTS (EXCEPT DIVIDENDS)(in € millions)

BOURBON OFFSHORE

SURF

SONASURF INTERNACIONAL

SHIP.

BOURBON OFFSHORE

INTEROIL SHIP.

BOURBON SHIPS AS

BOURBON SUPPLY INVEST.

BOURBON SUPPLY

ASIABOURBON MARITIME

FINANCIÈRE BOURBON

SNC

BOURBON CORPORATION

SA (LISTED COMPANY)

Revenues 55.6 141.1 42.7 10.7 2.9 0.1 - - -

Net property,

plant and

equipment 42.1 - 0.0 79.7 206.4 0.9 6.5 - -

Financial debt

(excl. Group) 1.5 - - 19.7 53.3 0.0 842.0 63.4 5.4

Cash and cash

equivalents - 31.9 2.1 2.2 0.0 0.6 0.1 71.9 0.2

Dividends paid

during the year

returning to the

listed company - - - - - - - - -

3 for operating companies: Bourbon Offshore Surf, Sonasurf

Internacional Shipping, Bourbon Offshore Interoil Shipping

Navegação, Bourbon Ships AS, Bourbon Supply Investissements

and Bourbon Supply Asia, which alone account for 40% of the

g roup’s revenue. The g roup’s remaining revenue is generated by

38 operating companies;

3 for shipowning companies: Bourbon Offshore Surf, Bourbon

Ships AS, Bourbon Supply Investissements and Bourbon

Supply Asia represent 21% of the g roup’s net property, plant and

equipment. The other property, plant and equipment are owned

by 115 companies, shipowning being the sole activity (mainly tax

vehicles) for 72 of them;

3 for companies with a fi nance activity: Bourbon Offshore Surf,

Bourbon Ships AS, Bourbon Supply Investissements, Bourbon

Maritime, Financière Bourbon SNC and Bourbon Corporation

SA account for around 66% of the g roup’s debt. The remaining

financial debt is carried by 40 companies, shipowning being

the sole activity (mainly tax vehicles) for 25 of them. In general,

transactions between members of the g roup are managed by

the centralized cash-clearing house, the subsidiary Financière

Bourbon.



6


2. INFORMATION ABOUT THE SHARE CAPITAL

The Company was listed for trading on the second market of the

Paris Stock Exchange on October 20, 1998.

Since February 2004, BOURBON Corporation SA has been classified

by Euronext in the “Oil Services” sector.

As at December 31, 2018, BOURBON Corporation SA was listed on

Compartment B of NYSE Euronext Paris.

2.1 SHARE CAPITAL

As at December 31, 2018, the number of shares (all of the same

class) amounted to 77,499,214. The amount of the share capital on

that date totaled €49,227,780.

More than 13 million BOURBON Corporation SA shares were traded

on NYSE Euronext Paris in 2018.

As of December 31, 2018, the Company’s market capitalization

amounted to €265.82 million at a year-end price of €3.43 per share

compared with €542.49 million as of December 31, 2017.

According to the criteria “number of shares traded”, “capital”,

“rotation rate” and “market capitalization”, depending on the

month and for 2018, BOURBON ranked between number 25 and

number 162 among the companies listed on Euronext Paris.

As of December 31, 2018, there were 679 employee shareholders

holding stock through the FCPE “BOURBON Expansion” mutual

fund for a total of 528,294 shares, or 0.68% of the capital.

With the exception of treasury shares (135,881 as at December 31,

2018, or 0.18% of the shares), no company shares have limited

voting rights.

2.2 POSITION OF STOCK OPTION PLANS FOR THE YEAR ENDED DECEMBER 31, 2018

MEETING DATE

JUNE 1, 2011

PLAN NO. 10(1) PLAN NO. 11

Date of Board meeting November 30, 2012 December 2, 2013

Start date for exercising options November 30, 2016 December 2, 2017

Expiration date November 29, 2018 December 1, 2019

Original number of beneficiaries 2 68

Total number of stock subscription or purchase options: 29,700 1,037,000

a) Corporate officers(2) 140,000(3)

Jacques d’Armand de Chateauvieux - -

Astrid de Lancrau de Bréon -

Gaël Bodénès - 60,000

b) Top 10 employee beneficiaries 29,700 198,000

Subscription or purchase price €19.82 €19.68

Discounts granted no no

Options exercised at 12.31.2018 - -

Options canceled or voided at 12.31.2018 29,700 400,000

Options remaining to be exercised at 12.31.2018 - 637,000

(1) Numbers of options and exercise prices are adjusted values, as required under applicable regulations, following trading in BOURBON Corporation SA

stock.

(2) List of the corporate offi cers with these duties during the year ended December 31, 2018.

(3) Options subject to performance conditions (see section 3.8 of the management report).



2.3 POSITION OF BONUS SHARES ALLOTTED AT DECEMBER 31, 2018

There was no longer a bonus share allotment plan in force at December 31, 2018.

2.4 POTENTIAL CAPITAL DILUTION AT DECEMBER 31, 2018

The table below shows the Company’s potential capital dilution in the event of the conversion or exercise of securities giving access to any

outstanding capital in the Company at December 31, 2018:

ALLOCATION DATE

MATURITY NUMBER OF POTENTIAL

SHARESPOTENTIAL

DILUTION

SHARE CAPITAL

(in shares)START END

Number of shares at December 31, 2018 77,499,214

Stock option plans 12.02.2013 12.02.2017 12.01.2019 637,000 0.82%

TOTAL STOCK SUBSCRIPTION OPTIONS 637,000 0.82%

POTENTIAL CAPITAL AT DECEMBER 31, 2017 78,136,214

The Company did not issue or grant any other rights or securities giving direct or indirect access to its capital, immediately or in the future.

2.5 CHANGES IN THE CAPITAL OVER THE PAST THREE YEARS

DATE OPERATION

SHARE ISSUES

TOTAL AMOUNT

OF CAPITAL(in euros)

TOTAL NUMBER OF SHARES

AMOUNT OF CAPITAL INCREASE

OR REDUCTION(in euros)

NUMBER OF SHARES

ISSUE AND MERGER

PREMIUMS(in euros)

07.18.2016

Payment of dividends in new

shares 3,008,497 4,736,272 42,743,890 48,493,096 76,342,603

12.31.2016

No stock options for new or

existing options were

exercised between January 1,

2016 and December 31, 2016 0 0 0 48,493,096 76,342,603

07.17.2017

Payment of dividends in new

shares 734,683 1,156,611 9,767,344 49,227,780 77,499,214

12.31.2017




2017 and December 31, 2017 0 0 0 49,227,780 77,499,214

12.31.2018




2018 and December 31, 2018 0 0 0 49,227,780 77,499,214

The number of shares comprising the share capital and the number of voting rights are adjusted monthly as necessary in accordance with the

“Transparency Directive”. This information is available on the Company’s website:

www.bourbonoffshore.com, under “INVESTORS” – “Capital and shareholding” - “Voting rights” - “Information relating to the number of shares

and voting rights composing the capital”.



6


SHAREHOLDER NUMBER OF SHARES % OF CAPITAL

NUMBER OF THEORETICAL

VOTING RIGHTS% OF THEORETICAL

VOTING RIGHTS

Jacques de Chateauvieux & related companies* 40,886,122 52.76% 41,176,212 43.70%

Henri de Chateauvieux & related companies** 6,187,422 7.98% 12,318,602 13.07%

TOTAL COLLECTIVELY 47,073,544 60.74% 53,494,814 56.77%



2.6 SIGNIFICANT TRANSACTIONS AFFECTING THE DISTRIBUTION OF CAPITAL OVER THE LAST THREE YEARS

Following the transactions mentioned below, up to the registration

date of the 2018 Registration Document and as far as the Company

is aware, the companies Mach-Invest International and Monnoyeur

SA hold more than 5% of BOURBON Corporation SA’s share capital

and the JACCAR Holdings company more than 50%.

Fiscal year 2018

No transactions recorded.

Fiscal year 2017

The Combined Shareholders’ Meeting of BOURBON Corporation

SA, held on May 23, 2017, decided to pay the dividend in cash or

new shares.

1,156,611 new shares were issued on July 17, 2017 at the end of

the option period, representing approximately 1.52% of the capital

stock and 0.91% Company’s voting rights on the basis of the capital

stock and voting rights as of May 31, 2017.

After this issuance, the number of shares making up the share capital

and the total number of theoretical voting rights of the Company

increased from 76,342,603 to 77,499,214 shares.

Fiscal year 2016

The Combined Shareholders’ Meeting of BOURBON Corporation

SA, held on May 26, 2016, decided to pay the dividend in cash or

new shares.

4,736,272 new shares were issued on July 18, 2016 at the end of

the option period, representing approximately 6.6% of the capital

stock and 4.5% of the Company’s voting rights on the basis of the

capital stock and voting rights as of May 31, 2016.

After this issuance, the number of shares making up the share capital

and the total number of theoretical voting rights of the Company

increased from 71,606,331 to 76,342,603 shares.

SHAREHOLDER NUMBER OF SHARES % OF THE CAPITAL AND THEORETICAL VOTING RIGHTS

Jacques de Chateauvieux & related companies* 39,798,362 59.25%

Henri de Chateauvieux & related companies** 6,185,918 9.67%

TOTAL COLLECTIVELY 45,984,280 68.92%





2.7 CHANGES IN THE SHAREHOLDER BASE

SHAREHOLDER

POSITION AT 12.31.2018

NUMBER OF SHARES

% OF THE CAPITAL

NUMBER OF SHARES AND % OF THEORETICAL VOTING RIGHTS***

NUMBER OF SHARES & % OF ACTUAL VOTING RIGHTS***

Jacques de Chateauvieux & related companies*** 40,886,122 52.76% 41,177,031 43.16% 41,177,031 43.22%

Henri de Chateauvieux & related companies** 6,130,370 7.92% 12,259,236 12.85% 12,259,236 12.87%

Total Collectively 47,016,492 60.68% 53,436,267 56.00% 53,436,267 56.08%

Monnoyeur SA 4,398,813 5.68% 4,398,813 4.61% 4,398,813 4.62%

Treasury shares 135,881 0.18% 135,881 0.14% 0 0.00%

Employees 528,294 0.68% 528,294 0.55% 528,294 0.55%

Public 25,419,734 32.80% 36,915,545 38.69% 36,915,545 38.74%

TOTAL 77,499,214 100.00% 95,414,800 100.00% 95,278,919 100.00%


** Henri de Chateauvieux & related companies = Mach-Invest SAS + Mach-Invest International + Henri de Chateauvieux.

*** Application of Law No. 2014-384 of March 29, 2014 to restore the real economy (the “Florange Law”) as from April 3, 2016:

registered shares held for more than two years receive double voting rights.

No material change has occurred in the holding of capital and voting rights since December 31, 2018.



6


POSITION AT 31.12.2017 POSITION AT 31.12.2016

NUMBER OF SHARES

% OF CAPITAL

NUMBER OF SHARES AND % OF THEORETICAL

VOTING RIGHTS***

NUMBER OF SHARES AND % OF ACTUAL VOTING RIGHTS***

NUMBER OF SHARES

% OF CAPITAL

NUMBER OF SHARES AND % OF THEORETICAL VOTING RIGHTS***

NUMBER OF SHARES & % OF ACTUAL VOTING

RIGHTS***

40,886,122 52.76% 41,176,212 43.70% 41,176,212 43.75% 39,798,362 52.13% 75,471,710 59.25% 75,471,710 59.45%

6,187,422 7.98% 12,318,602 13.07% 12,318,602 13.09% 6,185,918 8.10% 12,317,098 9.67% 12,317,098 9.70%

47,073,544 60.74% 53,494,814 56.77% 53,494,814 56.84% 45,984,280 60.23% 87,788,808 68.92% 87,788,808 69.15%

4,398,813 5.68% 4,398,813 4.67% 4,398,813 4.67% 4,398,813 5.76% 4,398,813 3.45% 4,398,813 3.47%

127,140 0.16% 127,140 0.13% 0 0.00% 426,576 0.56% 426,576 0.33% 0 0%

594,329 0.77% 594,329 0.63% 594,329 0.63% 360,862 0.47% 360,862 0.28% 360,862 0.28%

25,305,388 32.65% 35,618,961 37.80% 35,618,961 37.85% 25,172,072 32.97% 34,397,420 27.01% 34,397,420 27.10%

77,499,214 100.00% 94,234,057 100.00% 94,106,917 100.00% 76,342,603 100.00% 127,372,479 100.00% 126,945,903 100.00%



2.8 DISTRIBUTION OF CAPITAL AND VOTING RIGHTS

Total number of shares (December 31, 2018) 77,499,214

Total number of theoretical voting rights* (December 31, 2018) 95,414,800**

Total number of voting rights exercisable in Shareholders’ Meetings (December 31, 2018) 95,278,919**

Approximate number of shareholders (TPI shareholder identification procedure in August 2014) 40,000

* Theoretical (or gross) voting rights are used to calculate ownership thresholds: they include the voting rights attached to shares that do not have such

rights (treasury shares, liquidity contract, etc.).

** Application of Law No. 2014-384 of March 29, 2014 to restore the real economy (the “Florange Law”) as from April 3, 2016: registered shares held for

more than two years receive double voting rights.

Shareholders owning 5% or more of the capital and theoretical

voting rights (December 31, 2018):

3 more than 50%: JACCAR Holdings;

3 more than 5%: Mach-Invest International and Monnoyeur SAS.

To the Company’s knowledge, there are no other shareholders

owning, either directly or indirectly or together, 5% or more of the

capital and theoretical voting rights.

The personal shareholdings of the members of the Board of

Directors, of the adviser, and of the corporate officers of BOURBON

Corporation represent less than 1% of the Company’s share capital.

Details are provided in the management report (section 3.2.5).

As of December 31, 2018, the Company owned 135,881 of its own

shares (including 75,513 under the supervision and liquidity contract

with CIC), or 0.18% of the capital.

In addition, as of the same date, 679 employees owned 0.68% of the

capital, with 528,294 shares.

2004 Agreement

Since December 31, 2004, there has been a shareholders’

agreement stipulating a collective undertaking to retain shares of

BOURBON Corporation SA stock (“Loi Dutreil”, Article 885-I bis of

the French General Tax Code) involving 27.17% of the capital and

27.18% of the voting rights.

This agreement, which is tax-related in nature, does not under any

circumstances represent a “collective action” to implement a voting

policy or a BOURBON Corporation SA management policy. It does

not contain any preferred terms for sales.

This agreement was entered into for six years from the date the

agreement was signed and ended on the sixth anniversary of the

date it was registered.

At the end of the initial period of six years, the agreement was

extended for successive periods of 12 months.

The signatory of this agreement is Jacques d’Armand de

Chateauvieux, Chairman and Chief Executive Officer.

2015 ISF Agreement

Since December 18, 2015, there has been a shareholders’

agreement stipulating a collective undertaking to retain shares of

BOURBON Corporation SA stock (“Loi Dutreil”, Article 885-I bis of

the French General Tax Code) involving 48.52% of the capital and

48.79% of the voting rights.

This agreement, which is tax-related in nature, does not under any

circumstances represent a “collective action” to implement a voting

policy or a BOURBON Corporation SA management policy. It does

not contain any preferred terms for sales.

This undertaking was agreed for a period of two years from the

registration of this collective retention pledge.

At the conclusion of the period initially planned, the collective

retention undertaking will be tacitly extended for an indefinite period.

The signatories of this agreement are Jacques d’Armand de

Chateauvieux, Chairman of the Board of Directors and Chief

Executive Officer, Christian Lefèvre, Executive Vice President, and

Gaël Bodénès, Executive Vice President. JACCAR Holdings and Sté

Mach-Invest, at the date of signing this agreement, hold at least 5%

of the Company’s capital and voting rights.

2015 Transfer Agreements

Since December 8, 2015, there have been two shareholders’

agreements involving a collective undertaking to retain shares of

BOURBON Corporation SA stock (“Loi Dutreil”, Article 787 B of the

French General Tax Code).

These agreements do not under any circumstances represent a

“collective action” to implement a voting policy or a BOURBON

Corporation SA management policy. It does not contain any preferred

terms for sales.

The signatories of these agreements are Jacques d’Armand de

Chateauvieux, Chairman of the Board of Directors and Chief

Executive Officer, Christian Lefèvre, Executive Vice President, and

Gaël Bodénès, Executive Vice President. JACCAR Holdings and

Mach-Invest, at the date of signing this agreement, hold at least 5%

of the Company’s capital and voting rights:

3 the first agreement was entered into for a period of two years

from its registration date and concerns 36.04% of the capital

and 36.25% of voting rights. At the conclusion of the period

initially planned, the collective undertaking will end except where

extended expressly by all signatories of the agreement;

3 the second agreement was entered into for a period of two years

from its registration date and concerns 46.70% of the capital

and 46.96% of voting rights. At the conclusion of the period

initially planned, the collective retention undertaking will be tacitly

extended for an indefinite period.



6


2.9 CHANGE IN SHARE PRICE IN EUROS OVER 18 MONTHS

DATE HIGH(1) LOW(2)

VOLUME OF SHARES TRADED

CAPITAL TRADED(in € millions)

2017

October 7,800 7,150 536,026 4.02

November 7,950 6,700 748,149 5.46

December 7,150 6,660 662,198 4.53

2018

January 8,730 7,020 1,114,043 9.00

February 8,150 6,460 964,034 6.79

March 7,100 4,700 1,623,163 9.46

April 5,200 4,750 853,912 4.26

May 5,980 4,960 1,221,600 6.75

June 5,640 4,730 532,677 2.79

July 5,040 4,095 761,259 3.42

August 5,430 4,250 925,863 4.60

September 5,780 4,110 1,787692 8.67

October 5,960 4,655 1,412,983 7.52

November 5,580 4,165 867,655 4.15

December 4,815 3,390 1,265,897 5.09

2019

January 3,795 3,280 926,587 3.28

February 3,535 2,840 1,139,614 3.68

March 3,265 2,310 1,705,642 4.60

(1) Highest reached in intraday over the period.

(2) Lowest reached in intraday over the period.


OTHER LEGAL AND FINANCIAL INFORMATION6 Trademarks, licenses, patents, property, plant and equipment

TRADEMARKS, LICENSES, PATENTS, PROPERTY, PLANT AND EQUIPMENT

1. TRADEMARKS, LICENSES, PATENTS

BOURBON Corporation SA has fi led its logo, including the graphic

features. It has also protected its trademarks, i.e. BOURBON,

Bourbon Offshore and Les Abeilles, for the products and services

concerned.

BOURBON Corporation SA has registered the brands “Under The

Flag of Excellence”, “myBOURBON,” “Safety Takes Me Home,”

UGO, and CREWLINER with the INPI (National Industrial Property

Institute).

BOURBON Corporation has registered two European boat design

models with the OHMI (European Union Intellectual Property Office).

2. PROPERTY, PLANT AND EQUIPMENT

The vessel fl eet constitutes most of the g roup’s property, plant, and equipment: vessels accounted for almost 99% of net property, plant and

equipment at December 31, 2018. During 2018, the average utilization rate for the fl eet in service was 52.2%. Between 2018 and 2017, the

fleet composition underwent the following changes:

MARINE SERVICES

SUBSEA SERVICESDEEPWATER OFFSHORESHALLOW WATER

OFFSHORE CREW BOATS

BY YEAR

2018 2017 2018 2017 2018 2017 2018 2017

Number of vessels (end of period) 87 86 124 131 252 269 20 22

Average utilization rate(1) 62.4% 61.2% 44.0% 40.8% 53.1% 56.9% 48.5% 60.7%

Average daily rates (US dollar) $12,895 $14,389 $7,939 $8,669 $4,308 $4,418 $32,592 $35,328


At December 31, 2018, the offshore fleet consisted of the following:

POSITION AT 12.31.2018 OWNEDBAREBOAT

CHARTERINGOPERATING

VESSELS AVERAGE AGE

AVERAGE UTILIZATION

RATE (%)

Deepwater off shore vessels 72 15 87 11.4 62.4%

Vessels (shallow water off shore) 87 37 124 8.4 44.0%

TOTAL MARINE AND LOGISTICS 159 52 211 9.7 51.4%

Crew boats 252 - 252 9.8 53.1%

TOTAL MOBILITY 252 - 252 9.8 53.1%

IMR vessels 13 7 20 9.0 48.5%

TOTAL SUBSEA 13 7 20 9.0 48.5%

TOTAL VESSELS 424 59 483 9.7 52.2%



6

Trademarks, licenses, patents, property, plant and equipment

BOURBON also has 25 ROVs with an average age of 8 years.

Contractualization rate(1) at December 31, 2018, 45.3% of offshore

support vessels were under long-term contracts, with an average

residual contract duration of six months, excluding crew boats.

BOURBON’s fleet of offshore support vessels (excluding crew boats)

is valued at the end of each year by independent ship brokers, all with

extensive knowledge of the markets in which our vessels operate.

Three valuation methods are generally used to determine the market

values of vessels by independent shipbrokers:

3 net book value method, determined by reference to the

acquisition value of the vessel (new building value), after applying

a depreciation factor calculated in relation to the type and age of

the vessel. The value thus determined is re-estimated in relation

to the conditions and trends in the vessel buying/selling market;

3 valuation method based on transactions in the vessel buying/

selling market, involving vessels with characteristics that are as

similar as possible. Any specific criteria are taken into account,

such as the country in which the vessel was built (providing or

closing off access to certain markets) and the greater or lesser

proximity of an operational zone targeted by the buyer, as well as

the condition and age of the vessel;

3 valuation method based on market contractualization rates (Time

Chart or Bare Boat).

In view of the current market situation, and in the absence of a

sufficient number of purchase/sale or contractualization transactions,

the market value of each vessel was established based on the new

building value of the vessel.

Based on the market values provided as of December 31, 2018

and the net book value of offshore support vessels on that date, the

unrealized capital gains stand at approximately €56 million (versus

€380 million at year-end 2017 and €435 million at year-end 2016).

The change in the underlying capital gains since 2016 should be

viewed in the context of the deterioration in the offshore oil services

market, but also the fl eet of “non-smart” vessels and non-strategic

vessels which have undergone impairment (see note 3.3 to the

consolidated fi nancial statements); the value of such vessels was

determined according to offers or estimates from independent

brokers considering that these stacked vessels would be sold “as is

where is” with buyers being liable for the reactivation costs.

As indicated in the notes to the consolidated financial statements,

maintenance operations are performed on all our vessels at regular

intervals according to a multi-year plan for compliance with the

classification requirements of international agreements or regulations.

Thus every vessel involves two components:

3 a vessel component;

3 an “overhaul” component, representing the cost of an overhaul.

Treatment of the “overhaul” component is also explained in

note 1.5.5 to the consolidated financial statements. A summary of

BOURBON’s property, plant and equipment and the main expenses

related thereto (amortization and losses in value) is included in

note 3.3 to the consolidated financial statements. In addition, in

section 4.2, the management report describes the environmental

risks and BOURBON’s approach to them.

(1) Contractualization rate: the ratio of the number of long-term contract vessels to the total number of vessels operated by BOURBON; a long-term contract

is defined as one with a residual duration of six months or more.

3. VESSEL DELIVERIES AND FINANCING

BOURBON did not take delivery of any vessels in 2018.

The table below summarizes the number of vessel deliveries forecast

for the 2019 period. It takes account of the fact that BOURBON has

still to receive one vessel as part of the 2012 investment plan and one

vessel as part of the “BOURBON 2015 Leadership Strategy” plan;

The amounts given below are the estimated values of vessels ordered

but not delivered as at December 31, 2018 (excluding financing costs)

expressed in $ million, and not the amounts disbursed on delivery

(advance payments are made at different stages of construction).


OTHER LEGAL AND FINANCIAL INFORMATION6 Trademarks, licenses, patents, property, plant and equipment

DELIVERIES SCHEDULED FOR 2019 TOTAL

Deepwater off shore vessels

Number 1 1

Value (before financing costs) $25.6 million $25.6 million

Vessels (shallow water off shore)

Number - -

Value (before financing costs) - -

Crew boats

Number - -

Value (before financing costs) - -

IMR vessels

Number 1 1

Value (before financing costs) $46.7 million $46.7 million

TOTAL

NUMBER 2 2

VALUE (BEFORE FINANCING COSTS) $72.3 MILLION $72.3 MILLION

4. REAL ESTATE

As of December 31, 2018, the g roup had access, either through leases or through direct ownership, to the following real estate:

COUNTRY LOCATION DESTINATION LEGAL STATUS

France Paris Head office Lease

Brazil Rio de Janeiro Offices, warehouse Lease

Congo Pointe-Noire Offices, logistics base, other Lease

United Arab Emirates Dubai Offices, other Lease

Egypt Cairo – Agouza Offices Lease

France Le Havre, Marseille Offices, other Ownership/Lease

Gabon Port Gentil Offices, logistics base, other Lease

Indonesia Balikpapan, Jakarta, Tamapole Offices, logistics base Ownership/Lease

Italy Ravenna Offices Lease

Luxembourg Luxembourg Offices Lease

Malaysia Labuan, Kuala Lumpur Offices, other Lease

Mexico Tampico, Ciudad del Carmen, Dos Bocas Offices, logistics base Lease

Nigeria Lagos, Port Harcourt, Onne Offices, logistics base, other Ownership/Lease

Norway Fosnavaag Offices Lease

Netherlands Beneden Offices Lease

Portugal Funchal Offices Lease

Romania Bucharest Offices Lease

Singapore Singapore Offices, other Lease

Trinidad Le Brea Offices, other Lease

N.B.: real estate owned/leased by fully consolidated companies.

Property, plant and equipment under lease principally comprise premises used for administrative purposes. The g roup is the owner of buildings

located in Marseille, which house the main corporate departments as well as the head offices of several subsidiaries. Operating leasing

expenses for real property are included in the information given in point 5.1 of the notes to the consolidated financial statements showing

contractual obligations.



6

Agenda for the combined Shareholders’ Meeting of June 28, 2019

AGENDA FOR THE COMBINED SHAREHOLDERS’ MEETING OF JUNE 28, 2019

1. AGENDA FOR THE ORDINARY GENERAL MEETING

3 Approval of the annual financial statements for the year ended

December 31, 2018.

3 Approval of the consolidated financial statements for the year

ended December 31, 2018.

3 Appropriation of net income for the fiscal year.

3 Statutory Auditors’ Special report on regulated agreements and

commitments - Absence of any new agreements

3 Renewal of the term of offi ce of Mr. Jacques d’Armand de

Chateauvieux as Director.

3 Renewal of the term of offi ce of Mr. Christian Lefèvre as Director.

3 Renewal of the term of offi ce of Ms. Wang Xiaowei as Director.

3 Approval of the principles and criteria for the determination,

distribution and allocation of the fixed, variable and exceptional

components of total compensation and benefits of any kind

payable to the Chairman of the Board of Directors.

3 Approval of the principles and criteria for the determination,

distribution and allocation of the fixed, variable and exceptional

components of total compensation and benefits of any kind

payable to the Chief Executive Offi cer.

3 Approval of the compensation components paid or granted to

Mr. Jacques d’Armand de Chateauvieux, Chairman of the Board of

Directors, in respect of the fiscal year ended December 31, 2018.


Mr. Gaël Bodénès, Chief Executive Officer, in respect of the fiscal

year ended December 31, 2018.


Ms. Astrid de Lancrau de Bréon, Executive Vice President, Chief

Financial Officer, in respect of the fiscal year ended December

31, 2018.

3 Authorization for the Board of Directors to arrange for the

Company to buy back its own shares, as provided for under

Article L. 225- 209 of the French Commercial Code. Duration,

purpose, terms and ceiling of this authorization.

2. AGENDA OF THE EXTRAORDINARY GENERAL MEETING

3 Authorization for the Board of Directors to cancel shares bought

back by the Company within the terms of Article L. 225-209 of the

French Commercial Code. Duration and ceiling of this authorization.

3 Authorization to be given to the Board of Directors to grant existing

and/or new bonus shares to salaried members of staff and/or

some corporate offi cers of the Company or of related companies,

waiver by the shareholders of their preferential subscription right,

duration of the authorization, ceiling, duration of vesting periods,

particularly in the event of invalidity and lock-up periods.

3 Delegation of authority to be granted to the Board of Directors to

increase the capital by issuing ordinary shares and/or marketable

securities convertible to equity with removal of the preferential

subscription right for members of a company savings plan

pursuant to Articles L. 3332- 18 et seq. of the French Labor Code,

duration of the delegation, maximum par value of the capital

increase, issue price, option to allocate bonus shares pursuant to

Article L. 3332-21 of the French Labor Code.

3 Delegation to be granted to the Board of Directors to realign the

Company’s bylaws with the applicable laws and regulations.

3 Realignment of Article 11 VII “rights and obligations attached to

shares – indivisibility” of the Company bylaws.

3 Powers for the completion of formalities.


OTHER LEGAL AND FINANCIAL INFORMATION6 Draft resolutions for the Combined General Meeting of June 28, 2019

DRAFT RESOLUTIONS FOR THE COMBINED GENERAL MEETING OF JUNE 28, 2019

1. RESOLUTIONS FOR THE ORDINARY GENERAL MEETING

First resolution − Approval of the annual financial statements for the year ended December 31, 2018

The Shareholders’ Meeting, ruling under the conditions of majority

and quorum required for Ordinary General Meetings, having reviewed

the reports of the Board of Directors and the Statutory Auditors with

respect to the fiscal year ended December 31, 2018, approves, as

presented, the annual financial statements prepared up to this date,

which show a loss of €1,336,057.45.

Second resolution − Approval of the consolidated financial statements for the year ended December 31, 2018



the reports of the Board of Directors and of the Statutory Auditors

on the consolidated financial statements at December 31, 2018,

approves these financial statements as presented.

Third resolution − Appropriation of net income for the fiscal year


and quorum required for Ordinary General Meetings, upon the

proposal of the Board of Directors, decides to allocate the net

income from the fiscal year ended December 31, 2018 as follows:

Origin

Loss for the fi scal year €1,336,057.45


Appropriation

Legal reserve €0


As required by Article 243 bis of the French General Tax Code (CGI),

the table below shows the amount of dividends and other revenue

distributed over the past three years, as well as their potential

eligibility for a 40% tax abatement pursuant to Article 158 3-2 of the

same Code applicable to individuals who are French tax residents.

FISCAL YEAR

REVENUE ELIGIBLE FOR TAX ABATEMENT UNDER ARTICLE 158- 3-2 OF THE CGI

REVENUE NOT ELIGIBLE FOR TAX ABATEMENT UNDER

ARTICLE 158- 3- 2° OF THE FRENCH GENERAL TAX CODE

DIVIDENDSOTHER REVENUE

DISTRIBUTED

2015

€71,204,986.00*

i.e. €1 per share - -

2016

€8,422,460.00*

i.e. €0.25 per share

2017 - - -

* This corresponds to the amount actually paid and does not include unpaid dividends on treasury stock, which is carried forward.

Fourth resolution - Statutory Auditors’ Special report on regulated agreements and commitments - Absence of any new agreements

The Shareholders’ Meeting ruling, under the conditions of majority and quorum required for Ordinary General Meetings, on the Statutory

Auditors’ special report on regulated agreements and commitments presented to it, acknowledges, purely and simply, the absence of any new

agreement entered into during the fi scal year ended December 31, 2018.



6

Draft resolutions for the Combined General Meeting of June 28, 2019

Fifth resolution - Renewal of the term of office of Mr. Jacques d’Armand de Chateauvieux as Director.


and quorum required for Ordinary General Meetings, resolves to

reappoint Mr. Jacques d’Armand de Chateauvieux as Director for a

term of three years ending at the close of the Shareholders’ Meeting

to be held in 2022 to approve the financial statements for the past

fiscal year.

Sixth resolution - Renewal of the term of office of Mr. Christian Lefèvre as Director.



reappoint Mr. Christian Lefèvre as Director for a term of three years

ending at the close of the Shareholders’ Meeting to be held in 2022

to approve the financial statements for the past fiscal year.

Seventh resolution - Renewal of the term of office of Ms. Wang Xiaowei as Director.



reappoint Ms. Wang Xiaowei as Director for a term of three years

ending at the close of the Shareholders’ Meeting to be held in 2022

to approve the financial statements for the past fiscal year.

Eighth resolution - Approval of the principles and criteria for the determination, distribution and allocation of the fixed, variable and exceptional components of total compensation and benefits of any kind payable to the Chairman of the Board of Directors.



the report of the Board of Directors on corporate governance

prepared pursuant to Article L. 225-37-2 of the French Commercial

Code, approves the principles and criteria for determining, allocating

and granting the fixed, variable and exceptional components of

the overall compensation and benefits of any kind to be awarded

to the Chairman of the Board of Directors in respect of his duties,

as described in such report and set out in paragraph 3.8 of the

Company’s 2018 Registration Document.

Ninth resolution - Approval of the principles and criteria for the determination, distribution and allocation of the fixed, variable and exceptional components of total compensation and benefits of any kind payable to the Chief Executive Officer.



the report of the Board of Directors on corporate governance

prepared pursuant to Article L. 225-37-2 of the French Commercial

Code, approves the principles and criteria for determining, allocating

and granting the fixed, variable and exceptional components of the

overall compensation and benefits of any kind to be awarded to

the Chief Executive Offi cer in respect of his duties, as described in

such report and set out in paragraph 3.8 of the Company’s 2018


Tenth resolution - Approval of the compensation components paid or granted to Mr. Jacques d’Armand de Chateauvieux, Chairman of the Board of Directors, in respect of the fiscal year ended December 31, 2018.



the report of the Board of Directors on corporate governance,

approves, in accordance with the provisions of Article L. 225-100

of the French Commercial Code, the fixed, variable and exceptional

components of the overall compensation and benefits of any kind

paid or granted to Mr. Jacques d’Armand de Chateauvieux in

respect of his position as Chairman of the Board of Directors for the

fiscal year ended December 31, 2018, as described on pages 60 et

seq. of the 2018 Registration Document.

Eleventh resolution – Approval of the compensation components paid or granted to Mr. Gaël Bodénès, Chief Executive Officer , in respect of the fiscal year ended December 31, 2018

The Shareholders’ Meeting, ruling under the conditions of majority and

quorum required for Ordinary General Meetings, having reviewed the

report of the Board of Directors on corporate governance, approves,

in accordance with the provisions of Article L. 225-100 of the French

Commercial Code, the fixed, variable and exceptional components

of the overall compensation and benefits of any kind paid or granted

to Mr. Gaël Bodénès in respect of his position as Chief Operating

Officer for the fiscal year ended December 31, 2018, as described

on pages 60 et seq. of the 2018 Registration Document.



Twelfth resolution – Approval of the compensation components paid or granted to Ms. Astrid de Lancrau de Bréon, Executive Vice President, Chief Financial Officer, in respect of the fiscal year ended December 31, 2018



the report of the Board of Directors on corporate governance,

approves, in accordance with the provisions of Article L. 225-100

of the French Commercial Code, the fixed, variable and exceptional

components of the overall compensation and benefits of any kind

paid or granted to Ms. Astrid de Lancrau de Bréon in respect of her

position as Chief Financial Officer until July 10, 2018 in respect of the

fiscal year ended December 31, 2018, as described on pages 60 et

seq. of the 2018 Registration Document.

Thirteenth resolution − Authorization for the Board of Directors to arrange for the Company to buy back its own shares, as provided for under Article L. 225-209 of the French Commercial Code


and quorum required for Ordinary General Meetings and in light of

the report of the Board of Directors, authorizes the Board for a period

of 18 months, as provided for under Articles L. 225-209 et seq. of

the French Commercial Code, to proceed with the purchase, in one

or more steps and at times of its choosing, of the Company’s shares,

up to the limit of 5% of the overall number of shares composing the

share capital, this ceiling being adjusted where necessary to allow

for possible increases or reductions of capital in the course of the

program.

This authorization terminates the previous authorization granted to

the Board by the Shareholders’ Meeting of May 30, 2018 in its 15th

ordinary resolution.

The shares may be purchased for any purpose permitted by law,

including:


BOURBON Corporation SA shares through an investment service

provider, operating within the scope of a liquidity contract in

accordance with regulatory practice;

3 holding shares to cover stock option plans and/or bonus share


or representatives of the g roup, and to allow allotments of shares




and/or corporate officers of the g roup;

3 the possible canceling of the shares thus acquired, subject to the

authorization to be granted by this Shareholders’ Meeting in its

fourteenth extraordinary resolution.



choose.



The maximum purchase price is fixed at €12 per share. In the

event of any transaction affecting the capital, notably stock





the transaction).

The ceiling for the transaction is thus fixed at €46,463,304.

The Shareholders’ Meeting grants full powers to the Board of






6

Draft resolutions for the Combined General Meeting of June 28, 2019

2. RESOLUTIONS FOR THE EXTRAORDINARY GENERAL MEETING

Fourteenth resolution – Authorization for the Board of Directors to cancel shares bought back by the Company within the terms of Article L. 225-209 of the French Commercial Code


and quorum required for Extraordinary General Meetings, and having

reviewed the report of the Board of Directors and the Statutory

Auditors’ report:

1) grants the Board of Directors its authorization to cancel—as the

Board sees fit and in one or more steps, within the limit of 10%

of the capital calculated on the date of the decision to cancel,

after deduction of any shares canceled within the previous 24

months – shares which the Company holds or may come to

hold after repurchases made in accordance with the terms

of Article L. 225-209 of the French Commercial Code, and to

thereby reduce the share capital accordingly in compliance with

applicable regulations and legislation;

2) limits the validity of this authorization to twenty-four months from

the date of this meeting;

3) vests the Board of Directors with full powers, with the right to

sub-delegate, to undertake the transactions required for these

cancellations and the correlative reductions of capital, to amend

the Company’s bylaws accordingly and to satisfy all necessary

formalities.

Fifteenth resolution - Authorization for the Board of Directors to award existing and/or new bonus shares to salaried members of staff and/or certain corporate officers of the Company or of related companies.


and quorum required for Extraordinary General Meetings, having

reviewed the report of the Board of Directors and the Statutory

Auditors’ special report, authorizes the Board of Directors to allocate,

in one or more steps, in accordance with Articles L. 225- 129-4,

L. 225-197-1 and L. 225-197-2 of the French Commercial Code,

ordinary existing or new company shares, to:

3 salaried members of staff and/or corporate offi cers of the

Company or of related companies or groups (as defi ned by

Articles L. 225-197-1 and L. 225-197-2 of the French Commercial

Code) or certain categories thereof.

The total number of bonus shares awarded may not exceed 5% of

the share capital on the date of the Board’s decision to award the

shares.

The total number of bonus shares awarded to the Company’s

corporate offi cers may not exceed 1% of the share capital within this

overall limit. In addition, in the event of bonus shares being awarded

to corporate offi cers, the fi nal award of such shares shall be subject

to performance conditions.

The award of the shares to the benefi ciaries would become fi nal at

the end of a vesting period set by the Board of Directors, namely (i)

at the end of a one-year vesting period, the benefi ciaries then having

to retain said shares for a minimum period of one year from the fi nal

award of said shares, such period being decided by the Board of

Directors, or (ii) at the end of a vesting period of two or more years,

the benefi ciaries not then being subject to a lock-up period if the

Board of Directors should see fi t to waive this requirement.

However, the shares would become fully vested before the end

of the vesting period in the event of the benefi ciary’s invalidity,

corresponding to the classifi cation in the second or third categories

defi ned by Article L. 341-4 of the French Social Security Code.

The existing shares that may be awarded pursuant to this resolution

shall be acquired by the Company either in accordance with

Article L. 225-208 of the French Commercial Code or, where relevant,

as part of a share buyback program authorized pursuant to the

thirteenth ordinary resolution adopted by this Shareholders’ Meeting

under Article L. 225-209 of the French Commercial Code, or as part

of any share buyback program applicable prior or subsequent to the

adoption of this resolution.

The Shareholders’ Meeting acknowledges and decides, if new bonus

shares are to be allocated, that this authorization represents, in favor

of the benefi ciaries of new ordinary share allocations, a waiver by the

shareholders of their preferential right to subscribe for new ordinary

shares issued as and when the shares are fi nally awarded, and will

result, after the vesting period, in a potential capital increase through

the incorporation of reserves, profi ts or premiums for the benefi t of

the benefi ciaries of said bonus shares and corresponding waiver by

the shareholders in favor of the benefi ciaries of the bonus shares of

the portion of reserves, profi ts and premiums incorporated.

All powers are conferred upon the Board of Directors, which may

delegate those powers, for the purposes of:

3 determining the conditions and, where appropriate, the criteria for

awarding shares;

3 determining the identity of the benefi ciaries and the number of

shares awarded to each of them;

3 determining the impacts on benefi ciaries’ rights of transactions

which change the capital or which are likely to affect the value of

the shares awarded during the vesting and lock-up periods and,

therefore, change or adjust, if necessary, the number of shares

awarded to preserve the benefi ciaries’ rights;

3 determining, within the limits set by this resolution, the duration

of the vesting period and any lock-up period applicable to bonus

shares;

3 where appropriate:

3 noting the existence of suffi cient reserves and, for each award,

transferring the sums required to release the new shares to be

awarded to a tied-up reserve account,

3 deciding, at the appropriate time, on one or more capital

increases via incorporation of reserves, premiums or profi ts as

a result of the new bonus shares being issued,



3 purchasing the necessary shares under the share buyback

program and transferring them to the allocation plan,

3 taking all useful steps to ensure that benefi ciaries comply with

the lock-up requirements,

3 and, generally, carrying out all steps required to implement this

authorization, in accordance with the legislation in force.

This authorization is granted for a period of thirty-eight months from

the date of this Meeting.

Any previous authorization with the same purpose is rendered

ineffective.

Sixteenth resolution - Delegation of authority to the Board of Directors to increase the share capital by issuing ordinary shares and/or marketable securities convertible to equity, with removal of preferential subscription rights, for the benefit of members of a company savings plan pursuant to Articles L. 3332-18 et seq. of the French Labor Code



reviewed the reports of the Board of Directors and the Statutory

Auditors’ special report, ruling pursuant to Articles L. 225-129-4,

L. 225-129-6, L. 225-138-1 and L. 228-92 of the French Commercial

Code and L. 3332-18 et seq. of the French Labor Code:

1) delegates its authority to the Board of Directors for the purpose,

if it sees fi t, at its sole initiative, of increasing the share capital

in one or more steps by issuing ordinary shares or marketable

securities convertible to new equity securities of the Company

for members of one or more company or group savings plans set

up by the Company and/ or French or foreign companies related

to it under the conditions stipulated by Article L. 225-180 of the

French Commercial Code and Article L. 3344-1 of the French

Labor Code;

2) removes the preferential right of these people to subscribe for any

shares issued under this delegation;

3) limits the validity of this delegation to twenty-six months from the

date of this Meeting;

4) limits the maximum par value of any capital increases that can

take place by using this delegation to €5,000,000; this amount

is independent of any other limit provided for capital increase

delegations. Added to this amount, if necessary, would be the

additional value of new ordinary shares issued to preserve (as

required by law and any contractual provisions stipulating other

cases of adjustment) the rights of holders of marketable securities

convertible to the Company’s equity securities;

5) decides that the price of the shares to be issued pursuant to 1/ of

this delegation may not be any more than 20% lower, or 30%

lower when the unavailability duration provided for by the plan

pursuant to Articles L. 3332-25 and L. 3332-26 of the French

Labor Code lasts 10 years or longer, than the average opening

prices of the share on the 20 trading days prior to the decision of

the Board of Directors to carry out the capital increase and the

corresponding share issue, or higher than this average;

6) decides, pursuant to the provisions of Article L. 3332-21 of the

French Labor Code, that the Board of Directors may provide for

the award to the benefi ciaries referred to in the fi rst paragraph

above, of existing or new bonus shares or other existing or new

securities convertible to Company equity, via (i) any employer

contribution paid out pursuant to the regulations of company or

group savings plans, and/or (ii), if applicable, a discount;

7) acknowledges that this delegation renders ineffective any

previous delegation with the same purpose.

The Board of Directors may or may not implement this delegation,

take any measures and carry out all necessary formalities, and may

delegate these powers.

Seventeenth resolution – Delegation to be granted to the Board of Directors to realign the Company’s bylaws with applicable laws and regulations.



reviewed the report of the Board of Directors, grants all powers to the

Board of Directors to bring the Company’s bylaws into compliance

with laws and regulations, subject to ratification of such modifications

by the next Extraordinary General Meeting.

Eighteenth resolution - Realignment of Article 11 VII “rights and obligations attached to shares – indivisibility” of the Company bylaws



reviewed the report of the Board of Directors, decides to align

Article 11 of the Company bylaws “Rights and obligations attached

to shares – Indivisibility” with Article 787 B of the French General Tax

Code and to modify VII of said article accordingly as follows; the rest

of the article remains unchanged:

“In the event of split ownership of a share, the voting right is awarded

as follows:

3 when the bare owner benefi ts, on transfer of bare ownership with

usufruct for the donor, from the provisions relating to the partial

exemption, provided for by Article 787B of the French General Tax

Code, the voting right belongs to the usufructuary for decisions

concerning the appropriation of profi ts and to the bare owner for all

other decisions.

This division applies indefi nitely.

To ensure its implementation, this division of voting rights between

the usufructuary and the bare owner will be stated on the account

which holds the rights.

3 in other cases, unless an agreement otherwise has been notifi ed to

the Company, the voting right belongs to the usufructuary at ordinary

Shareholders’ Meetings and to the bare owner at extraordinary

Shareholders’ Meetings.”

Nineteenth resolution − Powers for completion of formalities


and quorum required for Extraordinary General Meetings, grants full

powers to the bearer of a copy of, or extract from these minutes

to complete all the formalities of filing and legal publication required

by law.



6

Statutory auditors’ report on the share capital reduction

STATUTORY AUDITORS’ REPORT ON THE SHARE CAPITAL REDUCTION

This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience of English

speaking readers.


in France.

Combined Shareholders’ Meeting of June 28, 2019 (14th resolution)


In our capacity as statutory auditors of your Company and in accordance with Article L.225-209 of the French Commercial Code (Code de

commerce) in the event of a share capital reduction by cancellation of shares purchased, we hereby report to you on our assessment of the

reasons for and terms and conditions of the proposed share capital reduction.

The Board of Directors recommends that you delegate to it for a period of 24 months, as from the date of the Combined Shareholders’ Meeting

of June 28, 2019, all powers to cancel, up to a maximum of 10% of its share capital by 24-month periods, the shares purchased by the

Company pursuant to the authorization to purchase its own shares of its share capital, under the provisions of the above-mentioned Article.

We have performed the procedures that we considered necessary in accordance with the professional guidelines of the French National Institute

of Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this engagement. These procedures consisted in

examining the fairness of the reasons for and terms and conditions of the proposed share capital reduction. In particular, our procedures

involved verifying that the share capital reduction does not undermine shareholder equality.

We have no comments on the reasons for or terms and conditions of the proposed share capital reduction.



French original signed by

EuraAudit C.R.C.





OTHER LEGAL AND FINANCIAL INFORMATION6 Statutory auditors’ report on the authorization to grant free shares (existing or to be issued)

STATUTORY AUDITORS’ REPORT ON THE AUTHORIZATION TO GRANT FREE SHARES (EXISTING OR TO BE ISSUED)

This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience of English

speaking users. This report should be read in conjunction with, and construed in accordance with, French law and professional standards




As statutory auditors of your Company and in accordance with the procedures provided for in Article L. 225-197-1 of the French Commercial

Code (code de commerce), we hereby report to you on the proposed authorization to grant free shares, existing or to be issued, to employees

of your Company and/or companies that are directly or indirectly related to your Company pursuant to Article L. 225-197-2 of the French

Commercial Code, a transaction on which you are being asked to vote.

The total number of shares that may be granted pursuant to this authorization may not exceed 5% of the share capital of the Company at the

date of the grant decision by the Board of Directors.

Based on its report, your Board of Directors proposes that you confer on it, for a period of 38 months as from the date of this Combined

Shareholders’ Meeting of June 28, 2019, the authority to grant free shares, existing or to be issued.

It is the responsibility of the Board of Directors to prepare a report on the transaction it wishes to perform. Our role is to express our comments,

if any, on the information presented to you on the planned transaction.

We conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute of

Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this engagement. These procedures mainly consisted in

verifying that the proposed terms and conditions presented in the Board of Directors’ report comply with applicable legal provisions.

We have no comments on the information presented in the Board of Directors’ report on the proposed authorization to grant free shares.



EuraAudit C.R.C.






6

Statutory auditors’ report on the share capital increase reserved for members of a company savings plan

STATUTORY AUDITORS’ REPORT ON THE SHARE CAPITAL INCREASE RESERVED FOR MEMBERS OF A COMPANY SAVINGS PLAN

This is a free translation into English of the statutory auditors’ report issued in French and is provided solely for the convenience of English

speaking users. This report should be read in conjunction with, and construed in accordance with, French law and professional standards




As statutory auditors of your Company and in accordance with the procedures provided for in Articles L. 225-135 et seq. of the French

Commercial Code (code de commerce), we hereby report to you on the proposal to authorize the Board of Directors to decide a share capital

increase, on one or more occasions, by issuing ordinary shares and/or marketable securities granting access to share capital to be issued,

with cancellation of preferential subscription rights, reserved for members of one or more company or group savings plans set up by your

Company and/or affi liated French or foreign companies within the meaning of Article L. 225-180 of the French Commercial Code (code de

commerce) and L. 3344-1 of the French Labor Code (code du travail), up to a maximum amount of €5,000,000, a transaction on which you

are being asked to vote.

This share capital increase is being submitted to you for approval pursuant to Articles L. 225-129-6 of the French Commercial Code and

L. 3332-18 et seq. of the French Labor Code.

Based on its report, your Board of Directors recommends that you confer on it, for a period of 26 months, the authority to decide a share

capital increase, and waive your preferential subscription rights to the ordinary shares to be issued. If applicable, the Board of Directors will set

the fi nal terms and conditions of this transaction.

It is the responsibility of your Board of Directors to prepare a report in accordance with Articles R. 225-113 and R. 225-114, of the French

Commercial Code. Our role is to express an opinion on the fairness of the quantifi ed data extracted from the fi nancial statements, on the

proposed cancellation of preferential subscription rights and on certain other information pertaining to the issuance as presented in this report.

We conducted the procedures we deemed necessary in accordance with the professional guidelines of the French National Institute of

Statutory Auditors (Compagnie Nationale des Commissaires aux Comptes) relating to this engagement. These procedures consisted in

verifying the content of the Board of Directors’ report in respect of this transaction and the procedures for determining the share issue price.

Subject to our subsequent review of the terms and conditions of the share capital increase that will be decided, we have no comments to make

on the procedures for determining the issue price of the ordinary shares to be issued presented in the Board of Directors’ report.

As the fi nal terms and conditions of the issue have not been determined, we do not express an opinion thereon and, as such, on the proposed

cancellation of preferential subscription rights.

In accordance with Article R. 225-116 of the French Commercial Code, we will issue an additional report, where necessary, when this

delegation of authority is used by your Board of Directors.



EuraAudit C.R.C.





OTHER LEGAL AND FINANCIAL INFORMATION6 Persons responsible for the Registration Document and the audit of the fi nancial statements

PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE AUDIT OF THE FINANCIAL STATEMENTS

1. PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT

1.1 PERSON ASSUMING RESPONSIBILITY FOR THE REGISTRATION DOCUMENT

Mr. Gaël Bodénès, Chief Executive Officer.

1.2 ATTESTATION BY THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT

I hereby attest, after taking any and all reasonable measures for such purpose, that the information contained in this Registration Document

is, to my knowledge, true and accurate and does not contain any omissions liable to alter the scope thereof.

I hereby attest that, to the best of my knowledge, the accounts have been prepared in accordance with the applicable accounting standards

and give a true and fair view of the assets, financial position and results of the Company and of all the companies included in the scope of

consolidation and that the management report included in this Registration Document faithfully reflects the changes in the business, results

and financial position of the Company and of all the companies included in the scope of consolidation, while presenting the main risks and

uncertainties faced by them.

I have received from the Statutory Auditors, Deloitte & Associés and EurAAudit CRC, a letter in which they indicate that they have audited the

information on the financial position and the financial statements given in this Registration Document and have read the entire Registration

Document.

Paris, April 26, 2019

The Chief Executive Officer

2. STATUTORY AUDITORS

Statutory Auditors

DATE FIRST APPOINTED END OF TENURE

Deloitte & AssociésRepresented by Mr. Christophe Perrau

6, Place de la Pyramide 92908 Paris La

défense Cedex

Appointed by the Combined

Shareholders’ Meeting of June 7, 2005

After the Ordinary General Meeting of

2020 to approve the fi nancial statements

for the year ending December 31, 2019

EurAAudit CRCRepresented by Mr. Jean-Marc Rousseau

Immeuble “Le CAT SUD” – Bâtiment B

68, cours Albert Thomas

69008 Lyon


Shareholders’ Meeting of May 30, 2002




Alternate

DATE FIRST APPOINTED END OF TENURE

BEAS

6, Place de la Pyramide 92908 Paris La

défense Cedex


Shareholders’ Meeting of June 7, 2005






6

Cross reference tables

CROSS REFERENCE TABLES

This Registration Document contains all of the components of the annual financial report as stated in Articles L. 451-1-2 of the French

Monetary and Financial Code and of 222-3 of the AMF General Regulation. You will find below the references to the extracts of the Registration

Document corresponding to the various parts of the annual financial report.

ANNUAL FINANCIAL REPORTREGISTRATION

DOCUMENT

1. Statement made by the persons responsible for the annual financial report 244 § 1 and § 2

2. Management report 24 to 110

3. Parent company fi nancial statementS 193 to 211

4. Statutory Auditors’ report on the parent company financial statements 212 to 216

5. Consolidated financial statements 111 to 188

6. Statutory Auditors’ report on the consolidated financial statements 189 to 192

7. Fees paid to the Statutory Auditors and members of their networks 181 § 5.7

8. Report of the Board of Directors on corporate governance 34 to 72

9. Statutory Auditors’ report on the report by the Board of Directors on corporate governance 212 to 214

In order to facilitate the consultation of this Registration Document, the following index lists the main headings required by the provisions of

Appendix 1 of European Commission regulation No. 809/2004 of April 29, 2004.

HEADINGS REGISTRATION DOCUMENT

1. Persons responsible

1.1. Person responsible for the Registration Document 244 § 1

1.2 Attestation by the person responsible for the Registration Document 244 § 1

2. Statutory Auditors 244 § 2

3. Selected financial information 8 -10; 27 -32

4. Risk factors 76 -89

5. Information about the issuer

5.1 History and development of the Company

5.1.1 Corporate name and trade name 218

5.1.2 Place of registration and registration number 218

5.1.3 Date of incorporation and term 218

5.1.4 Registered office, legal structure, applicable legislation 218

5.1.5 Significant events in the conduct of business activities 14; 26 -27

5.2 Investments

5.2.1 Main investments made over the last three years 32 § 2.3; 115; 142 -146

5.2.2 Main investments–ongoing 233 §3; 234

5.2.3 Main investments–planned 20 § 5; 32 § 2.3

6. Business overview

6.1 Main activities 15 -19

6.2 Main markets 21 -23

6.3 Exceptional events 27 § 1.2; 176 § 5.4; 209 § 20

6.4 Extent to which the issuer is dependent on patents or licenses, industrial, commercial or

financial contracts or new manufacturing processes 79 § 5.2; 80 -81; 232

6.5 Competitive position 21 § 6; 22; 78 § 5.1.2


OTHER LEGAL AND FINANCIAL INFORMATION6 Cross reference tables


7. Organizational structure

7.1 Description of the g roup 19

7.2 List of major subsidiaries 182 -187; 224 § 1.19

8. Property, plant and equipment

8.1 Significant property, plant and equipment 142 -146

8.2 Environmental issue liable to aff ect the use of property, plant and equipment 79 -81; 99 § 6.3.2 and 6.3.3

9. Examination of financial position and earnings

9.1 Financial position 112 -119; 194 -196

9.2 Operating income/loss

9.2.1 Important factors with a significant impact on operating income 27 -32

9.2.2 Explanation of changes in net revenue or net income 27 -32

9.2.3 External factors that have had (or may have) a significant impact on activities 76 -78

10. Capital resources

10.1 Information on the issuer’s capital

116 -117; 150 -151;

198 -200; 225 § 2 -231; 101

-103

10.2 Source and amount of the issuer’s cash flows 107

10.3 Borrowing terms and financial structure of the issuer

82 § 5.5 -89;

165 § 3.18 -170;

173 § 5.1 -174; 154 § 3.13

-156

10.4 Restrictions on the use of capital that may have a significant impact on operations 82 § 5.5 -89

10.5 Anticipated sources of funds needed to fulfill commitments related to investments 32 § 2.3

11. Research and development, patents and licenses 20; 232

12. Trend information

12.1 Main trends having an impact on production, sales and inventories, costs and sale prices

since the end of the last fiscal year 34 § 2.6

12.2 Known trends, uncertainties, requests, commitments or events likely to have a significant

impact on the current year’s outlook 21 -23; 34 § 2.6; 76 -89

13. Income forecasts or estimates 34 § 2.6

14. Administrative and management bodies

14.1 Information on the members of administrative and management bodies 11; 34 -72

14.2 Interests of executives 55 §3.4 -57

14.3 Internal control procedures 73 -75

15. Compensation and benefits

15.1 Amount of compensation paid and benefits in kind

60 § 3.7 -65; 177 § 5.6 -180;

205 § 14

15.2 Total provisions or amounts set aside by the issuer to pay pensions, retirement benefits

or other benefits 60 -65; 177 § 5.6 -180

16. Operation of administrative and management bodies

16.1 Date current term expires 34 -54

16.2 Service contracts binding members of administrative and management bodies 176 § 5.5; 215 -216

16.3 Information on the Audit Committee and the Compensation Committee 11; 58 § 3.6 -60

16.4 Declaration of compliance with corporate governance rules 34

17. Employees

17.1 Number of employees 176 § 5.3

17.2 Equity interests, stock options and bonus share award plans 64; 102 -103; 151 -152

17.3 Arrangements for involving the employees in the capital of the issuer

103 § 7.3.3; 70 § 3.11

71; 225 § 2.1



6

Cross reference tables


18. Major shareholders

18.1 Allocation of capital 101; 225 § 2.1 -230

18.2 Existence of diff erent voting rights 225 § 2.1; 222 -224;

18.3 Control of the issuer 227 -229

18.4 Arrangements that may result in a change of control

70 § 3.11 -71; 103 § 7.4

230 § 2.8

19. Related-party transactions 176 § 5.5; 215 -216

20. Financial information concerning the issuer’s assets, financial position and results

20.1 Historical financial information 111 -188; 193 -211

20.2 Pro forma financial information N/A

20.3 Financial statements 111 -188; 193 -211

20.4 Audit of annual historical financial information

20.4.1 Audit of historical financial information 189 -192; 212 – 214

20.4.2 Other information included in the Registration Document and audited by the

Statutory Auditors 215 -216; 108 -110

20.4.3 Auditors Financial information included in the Registration Document and not

taken from the issuer’s certified financial statements N/A

20.5 Date of latest financial information December 31, 2018

20.6 Interim financial information

20.6.1 Quarterly or half-year financial information prepared since the date of the last

audited fi nancial statements N/A

20.6.2 Interim financial information for the first six months of the year following the

end of the last audited fiscal year N/A

20.7 Dividend policy

101 § 7.2;

236 § 1; 222 § 1.11 -223

20.8 Legal and arbitration procedures 81 § 5.3; 170 § 3.19

20.9 Significant change in financial or trading position 26 § 1.1 -27; 134 -135

21. Additional information

21.1 Share capital

21.1.1 Subscribed and authorized capital 101 § 7.1; 103

21.1.2 Shares not representing capital N/A

21.1.3 Shares held by the issuer or its subsidiaries 101 § 7.1 -103; 204 § 9

21.1.4 Marketable securities giving future access to the issuer’s capital stock

103 § 7.4; 70 § 3.11 -71; 64 §

3.7.10; 152 § 3.11;

225 § 2 -231

21.1.5 Terms of any acquisition rights and/or obligations attached to capital

subscribed but not paid-up, or any capital increase N/A

21.1.6 Capital of any part of the g roup subject to an option N/A

21.1.7 History of the issuer’s capital stock over the last three years 226

21.2 Memorandum and bylaws

21.2.1 Corporate purpose of the issuer 218

21.2.2 Statutory provisions and charters concerning members of administrative and

management bodies 34 -54; 218 -224

21.2.3 Rights, preferences and restrictions attached to each class of existing shares

70 § 3.11 -71; 103 § 7.4;

225 § 2 -231; 235

21.2.4 Actions required to change shareholders’ rights 70 § 3.11 -71; 103 § 7.4


OTHER LEGAL AND FINANCIAL INFORMATION6 Cross reference tables


21.2.5 Notices to attend the Shareholders’ Meetings and conditions for admission 235

21.2.6 Provisions of the issuer’s bylaws, charter or regulations that may delay, defer or

prevent a change in control of the issuer N/A

21.2.7 Disclosures of statutory thresholds crossed 221 § 1.9; 228 -230

21.2.8 Conditions more stringent than the law for modifying the capital stock N/A

22. Significant contracts (other than contracts entered into in the normal course of business) N/A

23. Information from third parties, statements by experts and declarations of interest N/A

24. Publicly-available documents N/A

25. Information on equity interests 182 -187; 210 -211

N/A: not applicable.

Person responsible for the Registration Document

Pursuant to Article 28 of European Commission regulation No. 809/2004, the following information is included by reference:

3 the consolidated and parent company financial statements,

together with the corresponding Statutory Auditors’ reports, are

found on pages 105 to 208 of the 2017 Registration Document

filed with the French Financial Markets Authority (Autorité des

marchés financiers – AMF) on April 25, 2018, under number

D. 18-0384;

3 the consolidated and parent company financial statements,

together with the corresponding Statutory Auditors’ reports, are

found on pages 91 to 188 of the 2016 Registration Document

filed with the French Financial Markets Authority (Autorité des

marchés financiers – AMF) on April 25, 2017, under number

D. 17-0424;

3 parts not included in these documents are either irrelevant for

the investor or included elsewhere in this Registration Document.


BOURBON CorporationA French Société anonyme with capital of 49,189,434 euros

Company registration: RCS MARSEILLE 310 879 499

Head offi ce:

148, rue Sainte - 13007 MARSEILLE - France

Tel.: +33 (0)4 91 13 08 00

Fax: +33 (0)4 91 13 14 13

Investor relations, analysts, shareholders:

[email protected]

BOURBONOFFSHORE.COM

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