2017 Registration Document BOURBON · 2017 REGISTRATION DOCUMENT Annual ﬁ nancial report...

2017 REGISTRATIONDOCUMENTAnnual fi nancial report

Building together a sea of trustBOURBONOFFSHORE.COM

Contents

BOURBON IN 2017 31. Key fi gures 4

2. BOURBON Corporation sa stock market data 5

3. Management bodies 7

GENERAL INTRODUCTION TO THE GROUP 91. Bourbon timeline 10

2. Simplifi ed overview of BOURBON’s business activities 11

3. Activities 11

4. Innovation 14

5. Competitive environment 14

6. Main market trends 16

MANAGEMENT REPORT 191. Activities and highlights 20

2. Results 22

3. Report of the Board of Directors on corporate governance 30

Summary table of delegations of power and current authorizations granted by the shareholders’ meeting to the Board of Directors for capital increases 63

4. Control environment 64

5. Risk factors 67

6. Social and environmental information 81

7. BOURBON Corporation and its shareholders 94

8. Report explaining the Board of Directors’ resolutions proposed to the Combined Shareholders’ Meeting of may 30, 2018 97

Financial results of the parent company over the last five years 100

Report by one of the Statutory Auditors, appointed as independent third party, on the consolidated human resources, environmental and social information included in the management report 101

CONSOLIDATED FINANCIAL STATEMENTS 105Financial position statement 106

Statement of comprehensive income 107

Statement of consolidated cash flows 109

Statement of changes in equity 111

Notes to the consolidated financial statements 114

Statutory Auditors’ report on the consolidated financial statements (Year ended December 31, 2017) 180

PARENT COMPANY FINANCIAL STATEMENTS 185Parent company balance sheet – BOURBON Corporation SA 186

Income statement of the parent company BOURBON Corporation SA 188

Notes to the Company financial statements 189

Statutory Auditors’ report on the annual financial statements (year ended December 31, 2017) 204

Statutory Auditors’ special report on regulated agreements and commitments 207

OTHER LEGAL AND FINANCIAL INFORMATION 209General information about BOURBON Corporation SA and its share capital 210

Trademarks, licenses, patents, property, plant and equipment 224

Agenda of the combined Shareholders’ Meeting of May 30, 2018 227

Draft resolutions for the Combined General Meeting of May 30, 2018 228

Statutory Auditors’ report on the share capital reduction 233

Persons responsible for the Registration Document and for the financial statement audit 234

Cross reference tables 235

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5

6

2

3

1BOURBON

2017 Registration Document

This Registration Document is an unoffi cial translation of the French Document de référence, which was fi led with the French Autorité des marchés fi nanciers (AMF) on April 25, 2018, 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 fi nancial 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

Annual financial report

REGISTRATIONDOCUMENT 2017

BOURBON CorporationA French Société anonyme with capital of €49,227,780Company registration: RCS MARSEILLE 310 879 499

Corporate offi ce:148 Rue Sainte – 13007 Marseille - France

Tel.: +33 (0)4 91 13 08 00 – Fax: +33 (0)4 91 13 14 13

2BOURBON2017 Registration Document

BOURBON2017 Registration Document 3

1. KEY FIGURES 4

2. BOURBON CORPORATION SA STOCK MARKET DATA 5

3. MANAGEMENT BODIES 7

1BOURBON IN 2017

BOURBON2017 Registration Document4

BOURBON IN 20171 Key fi gures

1. KEY FIGURES 3 REVENUE* (IN € MILLIONS)

2015 2016

1,437

1,103

861

2017

* Adjusted.

3 EBITDAR (IN € MILLIONS)

547.7

383.0

252.4

2015 2016 2017

* Adjusted.

3 EBIT* (IN € MILLIONS)

66.1

-403.9

-165.1

2015 2016 2017

* Adjusted.

3 BREAKDOWN OF 2017 REVENUE BY ACTIVITY

Marine Services

73%1.5%

Subsea Services

25.5%

Other

3 EBITDA* (IN € MILLIONS)

371.3

193.3

87.8

2015 2016 2017

* Adjusted.

3 NET INCOME, GROUP SHARE (IN € MILLIONS)

-76.6

-576.3

-279.6

2015 2016 2017

* The adjusted 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). 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. Moreover, internal reporting (and therefore adjusted fi nancial information) does not refl ect the application of IAS 29 (Financial Reporting in Hyperinfl ationary Economies), applicable for the fi rst time in 2017 (retroactively to January 1) to an operating joint venture based in Angola.


BOURBON IN 2017

1

BOURBON Corporation sa stock market data

3 VESSELS OPERATED BY BOURBON*

448

62

451

62

449

59

Owned Bareboat leases

2015 2016 2017

* Excluding Endeavor.

3 NET DEBT (IN € MILLIONS)

2015 2016 2017

1,3951,468

1,365

2. BOURBON CORPORATION SA STOCK MARKET DATA

(in euros)

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20132011 2012 2015 201720162014

0

5

10

15

20

25

30

35

40

Stock price as of March 29, 2018€4,76

Initial public offeringOctober 21, 1998


BOURBON IN 20171 BOURBON Corporation sa stock market data

2.1 HISTORICAL DATA

2017 2016 2015

Number of shares as of December 31 77,499,214 76,342,603 71,606,331

Closing share price (in €)

- high 12.65 15.12 19.99

- low 6.70 9.46 10.89

- as of December 31 7.00 12.25 14.95

Stock market capitalization as of December 31 (in € millions) 542 935 1,071

Net earnings per share (in €) (7.47) (3.68) (1.01)

Dividend per share (in €) 0.25 1.00 1.00

Total dividend (in € millions) 8.5 25.5 71.6

Shareholders’ calendar

May 3, 2018

Publication of fi rst quarter revenue for 2018

May 30, 2018

Annual General Meeting of Shareholders

September 6, 2018

Publication of the results for the fi rst half of 2018

November 8, 2018

Publication of third quarter revenue for 2018

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 2017

1

Management bodies

(1) Independent Director.

3. MANAGEMENT BODIES

3.1 SENIOR MANAGEMENT AS OF DECEMBER 31, 2017

Jacques d’Armand de Chateauvieux

Chairman and Chief Executive Offi cer

Since March 14, 2018, the date of the decision by the Board of Directors to separate the functions of Chairman of the Board of Directors and Chief Executive Offi cer, Jacques d’Armand de Chateauvieux has been Chairman of the Board of Directors.

Gaël Bodénès

Chief Executive Offi cer

Since March 14, 2018, the date of the decision by the Board of Directors to separate the functions of Chairman of the Board of Directors and Chief Executive Offi cer, Gaël Bodénès has been Chief Executive Offi cer of BOURBON Corporation SA.

Astrid de Lancrau de Bréon

Chief Financial Offi cer

3.2 COMPOSITION OF THE BOARD OF DIRECTORS AS OF DECEMBER 31, 2017

Jacques d’Armand de Chateauvieux

Adrien de Chomereau de Saint André

Adeline Challon-Kemoun(1)

Christian Lefèvre

Baudouin Monnoyeur

Agnès Pannier-Runacher(1)

Philippe Salle(1)

Mahmud Tukur(1)

Elisabeth Van Damme(1)

Xiaowei Wang

Since Philippe Salle’s resignation as a Director on March 12, 2018, he is no longer a member of the Board.

The Board of Directors is also assisted by an observer: Henri d’Armand de Chateauvieux.

3.3 COMMITTEES OF THE BOARD OF DIRECTORS

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.

3.4 NOMINATIONS, 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 offi cers, including allocations of stock options for new or existing shares, where applicable.

As of December 31, 2017, the Nominating, Compensation and Governance Committee was composed of three members:

3 Philippe Salle, Independent Director, who chairs the committee;

3 Adeline Challon-Kemoun, Independent Director;

3 Adrien de Chomereau de Saint André, Director.

At its meeting on March 14, 2018, the Board of Directors appointed Adeline Challon-Kemoun as Chairman of the Nominations, Compensation, and Governance Committee to replace Philippe Salle, who resigned.

3.5 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 company and consolidated fi nancial statements, the quality of internal control and the information available to shareholders and the markets.

As of December 31, 2017, the Audit Committee was composed of three members:

3 Agnès Pannier-Runacher, Independent Director, who chairs the committee;

3 Elisabeth Van Damme, Independent Director;

3 Mahmud Tukur, Independent Director.

Since the Board meeting on March 14, 2018, Elisabeth Van Damme has left the Audit Committee to become a member of the Nominating, Compensation and Governance Committee.


BOURBON IN 20171


GENERAL INTRODUCTION TO THE GROUP

2

1. BOURBON TIMELINE 10

2. SIMPLIFIED OVERVIEW OF BOURBON’SBUSINESS ACTIVITIES 11

3. ACTIVITIES 113.1 Geographical footprint 123.2 Marine services 123.3 Subsea Services 13

4. INNOVATION 14

5. COMPETITIVE ENVIRONMENT 145.1 Marine services 145.2 Subsea Services 15

6. MAIN MARKET TRENDS 16


GENERAL INTRODUCTION TO THE GROUP2 Bourbon timeline

BOURBON offers a broad range of offshore oil and gas marine services. The Company has a large fl eet of innovative and highly productive offshore vessels to guarantee the safest and highest quality services to the most demanding oil and gas customers worldwide. BOURBON also protects the French coastline for the French Navy.

Classifi ed by ICB (Industry Classifi cation Benchmark) in the “Oil Services” sector, as of December 31, 2017, BOURBON Corporation had been listed in capitalization compartment B of NYSE Euronext Paris since January 2016.

1. BOURBON TIMELINE

Established in 1948, BOURBON Corporation SA (then known as “Sucreries de BOURBON”) was a sugar company based on the Island of Réunion when Jacques d’Armand de Chateauvieux was appointed Chairman in 1979.

3 1980 to 1989:

Industrial restructuring of the Sugar activity. Diversifi cation of activities into food-processing, then distribution and marine services.

3 1992:

Acquisition of the Compagnie Chambon and its subsidiary Surf, dedicated to offshore oil and gas marine services.

3 1998:

Initial Public Offering on the Paris secondary market.

3 2001:

The Group steadily disengaged from its historic activities in Foods, Distribution and Sugar and began to concentrate on marine services.

3 2003:

Implementation of the 2003-2007 strategic plan, which stepped up the Group’s shift toward the sole business of marine services.

3 2004:

BOURBON was classifi ed by Euronext in the “Oil Services” sector.

3 2005:

“ BOURBON Group” became BOURBON and the head offi ce was transferred from La Réunion to Paris.

3 2006:

BOURBON 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.

3 2008:

BOURBON extended its strategic plan and outlook within the new strategic plan: Horizon 2012.

BOURBON positioned itself in the offshore oil fi eld IMR (Inspection, Maintenance and Repair) market: the Group extended its range of services by launching a new Subsea Services business.

3 2010:

BOURBON 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 fl eet.

3 2011:

Changes in BOURBON’s governance: the roles of Chairman of the Board of Directors and Chief Executive Offi cer were separated.

3 2012:

Bourbon Offshore Surf celebrated 40 years of professionalism in client service.

3 2013:

BOURBON 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.

3 2014:

After 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 fi rst bond issuance (Perpetual Deeply Subordinated Notes (TSSDI)), for €100 million. This has been followed the following year by a second bond issue that is part of the same issuance as the initial bonds, for an amount of €20 million.

3 2016:

In an offshore oil and gas sector marked by the drop in the price of oil, BOURBON proved its resilience not just in terms of its operational performance and cost control, but also with the completion of its Transforming for Beyond action plan, which enabled the generation of free cash fl ow.

“BOURBON SA” became “BOURBON Corporation SA”.

3 2017 to 2018:

BOURBON announced its strategic action plan #BOURBONINMOTION in February 2018, 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.



2

Activities

2. SIMPLIFIED OVERVIEW OF BOURBON’S BUSINESS ACTIVITIES

Marine services Subsea Services

- Offshore installation supply - Offshore operations engineering, supervision and management

- Offshore installation anchor handling, towage and positioning - Offshore fi eld and wind farm development support

- Offshore oil and gas production and storage terminal support - Inspection, Maintenance and Repair (IMR) of submarine infrastructure

- Personnel transport - Remotely Operated Vehicles

- Assistance, salvage and pollution remediation - Subsea well stimulation

BOURBON provides its clients with marine resources, equipment, Remotely Operated Vehicles, and crews, billing its clients for daily charters under chartering contracts ranging from spot to fi ve-year charters. Fifteen affi liates in charge of ship management ensure the reliability of the fl eet on a daily basis, supported by a centralized maintenance organization based in Dubai, to ensure that each vessel is certifi ed, manned, supplied and properly maintained.

Further, as part of its Subsea Services business, BOURBON 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 management services. Some services can be provided on a fi xed-price basis with a performance commitment. These services account for less than 20% of Subsea revenue.

The list of companies that make up the Group as well as their geographical locations are presented in note 5.8 to the consolidated fi nancial statements (pages 174 to 178).

3. ACTIVITIES

BOURBON supplies a wide range of maritime support services for exploration, production and development of offshore gas and oil fi elds, either in shallow water offshore or deepwater offshore.

The Group offers local services through its 29 operating subsidiaries, which are close to clients and their operations. It meets the highest operational excellence and risk management standards all over the world. The Group has two divisions, Marine Services and Subsea Services. 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 refl ect its operational excellence and risk management priorities based on:

3 a modern, diversifi ed fl eet of 508 offshore vessels, most of which were built in series;

3 8,400 employees working under the fl ag of excellence;

3 a single operations and safety management system focused on customer satisfaction;

3 a network of local subsidiaries that supports vessel operations and provides local services to customers.

To continue to better serve its customers, BOURBON has announced the reorganization of the Group’s activities into three separate subsidiaries: Bourbon Marine & Logistics, Bourbon Subsea Services and Bourbon Mobility. These three entities will implement their own strategy and have dedicated governance structures. They will focus on profi table growth through the development of their models towards more integrated services.

These strategic elements are detailed in section 2.3 of the management report (page 28).


GENERAL INTRODUCTION TO THE GROUP2 Activities

3.1 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 North Sea;

3 the Mediterranean Sea;

3 Brazil, Mexico and the Caribbean;

3 India and the Middle-East;

3 Australia;

3 South-East Asia.

3.2 MARINE SERVICES

BOURBON is a leader in the offshore oil maritime services industry which relies on a modern, standardized and competitive fl eet. The Group applies very high international quality standards in the supply of maritime services.

Having made operational risk management its main priority, the Marine Services activity has established a Client satisfaction chain process . This unique organizational model focuses on the vessel which is 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).

3.2.1 The fleet – vessels dedicated to supporting offshore operations

Anchor Handling Tug Supply vessels (AHTS)BOURBON’s 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 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 TugsBOURBON’s fl eet of terminal tugs is used for assistance, standby and intervention operations on offshore oil and gas terminals, and is specialized in FPSO (fl oating production, storage and unloading unit) assistance.

3.2.2 Crew Boats

The FSIVs (Fast Support Intervention Vessels) provide urgent supplies and transport of response teams. The surfers are fast crew boats that can transport personnel rapidly to offshore oil sites and serve platforms located in an oil or gas fi eld.

Since 1986, thanks to the skills of its teams, BOURBON has offered a safe and reliable personnel transport service, making the Group the world’s leading provider of this key service to the oil industry.

3.2.3 The fleet – Coastal protection

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 fi ght against oil pollution.

3.2.4 Types of contract used

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 of leading oil companies.

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

Activities

3.3 SUBSEA SERVICES

BOURBON offers its clients (oil operators or contractors) a range of resources for Inspection, Maintenance and Repair (IMR) and offshore structure construction activities. This range includes:

3 specialized vessels;

3 underwater Remote Operated Vehicule (ROV) which can perform operations at depths of up to 4,000 meters;

3 teams of engineers and technicians to provide solutions for the installation and maintenance of offshore platforms and subsea fi elds, in addition to the installation of equipment and cables for the offshore renewable energy business.

Therefore, the service is contracted as follows:

3 bareboat vessel chartering;

3 by chartering vessel with associated crew, crane operator, catering services, and remote operated vehicule ;

3 on a fi xed-price basis for some installation contracts, with a performance commitment and limitation of liability.

Chartering of Remote Operated Vehicule (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 contracts, particularly in the fi eld of renewable energy, BOURBON provides fi xed-price installation services subject to limitation of liability.

3.3.1 The Subsea fleet

IMR vesselsThese 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 offers a wide range of vessels with cranes from 10 t to 250 t operating at depths of up to 3,000 m. Vessel are dynamically positioned with crane design to compensate vessel motions due to swell . Vessel have large deck and cargo capacity in addition to large accomodation capacity 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 contractors works for fi eld development ;

3 surface or subsea maintenance of offshore oil and gas fi elds;

3 emergency situations, including fi re protection, surface and subsea anti-pollution, and personnel safety.

The last generation Bourbon Evolution 800 vessels benefi t from the support of and synergies with the BOURBON Marine Services activity, and the standardization of propulsion and communication equipment.

Remote Operated Vehicles (ROV)Bourbon Subsea Services’ fl eet 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.

3.3.2 Engineering and management services

BOURBON also offers recognized IMR project engineering expertise for oil fi elds in operation (replacement of undersea connections, well heads, cables, narrow diameter pipelaying, etc.). This activity is complementary to the provision of vessels and ROV , enabling BOURBON to establish itself as a single provider for preparing and performing operations required on offshore fi elds. This service includes the complex project management and planning of procedures, as well as the provision of specialized personnel to manage the operations in question on board the vessels.


GENERAL INTRODUCTION TO THE GROUP2 Innovation

4. INNOVATION

Innovation is at the heart of BOURBON’s model and strategy. This approach is refl ected in technological concepts, new techniques and operational innovations.

BOURBON keeps a constant watch on technological developments, supports research and development with its main subcontractors, and supports poles for innovation developments such as French marine clusters.

For example, this approach has made it possible to develop the Bourbon Liberty 100, 150, 200 and 300 series.

These vessels have many innovative characteristics in common: reduced fuel consumption, approximately 30% more cargo capacity (compared with vessels of comparable size), reduced operational times and considerable maneuverability. Finally, a high level of availability can be guaranteed because the maintenance of these

modern vessels is facilitated by standardization. All these assets generate signifi cant productivity gains on operations conducted for clients, effi ciently and over the long term.

BOURBON support vessels are set apart by the standardized installation of high tech equipment, such as dynamic positioning, which is essential to the safety of towing, anchoring, and refueling operations. BOURBON also took the decision to equip most of its support vessels with a diesel-electric propulsion system, which is more fuel effi cient for offshore oil support operations and equally more environmentally friendly.

In 2017, BOURBON implemented its fi rst digital transformation projects, in particular in the Smart Shipping program. The aim is to reduce operating costs, improve safety and strengthen client relationships by offering new digital tools.

5. COMPETITIVE ENVIRONMENT

5.1 MARINE SERVICES

There are two types of operators:

3 international companies present in the major global markets; these represent about 24%(1) of the total fl eet (including BOURBON). The main companies are as follows: Tidewater (United States), Seacor (United States), Farstad/Solstad (Norway), Maersk Supply (Denmark), Gulfmark (United States), Edison Chouest (United States), and Swire Pacifi c (Hong Kong);

3 over 500 local operators, each with a fl eet made up of a limited number of vessels.

BOURBON is the world leader in the offshore oil and gas services market owing to the size of its fl eet and its geographical positioning. BOURBON’s vessels are standardized and equipped with Dynamic Positioning Systems (DP2), diesel electric propulsion engines and satellite communication systems. Based on its number of vessels of less than 30 years, BOURBON Corporation has the largest fl eet. Then there are three companies with more than 120 vessels, fi ve companies with a fl eet of 50 to 70 vessels, 11 companies with a fl eet of 30 to 50 vessels, 64 companies with a fl eet of 10 to 30 vessels, and nearly 470 other players with a fl eet of fewer than 10 vessels.

BOURBON

Competit

or #1

Competit

or #2

Competit

or #3

Competit

or #4

Concurrent #

5

Competit

or #6

Competit

or #7

Competit

or #8

Competit

or #9

Competit

or #10

Number of supply vessels

0

50

100

150

200

250

(1) Source: Clarksons (excluding vessels that are more than 30 years old).



2

Competitive environment

3 GEOGRAPHICAL POSITIONING

Asia Med/Middle-East North Sea Americas Africa

BOURBON x x x x x

Competitor #1 x x x x

Competitor #2 x x x x x


Competitor #4 x x x x x

Competitor #5 x x

Competitor #6 x x x

Competitor #7 x x



Competitor #10 x

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, 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 fi nancial partners. Another approach was that taken by Norwegian companies who chose to consolidate in order to reduce structural costs and increase volumes.

5.2 SUBSEA SERVICES

The major shipowners renegotiated their debt to equity ratio in 2017. The changes to their fi nancial and equity structures could create charter pricing distortions based on their short-term cash generation strategy. Non-shipowner companies benefi ted 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/Farstad (Norway) when it comes to pure charters, as well as service integrators such as DOF Subsea (Norway), DeepOcean (Norway) and Oceaneering (USA).


GENERAL INTRODUCTION TO THE GROUP2 Main market trends

6. MAIN MARKET TRENDS

The International Energy Agency (IEA) is forecasting that the oil market in 2018 will be balanced thanks to a limited increase in supply and economic recovery. Growth in global oil demand is increasingly steadily by 1.4 million barrels per day (bpd) and will reach 97.7 bpd in 2018 (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 November 2017, they decided to continue this action until the end of 2018 by reducing their total production by 1.8 million barrels per day. This production cut-off led to a reduction in global stocks and consolidated the rise in the price of oil. Overall,

the price of a barrel of Brent rose $10 in 2017 compared to the previous year, from $44 to $54. For 2018, a number of experts see the price of oil increasing to an average of around US$60. The Energy Information Agency (EIA) is looking at US$60 a barrel, the US bank Goldman Sachs US$62 a barrel and the World Bank US$56. In this context, the amount spent by oil companies on exploration and production expenses increased by 4% in 2017 to some US$390 billion and could grow by 2% to 6% worldwide in 2018 (source: IFP).

Deepwater off shore

From 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 signifi cantly reducing drilling programs. In 2017, the rise in oil prices led to increased demand for drilling

platforms. The utilization rate of semi-submersible-type drilling rigs and drill ships increased from 64% in 2016 to 65% in 2017 (source: Clarksons).

Utilization rate % of worldwide fl eet Units under construction

Semi-submersible drilling rigs and drill ships65% (+1 pt)

(2017 vs. 2016) 18% 53

Furthermore, of the 245 vessels ordered worldwide in 2017 (source: Clarksons), the share of vessels ordered by BOURBON is not signifi cant, with only one vessel 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.

The average age of BOURBON’s deepwater offshore fl eet is 10.2 years, in a global fl eet estimated at more than 1,734 units, 5% of which are over 25 years old (source: Clarksons/BOURBON).



2

Main market trends

Shallow water off shoreIn this market, activity remained stable in 2017. The usage rate for jack-ups in 2017 was 65% (source: Clarksons).

Utilization rate % of worldwide fl eet Units under construction

Jack Up65% (=)

(2017 vs. 2016) 18% 99

To meet the requirements of the oil companies, the phenomenon of replacing vessels that are old or deemed obsolete with more recent vessels has accelerated with the crisis and customers are increasingly choosing more recent vessels, especially since more powerful vessels equipped with dynamic positioning technology are needed. The average age of BOURBON’s shallow water offshore fl eet is 7.5 years, in a global fl eet estimated at more than 1,839 units, 26% of which are over 25 years old (source: Clarksons/BOURBON).

Stacked worldwide fl eetAn analysis of the worldwide fl eet of vessels dedicated to supporting offshore operations (AHTSs and PSVs, tugs and ships over 30 years old excluded - source: Clarkson) shows that out of an estimated fl eet of 3,500 ships worldwide, 1,200 (30% of the fl eet) are stacked (moored dockside, crewless or having suspended their navigation and classifi cation certifi cates ).

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 ship 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.


GENERAL INTRODUCTION TO THE GROUP2


1. ACTIVITIES AND HIGHLIGHTS 201.1 Highlights 201.2 Signifi cant events after the end of the reporting period 212. RESULTS 222.1 Financial performance 222.2 Results by business 242.3 Growth strategy 282.4 BOURBON Corporation SA results 282.5 Change in accounting methods 292.6 Outlook 293. REPORT OF THE BOARD OF DIRECTORS ON

CORPORATE GOVERNANCE 303.1 Separation of the functions of Chairman and Chief

Executive Offi cer – powers of the Chief Executive Offi cer and the Chief Financial Offi cer 30

3.2 Composition of the Board of Directors and manner in which it plans and organizes its work, terms of offi ce and functions of corporate offi cers 32

3.3 Principle of governance 433.4 Manner in which the Board of Directors plans and

organizes its work 443.5 Assessment of the Board of Directors and the committees 463.6 Specialized committees of the Board of Directors 463.7 Compensation and benefi ts of corporate offi cers in

respect of the fi scal year ended on December 31, 2017 493.8 Principles and criteria for the determination, allocation

and granting of fi xed, variable and exceptional items comprising total compensation and benefi ts of any kind attributable to Executive Directors in 2018 55

3.9 Application of the AFEP-MEDEF Code of corporate governance: summary table 60

3.10 Shareholder participation in the shareholders’ meeting 603.11 Factors that could have an impact in the event of a public

offering 603.12 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 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 62

SUMMARY TABLE OF DELEGATIONS OF POWER AND CURRENT AUTHORIZATIONS GRANTED BY THE SHAREHOLDERS’ MEETING TO THE BOARD OF DIRECTORS FOR CAPITAL INCREASES 634. CONTROL ENVIRONMENT 644.1 General organization of internal control 644.2 Managing internal control 654.3 The Statutory Auditors 664.4 Risk management 664.5 Compliance 66

5. RISK FACTORS 675.1 Risks related to the offshore oil and gas marine services

markets 675.2 Risks relating to BOURBON’s business 705.3 Legal risks 725.4 Ethical and non-compliance risks 735.5 Financial risk management objectives and policy 735.6 Insurance cover for risks 806. SOCIAL AND ENVIRONMENTAL INFORMATION 816.1 Social information 816.2 Societal information 866.3 Environmental information 886.4 Note on social and environmental reporting methodology 906.5 Cross-reference table of social and environmental information 927. BOURBON CORPORATION AND ITS SHAREHOLDERS 947.1 Share capital and shareholder base 947.2 Dividends paid for the last three fi scal years 947.3 Transactions on company stock 957.4 Factors that could have an impact in the event of a public

offering 968. REPORT EXPLAINING THE BOARD OF DIRECTORS’

RESOLUTIONS PROPOSED TO THE COMBINED SHAREHOLDERS’ MEETING OF MAY 30, 2018 97

8.1 Approval of the fi nancial statements for the fi scal year ended december 31, 2017 97

8.2 Appropriation of net income 978.3 Related party agreements 978.4 Ratifi cation of the transfer

of the corporate offi ce 978.5 Renewal of Directors’ terms

of offi ce 978.6 Approval of the principles and criteria for determining,

allocating, and granting the components of Executive Director compensation 98

8.7 Approval of the components of compensation paid or allocated pursuant to the fi scal year ended december 31, 2017 to J acques d’A rmand de C hateauvieux, Chairman and Chief Executive Offi cer, G aël B odénès and C hristian L efèvre, C hief O perating O ffi cers and to A strid de L ancrau de B réon, Chief Financial Offi cer 98

8.8 Share buyback program – cancellation of treasury shares 988.9 Financial delegation 998.10 Realignment of the bylaws

of the Company 99FINANCIAL RESULTS OF THE PARENT COMPANY OVER THE LAST FIVE YEARS 100

REPORT BY ONE OF THE STATUTORY AUDITORS, APPOINTED AS INDEPENDENT THIRD PARTY, ON THE CONSOLIDATED HUMAN RESOURCES, ENVIRONMENTAL AND SOCIAL INFORMATION INCLUDED IN THE MANAGEMENT REPORT 101

3MANAGEMENT REPORT


MANAGEMENT REPORT3 Activities and highlights

1. ACTIVITIES AND HIGHLIGHTS

1.1 HIGHLIGHTS

On March 8, 2017, BOURBON announced the restructuring of the majority of its fi nancial debt , amounting to €910.8 million, of which the major characteristics are the following:

3 out of long and medium-term debt totaling €692 million, €365 million of repayments due between 2016 and 2018 have been rescheduled and reduced to an amount of €63 million not repayable until 2018. The remainder of the debt, i.e. €629 million, will henceforth be repaid progressively between 2019 and 2025; the weighted average of the spreads applicable to these facilities will initially represent approximately 2.1% from October 1, 2017, then approximately 3.1% from January 1, 2020 and lastly approximately 4% from January 1, 2022;

3 short term facilities amounting to €196.8 million will be refi nanced and maintained at this level from 2017 to 2020 inclusive, before being repaid progressively afterwards, while €22 million in short-term credits will be maintained and repaid progressively as from 2018; the weighted average of the spreads applicable to these facilities will initially and from the completion date represent 1.9%, then 2.9% from January 1, 2020 and lastly 3.9% from January 1, 2022.

In the context of these agreements, debts with bullet repayments due in 2017 in the amount of €143 million have been rescheduled in order to benefi t from progressive repayment until 2022, under the terms of the debt rescheduling agreement.

On July 28, 2017, the conditions precedent for the implementation of the debt rescheduling agreement were met and BOURBON confi rmed the effective restructuring of its debt (see note 3.14 to the consolidated fi nancial statements).

At the same time as the negotiations that led to the restructuring of its principal debt, BOURBON also 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 provides for a USD240 million reduction in BOURBON’s charter payments between 2016 and 2018 in consideration for the two-year extension of the initial bareboat charter period at a rate of 8% and more favorable commercial terms for ICBC Financial Leasing.

This agreement will not have a material impact on the Group’s consolidated fi nancial statements since it does not affect the qualifi cation of the bareboat chartering contract of the vessels. In accordance with IFRS, bareboat charter expenses will be recognized on a straight-line basis from the date of renegotiation and for the remaining term of the contract. The non-cash impact of the charter expenses following these negotiations and the required straight-line accounting amounted to €92.5 million for 2017.

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 market environment weighed heavily on the Group’s revenue in 2017 and, consequently, on its net income. The cash fl ows generated by the activity are thus insuffi cient to service the debt in the short term.

Furthermore, and for the same reasons, the Group was not able to comply with various covenants defi ned in its credit documentation . The Group has asked its lenders to formally suspend, for the expected duration of the discussions, the exercise of their rights under the credit agreements, in particular their repayment. On the date of writing this report, a number of responses are still pending, but the Group is confi dent that it will obtain these waivers and stand-stills.

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 debt with the expected gradual recovery in the market and the corresponding upturn in the Group’s performance.

On February 12, 2018, BOURBON Corporation’s Board of Directors approved the new strategic action plan – #BOURBONINMOTION – initiated at the end of 2017. It should 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. BOURBON’s goal is to accelerate its transformation in order to be ready for the expected recovery.

The #BOURBONINMOTION action plan is based on three priorities:

3 providing better service to clients by reorganizing the Group’s activities into three distinctive subsidiaries: Bourbon Marine & Logistics, Bourbon Subsea Services and Bourbon Mobility. Each of these 3 entities will implement its own strategy and have a dedicated governance structure (management team in which the Chief Executive Offi cer will report to a Board of Directors). They will focus on profi table growth through the development of their models towards more integrated services;


MANAGEMENT REPORTActivities and highlights

3

3 capitalizing on the digital revolution to stand out through a connected fl eet. With the aim of improving operational excellence at the optimum cost, the “ Smart Shipping” program will connect Bourbon Marine & Logistics’ fl eet of 132 modern supply vessels (called the “ smart fl eet” ). This program represents an investment of €75 million over a period of three years. It will reduce the vessels’ operating costs over the long term;

3 responding to the human challenge by supporting the change.

The three new subsidiaries will benefi t from privileged market access thanks to the numerous partnerships already in place in the main countries where BOURBON currently operates, in compliance with the rules of the countries involved, particularly in terms of local content.

Within BOURBON Marine & Logistics’ traditional fl eet of 65 vessels, the 41 oldest vessels, which cannot be connected (known as the “ non-smart fl eet” ), will be sold “ 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 fi nancial statements (see note 3.3 to the consolidated fi nancial statements). Note that a provision of €1.4 million was consequently booked for these vessels’ spare parts recorded in inventories (see note 3.6 to the consolidated fi nancial statements).

Under this strategy, the Group also decided to dispose of seven specialized vessels considered as non-strategic for the Group. These vessels will also be sold “ as is where is” and according to the same process, generating an impairment charge of -€29.6 million (see note 3.3 to the consolidated fi nancial statements).

1.2 SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

A vessel sale and lease-back agreement amounting to €50 million for 5 Les Abeilles vessels started in January 2018 for a period of 10 years, to replace the fi nancing obtained in July 2017 for these vessels under less favorable conditions.

Moreover, on February 12, 2018, BOURBON Corporation’s Board of Directors approved the new strategic action plan – #BOURBONINMOTION – initiated at the end of 2017. It should enable the Group to meet the need for competitiveness and to

respond to customers’ new demands, in the context of a market that has challenged all market players in the Oil & Gas industry . BOURBON’s goal is therefore to accelerate its transformation in order to be ready for the expected recovery (see note 2.1 to the consolidated fi nancial statements).

As announced in its annual results press release dated March 15, 2018, BOURBON has initiated discussions with its main fi nancial 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.

As a consequence, a general waiver should be fi nalized with BOURBON’s leasers and debt holders in order to allow the group to withhold all payments. Aiming at enabling all parties to negotiate quickly within a secured legal framework, this general waiver, that the group is confi dent to obtain, also demonstrates the goodwill of all parties to achieve a satisfactory debt reshaping.

In this context, the group has suspended servicing both its leases and debt commitments, during the negotiation period. This allows BOURBON to focus on its operational priorities and market turnaround and should encourage all parties to make negotiations as short as possible.

The group continues to implement its #BOURBONINMOTION strategic plan, notably through its “Smart Shipping” program and re-activation of vessels, thanks to a preserved cash situation.

As part of the abovementioned negotiation, BOURBON has requested the consent of the general meeting of the Bondholders to defer by one year the next interest payment date due under the Bonds 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 corresponding to the applicable rate to the Bonds.

The general meeting held on April 20 has authorized BOURBON to postpone this interest payment by one year, demonstrating once again the confi dence of its fi nancial partners in its capability to benefi t from market recovery and implement the new and innovative strategy #BOURBONINMOTION.

The company is confi dent in its ability to fi nd before year end a balanced solution with all its lenders - often long-standing partners - that suits all parties and allows the company to adapt its fi nancing to its future development.


MANAGEMENT REPORT3 Results

2. RESULTS

2.1 FINANCIAL PERFORMANCE

Segment information and the reconciliation of adjusted fi nancial information with the consolidated fi nancial statement are presented in note 4 to the consolidated fi nancial statements.

2017 2016Change

2017/2016 Change %

Operational indicators

Number of vessels (FTE)* 511.9 512.3 (0.4) -0.1%

Total fl eet in operation (FTE) 333.7 386.4 (52.7) -13.6%

Number of stacked vessels (FTE) 178.2 125.9 +52.3 +41.5%

Utilization rate of fl eet in operation(1) 82.4% 83.1% -0.7 pt

Average utilization rate(2) 53.7% 62.7% -9.0 pts

Average daily rate $/d 8,725 9,586 (861) -9.0%

* FTE: Full Time Equivalent.(1) Utilization rate of the fl eet in operation: over a period, the number of revenue-generating days, divided by the number of calendar days, for vessels that are not stacked.(2) Utilization rate: over a period, the number of revenue-generating days, divided by the number of calendar days.

In € millions, unless otherwise noted 2017 2016Change € million Change %

Financial performance

Adjusted revenues 860.6 1,102.6 (242.0) -21.9%

(change at constant rate) -21.3%

Operating and general costs (608.3) (719.6) +111.3 +15.5%

Adjusted EBITDAR (excl. capital gains) 252.4 383.0 (130.6) -34.1%

as a % of adjusted revenue 29.3% 34.7% -5.4 pts

Bareboat charters expense (164.4) (188.7) +24.3 +12.9%

Adjusted EBITDA 87.8 193.3 (105.5) ns

Impairment (196.8) (36.0) (160.8) ns

Adjusted EBIT (403.9) (165.1) (238.8) ns

EBIT (406.6) (175.3) (231.3) ns

Net income (group share) (576.3) (279.6) (296.7) -106.1%

For defi nitions of fi nancial indicators, refer to the fi nancial glossary presented in note 6 to the consolidated fi nancial statements.

2.1.1. For the income statement

FY 2017 saw a further decline in activity, which resulted in a reduction in the operating fl eet to 334 vessels and an increase in the number of stacked vessels, with 52 additional units. Adjusted revenues totaled €860.6 million, down 21.9% compared to the previous year, the result of a stable utilization rate for a fl eet in operation(1) of 82.4% and an average daily rate decrease of approximately $1,000/day, to $8,725.

Adjusted EBITDAR generated totaled €252.4 million, down 34.1% compared to 2016. The decrease in operating costs, net of additional charges for stacked vessels, and general expenses was 15.5% year-on-year. As a result, the adjusted EBITDAR margin decreased to 29.3% compared to 34.7% the previous year.

The sharp decline in adjusted EBIT of -€403.9 million compared to -€165.1 million in 2016 is mainly the result of impairment on vessels of €196.8 million, of which €167.2 million for the non-smart fl eet, and provisions for impairment of €30 million, of which €24.5 million for trade receivables.

In terms of fi nancial income, the cost of net fi nancial debt amounted to €54.6 million compared to €43 million the previous year. This item also includes foreign exchange losses of €83 million, of which €73 million in unrealized losses, impairment of fi nancial receivables of €28 million and other non-recurring fi nancial expenses of €22 million related to the treatment of the Group’s debt as of December 31, 2017 and the uncertain nature of future cash fl ows related to it.

Net income, group share of -€576.3 million refl ected the impact of the crisis in the sector, its impact on asset values and the risk of recoverability for certain receivables.

(1) Utilization rate of the fl eet in operation: over a period, the number of revenue-generating days, divided by the number of calendar days, for vessels that are not stacked.


MANAGEMENT REPORTResults

3

2.1.2. For the balance sheet

Consolidated Capital Employed (in € millions) 12.31.2017 12.31.2016

Net non-current Assets 2,028.3 2,654.5

Working capital 102.0 198.0

TOTAL CAPITAL EMPLOYED 2,130.3 2,852.5

Shareholders’ equity 643.6 1,255.5

Non-current liabilities (provisions and deferred taxes) 121.5 128.7

Net Debt 1,365.2 1,468.2

TOTAL CAPITAL EMPLOYED 2,130.3 2,852.5

The decrease in capital invested of €722.2 million in 2017 is the consequence of:

3 a decrease in the value of fi xed assets for €626.1 million, following the recognition of exceptional impairment losses, asset disposals and regular depreciation and amortization;

3 a reduction in the working capital requirement due to lower revenue and a reduction in customer payment delays for €96.1 million.

As a result, shareholders’ equity now amounts to €643.6 million compared to €1,255.5 million at the end of 2016. In addition, there was a slight reduction in net debt of €103 million year-on-year.

Furthermore, as of December 31, 2017, the Group was unable to comply with various covenants defi ned in its credit documentation.

This situation of breach of covenants on the closing date of the fi scal year constrains the Company, in accordance with IFRS standards, to refl ect the fact that the debt is due by reclassifying it as current liabilities, even though its lenders have not demanded payment. The amount thus reclassifi ed totals €1,121 million as of December 31, 2017.

BOURBON has asked its lenders to formally suspend, for the expected duration of the discussions, the exercise of their rights under the credit agreements, in particular their repayment. To date, a number of responses are still pending, but the Group is confi dent that these postponement agreements can be obtained.

As a result, the Group decided to undertake new discussions with its lenders, both in France and abroad, in order to match its debt service with the expected but gradual recovery in the market and therefore its performance.

Even though this situation brings signifi cant uncertainty concerning the continuity of operations, the Group is confi dent in its ability to fi nd, with its lenders, who are often long-term partners, a balanced solution that suits all parties in order to best adapt the fi nancing of the Company to its development.

The cash generated by business activity enables the Group to meet its current operating needs. In this context, it prepared the consolidated fi nancial statements as of December 31, 2017 according to the going concern principle.

2.1.3. For cash flows

Simplifi ed Cash Flow Statement (in € millions) 2017 2016

Cash fl ow from operating activities

C onsolidated net income (loss) (608.9) (263.0)

C ash fl ow from operating activities 759.6 476.8

Net cash fl ow from operating activities (A) 150.7 213.8

Cash fl ow from investing activities

Acquisition of property, plant and equipment and intangible assets (47.1) (154.3)

Sale of property, plant and equipment and intangible assets 24,2 5.2

O ther cash fl ow from investing activities 20.6 (28.9)

Net c ash fl ow from investing activities (B) (2.3) (178.0)

Cash fl ow from fi nancing activities

N et increase (decrease) in borrowings 94.1 (16.2)

Perpetual bond issue - -

Dividends paid to parent company shareholders (8.5) (25.5)

Dividends paid to non-controlling interests (7.6) (18.5)

C ost of net debt (56.2) (47.2)

O ther cash fl ow from fi nancing activities (0.2) (4.4)

Net c ash fl ow used in fi nancing activities (C) 21.6 (111.8)

Impact from the change in exchange rates and other reclassifi cations 9.0 0.4

Change in net cash (A) + (B) + (C) + (D) 179.0 (75.6)



Cash fl ow analysis in 2017 highlighted the following key events:

3 positive cash fl ow from operating activities was €150.7 million. Charter expenses disbursed were €71.9 million, compared to €164.4 million accounted for under IFRS;

3 cash fl ow from investing activities was negative by only €2.3 million, with a sharp reduction in periodic maintenance expenses, which were offset by the sale of Endeavor, a cement carrier that was kept in the fl eet after the sale of the remainder in 2010, and the repayment of loans and advances granted;

3 cash fl ow from fi nancing activities was +€21.6 million. Repayments of borrowings and the cost of net fi nancial debt were offset by the issuance of new loans for €73.2 million and the refi nancing of short term facilities for a net amount of €196.0 million.

Overall, the Company’s cash position improved by €179.0 million, taking into account the refi nancing of short-term facilities. Excluding this refi nancing, the Group’s cash position deteriorated by €17.8 million.

In 2018, BOURBON will maintain a cautious approach with the goal of:

3 selling the non-smart fl eet, whose operation no longer corresponds to its strategy;

3 focusing on vessel reactivation investments for new contracts and contracts related to its #BOURBONINMOTION action plan;

3 apportioning its disbursements for chartered vessels and fi nancial debt to available cash.

2.2 RESULTS BY BUSINESS

2.2.1 Marine Services

2017 2016Change

2017 vs. 2016 Change %


Number of vessels (FTE)* 489.5 489.3 +0.2 +0.0%

Fleet in operation (FTE) 317.5 370.5 -53.0 -14.3%




Average daily rate $/d 7,365 8,400 (1,035) -12.3%


In € millions, unless otherwise noted 2017 2016 Change € million Change %


Adjusted Revenues* 627.4 864.1 (236.6) -27.4%


Adjusted EBITDAR*(excl. capital gains) 161.7 278.2 (116.5) -41.9%

As a % of adjusted revenues 25.8 % 32.2 % -6.4 pts


Adjusted EBITDA* 42.4 144.2 (101.8) -70.6%

Impairment (177.1) (36.0) (141.1) ns

Adjusted EBIT* (374.5) (155.7) (218.8) ns

* For defi nitions of indicators, refer to the fi nancial glossary presented in note 6 to the consolidated fi nancial statements.

Impairment losses of €177.1 million account for most of the change in adjusted 2017 EBIT compared to the previous year.



3

2.2.1.1 Marine Services: Deepwater off shore vessels

2017 2016Change

2017 vs. 2016 Change %



Fleet in operation (FTE) 63.3 70.9 (7.6) -10.7%


Utilization rate of fl eet in operation(1) 85.7% 85.6% +0.1 pt








Adjusted EBITDAR* (excl. capital gains) 73.1 115.3 (42.2) -36.6%

as a % of adjusted revenues 28.4 % 34.2 % -5.8 pts

Adjusted EBITDA 11.3 47.4 (36.1) -76.1%


The utilization rate of the fl eet in operation remains satisfactory at 85.7%, unchanged from 2016.

Weak demand has increased the number of stacked vessels by 7.5 full-time equivalent units, while the large number of vessels available has naturally affected the average daily rate, which was down by about $2,000/day or -12.9%.

As a result, adjusted revenues decreased by 23.8% and, despite a sharp reduction in costs, adjusted EBITDAR generated decreased by 36.6% to €73.1 million year-on-year.

The outlook in all regions in which we operate remains diffi cult. However, thanks to increased demand in the last quarter of 2017, we have started to reactivate vessels to meet the needs of our customers in West Africa and the Mediterranean.

2.2.1.2. Marine Services: Shallow water off shore vessels

2017 2016Change

2017 vs. 2016 Change %





Utilization rate of fl eet in operation(1) 89.3% 88.1% +1.2 pt




In € millions, unless otherwise noted 2017 2016Change

€ million Change %





as a % of adjusted revenues 21.5 % 33.0 % -11.5 pts

Adjusted EBITDA (24.5) 25.6 (50.1) ns




BOURBON’s shallow water offshore activity is now the most heavily affected in terms of the number of vessels in operation, after three years of a cyclical low. The number of stacked vessels increased by 25.8 units in full-time equivalent, and the excess supply caused the average daily rate to drop by 20%, or more than $2,000/day.

In this context, the proactive policy of stacking vessels has made it possible to maintain a utilization rate for those in operation of 89.3%, a slight increase year-on-year.

Nevertheless, income in terms of adjusted revenue fell sharply by 44.8% to €154.2 million, €125 million less than the previous year.

Tight management of operating expenses and the cost of stacked vessels was able to offset only half of that decrease, and 2017 adjusted EBITDAR fell to €33.2 million compared to €92.1 million in 2016.

We reacted positively to an increase in tenders at the end of 2017 in West Africa and the Middle East by reactivating a number of vessels for medium- and long-term contracts.

Diffi cult market conditions will prevail in the Shallow water offshore segment in 2018. Pressure on daily rates is expected to continue in 2018 and probably until 2019. The improvement in revenue will come from the increase in the utilization of vessels.

2.2.1.3. Marine Services: Crew boat vessels

2017 2016Change

2017 vs. 2016 Change %


Number of vessels (FTE)* 269.0 267.5 +1.5 +0.6%





Average daily rate $/d 4,418 4,394 +24.0 +0.5%




Adjusted revenues 216.3 247.8 (31.5) -12.7%

Operating* and general costs (160.8) (177.0) +16.2 +9.2%



Adjusted EBITDA 55.5 71.2 (15.7) -22.0%


In the Crew Boats activity, the level of demand for contractors’ projects accounts for most of the decrease in adjusted revenue of 12.7% to €216.3 million, even though three FSIVs in the Caribbean zone were repositioned in West Africa.

Since the utilization rate for the ships in operation and the average daily rate have remained stable, the decline is due to the increase in stacked vessels of 19.8 full-time equivalent units. However, the transfer of passengers from helicopters to crew boats continues,

with a +3.5% increase in the number of passengers transported between 2016 and 2017.

In addition, cost reductions in this segment of €16.2 million were able to offset only about 50% of the decline in revenue, which was due in particular to non-recurring maintenance costs on certain vessels, leading to an adjusted EBITDAR level of €55.4 million.



3

2.2.2 Subsea Services

2017 2016Change

2017 vs. 2016 Change %


Number of vessels FTE* 22.0 22.0 - -

Fleet in operation (FTE) 15.8 14.9 +0.9 +6.0%

Number of stacked vessels FTE 6.2 7.1 (0.9) -12.7%


Average utilization rate(2) 60.7% 57.1% +3.6 pts





Adjusted revenues* 220.1 217.2 +2.9 +1.3%

Operating and general costs (134.1) (119.0) (15.1) -12.7%




Adjusted EBITDA 40.6 42.4 (1.9) -4.4%

Impairment (19.8) - (19.8) ns

Adjusted EBIT (27.6) (6.6) (21.0) ns


Even though adjusted revenue remained stable between 2016 and 2017, it had a different mix in 2017, as turnkey projects now represent 10% of revenues.

Expenses increased by 12.7% as a result of turnkey projects, in particular outsourced activity as well as the cost of leasing tools and spare parts for ROVs. The decrease in adjusted EBITDAR is mainly

a refl ection of the decrease in the average charter rate of 8.5% between 2016 and 2017.

Subsea activity for contractors was steady in H1 2017 and partial in H2 2017; this activity will be reduced in 2018.

The Bourbon Subsea Services fl eet remains strategically positioned to respond to cycle differences between regions.

2.2.3 Other






As a % of adjusted revenues 36.1 % 31.4 % +4.6 pts

Adjusted EBITDA 4.9 6.7 (1.9) -27.7%


Other activities are those that do not fi t into either Marine Services or Subsea Services. They mainly comprise earnings from such items as

miscellaneous ship management and logistics activities and activities of the cement carrier Endeavor, which was sold in July 2017.



2.3 GROWTH STRATEGY

Initiation of a transformation plan in 2017 and launch of a strategic plan in early 2018

BOURBON became the leader in offshore oil and gas marine services following a long development program marked by signifi cant investments in innovative vessels, built in series and enabling 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. In addition to the “Stronger for Longer” action plan that has been in place since 2015 with the aim of reducing costs and preserving the cash position, BOURBON Corporation wanted to accelerate its transformation, and on February 13, 2018, it announced its strategic action plan, #BOURBONINMOTION, which will enable it to meet competitiveness requirements and the new needs of its customers.

This plan is structured around three priorities:

3 P roviding better service to clients by reorganizing the Group’s activities into three distinctive subsidiaries: Bourbon Marine & Logistics, Bourbon Subsea Services and Bourbon Mobility. These three entities will implement its own strategy and have a dedicated governance structure (management team in which the Chief Executive Offi cer will report to a Board of Directors). They will focus on profi table growth through the development of their models towards integrated services in the areas of:

3 integrated marine logistics services for Bourbon Marine & Logistics,

3 transformation of the passenger experience for Bourbon Mobility,

3 light turnkey projects and integrated solutions for Bourbon Subsea Services.

The three new standalone subsidiaries will benefi t from privileged market access thanks to the numerous partnerships already in place in the main countries where BOURBON currently operates, in compliance with the rules of the countries involved, particularly in terms of local content.

3 Capitalizing on the digital revolution to stand out through a connected fl eet and reduce operating costs. With the aim of improving operational excellence at the optimum cost, the “Smart Shipping” program will be deployed over a three-year period and connect Bourbon Marine & Logistics’ fl eet of 132 modern supply vessels (called the “smart fl eet”). It is structured around four main projects: automation of dynamic positioning systems, simplifi cation of on-Board processes, maintenance and operational support. It will represent an investment of €75 million over a period of three years and will reduce the vessels’ operating costs over the long term. It will rely on technological partnerships such as those entered into with Kongsberg or Bureau Veritas in 2017.

In the traditional Bourbon Marine & Logistics fl eet of 65 ships, the 41 oldest ships (average age: 12 years) cannot be connected and will eventually be too expensive to operate. Since it no longer meet the needs of customers on account of technical, design or economic constraints, this so-called “non-smart” fl eet of 41 vessels is slated to be sold at the current market price.

3 Responding to the human challenge by supporting the change.

The #BOURBONINMOTION plan reveals the new face of a Group that is not afraid to reinvent itself and innovate by shifting its model toward more integrated services. In addition to the technological revolution, the men and women of BOURBON have taken on a human challenge.

2.4 BOURBON CORPORATION SA RESULTS

The Company had no revenue in 2017. The operating loss of €8.8 million was relatively stable compared to the previous year’s loss of €8.5 million.

Financial income was positive at €49.6 million, up by nearly €16 million from the previous year. This increase is primarily related to the rise in fi nancial income from investments for €14.4 million over the previous year, which were partly offset by a reduction in fi nancial expenses of €1.3 million.

Non-recurring income was positive at €1.8 million.

As a result, the net income of €71.9 million posted for the year was up €43.6 million compared with 2016.

No expense referred to in Articles 39.4 and 223 quarter of the French General Tax Code was identifi ed.



3

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, 2017 is shown in the table below.

(in €)

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 concerned

0 15 0 0

Total amount incl. tax of all invoices concerned

0 727 0 3,105 4,085(*) 7,917 0 0 0 0 0 0

Percentage of total amount of purchases for the year

0.0% 0.0% 0.0% 0.1% 0.1% 0.3%

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 excluded

0 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

(*) Deposit on delivery

2.5 CHANGE IN ACCOUNTING METHODS

There is no change in accounting method to report.

2.6 OUTLOOK

The price of oil increased by more than 25% in the last three quarters and seemed to stabilize around $60-$65/barrel. The growth in cash generated by oil groups suggests a gradual recovery in investment. While investments in Company acquisitions, shale gas, onshore projects and renewable energies seem to have resumed, the gradual growth of investments in the offshore sector is not expected until 2019. Prices will remain low over the long term and will be impacted by the overcapacity of vessels in the PSV and AHTS segment.

Furthermore, expected performance for 2018 should be comparable to 2017’s in terms of activity.

Convinced that tomorrow’s models in our sector will not be a return to those of yesterday, BOURBON decided to implement a #BOURBONINMOTION action plan structured around three main priorities :

3 providing better service to clients through the development of its business model toward more integrated services and the reorganization of the Company into three distinct companies: Bourbon Marine & Logistics, Bourbon Subsea Services and Bourbon Mobility;

3 delivering operational excellence at an optimal cost through the implementation of the smart shipping program by connecting the fl eet of 132 modern supply vessels (called the “smart fl eet”) and separating itself from the fl eet that can no longer be operated according to the new BOURBON standards (called the “non-smart fl eet”);

3 responding to the human challenge by supporting the change.

Our customers are showing us the way by connecting their Offshore facilities and there is very high demand for a change to a contract model with more sharing of responsibility. That is why we must prepare for these changes, which will occur alongside the gradual recovery of the market in the years to come.


MANAGEMENT REPORT3 Report of the Board of Directors on corporate governance

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, 2017;

3 the restrictions placed by the Board of Directors on the powers of the Chief Executive Offi cer;

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 fi nancial authorizations for a capital increase;

3 the principles and rules established by the Board of Directors for determining the compensation and benefi ts of any kind granted to corporate offi cers.

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 14, 2018, 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 bylaws of the Company are available on its website at www.bourbonoffshore.com, under Group − Corporate Governance − Board of Directors and Investors – Capital and shareholding – Company By-laws.

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

After a period in which the offi ces 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 Offi cer 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 Offi cer 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 Offi cer of SA BOURBON Corporation.

In addition, on September 4, 2017, the Board of Directors duly noted the termination of the duties as Chief Operating Offi cer of Christian Lefèvre as of October 1, 2017 (with Christian Lefèvre remaining a Director) and appointed, effective October 1, 2017, Astrid de Lancrau de Bréon as Chief Financial Offi cer.

The Board has nine members, four of whom are independent. It has two specialized committees chaired by Independent Directors, which meet without the Chief Executive Offi cer being present. Lastly, the Board of Directors has set authorization limits, particularly with regard to investments and divestments, which are specifi ed 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 defi ned by law and the bylaws, the Chairman provides assistance and advice to the Chief Executive Offi cer on the following subjects: fi nancial communication; promotion of corporate image and culture; relations with the Group’s partners and shareholders.

The Chairman organizes his activity to guarantee his availability so that his experience can be used for the benefi t of the Group. At the request of the Chief Executive Offi cer, he may participate in any internal meeting dealing with matters relating to strategy, organization or investment or divestment projects.

The Chief Executive Offi cer is responsible for the Company’s general management. By coordinating the operational and fi nancial strategy, he can deliver insight to the Group’s fi nancial communication and promotion of the Company’s image through the media. The Chief Financial Offi cer oversees the implementation of the strategic guidelines, in particular during the current transformation period, and assists the Chief Executive Offi cer in his operational responsibilities and the Company’s day-to-day management.

The Chief Executive Offi cer and Chief Financial Offi cer represent the Company in its dealings with third parties and have the same powers to act on behalf of the Company in all situations.


MANAGEMENT REPORTReport of the Board of Directors on corporate governance

3

With respect to internal measures, in accordance with the provisions of the internal regulations of the Board of Directors, available on the bourbonoffshore.com website, the Chief Executive Offi cer and Chief Operating Offi cer have all necessary powers to carry out investments and divestments approved by the Board in accordance with the budget and/or strategy defi ned by the Board; beyond said budget and/or strategy, they 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 offi cer to be a member of the Executive Committee or to be Chief Executive Offi cer of BOURBON Corporation SA and its subsidiaries.



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

3.2.1 Directors in office as of December 31, 2017

Mr. Jacques d’Armand de Cha teauvieuxBorn February 13, 1951

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 Sinopacifi c Shipbuilding Group (China) - Chairman of Evergas A/S (Denmark).

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

None.

Positions that have expired in 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, Sinopacifi c Offshore and Engineering (China)

Chairman and Chief Executive Offi cer*

Business address: BOURBON Corporation 148 rue Sainte 13007 Marseille

First term of offi ce: October 14, 1977

Term expires on: Shareholders’ Meeting called to approve the fi nancial statements for the year ended December 31, 2018

French nationality

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 was appointed Chairman and Chief Executive Offi cer of BOURBON Corporation on May 26, 2016 following the decision to combine the roles of Chairman and CEO.Jacques d’Armand de Chateauvieux is President of JACCAR Holdings SAS, the majority shareholder of BOURBON Corporation.

* 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 Offi cer.

(1) Based on the main subsidiaries listed on page 215 of the 2017 Registration Document.



3

Mr. Christian LefèvreBorn August 27, 1957


- Chairman of Marine SAS - Director of Sapmer Holding (Singapore) - Director of Evergas A/S (Denmark) - Chairman of Greenship Gas SAS


None


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

- Director of ENSM - Representative of Bourbon Offshore SASU and

Chairman of Bourbon Supply Investissements SASU - Chairman of Bourbon Maritime SASU

Director

Business address: JACCAR Holdings148 rue Sainte 13007 Marseille

First term of offi ce: May 28, 2013


French nationality

Graduate of the École nationale de la Marine in 1984. He began his career at BOURBON as an offi cer then Chief Engineer and Captain of offshore vessels before becoming Head of Agencies in Gabon and Cameroon. He was then successively appointed Chief Operating Offi cer at Bourbon Offshore Surf (an indirect subsidiary of BOURBON Corporation) from 1990 to 1995, then CEO of Bourbon Offshore Surf from 1996 to 2001. CEO, Offshore Division in 2001, Chief Operating Offi cer of BOURBON Corporation, in charge of operations, in December 2005, and Chief Executive Offi cer in January 2011. On October 1, 2017, he resigned as Chief Operating Offi cer of the Company and is now Chief Executive Offi cer of JACCAR Holdings SAS.

Mr. Baudouin MonnoyeurBorn April 24, 1949


- Chairman and Chief Executive Offi cer of Monnoyeur SA and Chairman of the Group’s subsidiaries


None


- Member of the Fonds Quelium Policy committee (CDC)

- Chairman of Pleyel Investissements SA

Director

Business address: Monnoyeur SA 117 rue Charles-Michels 93200 SAINT-DENIS



French nationality

A graduate of the Paris Institut d’Études Politiques and holder of an MBA from INSEAD. Baudouin Monnoyeur is Chairman of the Monnoyeur group, a French family c ompany created in 1906, specializing in building and engineering distribution and services, a distributor of brands such as Caterpillar, Mercedes Benz and John Deere, which is now established in several countries. As of December 31, 2018, Baudouin Monnoyeur held 5.68% of BOURBON Corporation’s capital through his company Monnoyeur SAS.




Ms. Agnès Pannier-RunacherBorn June 19, 1974


- 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, Eiffarie SA - Director, Adelac SAS - Director, Macquarie Autoroutes de France - Director, Cryptolog SAS


None


- Director of AFP - Director, BPI Groupe - Director, Grévin et Compagnie

Independent Director

Chairperson of the Audit Committee

Business address: Compagnie des Alpes50/52 Boulevard Haussmann 75009 Paris

First term of offi ce: August 24, 2009


French nationality

A graduate of the HEC and ENA and holder of a CEMS Master’s. Successively Financial Inspector and Chief of Staff, then member of the Executive Committee of the APHP, Deputy Director of Finance and Strategy, Head of Investments and Development department at Caisse des Dépôts. In 2009, she became a member of the Executive Committee and Director for Finance and Strategy for the FSI portfolio and then joined Faurecia in 2011 as Director of the Tata-JLR, GME, Volvo Customer Division at Faurecia Interior Systems.Agnès Pannier-Runacher has been Chief Executive Offi cer of Compagnie des Alpes since 2013.




3

Mr. Philippe SalleBorn May 17, 1965


- Chairman of FONCIA Groupe SAS - Chairman of Finellas SAS - Permanent representative of CIC Associés, Banque

Transatlantique - Director of GTT


None


- Chairman and Chief Executive Offi cer and Director of Altran Technologies (Company listed on Euronext Paris)

- Chairman of the Altran Innovation Foundation - Chairman of Altimus - Chairman and Chief Executive Offi cer and Director of

Elior (Company listed on Euronext Paris) - Chairman and Chief Executive Offi cer and Director of

Elior Restauration et Services - Director of Elior UK Holdings Limited (UK) - Chairman and Chief Executive Offi cer and Director of

Areas Worldwide (Spain)


Chairman of the Nominating, Compensation and Governance Committee*

Business address: FONCIA Groupe SAS,13, avenue Lebrun92188 Antony Cedex


Term expires on: Philippe Salle resigned as a member of the Board on March 12, 2018

French nationality

A graduate of École des Mines in Paris and holder of an MBA from the Kellogg Graduate School of Management at Northwestern University (Chicago, United States). He began his career at Total in Indonesia before joining Accenture in 1990. He joined McKinsey in 1995, where he became associate partner in 1998. He joined the Vedior France Group in 1999, became Chairman and Chief Executive Offi cer in 2002, and in 2006 President of the Southern Europe region. He held that position until 2007, when he joined the Geoservices group as Chief Operating Offi cer, then Chairman and Chief Executive Offi cer until March 2011. He then became Chairman and Chief Executive Offi cer of the Altran group, before joining the Elior group as Chairman and Chief Executive Offi cer in April 2015.In late 2017 he left the Elior group to assume the chairmanship of the Foncia Group.

* At the Board of Directors’ meeting of March 14, 2018, Adeline Challon-Kemoun was appointed Chairman of the Nominating, Compensation and Governance Committee to replace Philippe Salle.




Mr. Mahmud B. TukurBorn February 19, 1973


- 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)

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

None


None


Member of the Audit Committee

Business address:Eterna plc, 5a Oba Adeyinka Oyekan Avenue,Lagos – Nigeria

First term of offi ce: June 1, 2012


Nigerian nationality

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 fi eld.Mahmud B. Tukur has also served for a number of years as Chief Executive Offi cer and Managing Director of Daddo Maritime Services Limited. Since June 2010, he has been Chief Executive Offi cer and Managing Director of Eterna Plc.

Ms. Xiaowei WangBorn November 28, 1968


Chairperson and Director of SYWG Alternative Investment Co (China)


None.


NoneDirector

Business address: Shenyin & Wanguo Securities Co.,Ltd (SYWS)Shanghai, China



Chinese nationality

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 fi nance and accounting positions for over 22 years, including a position as Finance Director at Baosteel in New York (USA) for seven years. She is now Chairperson of Shenyin & Wanguo Alternative Investment Co, a subsidiary of one of the largest fi nancial companies in China.




3

Ms. Adeline Challon-KemounBorn March 6, 1967


- Independent Director of Econocom Group

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

None


Director of Air France FoundationIndependent Director

Member of the Nominating, Compensation and Governance* Committee

Business address: 23 Place des Carmes Déchaux63040 – CLERMONT FERRAND Cedex 9

First term of offi ce: March 13, 2017


French nationality

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 fi rm Image 7, Deputy Chief Executive Offi cer of the Euris group, General Secretary of Rallye, then Director of Communications at Casino group 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 offi ce until 2017.Since 2016, she has been an Independent Director on the Econocom group Board of Directors. From April 3, Adeline Challon-Kemoun joined the Michelin group as the new Brand Director.

* At the Board meeting of March 14, 2018, Adeline Challon-Kemoun was appointed Chairperson of the Nominating, Compensation and Governance Committee.

Ms. Elisabeth Van DammeBorn March 17, 1966


- Independent Director of the Elior group


None


NoneIndependent Director

Member of the Audit Committee*

Business address: Redwood FinanceDahlialaan, 26 3090 OverijseBelgium



Belgian nationality

She has a degree in applied economics and is currently a partner of Redwood Finance, a fi nancial consulting services Company. She is also a Director at Elior group 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.

* At the Board of Directors’ meeting of March 14, 2018, Elisabeth Van Damme left the Audit Committee to become a member of the Nominating, Compensation and Governance Committee.




3.2.2 Individual whose provisional appointment is subject to ratification by the Shareholders’ Meeting of May 30, 2018

Mr. Adrien de Chomereau de Saint-AndréBorn December 22, 1981


- Director and Chief Executive Offi cer, SAPMER SA and holder of offi ces in Sapmer group subsidiaries.

- Deputy CEO of SAPMER HOLDING PTE.LTD (Singapore)

- Director, Bourbon Ben Luc (Vietnam) - Director, Vietnam Century Fund (Mauritius) - Director, Jaccar Investment Manager (Mauritius) - Director, Jaccar Capital Fund (Mauritius) - Chairman of COMPAGNIE D’ARMEMENT A LA

PECHE (Réunion)


None


None

Director

Member of the Nominating, Compensation and Governance Committee

Business address: Freeport Zone 8Quay D RoadPort Louis – Mauritius

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

First term of offi ce: co-opted by the Board on June 19, 2017 due to the resignation of Guillaume d’Armand de Chateauvieux.


French nationality

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), fi rst as head of fi nancial services and then head of portfolio management. In August 2014, he joined SAPMER as Chief Financial Offi cer, and from December 2014 as Chief Executive Offi cer and Director.

3.2.3 Person whose appointment is proposed to the Shareholders’ Meeting of May 30, 2018

Mr. Antoine GrenierBorn October 16, 1973


None


None


- Director of Altran, the Group’s Indian subsidiary

Business address: 21 rue de Lübeck 75116 Paris

French nationality

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 Offi cer 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 group as Deputy Chief Financial Offi cer. 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 Offi cer of the Foncia group, in charge of fi nance, mergers and acquisitions, legal affairs and internal audit.




3

3.2.4 Directorships that expired in 2017

Mr. Guillaume d’Armand de ChateauvieuxBorn July 28, 1978


None


None


None

Director

Member of the Audit Committee

Business address: 148 rue Sainte 13007 Marseille


End of term: June 19, 2017

French nationality

Mr. Bernhard SchmidtBorn September 19, 1960


- Member of the Supervisory Board, Tougas Gmbh (Germany)

- Member of the Supervisory Board, Metargo AG (Austria) - Chairman of Ryco Energy Solutions Inc. (US) - Member of the Rohölaufsuchungsgesellschaft AG Advisory

Board (Austria)


None


None

Director


Business address: Petroleum Equity Group Berkeley Square London, W1J 6BD


End of term: May 23, 2017

Austrian nationality

Ms. Astrid de Lancrau de BréonBorn December 23, 1979


None


- Chief Financial Offi cer of BOURBON Corporation SA - Chairwoman of Bourbon Maritime


None

Director


Business address: 148 rue Sainte 13007 Marseille

Niece of the Chairman and Chief Executive Offi cer and daughter of the Advisor.


End of term: February 1, 2017

French nationality




3.2.5 The Board is also assisted by an advisor, as allowed by the bylaws

Mr. Henri d’Armand de ChateauvieuxBorn August 17, 1947


- 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)

Advisor since August 25, 2014

Brother of the Chairman of the Board of Directors and father of Astrid de Lancrau de Bréon.

French nationality

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, 2017, through the companies Mach-Invest and Mach-Invest International, Henri d’Armand de Chateauvieux held 7.98% of BOURBON Corporation SA’s capital.


3.2.6 Other non-Director corporate officer members of the General Management of BOURBON Corporation at December 31, 2017

Mr. Gaël BodénèsBorn April 3, 1968


None


- Representative of Bourbon Offshore SASU and Chairman of Bourbon Offshore Surf SAS

- Chief Executive Offi cer of Bourbon Supply Investissements SASU

- Chief Executive Offi cer of Bourbon Maritime SASU - Director of Bourbon Supply Asia PTE LTD


None

Chief Operating Offi cer – Operations*

Since January 1, 2011

Business address: 148 rue Sainte, 13007 Marseille


French nationality

Gaël Bodénès is a naval engineer who graduated from ENSIETA (Naval Engineering School) 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.Since January 2011, he has been Chief Operating Offi cer of BOURBON Corporation.

* Gaël Bodénès has been Chief Executive Offi cer 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 Offi cer.


BOURBON 2017 Registration Document 41

ManageMent reportReport of the Board of Directors on corporate governance

3

Ms. Astrid de Lancrau de BréonBorn December 23, 1979


None


- Chairman of Bourbon Maritime

Positions that have expired in the past five yearsBOURBON Corporation SA

Chief Financial Officer

Since October 1, 2017

Business address: 148 rue Sainte, 13007 Marseille

Niece of the Chairman and Chief Executive Officer and daughter of the Advisor.

Term expires on: Shareholders’ Meeting called to approve the financial statements for the year ended December 31, 2018

French nationality

Having graduated from the ESSEC business school in 2004, with a major in Finance, Astrid de Lancrau de Bréon has since worked for BNP Paribas, first as a chargée d’affaires within the Group’s finance division, where she was then responsible for the “Emerging Markets” area. In 2010, she became Head of Group Strategy, reporting to the general management of BNP Paribas. From 2014 to 2017, she served as Head of Corporate and Institutional Clients at the Paris Étoile Entreprises Business Centre. Astrid de Lancrau de Bréon was appointed Chief Financial Officer of the Group effective February 1, 2017 and resigned from her position as Director.At its meeting on September 4, 2017, the Board of BOURBON Corporation appointed Astrid de Lancrau de Bréon as Chief Financial Officer.

(1) Based on the main subsidiaries listed on page 215 of the 2017 Registration Document.Except for the family ties mentioned above between Jacques d’Armand de Chateauvieux, Astrid de Lancrau de Bréon, 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.

3.2.7 Shares held by corporate officers

Pursuant to the provisions of Article 13 of the bylaws in force at the date of this Registration Document, each Director is required to own at least 300 shares of the Company.

As of December 31, 2017, as far as the Company is aware, the members of the Board of Directors and the corporate officers, individuals, held the following number of shares:

Directors

Jacques d’Armand de Chateauvieux(1) 28,257

Christian Lefèvre 247,730

Baudouin Monnoyeur(1) 399

Agnès Pannier-Runacher 363

Philippe Salle 12,000

Mahmud B. Tukur 300

Xiaowei Wang 300

Adeline Challon-Kemoun 300

Elisabeth Van Damme 1,350

Adrien de Chomereau de Saint-André 300

Advisor

Henri d’Armand de Chateauvieux(1) 376,989

Corporate officers

Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Officer (see above)

Gaël Bodénès, Executive Vice President 6,256

Astrid de Lancrau de Bréon, Chief Financial Officer 2,418

TOTAL 676,962

(1) See also paragraph 7.1. page 94 for a complete look at the allocation of capital.



During its meeting held on March 12, 2018, 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 (November 2016 version). The committee concluded that the Company’s practices were consistent with the recommendations, except for one provision, which is not applied for the reasons given in the table in section 3.9 of this management report.

At March 31, 2018, the Board of Directors was composed of nine Directors, including four women – making up at least 40% of the Board – and three foreign nationals (Belgian, Chinese and Nigerian), all of whom have General Management experience and different and complementary skillsets.

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 offi ce after serving as a Director of the Company for many years. He assists the Board in its work and attends Board meetings in an advisory and non-voting capacity.

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 the appointment of a new Director, Antoine Grenier to the Combined Shareholders’ Meeting of May 30, 2018

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 ratifi cation 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.

It should be noted that at the Shareholders’ Meeting of May 30, 2018, an amendment to the bylaws of BOURBON Corporation SA will be proposed to provide for the election of a Director representing employees on the Board of Directors of BOURBON Corporation SA.

General rules relating to the composition of the Board and the appointment of Directors

End of tenure Directors whose term is set to end

Shareholders’ Meeting called to approve the fi nancial statements for the year ended December 31, 2017

Agnès Pannier-Runacher, Mahmud B. Tukur


Jacques d’Armand de Chateauvieux, Christian Lefèvre, Xiaowei Wang


Adrien de Chomereau de Saint-André, Adeline Challon-Kemoun, Elisabeth Van Damme, Baudouin Monnoyeur

Changes to the Board’s composition during the 2017 fi scal year and since the beginning of the 2018 fi scal year

BM/SM date Cooptation/Appointment Renewal Departure

03/14/2018 BM Appointment of Jacques d’Armand de Chateauvieux as Chairman of the Board of Directors

03/12/2018 BM Philippe Salle(resignation)

09/04/2017 BM Henri d’Armand de Chateauvieux(Advisor)

06/19/2017 BM Adrien de Chomereau de Saint-André(provisional appointment to replace Guillaume d’Armand de Chateauvieuxfor the duration of his term)

Guillaume d’Armand de Chateauvieux(resignation)

05/23/2017 SM Elisabeth Van Damme(appointment)Adeline Challon-Kemoun (ratifi cation of her co -opting and renewal)

Guillaume d’Armand de ChateauvieuxBaudouin Monnoyeur

Bernhard Schmidt(not renewed)

03/ 13/ 2017 BM Adeline Challon-Kemoun (provisional appointment to replace Astrid de Lancrau de Bréon for the duration of her term)

Astrid de Lancrau de Bréon(resigned February 1, 2017)



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Changes to management during the 2017 fi scal year and since the beginning of the 2018 fi scal year

BM date Appointment Departure

03 /14 /2018 Appointment of Gaël Bodénès as Chief Executive Offi cer

Resignation of Jacques d’Armand de Chateauvieux as Chief Executive Offi cerResignation of Gaël Bodénès as Chief Operating Offi cer

09/04/2017 Appointment of Astrid de Lancrau de Bréon as Chief Financial Offi cer (as from October 1, 2017)

Resignation of Christian Lefèvreas Chief Operating Offi cer (as from October 1, 2017)

Independence of Board members with respect to the criteria specifi ed 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 specifi c independence criteria recommended by the AFEP-MEDEF Code. At its meeting on March 14, 2018, the Board discussed whether Directors’ relations with the Company were signifi cant 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:

Agnès

Pannier-RunacherAdeline

Challon-KemounMahmud B. Tukur

Elisabeth Van Damme

Not to be, either currently or at any time in the previous fi ve 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. Compliant Compliant Compliant Compliant

Not 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 offi ce or having held such offi ce for less than fi ve years) is a Director. Compliant Compliant Compliant Compliant

Not to be a customer, supplier, investment banker or commercial banker: - that is material for the Company or its Group; - or for a signifi cant part of whose business the Company

or its Group accounts. Compliant Compliant Compliant Compliant

Does not have close family ties with any corporate offi cer in the Company. Compliant Compliant Compliant Compliant

Not to have been an Auditor of the Company within the previous fi ve years. Compliant Compliant Compliant Compliant

Has not been a Director of the Company for more than 12 years. Compliant Compliant Compliant Compliant

3.3 PRINCIPLE OF GOVERNANCE

The Board of Directors has had its own internal regulations since December 10, 2007, defi ning 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 notifi es Directors of the restrictive periods at the start of the fi scal year according to the fi nancial 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 shares

Although French law no longer requires Directors of incorporated companies to hold a minimum number of shares, section 13-V of the Company’s bylaws requires each Director to own at least 300 shares (see table in section 3.2.7 of this report).

3.3.2 Directors’ duty of confidentiality

Directors have a general duty of confi dentiality concerning Board and committee discussions and with regard to information of a confi dential nature of which they become aware as part of their responsibilities as Directors. The general duty of confi dentiality of Directors has been extended to all of the information and documents of which they are aware as part of their responsibilities as Directors.

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 confl ict of interest with the Group. In accordance with the Director’s charter, any Director who has a confl ict 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 confl ict 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 offi cers

To the Company’s knowledge, in the past fi ve years, no corporate offi cer:

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 offi cial 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 confl icts of interest, no corporate offi cer 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 confl ict 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 confl ict of interest has been identifi ed between the duties of each member of the Board of Directors and the Management with regards to the Company in their capacity as corporate offi cers 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 fi ve 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 the part 1.4 of 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 MANNER IN WHICH THE BOARD OF DIRECTORS PLANS AND ORGANIZES ITS WORK

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 offi cers 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 briefi ngs and can obtain information at all times on any changes in the activity or results of the Group, its fi nancial position, indebtedness, cash position and more generally on any of the Group’s commitments, particularly any diffi culties calling into question the implementation of any of the guidelines in the strategic plan.

The Board determines the objectives in terms of fi nancial 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;



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(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 offi cer to be a member of the Executive Committee or to be Chief Executive Offi cer 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 Meetings of the Board of DirectorsThe 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 signifi cant events occurring in the Company between Board meetings.

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 fi nancial statements.

The Board of Directors held nine meetings in 2017, with an average duration of three hours for Board meetings dealing with ongoing topics (six meetings), and a whole day for strategic Board Meetings (one meeting). An additional meeting was held by teleconference as provided for in the bylaws and the Board’s internal regulations to discuss specifi c items for strategic decision-making immediately, for which the Directors were very responsive. Directors were also consulted electronically to give their opinions on specifi c subjects when necessary.

3.4.4 Table summarizing attendance rates at Board and committee meetings in 2017

Directors Board Audit CommitteeNominating and

Compensation Committee

Jacques d’Armand de Chateauvieux 100% - -

Adrien de Chomereau de Saint André (1) 100% - 100%

Guillaume d’Armand de Chateauvieux(2) 100% 100%

Christian Lefèvre 100% - -

Baudouin Monnoyeur 100% - -

Astrid de Lancrau de Bréon(3) 100% 100%

Agnès Pannier-Runacher 100% 100% -

Philippe Salle 78% - 100%

Adeline Challon-Kemoun(4) 89% - 100%

Elisabeth Van Damme(5) 89% 100%

Mahmud B. Tukur 89% 67% -

Xiaowei Wang 78% - -

Advisor

Henri de Chateauvieux 100% - -

(1) Adrien de Chomereau de Saint André has been a Director since June 19, 2017.(2) Guillaume d’Armand de Chateauvieux is no longer a Director effective June 19, 2017.(3) Ms. de Lancrau de Bréon is no longer a Director effective February 1, 2017.(4) Adeline Challon-Kemoun has been a Director since March 13, 2017.(5) Elisabeth Van Damme has been a Director since May 23, 2017.

The meetings of the Board of Directors in 2017 focused on reviewing and discussing the following issues:

3 monitoring of day-to-day management:

3 detailed review of Group activity,

3 approval of interim statutory and consolidated fi nancial statements, approval of annual statutory and consolidated fi nancial statements,

3 review of the Group’s cash position and indebtedness,

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 how to secure the Company’s future during the upswing in the offshore oil and gas market and accommodate new innovative services able to fulfi ll the expectations of its clients, notably through digitization/digital transformation,

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 offi cers,

3 evaluation, corporate governance rules, and Director status with respect to independence criteria,

3 approval of Board reports,

3 composition of the Board and recruitment of new Directors,

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.

To this end, on December 4, 2017 the Board of Directors authorized the agreement to suspend the employment contract of the Chief Financial Offi cer, Astrid de Lancrau de Bréon, signed with BOURBON Corporation SA, following her appointment as the Company’s Chief Financial Offi cer. The Board of Directors also monitored the agreements authorized and entered into in previous fi scal years, whose performance was ongoing.

In addition, at its meeting on December 4, 2017, 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 periodic newsletter informing them of subsequent action on the decisions made by the Board, the situation of the surrounding market and the changes in main operational indicators. Where necessary, they are also able to question members of the Management and may communicate with each other privately without Executive Directors being present.

3.5 ASSESSMENT OF THE BOARD OF DIRECTORS AND THE COMMITTEES

The last formal assessment of the Board of Directors took place in late 2017 in the form of a detailed questionnaire.

The conclusions of this self-assessment were positive overall, particularly regarding:

3 the composition and operation of the Board;

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 signifi cant involvement of the Directors in the work of the Board;

3 a strong climate of trust among members of the Board of Directors facilitating quality discussions and great freedom of expression;

3 the subjects addressed during the meetings appropriate to the challenges facing the Company.

Both specialized committees also performed a self-assessment of their functioning in 2017.

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.

3.6 SPECIALIZED COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors is assisted in its work by two specialized committees: the Audit Committee and the Nominating, Compensation and Governance 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.



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3.6.1 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 company and consolidated fi nancial 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 fi nancial 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 fi nancial 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 fi nancial 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 fi nancial statements;

3 it examines the relevance and consistency of the accounting policies and standards used to prepare the fi nancial 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 fi nancial data, without compromising its independence, ensuring in particular that the Internal Control committee has been appointed and operates satisfactorily;

3 it reviews the fi nancial and cash position;

3 it examines the procedures adopted to evaluate and manage signifi cant risks;

3 it examines the fi nancial 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 Offi ce Board (HCCC) following the audits carried out;

3 it approves the provision by the Statutory Auditors of services other than the certifi cation of the accounts;

3 it reports regularly to the Board of Directors on the results of the certifi cation of the accounts, on how this work has contributed

to the integrity of the fi nancial data, and on the role it played in this process. It also informs it immediately of any diffi culties 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 Modus Operandi 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 offi ce 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 identifi ed 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, 2017, the committee is composed of three people, of which all three are Independent Directors, complying with the proportion of at least two-thirds recommended by the AFEP- MEDEF in listed companies:

3 Agnès Pannier-Runacher, Independent Director, who chairs the committee;

3 Elisabeth Van Damme; Independent Director;

3 Mahmud B. Tukur, Independent Director.

Since the meeting of the Board of Directors on March 14, 2018, Elisabeth Van Damme has joined the Nominating, Compensation and Governance Committee.

Its members all have recognized fi nancial 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 offi ce and functions of corporate offi cers» of this report).

The Audit Committee reviewed the fi nancial statements prior to their examination by the Board of Directors.

When the annual and interim fi nancial statements are closed, the members of the Audit Committee consult the Statutory Auditors on the methods used to carry out their work.

Astrid de Lancrau de Bréon, in her capacity as Chief Financial Offi cer of the Group, then in her capacity as Chief Operating Offi cer, took part in all the meetings of the 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 during the year by the Director of Internal Audit.

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.

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 2017. The Statutory Auditors attended committee meetings discussing the closing of the audited fi nancial 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 fi nancial statements for the fi scal year ended December 31, 2016, and the 2017 interim fi nancial 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 fi nancial position, indebtedness and cash position;

3 analyzed the results of the impairment tests on the Group’s Cash Generating Units;

3 evaluated the fi nancial 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 2018;

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 recommended the Board’s proposal for the reappointment of the Principal Statutory Auditor.

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 offi cer, 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 benefi ts system, in-kind benefi ts and other pecuniary rights, including any stock options for new or existing shares awarded to the corporate offi cers and/or Executive Directors of the Group. 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 for new or existing shares, 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 Modus Operandi 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, 2017, the Nominating, Compensation and Governance Committee is composed of three members, two of whom are Independent Directors:

3 Philippe Salle, Independent Director, who chairs the committee;

3 Adeline Challon-Kemoun, Independent Director;

3 Adrien de Chomereau de Saint-André, Director.

Given the resignation of Philippe Salle as Director on March 12, 2018, as of the date of fi ling of the present document, the Nominating, Compensation and Governance Committee is composed as follows:

3 Adeline Challon-Kemoun, Independent Director, who acts as chair;

3 Adrien de Chomereau de Saint-André, Director;

3 Elisabeth Van Damme, Independent Director.

The Nominating, Compensation and Governance Committee adopted internal regulations on March 15, 2010.

The Chairman of the Board and the Chief Executive Offi cer 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

The committee met twice in 2017 with a 100% attendance rate.

The committee dealt with various issues, particularly:

3 reviewing the independent status of Directors;

3 evaluating the achievement of performance-criteria objectives for the stock option plan of December 2013, which is reaching maturity;

3 reviewing the candidacies for new Directors affecting the current confi guration of the Board of Directors;

3 evaluating the performance and quality of management of each corporate offi cer;

3 the compensation of the corporate offi cers and defi nition 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.



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3.7 COMPENSATION AND BENEFITS OF CORPORATE OFFICERS IN RESPECT OF THE FISCAL YEAR ENDED ON DECEMBER 31, 2017

This paragraph describes the compensation and benefi ts paid in respect of fi scal year 2017 to the corporate offi cers of the Company.

The summary tables prepared in accordance with the provisions of Position-Recommendation n°2009-16 of the French Financial Markets Authority are shown in the current paragraph 3.7.3 below.

The components of the compensation and benefi ts of any kind paid in respect of the fi scal year ended December 31, 2017 to Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer, Gaël Bodénès, Chief Operating Offi cer, Christian Lefèvre, Chief Operating Offi cer until September 30, 2017 and Astrid de Lancrau de Bréon, Chief Financial Offi cer from October 1, 2017, in application of the compensation policy approved by the Shareholders’ Meeting of May 23, 2017 (thirteenth ordinary resolution), will be submitted to the vote of the Shareholders’ Meeting of May 30, 2018 in accordance with the provisions of Article L. 225-100 of the French Commercial Code. They are detailed below.

3.7.1 Compensation of the Chairman and Chief Executive Officer in respect of fiscal year 2017

Until May 26, 2016, Jacques d’Armand de Chateauvieux, in his capacity as Chairman of the Board of Directors, received no direct compensation from BOURBON Corporation other than Directors’ fees.

On May 26, 2016, the Shareholders’ Meeting re-elected Jacques d’Armand de Chateauvieux to the Board. At a Board meeting held the same day, the Company’s Directors re-elected him as Chairman and resolved to combine the roles of Chairman of the Board of Directors and Chief Executive Offi cer of the Company and to appoint him as Chairman and Chief Executive Offi cer of BOURBON Corporation SA.

At its meeting on March 13, 2017, 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 2017 fi scal year would be as follows:

3 a fi xed annual salary of €144,000;

3 variable compensation, entirely linked to the Company’s performance, corresponding to 1% of surplus net income (group share) for the year in question and limited to a maximum of €500,000;

3 Directors’ fees paid by BOURBON Corporation.

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 specifi c 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 offi cers, 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.

At its meeting on March 14, 2018, the Board, after approving the Company’s fi nancial statements, noted that net income (group share) was negative. Therefore, no variable compensation will be paid to Jacques d’Armand de Chateauvieux for fi scal year 2017.

3.7.2 Compensation of the Executive Vice Presidents in respect of fiscal year 2017

The compensation paid to Executive Vice Presidents has a fi xed component and a component which is variable annually. Some years they are also allocated stock options or stock purchase options linked to performance.

For the variable portion, several years ago the Board of Directors defi ned a calculation procedure based on fi xed compensation; variable compensation can reach 50% of fi xed compensation if the objectives are achieved, and up to 70% if the objectives are exceeded. The objectives are reviewed and voted on each year by the Board of Directors upon the proposal of the Nominating, Compensation, and Governance Committee, and aligned in part with the objectives of the Group’s key executives as well as with the objectives relating 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 confi dentiality.

The Executive Vice Presidents in offi ce at December 31, 2017 benefi t from unemployment insurance for senior executives, Gaël Bodénès has a Company car and Astrid de Lancrau de Bréon had the use of Company housing until December 3, 2017.

On the basis of the objectives defi ned at the meeting of March 13, 2017, 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, fi xed the variable compensation to be paid for fi scal year 2017, subject to the approval of the Shareholders’ Meeting of May 30, 2018.

Achievement of objectives for fi scal year 2017

Target % % granted

ECONOMIC PARAMETERS: 40% 0%

- Target for EBITDA excl. capital gains 20% Not achieved

- Objective for Days Sales Outstanding (DSO) 20% Not achieved

OPERATIONAL PARAMETERS/HSE: 40% 28%

- Target for average fl eet utilization rate 20% Not achieved

- Target for Group TRIR 20% Achieved

PERSONAL CONTRIBUTION : 20% 20%

TOTAL 100% 48%



3.7.3 Summary table of the compensation, stock options and shares granted to each Executive Director in office as of December 31, 2017 (in euros)

Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer Fiscal year 2016 Fiscal year 2017

Compensation due for the year (detailed in table 3.7.5) 102,000 174,000

Variable long-term compensation allocated over the year - -

Value of stock options awarded during the year - -

Value of the performance stock granted during the year - -

TOTAL 102,000 174,000

Gaël Bodénès, Chief Operating Offi cer Fiscal year 2016 Fiscal year 2017




Value of performance shares awarded during the year - -

TOTAL 309,825 408,512

Astrid de Lancrau de Bréon, Chief Financial Offi cer (since October 1, 2017) Fiscal year 2016 Fiscal year 2017





TOTAL 29,000 283,508

3.7.4 Summary table of the compensation, stock options and shares granted to each Executive Director whose term of office ended in 2017 (in euros)

Christian Lefèvre, Chief Operating Offi cer (until September 30, 2017) Fiscal year 2016 Fiscal year 2017

Compensation due for the year (detailed in table 3.7 .6 ) 443,162 505,018




TOTAL 443,162 505,018



3

3.7.5 Summary table of the compensation of each Executive Director in officeas of December 31, 2017 (in euros)

Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer

Fiscal year 2016 Fiscal year 2017

Due forthe year

Paid over the year

Due forthe year

Paid over the year

Fixed compensation 72,000 72,000 144,000 144,000

Variable compensation(1) - - - -

Variable long-term compensation - - - -

Exceptional compensation - - - -

Directors’ fees(2) 30,000 30,000 30,000 30,000

Benefi ts in kind - - - -

TOTAL 102,000 102,000 174,000 174,000

(1) Variable compensation is payable the following year, after approval of the fi nancial statements by the Shareholders’ Meeting.(2) The amount due may vary according to the number of Board meetings held between annual Shareholders’ Meetings.

Gaël Bodénès, Chief Operating Offi cer


Due forthe year

Paid over the year

Due forthe year

Paid over the year

Fixed compensation 265,005 265,005 326,337 326,337(3)

Variable compensation(1) 26,500 109,975 63,662 26,500



Directors’ fees for terms of offi ce served in the Group - - - -

Benefi ts in kind(2) 18,320 18,320 18,513 18,513

TOTAL 309,825 393,300 408,512 371,350

(1) Variable compensation is payable the following year, after approval of the fi nancial statements by the Shareholders’ Meeting.(2) Company car + unemployment insurance for senior executives.(3) Of which pay in lieu of vacation amounting to €61,204.

Astrid de Lancrau de BréonChief Financial Offi cer (since October 1, 2017)


Due for the year

Paid over the year

Due for the year

Paid over the year

Fixed compensation - - 226,461 226,461(3)

Variable compensation(1) - - 52,800 -



Directors’ fees for terms of offi ce served in the Group 29,000 37,000 - 29,000

Benefi ts in kind(2) - - 4,247 4,247

TOTAL 29,000 37,000 283,508 259,708

(1) Variable compensation is payable the following year, after approval of the fi nancial statements by the Shareholders’ Meeting.(2) Housing until December 3, 2017; as of December 4, 2017, Astrid de Lancrau de Bréon has had unemployment insurance for senior executives.(3) Of which pay in lieu of vacation amounting to €6,460.

No supplementary scheme has been granted by BOURBON Corporation, nor any benefi t in kind other than those mentioned in the tables above, for the Chairman and Chief Executive Offi cer and for each of the Chief Operating Offi cers.



3.7.6 Summary table of the compensation of each Executive Director (in euros) whose term of office ended in 2017

Christian Lefèvre, Chief Operating Offi cer (until September 30, 2017)


Due for the year

Paid over the year

Due for the year

Paid over the year




Exceptional compensation - - 65,000 -

Directors’ fees 30,000 30,000 29,000 30,000

Benefi ts in kind(2) 6,156 6,156 4,617 4,617

TOTAL 443,162 559,712 505,018 439,168

(1) Variable compensation is payable the following year, after approval of the fi nancial statements by the Shareholders’ Meeting.(2) Company car.(3) Of which pay in lieu of vacation amounting to €90,031.

3.7.7 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 fi xed 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 2017 to the members of the Board of Directors (before withholding tax for foreign Directors) totaled €359,000.

(in €)Directors’ fees

paid in 2016Directors’ fees

paid in 2017

Directors

Jacques d’Armand de Chateauvieux 30,000 30,000

Adrien de Chomereau de Saint André - -

Adeline Challon-Kemoun - 3,000

Christian Lefèvre 30,000 30,000

Baudouin Monnoyeur 30,000 30,000

Agnès Pannier-Runacher 45,000 45,000

Philippe Salle 40,000 34,000

Mahmud B. Tukur 42,000 37,000

Elisabeth Van Damme - -

Xiaowei Wang 25,000 24,000

Advisor

Henri d’Armand de Chateauvieux 15,000 15,000

Director whose term ended during the fi scal year

Astrid de Lancrau de Bréon 37,000 29,000

Guillaume d’Armand de Chateauvieux 40,000 45,000

Bernhard Schmidt 40,000 37,000

TOTAL 374,000 359,000

Members of the Board of Directors did not benefi t from any other compensation or benefi t during the year.



3

3.7.8 Stock options awarded and/or exercised during 2017

In accordance with the AFEP-MEDEF Code, to which the Company refers, stock option plans for corporate offi cers have been subject to performance conditions since 2009.

3.7.8.1 Plan no. 9 dated December 5, 2011 for stock subscription and/or purchase options

The 2011 plan is exercisable from December 5, 2015 until December 4, 2017. The Board of Directors had decided that the defi nitive allocation of options to the Chief Executive Offi cer and the Executive Vice Presidents would be subject to the following performance conditions:

3 1st criterion: TRIR = 0.70 on average over the 2010-2015 period;

3 2nd criterion: average annual revenue growth over the 2010-2015 period. The reference value is the same as the target in the “BOURBON 2015 Leadership Strategy” plan;

3 3rd criterion: EBITDA/Average capital employed excl. advances in 2015. The reference value is the same as the target in the “BOURBON 2015 Leadership Strategy” plan.

The Board of Directors, on the recommendation of the Nominating, Compensation and Governance Committee, having taken note of the results achieved versus the targets set, decided that only the fi rst criterion for the average safety rate for 2010-2015 had been achieved (average result of 0.63). The corporate offi cers were therefore able to exercise a third of the options granted to them in December 2011 between December 2015 and December 2017.

No options had been exercised as of December 31, 2017.

No options may be exercised after December 4, 2017.

3.7.8.2 Plan no. 11 dated December 2, 2013 for stock subscription and/or purchase options

The 2013 plan is exercisable from December 2, 2017 to December 1, 2019 The Board of Directors decided that the defi nitive allocation of options to the Chief Executive Offi cer and the Executive Vice Presidents would be subject to the following performance conditions:

10% will be paid if the 2013/2014/2015 TRIR (Total incidents recorded per million hours worked based on a 24-hour day) average does not exceed 0.65 in 2015;

3 10% will be paid if the fl eet availability rate is at least 95% in 2015;

3 20% will be paid if the EBITDAR/revenue ratio is at least 38% in 2015;

3 20% will be paid if the EBITDA/capital employed ratio is at least 20% at the end of 2015;

3 40% will be paid if the annual average increase in BOURBON share prices, over the four years of the plan, is at least 8% (based on the allocation price).

The Board reserves the option to adjust performance conditions in the event of major changes to exchange rates, in the event of exceptional circumstances requiring and justifying such a change, subject to approval by the Nominating, Compensation and Governance Committee, to neutralize, as far as possible, the

consequences of major changes to the targets set at the time of initial allocation.

All existing options allocated to corporate offi cers still in offi ce as of December 31, 2017 represent 0.10% of the Company’s potential share capital to date.

In accordance with Article L. 225-18 of the French Commercial Code, as of 2008 the Board of Directors decided that corporate offi cers would have to retain 20% of shares resulting from an exercising of options until the end of their tenure.

Also, corporate offi cers must not use any hedging instruments on any stock options or shares allocated to them by the Company.

Corporate offi cers must also honor a duty of care and vigilance, as well as an obligation to take extra precautions in any personal transactions on company securities. In particular, they must not carry out any speculative short-term transactions or trades on Company shares, in the following cases:

3 when they are in possession of information that could, when published, affect the price of these shares;

3 during periods explicitly indicated to them by the Company, especially during the month preceding the preliminary announcement of the annual and half-yearly results of the Company, and two weeks prior to the publication of the Company’s quarterly revenues;

3 during this period, only the simple exercise of options is permitted.

Upon notice from the Nominating, Compensation and Governance Committee and the Audit Committee, the members of the Board

On the recommendation of the Compensation and Governance Committee and the Audit Committee, the members of the Board noted in its meeting of December 4, 2017, that the only Executive Director having remained in post for the entire duration of the option period was Gaël Bodénès, and that only 40% of the performance criteria had been attained; the following 2 criteria had also not been met:

3 EBITDA/capital employed, which must be equal to 20% at the end of 2015;

3 average annual increase in the price of the BOURBON share, over the 4 years of the duration of the plan, which needed to be equal to 8% (based on the allocation price).

Consequently, the Board decided that Gaël Bodénès could exercise 40% of the number of options allocated in 2013.

3.7.9 Stock options awarded during the year 2017 to each Executive Director

None

3.7.10 Stock options exercised during the year by each Executive Director

None



3.7.11 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 2017

None

3.7.12 Performance shares awarded and/or that became available during the fiscal year

None

3.7.13 History of stock option grants or stock purchase options awarded

The table below shows all the information related to stock option plans granted by the Company in force as of December 31, 2017.

Meeting date

June 1, 2011

Plan No9(1) Plan No10(2) Plan No11

Date of Board meeting December 5, 2011 November 30, 2012 December 2, 2013

Start date for exercising options December 5, 2015 November 30, 2016 December 2, 2017

Expiration date December 4, 2017 November 29, 2018 December 1, 2019

Original number of benefi ciaries 1,153 2 68

Total number of stock subscription or purchase options: 2,789,050 29,700 1,037,000

a) Corporate offi cers(2) 110,000 (3) 140,000(3)

Jacques d’Armand de Chateauvieux - - -

Astrid de Lancrau de Bréon - -

Gaël Bodénès 38,500 - 60,000

b) Top 10 employee benefi ciaries 2,211,000 29,700 198,000

Subscription or purchase price €18.18 €19.82 €19.68

Discounts granted No No No

Options exercised at 12.31.2017 - - -

Options canceled or voided at 12.31.2017 2,789,050 - 273,000

Options remaining to be exercised at 12.31.2017(4) - 29,700 764,000

(1) Numbers of options and exercise prices are adjusted values, as required under applicable regulations, following trading in BOURBON Corporation stock.(2) List of corporate offi cers in post at December 31, 2017.(3) Options subject to performance conditions (see section 3.3.3.1 of the management report).(4) This stock option subscription or purchase plan ended on December 4, 2017.

3.7.14 History of bonus share allocations in force as of December 31, 2017

In 2013, the Board of Directors authorized a restricted stock award of existing or new shares to salaried members of staff, or certain categories of them, of all of BOURBON’s subsidiaries.

The vesting of the shares was subject to fulfi llment of the conditions and criteria laid down by the Board of Directors, as described below:

3 60% of the shares were subject to employment at the end of two (2) years: recipients still employed by BOURBON on December 2, 2015 fulfi lled this condition;

3 40% of the shares were subject to employment at the end of two (2) years and the attainment of performance criteria:

3 20% was awarded if the 2013/2014/2015 average TRIR (Total incidents recorded per million hours worked based on 24 hours per day) was 0.65 or less; 100% of this criterion was attained with an average of 0.60,

3 20% of the shares were granted if the fl eet availability rate in 2015 was greater than or equal to 95%; 100% of this criterion was attained with a rate of 96.4%.



3

The allotted shares were covered by the share buy-back that took place in 2015.

Meeting date June 1, 2011

Date of Board meeting December 2, 2013

Number of benefi ciaries 2,103

Total number of bonus shares allocated 767,400

Corporate offi cers -

Vesting date of the shares for French residents December 2, 2015(1)

Vesting date of the shares for foreign residents December 2, 2017(1)

End of lock-up period December 2, 2017

Total number of canceled or voided shares 135,600

Shares awarded(1) to French residents at the end of two years 312,000

Bonus shares granted to foreign residents in 2017 319,200

(1) The vesting period is two years for French residents (followed by a two-year lock-up period) and four years for foreign residents (with no lock-up period).

This bonus share award plan thus ended on December 2, 2017.

3.8 PRINCIPLES AND CRITERIA FOR THE DETERMINATION, ALLOCATION AND GRANTING OF FIXED, VARIABLE AND EXCEPTIONAL ITEMS COMPRISING TOTAL COMPENSATION AND BENEFITS OF ANY KIND ATTRIBUTABLE TO EXECUTIVE DIRECTORS IN 2018

In accordance with Article L. 225-37-2 of the French Commercial Code as amended by ruling no. 2017-1162 dated July 12, 2017, we hereby present below the principles and criteria for determining, allocating and granting the fi xed, variable, and exceptional components of the overall compensation and benefi ts of any kind to be awarded to the Chairman and Chief Executive Offi cer, to the Chairman of the Board of Directors, to the Chief Executive Offi cer (due to the separation of functions that occurred during the fi scal year) and to the Chief Operating Offi cers pursuant to their terms of offi ce.

The Board of Directors submits for the approval of the Combined Shareholders’ Meeting the principles and criteria for determining, allocating and granting the fi xed, variable, and exceptional components of the overall compensation and benefi ts of any kind to be awarded to the Chairman and Chief Executive Offi cer, to the Chairman of the Board of Directors, to the Chief Executive Offi cer (due to the separation of functions that occurred during the fi scal year) and to the Chief Operating Offi cers pursuant to their terms of offi ce, for the 2018 fi scal year, as described below (see paragraph 6 of this document setting out the resolutions to the Shareholders’ Meeting of May 30, 2018).

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 2019 in order to approve the fi nancial statements for the 2018 fi scal 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 November 2016 and which oversees compliance with the following principles:

3 the compensation policy is tailored to refl ect the responsibilities of each person and ensures that the compensation components fi t the Group’s overall compensation policy for executives in key positions;

3 the compensation policy must remain consistent with those of fellow 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 fi xed component and a variable component;

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 fi xed component;

3 the allocation of stock options or the allocation of bonus shares must refl ect 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 defi nitive allocation of bonus shares, the Executive Directors will have to retain 20% of the shares until the end of their tenure.

The stock options granted for new and/or existing shares refl ect a policy of proportional distribution which is not



concentrated on one category of benefi ciaries and, more particularly, on the Executive Directors, in accordance with the recommendations of the AFEP-MEDEF Code.The stock option plans for new or existing shares relate exclusively to shares of BOURBON Corporation.

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 specifi cally responsible for recommending the number of options to be awarded to management as well as setting any 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 shares;

The bonus share award plans refl ect a policy of proportional allocation which is not concentrated on one category of benefi ciaries 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 specifi cally 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 benefi ciaries:

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 for the relevant executive;

3 The Board of Directors considers, in respect of other compensation, such as exceptional and standard compensation, indemnities or benefi ts due or likely to be due as a result of taking offi ce, that in the interest of BOURBON and stakeholders, the principle of paying these to corporate offi cers under very specifi c circumstances should not rule out in principle. The payment of such compensation must be justifi ed 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 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: fi xed 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 The principles and criteria for the determination, distribution and allocation of fi xed, variable and exceptional items composing total compensation and benefi ts of any kind attributable to Executive Directors in respect of 2018 were agreed by the Board of Directors at its meeting of March 14, 2018 on the proposal of the Nominating, Compensation and Governance Committee; these principles and criteria are as follows, and are subject to approval by the Shareholders’ Meeting of May 30, 2018.

3.8.2 Principle and criteria for determining the compensation of the Chairman and Chief Executive Officer for the 2018 fiscal year

3 Directors’ fees: The Chairman and Chief Executive Offi cer may receive and retain Director’s fees paid by BOURBON Corporation up to the limit set by the Shareholders’ Meeting in accordance with the allocation rule defi ned by the Board.

The meeting of the Board of Directors of March 14, 2018, on the recommendation of the Nominating, Compensation and Governance Committee, decided to keep the same framework for fi xed and variable annual compensation for the 2018 fi scal year, nevertheless with a modifi cation concerning the limit on the variable compensation, i.e. with a calculation method based on the fi xed compensation, with the variable compensation being capped at 70% of the fi xed compensation:

3 annual fi xed compensation: it will remained unchanged at an amount of €144,000;

3 annual variable compensation: this would remain fully linked to the Company’s performance, corresponding to 1% of the surplus net income (group share) for the fi scal year concerned and capped at 70% of the fi xed compensation.

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 Article L. 225-100 of the French Commercial Code.

Other compensation, such as exceptional compensation, compensation, indemnities or benefi ts due or likely to be due upon taking offi ce, may be paid under very specifi c circumstances. The payment of such compensation must be justifi ed and the Board must provide an explanation of the reasons for granting such compensation. 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



3

accordance with Article L. 225-100 of the French Commercial Code amended by Order no. 2017-1162 dated July 12, 2017:

3 The Chairman and Chief Executive Offi cer may be granted stock subscription and/or purchase options as well as bonus shares under the conditions set out in section 3.8.1 «General principles for determining the compensation of Executive Directors»;

3 The Chairman and Chief Executive Offi cer may, under certain conditions, receive severance payments or compensation for a non-competition undertaking capped at 24 months of his or her annual compensation.

3.8.3 Principle and criteria for determining the compensation of the Chief Executive Officer for the 2018 fiscal year

3 Directors’ fees: the Chief Executive Offi cer holding a term of offi ce within BOURBON Corporation may receive and retain Directors’ fees paid by the Company up to the limit set by the Shareholders’

Meeting, and in accordance with the allocation rule defi ned by the Board.

3 Annual fi xed compensation: the Chief Executive Offi cer receives fi xed compensation in respect of his or her term of offi ce, determined by the Board of Directors on the recommendation of the Nominating, Compensation and Governance Committee.

3 Annual variable compensation: the Chief Executive Offi cer receives variable compensation in respect of his or her term of offi ce, determined by the Board of Directors on the recommendation of the Nominating, Compensation and Governance Committee.

The formula for calculating this variable compensation is reviewed annually by the Nominating, Compensation and Governance Committee and the Board of Directors.

At its meeting of March 14, 2018, the Board of Directors decided that a calculation method based on fi xed compensation would be retained. The variable component may reach 50% of fi xed compensation if targets are met, and 70% if the targets are exceeded. The targets for the 2018 fi scal year, based on the objectives of the 2018 budget, would be as follows:

Target %

ECONOMIC PARAMETERS: 40%

- Target objective for EBITDA excluding capital gains(1) 20%

- Objective for Days Sales Outstanding (DSO)(2) 20%

HSE/OPERATIONAL PARAMETERS: 40%

- Target objective for average fl eet utilization rate(3) 20%

- Target objective 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 for each parameter (economic/operational) would continue to be based on the application of a graduation 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 = 105% TO = 120%

R = 100% TO = 100%

R = 95% TO = 80%

R < 95% TO = 0%


The Chief Executive Offi cer 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 retirement benefi ts, or indemnities under a non-competition commitment, up to an amount not exceeding 24 months of his annual compensation.

Benefits of any kind:

The Chief Executive Offi cer may be provided with a company car and unemployment insurance for senior executives.



3.8.4 Principle and criteria for determining the compensation of the Chairman of the Board of Directors in respect of fiscal year 2018

3 Directors’ fees: the Chairman of the Board of Directors may receive and retain Directors’ fees paid by BOURBON Corporation up to the limit set by the Shareholders’ Meeting in accordance with the allocation rule defi ned by the Board.

3 Annual fi xed compensation: the Chairman of the Board of Directors receives fi xed compensation in respect of his or her term of offi ce; this compensation is set by the Board of Directors on the recommendation of the Nominating, Compensation and Governance Committee.

3 The Nominating, Compensation and Governance Committee and the Board of Directors review this fi xed compensation annually.

3.8.5 Principle and criteria for determining the compensation of the Chief Operating Officers for the 2018 fiscal year

3 Directors’ fees: the Chief Operating Offi cers holding a term of offi ce within BOURBON Corporation SA may receive and retain Directors’ fees paid by the Company up to the limit set by the

Shareholders’ Meeting in accordance with the allocation rule defi ned by the Board.

3 Annual fi xed compensation: the Chief Operating Offi cers receive fi xed compensation pursuant to their terms of offi ce, determined by the Board of Directors upon the recommendation of the Nominating, Compensation and Governance Committee.

This fi xed compensation is re-examined annually by the Nominating, Compensation and Governance Committee and the Board of Directors.

3 Annual variable compensation: the Chief Operating Offi cers receive variable compensation pursuant to their terms of offi ce, determined by the Board of Directors upon 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.

At the meeting of March 14, 2018, the Board of Directors decided that a calculation method based on the fi xed compensation will be retained. The variable compensation may reach 50% of the fi xed compensation if the objectives are realized and up to 70% if the objectives are exceeded. The objectives for the 2018 fi scal year based on the objectives of the 2018 budget would be as follows:

Target %

ECONOMIC PARAMETERS: 40%

- Target objective for EBITDA excluding capital gains(1) 20%

- Objective for Days Sales Outstanding (DSO)(2) 20%

HSE/OPERATIONAL PARAMETERS: 40%

- Target objective for average fl eet utilization rate(3) 20%

- Target objective for Total Recordable Incidents Rate (Group TRIR)(4) 20%

PERSONAL CONTRIBUTION: 20%

TOTAL 100%

The method used to determine the achievement of target objectives which is specifi c to each parameter (economic/operational) would continue to be based on the application of a graduation 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 = 105% TO = 120% R = 100% TO = 100% R = 95% TO = 80% R < 95% TO = 0%


The Chief Operating Offi cers 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, they may be paid retirement benefi ts, or indemnities under a non-competition commitment, up to an amount not exceeding 24 months of their annual compensation.

Benefits of any kindThe Chief Operating Offi cers may benefi t from a company car and unemployment insurance for senior executives.



3

3.8.6 Commitments of any kind made by the Company to its Executive Directors

Executive Directors affected by the recommendation of AFEP-MEDEF

Employment contract

Supplementary pension scheme

Indemnity or benefi ts 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 Chateauvieux(1),

Chairman and Chief Executive Offi cerStart of term of offi ce: 05.26.2016End of term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements for the fi scal year ending on 12.31.2018

x x x x

Gaël Bodénès(2),,Chief Operating Offi cerStart of term of offi ce: 05.26.2016End of term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements for the fi scal year ending on 12.31.2018

(3) x x x

Astrid de Lancrau de Bréon,Chief Financial Offi cerStart of term of offi ce: 10.01.2017End of term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements for the fi scal year ending on 12.31.2018

(4) x x x

Christian LefèvreChief Operating Offi cerEnd of term of offi ce: October 1, 2017

(5)

(1) Jacques d’Armand de Chateauvieux has been Chairman of the Board since March 14, 2018. His term of offi ce will end following the Shareholders’ Meeting called to approve the fi nancial statements for the fi scal year ending on 12.31.2018.

(2) Gaël Bodénès has been Chief Executive Offi cer since March 14, 2018 and his term of offi ce will end following the Shareholders’ Meeting called to approve the fi nancial statements of the fi scal year ending on 12.31.2018.

(3) The employment contract signed by Gaël Bodénès with the EIG Bourbon Management has been suspended.(4) The employment contract signed by Astrid de Lancrau de Bréon with BOURBON Corporation SA has been suspended.(5) Christian Lefèvre stepped down as Chief Operating Offi cer on October 1, 2017. His employment contract with the EIG Bourbon Management ended on September 30,

2017.



3.9 APPLICATION OF THE AFEP-MEDEF CODE OF CORPORATE GOVERNANCE:SUMMARY TABLE

As part of the “Apply or Explain” rule referred to in Article L. 225-37 of the French Commercial Code and Article 27.1 of the AFEP-MEDEF Code, BOURBON Corporation believes that it complies with the recommendations of the AFEP-MEDEF Code. 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 fi scal year 2017Section 24.2.3 of the AFEP-MEDEF Code states that “variable compensation should be subject to the achievement of specifi c and predefi ned objectives”.

The Board of Directors of BOURBON Corporation decided, at its meeting of May 26, 2016, to combine the functions of Chairman and Chief Executive Offi cer. Jacques d’Armand de Chateauvieux was accordingly appointed as Chairman and Chief Executive Offi cer.Jacques d’Armand de Chateauvieux is also Chairman of the simplifi ed joint stock company JACCAR Holdings, which is the majority shareholder in BOURBON Corporation.Given the diffi culties encountered by the offshore oil and gas activity and its impact on the Company’s results, the Directors of BOURBON Corporation, at the Board meeting of July 4, 2016, decided to assign moderate fi xed compensation to the Chairman and Chief Executive Offi cer 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.Effectively, 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 fi nancing, 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 Offi cer, 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 offi ce, this would give rise to any payment.The choice of the specifi ed ceiling as a target amount and not a percentage of the fi xed compensation is due to the moderate fi xed compensation of the Chairman and Chief Executive Offi cer.

Management report3.7.1 Compensation of the

Chairman and Chief Executive Offi cer

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 and in section 1.4 “Other Legal and Financial Information”.

3.11 FACTORS THAT COULD HAVE AN IMPACT IN THE EVENT OF A PUBLIC OFFERING

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 CompanyThe capital structure of BOURBON Corporation SA is detailed in paragraph 7.1 of the management report.



3

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 Internet site http://www.bourbonoffshore.com section «Investors» – «Capital and shareholding» – «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 fi nancial 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 fi rst paragraph [of Article L. 225-123 of the French Commercial Code] are valid, unless the Articles of Association 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 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 fi ve years as of this date, includes commitments on the transfer of company stock (AMF decision No. 214C236 of June 30, 2014);

Shareholders’ agreements relating to the collective commitment to hold BOURBON shares signed under Articles 787 B and 885-I bis of the French General Tax Code, mentioned in section 2.8 “Other legal and fi nancial 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”. Article 13 of the bylaws is reproduced in the section entitled “Information about the Company” in the Registration Document, which sets out the rules for the appointment of Directors.

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 identifi ed any signifi cant 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 23, 2017 in its sixteenth 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 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 benefi t 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 23, 2017 in its seventeenth 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 fi xed at €30 per share. In the event of any transaction affecting the capital, notably stock splits, consolidation of shares or allocation of bonus shares, the above-mentioned sum will be adjusted proportionally (multiplication coeffi cient 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 fi xed at €114,513,900.

The Shareholders’ Meeting has granted full powers to the Board of Directors to proceed with these operations, to decide on the terms and conditions thereof, to enter into any agreements and to satisfy all formalities.

It will be suggested at the Shareholders’ Meeting on May 30, 2018 that the share buyback program is renewed in accordance with the description of the share buyback program outlined in this Registration Document under “Related transactions on company stock – Stock 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

Most 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.

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 fi nancial 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 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

Agreement to suspend the employment contract signed by Gaël Bodénès with the EIG Bourbon Management, a subsidiary of BOURBON Corporation SA.


MANAGEMENT REPORT

3

Summary table of delegations of power and current authorizations grantedby 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 2017

Combined Shareholders’ Meeting of 05.26.201614th resolution

Delegation given to the Board of Directors to increase the capital by incorporating reserves, profi ts or premiumsMaximum amount(1): €7 million

Twenty-six months, i.e. until 07.25.2018 None


Delegation granted to the Board of Directors to proceed to share issues and/or issues of marketable securities with preferential subscription right.Maximum amount(1):Shares: €7 million.Debt securities: €250 million.



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 shares or marketable securities giving access to capital decided in application of the 15th resolution of the Shareholders’ Meeting of May 26, 2016



Authorization for the Board of Directors to allot existing or new bonus shares to members of the salaried staff (and/or certain authorized corporate offi cers).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


Delegation given to the Board of Directors to issue shares and/or marketable securities with cancellation of preferential subscription rights by offer to the public.Maximum amount(1):Shares: €8 million.Debt securities: €350 million.

26 months, i.e. until 07.22.2019 None


Authorization given to the Board of Directors to waive the conditions for fi xing the issue price of marketable securities issued in respect of the capital increase specifi ed in the 18th resolution of the Shareholders’ Meeting dated May 23, 2017



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 shares or marketable securities giving access to capital decided in application of the 18th resolution of the Shareholders’ Meeting of May 23, 2017


Combined Shareholders’ Meeting of 05.23.201721st resolution

Delegation given to the Board of Directors to increase the capital with the cancellation of preferential subscription rights in favor of members of a Company savings planMaximum amount(1):Shares: €5 million.


Combined Shareholders’ Meeting of 05.23.201722nd 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

(1) Separate ceilings.


MANAGEMENT REPORT3 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.

The control environment thus includes the behaviors of the people responsible for the internal control of accounting and fi nance.

4.1 GENERAL ORGANIZATION OF INTERNAL CONTROL

Under the authority issued by the Board of Directors, the Group is managed by the Chairman and Chief Executive Offi cer assisted by three committees:

3 the General Management Committee

The BOURBON Executive Committee is the decision-making body accountable towards clients, 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, fi nancial and business performance in line with the budget. In addition to the members of the Executive Committee, this committee is composed of nine members representing the Group’s central functions;

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 specifi c 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.

The operational units of BOURBON are grouped within the Subsea Services, Marine & Logistics and Mobility activities.

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, the operating units report quarterly to the Executive Committee on their operational and fi nancial 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 defi ned by the Group are in line with the guidelines defi ned by the Management.

Operating standards and proceduresThe Group’s policy in terms of conducting operations and controlling risks is clearly defi ned 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 certifi cation of employees, maintenance, purchases, analysis and the treatment of incidents and accidents.

Internal control procedures related to the preparation and treatment of fi nancial and accounting informationThe processes covered fall into two categories: those that enable information to be entered into the accounting data base and fi nancial and accounting information to be generated, and the procedures for year-end closure and fi nancial communication.

The reliability of the fi nancial 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 fi nancial statements in accordance with rules established and approved by Management. The Company draws up its consolidated fi nancial statements according to IFRS. An integrated software program is used to consolidate the Group’s fi nancial statements. The interim and annual consolidated fi nancial 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 fi nancial information.


MANAGEMENT REPORTControl environment

3

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.

4.2.1 Audit Committee

The attributes of the Audit Committee and the work conducted by it are described in section 1.5.1. of this report.

4.2.2 Internal Control and Risk Committee

As of December 31, 2017, the Internal Control Committee was composed of the Chief Operating Offi cer and the Chief Financial Offi cer. The Internal Audit, Risk Director and Group Compliance offi cer 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 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 Group 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, fi nancial, 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 is composed of fi ve people, including a Director, three Internal Auditors of whom two are dedicated to onshore audits and one to offshore audits, 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, 2017, Group Internal Audit reported to the Chief Financial Offi cer and to the General Management Committee. It has access to the Chairman and Chief Executive Offi cer and to the Chairman of the Audit Committee as necessary. It reports regularly to the Audit Committee on its analysis of the Group’s internal control. Group Internal Audit covers all fi elds 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, fi nances, 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. BOURBON’s Internal Audit Department is a member of the French Institute of Internal Audit and Control (IFACI).

Following an independent external audit carried out by IFACI Certifi cation, in December 2013 BOURBON’s Internal Audit Department was awarded certifi cation of compliance with international internal audit standards. Its certifi cation was renewed in January 2017. This certifi cation recognizes the professionalism of the Group Internal Audit team and attests that it has implemented internal audit methods meeting the highest international professional standards.

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 fi nancial processes. This guide applies to all of the Group’s entities.


MANAGEMENT REPORT3 Control environment

4.2.6 Group control of operating activities

The Group’s HSE (Health, Safety and Environment) managers and referring offi cers 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.

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 THE STATUTORY AUDITORS

As of December 31 each year, the Statutory Auditors perform a complete audit of the fi nancial statements of BOURBON Corporation and all its subsidiaries. An interim audit that takes the form of a limited review is also conducted by the Statutory Auditors on June 30 each year.

Their work provides the Group with reasonable assurance regarding the reliability and accuracy of the accounting and fi nancial 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 signifi cant misstatement in the fi nancial 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, “process owners”, Executive Committee, Audit Committee, Internal Audit, insurance).

The risk management process covers the updating of risk mapping and risk management, monitoring and control.

The risk map is updated annually, which enables the Group to precisely identify the most signifi cant risks to which it may be exposed. The potential risks identifi ed were of many different kinds, both at the Group level and in terms of its operational activities.

The Internal Audit, Risk Director and Group Compliance offi cer 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 evaluation: identifying all risks of non-compliance in order to develop the tools, techniques and corrective measures necessary to prevent these risks;

3 policies and procedures: the establishment and deployment of specifi c guidelines ensures that adequate compliance processes exist within the Group;

3 communication: the deployment of the program is regularly communicated to all employees;

3 in 2015, the Group also successfully launched an e-learning compliance program aimed at all onshore and offshore employees; this program continued during 2017;

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. 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 REPORTRisk factors

3

5. RISK FACTORS

BOURBON’s objective is to ensure that the entire internal control system can, as far as possible, prevent any risks to which it is exposed. With this in mind, a “risk-mapping” process was developed in 2005.

In 2015, the Group updated its risk map, enabling it to pinpoint the most signifi cant risks it might face. The potential risks identifi ed were of many different kinds, both at the Group level and in terms of its operational activities.

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 type and ranking of these risks are considered strategic and confi dential. Nevertheless, the principal risk factors are outlined below. The risk map was updated.

These are fed back regularly to the BOURBON Internal Control and Audit Committees.

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 signifi cantly prejudicial impact on the Group, its business, its fi nancial position, its results or its growth. Investors’ attention is drawn to the fact that there may exist other risks, which have not been identifi ed yet on the date of this Registration Document or whose occurrence was not considered on that same date as being likely to have a signifi cantly prejudicial effect on the Group, its business, its fi nancial position, its results or its growth.

5.1 RISKS RELATED TO THE OFFSHORE OIL AND GAS MARINE SERVICES MARKETS

The Offshore Marine Services activity cycle depends on the 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 infl uenced by short-term barrel prices, and by the need for oil companies to maintain their reserve levels. However, the production activity on existing fi elds is much less sensitive.

3 PRICE OF OIL (BRENT)

($/bbl)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

0

20

40

60

80

100

120

140

160U.S.A, Cushing WTI Average Oil Price, $/bbl

U.K., Brent Blend Spot Average Oil Price, $/bbl


MANAGEMENT REPORT3 Risk factors

Since June 2014, there has been a sharp drop in the barrel price. The average price of a barrel of Brent fell from USD99 in 2014 to USD52 in 2015, reaching a low of USD31 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 an overall decrease in production of 1.8 million barrels per day in the fi rst 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.

The price of Brent stood at USD54 over 2017, thus returning some margin for maneuver to the oil majors.

In 2016, for the second consecutive year, the low oil price continued to impact strongly on investment from oil companies in exploration and production (E&P investments dropped by 25% between 2014 and 2015, then by -28% between 2015 and 2016). In a context where the price of a barrel stood at USD54 over 2017 (the average price over 2016 was USD44), the movement reversed to reach an increase of 4%, which represents a volume of USD389 billion over 2017 (against USD374 billion the previous year) (source: IFPEN).

Since mid-2014, the offshore oil and gas marine services industry has seen levels of activity decline. A sharp slowdown in deepwater and shallow water offshore drilling resulted in a signifi cant fall in demand for supply vessels. Prospects are looking clearer for 2017, but the market for offshore services is not yet benefi ting from this recovery, which is slowed by overcapacity in vessels, which is keeping prices low. activity in offshore services is stabilizing and should gradually recover during 2018. Even if it is slow, the recovery should be seen through a very gradual increase in usage rates, held back by strong pressure on daily rates, as a consequence of the overcapacity in vessels on the market. The speed of this recovery will depend on the number of stacked vessels that are capable of re-entering service.

With regard to supply, changes to the fl eet of offshore supply vessels depend on the rate at which old vessels are scrapped and investment is made in new vessels. These two factors are infl uenced by several things, 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 fi nancial 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 signifi cantly prejudicial effect on BOURBON’s business, fi nancial 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 fi nancial 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 signifi cant infl uence 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 infl uence 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 fi elds, the oil services activity is expected to grow in the long term. However, the fall in barrel prices will affect the sector’s business in the short and medium term, as certain shallow water offshore projects are canceled or delayed.

BOURBON’s strategy is to develop close relationship with the national and international oil majors that have sustained investment plans and to place particular importance on a policy of long-term contractualization of BOURBON vessels. The long-term contractualization rate of offshore support vessels was 36.8% as of December 31, 2017. Active monitoring of the market in the fi eld 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 signifi cantly prejudicial effect on BOURBON’s business, fi nancial position, results or outlook.

Risks related to changes in technical requirements for marine oil and gas exploitation and related services.

The already high demands of oil and gas companies, in terms of risk management, have gone up further in view of the incidents that took place aboard the oil rigs in the Gulf of Mexico and the North Sea. On this account, oil companies generally prefer cutting-edge, high



3

performance vessels like those belonging to the BOURBON fl eet. This made more than 25 years old vessels obsolete and increased the need to substitute these old vessels.

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 effi ciency, 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 important to note the increased attention of oil and gas companies and the industry in general towards reducing energy consumption not only to reduce air emissions but also to reduce the energy costs of the 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 fi nancial, 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 9% in 2017 (source: Rystad Energy). Most of the regions where BOURBON operates have been affected by this slowdown. With an utilization rate of 61.2% in deepwater offshore and 40.8% in shallow water offshore in 2017, BOURBON was able to maintain client confi dence despite the depressed market.

BOURBON’s commercial strategy focuses on long-term contracts, which minimizes the risks of exposure to short-term market fl uctuations.

Finally, in a deteriorating market with a very low barrel price, together with a sharp capital expenditure downtrend in the oil sector,

BOURBON reacted quickly by anticipating the stacking of vessels with very low utilization rates.

Concerning strategic choices, it is possible that certain BOURBON competitors may decide to develop their market share in specifi c 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 fl eet 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 diffi cult to sustain over time as it is limited by operating costs and investments in vessels.

In the context of the current decline in market demand, the risk of price attacks is not limited, with competitors being forced to be more aggressive on daily rates.

In light of this risk, the fi rst measure taken by BOURBON is to actively monitor the positioning of the fl eets of its principal competitors and their pricing policy. The second measure is to geographically diversify the positioning of its fl eet and the third is to screen its client portfolios, and thereby ensure diversifi cation of the client portfolio.

This market oversight did not reveal any signifi cant movements by the competition of their fl eets 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 has secured key agreements with its main customers (such as TECHNIP, BP, TOTAL, EXXON and CHEVRON) and forged local partnerships, enabling us to continue working in countries even if they close themselves off again to protect their industry. This market information was reported during the BOURBONINMOTION conference on February 13, 2018. This 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.

Nevertheless, sporadic intensifi cation 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.

2010 2011 2012 2013 2014 2015 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Bourbon UR 82.5 88.8 90.6 89.5 88 80.3 62.1 45.8 48.1 50.2 51.9

Market UR 91 92 89 92 89 64 42 41 42 43 45



The need for BOURBON to adopt a different approach in order to return to profi tability 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 profi tability 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 insuffi cient 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.

5.2 RISKS RELATING TO BOURBON’S BUSINESS

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 fl ag 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 specifi c 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 fi tting-out of vessels;

3 the Convention on Standards of Training, Certifi cation and Watchkeeping for Seafarers (STCW) lists the qualifi cations 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) defi nes 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 defi nes the fundamentals for safety management for marine shipowners and operators, on board the vessels and at offi ces 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 specifi c 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 classifi cation societies. Their sphere of infl uence covers the audit of organizations, monitoring construction and periodic visits to vessels in operation. The main classifi cation societies are members of the IACS (International Association of Classifi cation Societies), which monitors the harmonization of their rules and actions. Delegations of power to classifi cation 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 offi ce 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.

BOURBON has a modern fl eet with an average age of 8.8, which is 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



3

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 signifi cant and/or rapid changes to current regulations would not, in the future, have a signifi cantly prejudicial effect on its business, fi nancial 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 signifi cant 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 defi ned 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.

In 2017, BOURBON continued developing its vessel operational management system so as to meet the requirements of the OCIMF (Oil Companies International Marine Forum) in more effective ways. BOURBON thus places the concerns of its clients at the heart of its strategy.

BOURBON fi rmly 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 verifi ed via internal audits.

BOURBON’s performance regarding the safety of individuals is constantly monitored. According to a survey by the International Support Vessel Owner’s Association (ISOA), which incorporates the leading players in offshore oil and gas marine services, BOURBON’s safety performances are among the best in the market. In 2017, BOURBON’s recordable incidents rate (TRIR) was 0.52 per million hours worked.

BOURBON’s strategy in this area is described in section 6.1.3 of the management report.

Improving and centralizing fl eet 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 most recent vessels is thus aimed at signifi cantly reducing the consumption of fossil fuels, and consequently, the level of polluting air emissions. BOURBON’s strategy concerning the environment is described in section 5.3 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 fi nancial 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 signifi cant 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 suffi ciently covered by its insurance policies, this being to the detriment of BOURBON’s reputation and image and having a signifi cantly prejudicial effect on its business, fi nancial 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 oilfi eld, 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 suffi cient, 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.

Part of BOURBON’s growth is in emerging countries, where operational risks may include political, economic, social or fi nancial instability. BOURBON may encounter diffi culties 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 fi nancial instability. It operates primarily in conjunction with local partners for the sharing of know-how and benefi ts, and aims to use as many local resources as possible. More specifi cally, BOURBON’s human resources strategy enables it to recruit, train and provide career paths for all locally recruited employees and associates.

Using this country-specifi c 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 effi cient management. If it does not succeed in doing so, its business, fi nancial position, results or outlook may be affected.

5.3 LEGAL RISKS

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 offi cials 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 offi cials, 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 the Bourbon group 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 offi cials , alongside the aforementioned persons.

BOURBON Corporation SA strongly disputes the charges that are brought against it, resulting from a judicial investigation that it considers incomplete; it recalls that is entitled to the presumption of innocence, and is reserving its explanations for the court.

The Group operates in complex environments. Its activities are carried out in strict compliance with the laws of each country and the Group attaches the utmost importance to compliance with anti-corruption regulations.

Furthermore, one of the Group’s subsidiaries is 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 appears to be groundless, because it seems to rely on an erroneous classifi cation of the services invoiced by the subsidiary, which the court of fi rst instance in the country in question confi rmed in its judgment rendered on October 18, 2016, invalidating the adjustments notifi ed by the local tax administration.

The local tax administration has 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 confi rmed the decision of the trial court canceling the adjustments.

The administration has a maximum deadline of 30 business days from the publication of the judgment to appeal to the competent Court of Cassation.

Should the administration appeal to the Court of Cassation, the case would be considered as defi nitively determined in favor of the Group company concerning the events, as the Court of Cassation would only examine the questions of law raised by the judgment under appeal.

It should be noted that in 2013, in a similar matter, the Superior Court of Justice in the same country also ruled for the taxpayer and against the local tax administration.



3

As a result, 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 is a contingent liability for which the likelihood of a signifi cant payout is currently slight. These proceedings are mentioned in the notes to the consolidated fi nancial statements (see section 3.20 on contingent liabilities) of this Registration Document.

Apart from the proceedings described above, 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 fi nancial position or profi tability.

For each signifi cant 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 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. The main measures used in this regard are outlined in the risk mapping part of the management report and in the “internal control and risk management procedures” section of the Chairman’s 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 fi nancial health of all customers seeking credit payment terms. Furthermore, the Group continually monitors client balances. The fi nancial 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 65% of 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 fi ve clients represented €364 million (45.9% of revenue) while the top ten clients accounted for nearly 65.8% (€522 million).

A statement of anteriority of credits and other debtors is presented in note 3.19.5. to the consolidated fi nancial statements.

In 2017, the portion of BOURBON’s revenue generated in countries at risk politically, such as Equatorial Guinea, Libya, and Myanmar, was very marginal (barely 1% of total revenue).

Concerning the credit risk on the Group’s other fi nancial assets, i.e. cash and cash equivalents, available-for-sale fi nancial assets and certain derivative instruments, the Group works only with top-ranking banks, particularly with the major French banks, and pays particular attention to the choice of banking institutions. 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. Historically, this policy consisted of fi nancing the Group’s needs through a combination of operating cash fl ows, disposal of assets, bank borrowings and market transactions, and in the context of the industry downturn, through a strategy of cash fl ow preservation that led to redefi ning BOURBON’s fi nancing platform for 2017 and the following years.

To manage the cyclical downturn seen in the offshore oil and gas market, the Group undertook discussions with its fi nancial partners in order to redefi ne its fi nancing platform for the forthcoming years. These discussions resulted in the signature of an agreement on March 6, 2017 with a number of fi nancial institutions and partners to restructure its principal debt in the amount of €910.8 million.


The agreement entered into with the Group’s principal fi nancial partners – described in detail in the notes to the 2016 fi nancial statements – thus restructured the repayments of its club deal loans, its bilateral loans, its fi nance 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 agreed to a number of restrictions, in particular regarding its indebtedness, cash fl ow, 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 confi rmed the effective 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 market environment weighed heavily on the Group’s revenue and, consequently, on its net income. The cash fl ows generated by the activity are thus insuffi cient to service the debt in the short term. The cash generated by the activity enables the Group to cover its current operating requirements for the next 12 months.

Furthermore, and for the same reasons, the Group was not able to comply with the various covenants defi ned in its credit documents.

This situation of breach of covenants on the closing date of the fi scal year constrains the Company, in accordance with IFRS standards, to refl ect the fact that the debt is due by reclassifying it as a short-term liability, even though its lenders have not demanded payment.


The Group has asked its lenders to formally suspend, for the expected duration of the discussions, the exercise of their rights under the credit agreements, in particular their repayment. On the date of writing this report, a number of responses are still pending, but the Group is confi dent that it will obtain these waivers and stand-stills.


In accordance with IAS 1.69 d, as of December 31, 2017: 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 reclassifi ed in current liabilities (see note 3.14 to the consolidated fi nancial statements for details of the reclassifi cations performed).

BOURBON’s gross fi nancial debt amounted to €1,609 million, including €183 million at more than one year.

The repayment schedule for the medium and long-term debt is presented in note 3.14 to the consolidated fi nancial statements. The residual term of the long- and medium-term debt is 5 years and 4 months, before taking IAS 1 into account.

The following table shows the composition of long and medium-term debt as of December 31, 2017 (excl. accrued interests not yet due):

(in € millions)Portion of medium/long-term

debt under one year Medium/long-term debt Total

CLUB DEAL loan – €320 million 32 - 32



EIG/SNC OUTSOURCED 61 67 128

Financing – Norway fl eet 70 - 70

48 other bilateral loans 684 115 799

TOTAL 1,341 182 1,523

The Group had cash assets of €244 million as of December 31, 2017. Bank overdrafts and short-term credit lines have been drawn down in the amount of €76 million due to the unit-linked agreements signed with two fi nancial institutions allowing the Group to combine available balances in US with euro balances.



3

Non-discounted contractual fl ows on the outstanding balance of the net fi nancial liabilities by maturity date, including interest fl ows and taking into account the reclassifi cations performed pursuant to IAS 1, are as follows:

(in € millions) 2018 2019 2020 2021 2022 > 5 years TotalBalance

sheet total

Bonds - - - - - - -

Commercial paper - - - - - - -

Draws on credit facilities - - - - - -

Borrowings on fi nance 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

Accrued interest 7.2 - - - - - 7.2 7.2

Borrowings 1,348.5 41.2 35.9 35.4 30.5 40.9 1,532.3 1,532.3

Bank overdrafts and cash current accounts 76.4 - - - - - 76.4 76.4


Cash and cash equivalents (243.6) - - - - - (243.6) (243.6)

Net cash (167.2) - - - - - (167.2) (167.2)

TOTAL NET FINANCIAL DEBT 1,181.3 41.2 35.9 35.4 30.5 40.9 1,365.2 1,365.2

(in € millions) 2018 2019 2020 2021 2022 > 5 years Total

Interest on fi nance lease borrowings 5.3 3.7 2.4 1.3 0.6 0.4 13.8

Interest on bonds 7.8 8.2 8.6 11.3 11.5 25.7 73.1

Interest on other bank borrowings 48.7 43.0 39.2 40.8 31.1 32.2 235.0

Future variable-rate interest fl ows were determined using the predicted rates of the indexes in question at year-end. Interest fl ows on bonds takes into account interest adjustment clauses (See note 3.9 to the consolidated fi nancial statements).

As of December 31, 2016


sheet total

Bonds - - - - - - -



Borrowings on fi nance leases 30.8 10.1 9.1 5.7 2.9 3.9 62.5 62.5

Other bank loans 1,199.4 37.0 35.4 23.2 23.6 67.8 1,386.3 1,386.3


Borrowings 1,237.8 47.1 44.5 28.9 26.5 71.7 1,456.4 1,456.4




Net cash 11.8 - - - - - 11.8 11.8




Interest on bonds* 5.7 8.0 8.2 8.6 11.3 37.6 79.4


* Withdrawn by construction over a period of 10 years from the date of the beginning of the loan, i.e. until 2024.



Medium- and long-term borrowingsMedium- and long-term borrowings comprise mainly “club deal” fi nancings and bilateral loans.

The majority of these borrowings are backed by assets (vessels) held as security (fi rst-ranking mortgage or negative pledge). The vessels are clearly identifi ed 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 fi nancial 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 refl ect 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, 2017;

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 €169 million as of December 31, 2017;

3 a €318 million “club deal” loan taken out in July 2009 for which the redemption phase began in 2011, fully repaid in July 2017;

3 a €340 million “club deal” loan taken out in 2015 for which the redemption phase began in June 2016, with an outstanding balance of €326 million as of December 31, 2017.

These 3 outstanding “club deal” loans are covered by the debt rescheduling agreement signed on July 28, 2017 and described above. 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. Therefore, in 2017:

3 a fi nancing agreement for €50 million was signed and drawn down in July 2017 for the refi nancing of fi ve deep-sea tugboats;

3 a fi nance lease for €23.3 million was signed and drawn down in July 2017 for the fi nancing of a PSV class Bourbon Explorer;

3 short-term credit lines totaling €216.8 million were transformed into a syndicated loan and two medium-term loans in June and July 2017.

In many instances, contractual documentation includes compliance with a debt/equity ratio. The documentation relating to the loans affected by the restructuring agreement was modifi ed 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 fl ow, 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 2 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 fi nancial 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 fl uctuations is related to the Group’s medium- and long-term variable rate fi nancial debt. BOURBON regularly monitors its exposure to interest rate risk. This is coordinated and controlled centrally. It is the responsibility of the Assets, Finance and Treasury Director, who reports to the Chief Financial Offi cer.

The Group’s policy consists of managing its interest rate expense by using a combination of fi xed-rate and variable-rate borrowing. In order to optimize the overall fi nancing cost, the Group sets up interest rate swaps under which it exchanges, at pre-determined intervals, the difference between the amount of fi xed-rate interest and the amount of variable-rate interest calculated on a pre-defi ned nominal amount of borrowing.

These swaps are assigned to hedge the borrowings. As of December 31, 2017, after taking into account interest rate swaps, approximately 44% of the Group’s medium- and long-term debt had been contracted at a fi xed interest rate.



3

As of December 31, 2017, the interest rate swap contracts were on the Group’s borrowings, transforming variable rates into fi xed 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,

2017 in foreign currencyOutstanding as of December 31,

2017 in euros Maturity

Currency – Fixed-rate borrowing swaps

EUR 21.3 21.3 07/26/2018

EUR 15.3 15.3 06/28/2019

EUR 80.0 80.0 01/27/2020

EUR 7.3 7.3 12/31/2020

EUR 242.0 242.0 03/31/2021

EUR 3.4 3.4 29/07/2021

NOK 12.9 1.3 07/29/2018

NOK 55.6 5.6 12/30/2021

USD 15.7 13.1 08/19/2019

USD 13.1 10.9 09/30/2019

TOTAL 400

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 one year 1 to 2 years 2 to 3 years

three to four years

four to fi ve 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

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 fi nancial debt by €6.9 million over one year.

(in € millions)


Less than a year

1 year to 2 years

2 years to 3 years

3 years to 4 years

4 years to 5 years


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 - 281.5 - - - - - - - - - - - 281.5

Term deposits - - - - - - - - - - - - - -




Deposits and securities received - - (0.3) - - - - - - - (0.3) -

Finance lease liabilities (26.5) (4.3) (10.1) - (9.1) - (5.7) - (2.9) - (3.9) - (58.2) (4.3)

Bank borrowings (136.6) (1,062.8) (14.7) (22.0) (15.1) (20.3) (15.4) (7.7) (15.0) (8.6) (26.7) (41.1) (223.5) (1,162.6)


Net position before hedging (139.1) (1,078.8) 8.4 (22.0) 2.1 (20.3) 4.1 (7.7) 11.5 (8.6) 16.0 (41.1) (97.1) (1,178.6)

Hedging (579.0) 579.0



Foreign exchange risk

ObjectivesThe Group’s policy is to reduce as far as possible the economic risk related to foreign currency fl uctuations over the medium term. The Group also tries to minimize the impact of the US dollar’s volatility on annual operating income.

Cash fl ows from operating activitiesThe main foreign exchange risks on operations are related to invoicing clients. BOURBON invoices a large portion (approx. 76%) of its services in US dollars. The Group has a natural foreign exchange hedge as it pays its expenses in dollars (representing about 35% 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 fl owsPolicy

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 fi nance 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 fi nance 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 fi scal 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 fi nance assets generating revenue in US dollars will be converted to US dollars and future acquisitions will again be fi nanced in US dollars.



3

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, 2017, foreign exchange derivatives covered fl ows in US dollars (USD) and broke down as follows:

As of 12/31/2017

Outstanding (in millions

of currency) MaturityAverage

exchange rate

Cross-currency swap

USD/EUR 9.6 06/30/2021 14,146

USD/NGN 5.0 01/11/2018 361.00

The table below shows, as of December 31, 2017, 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 1,153.1 2.4 90.3 30.3

Monetary liabilities (669.4) (3.5) (134.8) (20.7)

Net position before management 483.8 (1.1) (44.5) 9.6

Hedges (8.0) - - -

Net position after management 475.8 (1.1) (44.5) 9.6

As of December 31, 2017, a 1% change in the euro exchange rate against all the currencies would represent a total impact at Group level of €4.6 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 2017 and 2016:

(in € millions) 12/31/2017 12/31/2016

Euro (EUR) 896.9 1,357.4

Brazilian real (BRL) (204.5) (192.2)

Mexican Peso (MXN) 74.0 66.8

Norwegian Kroner (NOK) (57.8) 11.7

US Dollar (USD) (70.6) 9.5

Swiss Franc (CHF) 0.0 (0.2)

Other 5.7 2.5

TOTAL 643.6 1,255.5

As of December 31, 2017, a 1% change in the exchange rates would represent an impact on consolidated shareholders’ equity of €2.1 million (€3.6 million as of December 31, 2016).



Equity risksAs of December 31, 2017, the Group had no cash investments.

As indicated in note 3.12 to the consolidated fi nancial statements, BOURBON Corporation held 127,140 treasury shares as of December 31, 2017. Treasury shares are presented as a deduction from consolidated shareholders’ equity.

A 10% change either up or down in the BOURBON Corporation share price would result in a change in the market value of the treasury shares of €0.1 million.

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 signifi cant 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 fl eet (“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 confi dentiality.

Since January 1, 2016, the Group has retained part of the risk of damage to the fl eet and the “pecuniary loss” risks referred to above through a captive reinsurance company formed at the end of December 2015. The Company, known as BOURBON CAP RE, is wholly owned by BOURBON and 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 USD11.25 million in regular risks and USD2 million in war risks. An annual stop-loss agreement protects the captive insurer from any change in risk frequency and/or intensity.

Above these amounts, the risks are transferred to the Group’s insurers.

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 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 fi nancial rating below a certain level.


MANAGEMENT REPORTSocial and environmental information

3

6. SOCIAL AND ENVIRONMENTAL INFORMATION

This section of the management report sets out the guidelines and action plans addressing corporate social responsibility issues. In 2017, the Group continued to suffer the consequences of the crisis in the oil industry. All of BOURBON’s teams concentrated their actions on priorities, focusing on safety, local establishment, fuel consumption, ethics and compliance (detailed in section 5.4 of the management report).

The social and environmental reporting for this year enables an outline of quantitative indicators to be drawn up relative to the Grenelle II law. A cross-reference table at the end of this section (page 92-93) can be used to locate information on the basis of selected criteria.

All social and environmental information is audited annually by an independent third party. The relevant report can be found at the end of this section (pages 101-103).

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 2017, except for the personnel fl ows, training and absenteeism indicators, which take into account the entire workforce mobilized in 2017.

6.1.1 Employment

6.1.1.1 Composition and distribution of the workforceBOURBON’s workforce has declined as did the onshore and offshore activities.

At December 31, 2017, the service was delivered by around 8,400 (1) people, of whom 6,922 (2) were under contract, with 1,681 people ashore and 5,241 people at sea. Between 2016 and 2017, the Group’s combined contractual workforce shrank by 11%.

There are three main groups of personnel:

3 seagoing personnel (44% offi cers 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 21% are managerial staff.

3 DISTRIBUTION OF WORKFORCE BY AGE (3)

<=20 21 - 30

December 2016

31 - 40 41 - 50 51 - 60 > 60

December 2017

0.2% 0.2%

14%13%

40% 39%

31%32%

14% 15%

1% 1%

At the end of 2017, the average age of BOURBON personnel was 41 years and 52% of BOURBON employees were aged 40 or under.

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 4 25% 75%

Seagoing personnel 5,241 1% 99%

Onshore – all categories 1,681 31% 69%

Onshore – Managers 350 20% 80%

TOTAL GROUP WORKFORCE 6,922 8% 92%

(1) This total workforce includes personnel under contract at the end of 2017, 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 2017 (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 REPORT3 Social and environmental information

3 DISTRIBUTION OF WORKFORCEBY GEOGRAPHICAL ZONE AT 12/31/2017

12%Europe

15%Asia-Oceania

12%Americas

61%Africa

The share of the BOURBON workforce working in their country of origin has increased, going from 58% to 64%.

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. During 2017, several promotions increased the number of women in managerial positions.

In total, access to training and internal promotion enabled onshore management position s held by women to reach 20% (representing +1% compared to the previous year). 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 fi t for duty certifi cate is required for seagoing personnel, and a signifi cant number of onshore jobs require employees to be able to go onboard the vessels).

6.1.1.3 International recruitment policyIn 2017, BOURBON employed people from 80 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 defi ned 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 specifi c MLC certifi cation.

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 2017, the number of internal promotions recorded was 148 for onshore personnel. This fi gure confi rms 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 2017 . The subsidiaries recruited 332 personnel to onshore positions, while 388 personnel from this same category left the Group, including 110 due to dismissal or mutually agreed employment termination, i.e. a decrease of 2% for onshore personnel.

These subsidiaries also took on 1,877 seagoing or onboard personnel, while in this category 2,679 people left the Company, 601 as a result of a dismissal or mutually agreed employment termination, resulting in a decrease of 13% for seagoing or onboard personnel.

At December 31, 2017, the Group retention rate for the workforce as a whole, calculated over two years, was 89%, of which:

3 84% for onshore personnel;

3 85% (1) for seafarer offi cers.

6.1.1.5 CompensationContinuing the cost-reduction efforts, the Group directives for 2017 confi rmed the policy of a compensation freeze for the Group’s onshore personnel.

For seagoing personnel, in accordance with national and international regulations and the applicable company or collective agreements, the subsidiaries continued their efforts to reduce salaries and/or reorganize on-board periods to reduce the cost of crew rotations on board the vessels.

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.

For seagoing personnel, compensation is established in each organization according to the onboard role and vessel type.

For onshore personnel, 69% of subsidiaries must adhere to the minima imposed by legislation and 51% have their own salary scales in place.

In a context of cost reduction, the short-term bonus plans existing in the subsidiaries were mostly suspended. For the French companies, profi t-sharing agreements were dependent on the Group’s business results.

(1) All offi cers (deck & engine room) working on vessels of the supply type.



3

The rate of coverage of onshore and seagoing personnel by private medical insurance during 2017 was 68% for the subsidiaries employing seagoing personnel and 67% for the subsidiaries employing onshore personnel.

The changes in personnel expenses for all group employees are presented in note 5.3 to the consolidated fi nancial 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 personnel; the arrangements are then applied to BOURBON’s three main categories of staff through the operating subsidiaries that employ them.

The integrated computer system (Onsoft Computer Systems AS) which manages Group personnel and its crewing activity (administrative management, planning, training, pay) continued to be developed in 2017. 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, 2017.

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 reduce its training expenditure: only compulsory training or training that has been contractually agreed with clients is funded. Nearly all training that does not meet these criteria has been postponed indefi nitely. In addition, after setting up a digital e-learning solution for onshore personnel, BOURBON is continuing to roll out this solution to seagoing personnel. The internal transfer of skills also uses a network of occasional trainers who have been identifi ed and trained in the approach.

The training of onshore personnel (1) totaled 9,501 hours in 2017, including 1,058 hours in internal training (mainly job training) and 7% in e-learning training.

Job training made up 73% of this training and mainly involved security and safety (evacuation, fi re prevention) and standards and regulations (ISM and ISPS, MLC, ISO 9001, etc.).

In 2017, the training courses that are mandatory under international regulations (STCW, MLC), represented 54% of the training effort for seagoing personnel, which stood at 114,077 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 crewboat personnel.

6.1.2.3 Organization of work

6.1.2.3.1 Organization of workSeagoing personnel and specialized categories of onboard personnel work according to shift systems alternating periods onboard with onshore rest periods; these systems vary according to the operational zones, types of vessel, and depending 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 fl ag 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 specifi c or local entity level. All mobilized onshore personnel, payroll & contracted.

In 2017, 48% of subsidiaries reported that they referred to internal rules and 33% to collective agreements for managing the working time of their seagoing and/or onshore personnel.

In 2017, 50% 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 13% of subsidiaries and fl exible hours for 41% of subsidiaries. Some technical functions on the operational support bases require a continued presence. The personnel in these roles work according to specifi c 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 13% of subsidiaries in 2017.

6.1.2.3.2 Professional relations, collective agreements and organization of social dialog

BOURBON employs personnel in a large number of countries; compliance with employment regulations and social security protection is the responsibility of the management of each subsidiary. The audits and training campaigns carried out by the Compliance Department are designed to detect and prevent 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.

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 and it is therefore not necessary to establish additional agreements in HSE matters.

(1) All of the onshore personnel mobilized, payroll & contracted.



In the French companies, employee/management dialog continued to develop in 2017. The necessary adaptation of the Group to a challenging economic context brought the management and employee representatives together around the negotiating table and resulted in the signature of several agreements on compensation and employee benefi ts, notably:

3 a framework agreement on the procedures for calculating profi t-sharing bonuses for the employees of French companies;

3 two profi t-sharing agreements;

3 an agreement on the termination of a profi t-sharing agreement;

3 an agreement on an obligatory annual negotiation;

3 an agreement on the extension of the terms of offi ce of the employee representatives, in order to ensure continuity in employee/management dialog;

3 an agreement on working time.

At the level of the professional branch, negotiations are ongoing, notably on a framework agreement for working time.

6.1.2.3.3 Absenteeism and occupational illnessesIn 2017, 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, absence (1) due to sickness or occupational accident was measured, as was the number of unexplained absences. The observed rates were 2.26% for absence due to sickness or accident, and 0.16% 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 2.98%.

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 5.91%, including 5.40% for sickness and 0.51% due to accident.

In terms of occupational illnesses, the Group only publishes data for its French subsidiaries. Regulatory differences among the Group’s host countries and the specifi c aspects of managing seagoing personnel effectively preclude aggregation for this indicator.

In 2017, four cases of occupational illness were reported out of a total of 1,408 days of absence; 3 were due to lumbar, articular and periarticular conditions and 1 to a pulmonary 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.).

In 2018, the Group wished to broaden the scope of reporting of occupational illnesses to all of its subsidiaries. A survey should provide better information on illnesses of a work-related origin, for seagoing personnel and for onshore personnel.

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 ratifi ed within the ILO in 2006, entered into force in August 2013.

This convention, which is a new 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 certifi cate delivered by fl ag authorities, to prove that the convention is complied with. This certifi cate is valid for fi ve 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 2017 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.

6.1.3 Focus on safety

For BOURBON, operational safety is paramount. The Group strives to ensure that operations are safe, effi cient 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 2017, over 2.7 million passengers were safely 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, defi ning the responsibilities and individual responsibilities required for safe, effi cient operations.

(1) Onshore personnel directly contracted by one of the Group subsidiaries (payroll). Note the exclusion of the Sonasurf entity, for which it was not possible to make the data reliable this year.



3

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 2017, BOURBON continued to develop its latest monthly accident prevention tool called “Safety Post”. This new 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 fl eet, are in addition to the existing material made available during the last three years as part of the fi rst, 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 International Support Vessel Owner’s Association (ISOA) and 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 2017, the LTIR was 0.25, and the TRIR was 0.52.

For 2017, BOURBON recorded 8 Lost Time Injuries (LTI) of the Lost Work Cases (LWC) type, 7 Restricted Work Cases (RWC) and 2 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 defi ned by oil industry rules.

In 2017, four cases of occupational illnesses were reported to the Group by the subsidiaries. However, BOURBON draws particular attention to the risks posed by the malaria, Ebola and Zika viruses by publishing educational material on its intranet.



6.2 SOCIETAL INFORMATION

6.2.1 Involvement in the socio-economic development of the count ries 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. 64% of the workforce in a country are nationals, up 2% from 2016. This fi gure rises to 80% for onshore positions.

Local establishment (1) is 74% across the entire Group.

3 PERCENTAGE OF LOCAL WORKFORCE FOR EACH OPERATING ZONE

9

84%

90%

62%

42%

Local workforce

6.2.1.2 Partnerships/sponsorships in France and overseas

The BOURBON Foundation, under the aegis of the Fondation de France, continued to sponsor its two key partners in Nigeria and Thailand, and also launched new support projects. The Foundation’s mission is to develop and sponsor general-interest projects with direct links to education, training, health and local development, in France and other countries where the Group operates.

Current projects:

3 the last year of the three years of commitment with the IECD (2) once more enabled concrete results to be achieved. The

overarching objective is to foster the inclusion of young people within the labor market in Nigeria. This year was again marked by the second class of graduates and the development of new specializations (solar energy and electrical design), providing students with more possibilities for jobs and training courses;

3 the second partnership with the Baan Dek Foundation in Thailand, primarily aimed at giving Burmese migrants access to childcare, was also a success. More than 1,200 migrant children received educational support on topics relating to hygiene, health and the environment. BOURBON will have donated more than €45,000 in total, taking into account all the actions implemented in 2017.

(1) Local establishment: staff originating from the geographical region in which they work (Asia 84%, America 85%, Europe 97% and Africa 65%).(2) IECD: Institut Européen de Coopération et de Développement (European Institute for Cooperation and Development).



3

Finally, the open days held in 2017 showcasing the assistance, salvage and pollution remediation tugs operated by the Company Les Abeilles along the French coast raised more than €25,000, 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 identifi ed its stakeholders as all people and organizations able to infl uence or be infl uenced 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 defi nes 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 purchasesBOURBON 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 2017, local procurement accounted for around 56% 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 signifi cant added value in terms of response times and overall purchasing costs (including logistics).

6.2.1.3.2 Suppliers and subcontractorsIn 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. In 2017, more than 30 evaluations were carried out (70% fewer than in 2016) because, overall, the vessels had fewer programmed technical shutdowns, given the economic conditions.

BOURBON has defi ned a single scope for its suppliers and subcontractors. This includes, in addition to the procurement of parts and supplies, the following categories: fuel, classifi cation societies, fl ags, 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 9% of purchases respectively. In terms of risk management, therefore, it is essential that BOURBON prioritizes its actions with these suppliers:

3 fi rstly, external manning agents: these subcontractors are closely monitored since they manage a signifi cant percentage of the Group’s workforce (27% in 2017). 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 fl eet, 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.

6.2.1.3.3 Compliance programBOURBON has set up a compliance program. As regards the specifi c corruption risk linked to the countries in which the Group operates, anti-corruption measures and procedures are an integral part of this program. Its main components are described in the “internal control and risk management procedures” section of the management report. The Group has also put in place a dedicated compliance organization with 26 compliance managers across the Group’s subsidiaries who report to the Corporate compliance team. The Group also has a dedicated procedure for compliance requirements which it applies to third parties and its suppliers in particular.

In 2015, the Group launched a Compliance E-learning Program for all of its onshore and offshore employees. The e-learning program continued in 2017. Very close attention is paid to seagoing personnel who have limited internet access.



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.

6.3 ENVIRONMENTAL INFORMATION

6.3.1 General environmental policy

Five subsidiaries of the Group were certifi ed ISO 14001. With its Operational Safety Management (OSM) (1) standard, BOURBON takes a harmonized approach towards operational safety and effi ciency, with a special 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.

In 2017, the team responsible for managing fuel use continued its efforts to improve the collection, processing, quality, verifi cation and sharing of environmental data from vessels.

An application to collect operational data has been installed on Board 222 Supply and Crew Boats of 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 520 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 2017, crew training in good operational practices continued, the aim being to minimize fuel consumption and therefore greenhouse gas emissions as much as possible. For example, captains are automatically notifi ed by email when best practice for effi cient vessel management has not been followed.

Finally, the reference offi cers provide onboard training in modules on the BOURBON intranet. Reference offi cers 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 222 vessels and monthly monitoring on the rest of the fl eet makes it possible to distinguish consumption by vessels during chartering and non-chartering periods, and also enables fi gures 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 2017 was 368,090 m3 , and 1,834 m3 respectively. In 2017, consumption outside chartering periods represented 24,926 m3 , i.e. 6.7% of the Group’s total consumption.

The gross emissions for 2017 are presented in the table below:

(in metric tons) 2017 2016 2015

Emissions of CO2 1,002,705 1,158,888 1,393,658

Emissions of SOx * 1,716 1,646 2,211

Emissions of NOx 22,423 25,390 29,910

* The sulfur rate is reported by seafaring personnel or failing this, estimated using the following ratios 0.1% per unit mass in Europe, the North Sea, and 0.5% per unit mass in the rest of the world.

(1) OSM: Operational Safety Management – defi ned by the Oil Companies International Marine Forum (OCIMF).



3

Decree No. 2016-1138 was published in 2016 regarding environmental information in the context of the application of Article 173-IV of the law on energy transition. Accordingly, BOURBON 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 fi ght against climate change on a global scale. It is divided into three levels that correspond to specifi c emissions scopes.

The tool provided by the GHG Protocol therefore calculates CO2

emissions based on fi nancial data. It has facilitated the breakdown of emissions by scope and by main emissions category:

3 DISTRIBUTION OF CO2 EMISSIONS BY SCOPE

Scope 3

29.59%

Scope 2

0.12%

Scope 1

70.82%

3 MAIN CATEGORY OF INDIRECT EMISSIONS

Purchaseof goods and services

Energy(excl. Scopes 1 and 2)

Shippingof merchandise

Business travel Employee travel

29.84%

59.46%

53.4%

3.75%6.20%

0.70%

0%

10%

20%

30%

40%

50%

60%

The most signifi cant categories for emissions in scope 3 are:

3 category 3 “Energy” (59.46%), 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” (29.84%), 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 signifi cant provision that represents an environmental risk. BOURBON’s position in this area is described in section 5.3 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 offi cers issue instructions for each exercise.



6.3.2 Management of resources

BOURBON operates a fl eet of modern vessels, for the most part equipped with diesel-electric propulsion technology that signifi cantly 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.

Freshwater production is 61,148 m3 (produced by 47 vessels using osmosis fi lter systems). 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 296,982 m3 across the whole fl eet 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 offi ces of the operational subsidiaries. Electricity consumption by offi ces in France is almost 800 MWh.

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 2017, BOURBON did not log a single major incident (1) of the kind that would cause environmental harm.

The Bourbon Liberty 150 (15 vessels), Bourbon Liberty 300 (20 vessels), Bourbon Explorer 500 (10 vessels), Bourbon Evolution 800 (10 vessels), PX 105 (6 vessels) and P 105 (6 vessels) series meet the Oil Recovery classifi cation. This classifi cation 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 2017 was 13,947.96 m3. The volume of used (2) oil treated amounted to 3,773 m3 across the fl eet, excluding Crew Boats under 32 m. The waste generated and used oil discharged on land are processed by approved companies.

The latest series of vessels delivered – namely the Bourbon Liberty 300 (20 vessels), Bourbon Explorer 500 (9 vessels), Bourbon Evolution (10 vessels), P 105 (5 vessels) and PX 105 (4 vessels) – satisfy the Cleanship classifi cation requirements. 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 relies on Article 225 of the Grenelle II Act to report on and monitor its human resources, environmental and social indicators.

6.4.2 Tools used

The Onsoft Computer Systems AS integrated information system was used to collect and process the social data for 2017 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 fl eet of supply vessels and Surfers above 32 m.

6.4.3 Social indicators

BOURBON’s social reporting is carried out over the fi scal year (January to December). The scope of the social indicators includes subsidiaries controlled operationally by the Group and carrying employees, as well as three associate subsidiaries (Bourbon Gulf, Bourbon Marine Services Manila LTD, Sonasurf (Angola), Companhia de Serviços Maritimos, LDA). The other three associate subsidiaries (EPD Yangzhou, EPD Asia, Southern Transformer and Magnetics) are not included within the scope of the social indicators, as their core business is not the same as BOURBON’s.

Regional and local establishment are determined according to the geographical assignment of employees and their nationality.

The reporting of training hours covers 94% of the onshore workforce, excluding three entities (Naviera Bourbon Tamaulipas, Les Abeilles, Aries Marine), and 94% of the offshore workforce, excluding two subsidiaries (Naviera Bourbon Tamaulipas and Les Abeilles). In order to exclude weekends, which could be included in reports of offshore training courses, the following conservative approach was applied this year: training courses lasting less than 5 days were considered as calendar days and, for training courses of more than 5 days, only the business days were considered. This indicator will be made more reliable during the next fi scal year.

The reporting of rates of absenteeism covers all directly-contracted onshore personnel (payroll), representing 86% of the onshore workforce, a priori without the exclusion of any subsidiary; nevertheless, as it was not possible to make the data for the Sonasurf entity reliable this year, it was excluded from the consolidated data, causing a reduction in coverage rates for this indicator, which is now 77%. 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. 29% of offshore workforce.

(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.



3

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 classifi ed 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 confi rmed according to the rules defi ned 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 fl eet* 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 defi ned 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 x number of theoretical days worked. The number of theoretical days worked is defi ned in a table based on the legislation and collective agreements in force in each country where onshore personnel work. It excludes weekend days, holidays and annual leave.

In terms of occupational illnesses, the scope is limited to the Group’s French subsidiaries, i.e., 20% of the workforce at the end of the period.

6.4.4 Environmental indicators

The environmental data, for the indicators relative to gas emissions (emissions of CO2, SOx and NOx) and energy consumption (Marine Gas Oil) concern respectively 392, 391 and 388 of the 392 vessels of the Marine Services and Subsea Services activities that operated in 2017 (1). The impact of non-chartered vessels is not signifi cant.

The indicators on waste, the use of freshwater and used oil only cover Supply and Surfer vessels under 32 m. They do not cover the 178 Surfer vessels under 32 m whose overall impact is not signifi cant.

The indicator for the quantity of used oil incorporates 208 vessels following the exclusion of 6 vessels with unreliable data.

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 coeffi cient 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 specifi c 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 the Group’s operations: consumer health and safety, use of raw materials, land use, noise pollution and food wastage.

Furthermore, BOURBON does not disclose the electricity consumption of its offi ces outside France, as this is considered to be immaterial in comparison with its fl eet’s fuel consumption.

(1) 1 vessel had to be excluded from SOx emissions because it was not possible to make its data reliable this year and 4 vessels did not report information on NOx.



6.5 CROSS-REFERENCE TABLE OF SOCIAL AND ENVIRONMENTAL INFORMATION

Reference Grenelle Act 2 – Art. R. 225-102.1 (Decree No. 2012-557)Management

report pageManagement

report reference

Social Information

Employment

Total workforce and breakdown by gender, age and geographical zone 81 6.1.1.1

Hiring and departures 82 6.1.1.4

Compensation and change therein 82 6.1.1.5

Organization of work

Organization of work time 83 6.1.2.3.1

Absenteeism 84 6.1.2.3.3

Social relations

Organization of social dialog (procedures for informing, consulting and negotiating with staff)

84-85

6.1.2.3.2

Workplace health and safety agreements signed with trade union organizations or employee representatives 6.1.2.3.2

Record of collective agreements 6.1.2.3.2

Health and safety

The conditions of health and safety at work84-85

6.1.3

Accidents at work (frequency and seriousness) as well as occupational diseases 6.1.3

Occupational illnesses 84 6.1.2.3.3

Training

Training policies implemented83 6.1.2.2

Total number of hours of training

Equal treatment

Measures taken to promote equality among women and men 82 6.1.1.2

Measures taken to promote the employment and integration of disabled people 6.1.1.2

Anti-discrimination policy 82 6.1.1.2

Promotion of and compliance with the stipulations of the fundamental conventions of the International Labour Organization on respect for freedom of association and the right to collective bargaining

On respect for freedom of association and the right to collective bargaining

84

6.1.2.3.4

Elimination of discrimination in employment and occupation 6.1.2.3.4

Elimination of forced or compulsory labor 6.1.2.3.4

Effective abolition of child labor 6.1.2.3.4

Environmental information

General environmental policy

The organization of the Company to take into account environmental issues, and, if required, measures taken for environmental assessment or certifi cation

88-99 6.3.1

Activities carried out to train and inform employees regarding environmental protection

Resources allocated to the prevention of environmental risks and pollution

The amount set aside as provisions and guarantees for environmental risks, provided this information does not cause serious damage to the Company in an ongoing litigation



3

Reference Grenelle Act 2 – Art. R. 225-102.1 (Decree No. 2012-557)Management

report pageManagement

report reference

Pollution and waste management

Measures for preventing, reducing or repairing air, water and ground emissions seriously affecting the environment

90

6.3.3Measures for the prevention, recycling and elimination of waste

Taking into account noise pollution and all other forms of pollution specifi c to an activity N/A

Sustainable use of resources

Water consumption and supply according to local constraints 90 6.3.2

Consumption of raw materials and measures taken to improve their effi cient use N/A N/A

The consumption of energy, measures taken to improve energy effi ciency and use renewable energies 89-90 6.3.1 and 6.3.2

Use of land N/A N/A

Climate change

Greenhouse gas emissions

89-90 6.3.1Adaptation to the consequences of climate change

Protection of biodiversity

Measures taken to preserve or develop biodiversity 90 6.3.3

Information on societal commitments in favor of sustainable development

Territorial, economic and social impact of the Company’s activity

In terms of employment and regional development

866.2.1.1 and

6.2.1.2On local populations

Relations with persons or organizations affected by or involved in the Company’s activity, including integration associations, educational institutions, environmental protection associations, consumer associations and local populations

The conditions for dialog with these individuals or organizations

86-87

6.2.1.3

Partnership or sponsorship activities 6.2.1.2

Subcontracting and suppliers

Taking into account social and environmental issues in the purchasing policy

87

6.2.1.3.1

Importance of sub-contracting and consideration of social and environmental responsibility in relations with suppliers and sub-contractors 6.2.1.3.2

Fair practices

Measures taken to prevent corruption 87-88 6.2.1.3.3

Measures taken in favor of consumer health and safety N/A N/A

Other measures taken in favor of human rights 84 6.1.2.3.4


MANAGEMENT REPORT3 BOURBON Corporation and its shareholders

7. BOURBON CORPORATION AND ITS SHAREHOLDERS

7.1 SHARE CAPITAL AND SHAREHOLDER BASE

As at January 1, 2017, the fi rst day of the fi scal year, the share capital of BOURBON Corporation amounted to €48,493,096 divided into 76,342,603 fully paid-up shares.

The share capital as at December 31, 2017 was €49,227,780, divided into 77,499,214 shares of the same class and representing 94,234,057 (1) theoretical voting rights (94,106,917 (1)) 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 shareholder base as at December 31, 2017 was as follows:

ShareholderNumber

of shares

% of capital stock

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% 41,176,212 43.70% 41,176,212 43.75%

Henri de Chateauvieux & related companies** 6,187,422 7.98% 12,318,602 13.07% 12,318,602 13.09%

Total Collectively 47,073,544 60.74% 53,494,814 56.77% 53,494,814 56.84%

Monnoyeur SA 4,398,813 5.68% 4,398,813 4.67% 4,398,813 4.67%

Treasury shares 127,140 0.16% 127,140 0.13% 0 0.00%

Employees 594,329 0.77% 594,329 0.63% 594,329 0.63%

Public 25,305,388 32.65% 35,618,961 37.80% 35,618,961 37.85%

TOTAL 77,499,214 100.00% 94,234,057 100.00% 94,106,917 100.00%

* Jacques de Chateauvieux & related companies: JACCAR Holdings SA + Cana Tera S.C.A. + 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 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.

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 the

end of the fi scal yearNet dividend

per share(1) (in €)Total amount

distributed(2,3)(in €)

2014 74,559,688 1.00 71,579,994

2015 71,606,331 1.00 71,204,986

2016 76,342,603 0.25 18,972,748

(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 €10,502,027 paid in shares

(1) 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.


MANAGEMENT REPORTBOURBON Corporation and its shareholders

3

7.3 TRANSACTIONS ON COMPANY STOCK

7.3.1 Stock buyback program

Portion of the capital held by the Company and breakdown by objective for holding the Company’s treasury shares

At December 31, 2017, the Company held 127,140 treasury shares, representing 0.16% of the capital.

Objective for holding treasury sharesNumber of shares

held at year-endPurchase value

(in € thousands)Par value

(in € thousands)

Stimulation of the market by an investment service provider 66,772 462 42

Hedging 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 127,140 1,191 80

Transactions made by the Company on treasury shares during the year, by acquisition, disposalor transfer

At December 31, 2017, BOURBON Corporation held 127,140 shares, including 66,772 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, 698,286 shares were thus acquired at an average purchase price of €9.07, while 678,522 shares were sold at an average price of €8.98. 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, 2017.

Description of the share buyback program proposed to the Combined Shareholders’ Meeting on May 30, 2018

The 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 puts an end to that granted to the Board by the Shareholders’ Meeting of May 23, 2017 in its 16th ordinary resolution.

The shares may be purchased for any purpose permitted by law, including:

3 stimulating the secondary market or maintaining the liquidity of BOURBON Corporation hares through an investment service provider under 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 benefi t 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 offi cers 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 sixteenth extraordinary resolution.

These share purchases may be made by any means, including acquisition of blocks of shares, at such times as the Board may choose.


The maximum purchase price is fi xed 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 above-mentioned sum will be adjusted proportionally (multiplication coeffi cient 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 fi xed at €89,124,080.

The General Meeting grants full powers to the Board of Directors, which may delegate those powers, to proceed with these operations, to fi x the terms and conditions thereof, to enter into any agreements and to satisfy all formalities.

As at December 31, 2017, the Company had free reserves of €684,409 thousand.

By law, the amount of the program cannot be higher than this fi gure until the closure of the parent company fi nancial statements for the current year.


MANAGEMENT REPORT3 BOURBON Corporation and its shareholders

At January 31, 2018, the breakdown by objective of the treasury shares held was as follows:

Objective for holding treasury shares Number of shares held

Stimulation of the market by an investment service provider 33,975

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 94,343

7.3.2 Transactions performed on the Company’s stock 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 2017 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, 2017, through the employees’ mutual fund “Bourbon Expansion”, 730 employee shareholders held a total of 594,329 shares, representing 0.77% of the share capital.

7.4 FACTORS THAT COULD HAVE AN IMPACT IN THE EVENT OF A PUBLIC OFFERING

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.


MANAGEMENT REPORTReport explaining the Board of Directors’ resolutions proposed to the Combined Shareholders’ Meeting of may 30, 2018

3

8. REPORT EXPLAINING THE BOARD OF DIRECTORS’ RESOLUTIONS PROPOSED TO THE COMBINED SHAREHOLDERS’ MEETING OF MAY 30, 2018

8.1 APPROVAL OF THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

The shareholders are asked to approve the Company fi nancial statements for the year ended December 31, 2017, together with the consolidated fi nancial 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

Net income for the period €71,925,257.90

Retained earnings €136,782,670.98

Appropriation

Legal reserve €0.00

Other reserves €178,707,928.88


8.3 RELATED PARTY AGREEMENTS

During the 2017 fi scal year, a new regulated agreement was authorized by the Board of Directors. The Shareholders’ Meeting is requested to approve it.

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, 2017. 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 included in the 2017 Registration Document and is available on the Company’s website,http://www.bourbonoffshore.com.

8.4 RATIFICATION OF THE TRANSFER OF THE CORPORATE OFFICE

We request you to ratify the transfer of the corporate offi ce from 33 rue du Louvre – 75002 PARIS to 148 rue Sainte – 13007 Marseille, decided by the Board of Directors on December 4, 2017.

8.5 RENEWAL OF DIRECTORS’ TERMS OF OFFICE

As the terms of offi ce of the members of the Board of Directors Agnès Pannier-Runacher and Mahmud B. Tukur expire at the close of this meeting, the Board, having received the opinion of the Nominating, Compensation and Governance Committee, proposes the following:

3 the reappointment of Agnès Pannier-Runacher as Director;

3 the reappointment of Mahmud B. Tukur as Director.

The appointment of Antoine Grenier as Director is proposed by the Board for a period of three years, or until the close of the meeting held in 2021 called to vote on the fi nancial statements for the elapsed fi scal year.

In addition, you are asked to approve the following:

3 the ratifi cation of the provisional appointment of Mr. Adrien de Chomereau de Saint André by the Board of Directors on June 19, 2017, replacing Guillaume d’Armand de Chateauvieux who resigned, for the remainder of his predecessor’s term, i.e. until the close of the Shareholders’ Meeting to be held in 2020 to rule on the fi nancial statements for the elapsed fi scal year.

Biographical information about Antoine Grenier is given in note 3.2.3 of the management report in the 2017 Registration Document.


MANAGEMENT REPORT3 Report explaining the Board of Directors’ resolutions proposed to the Combined Shareholders’ Meeting of may 30, 2018

8.6 APPROVAL OF THE PRINCIPLES AND CRITERIA FOR DETERMINING, ALLOCATING, AND GRANTING THE COMPONENTS OF EXECUTIVE DIRECTOR COMPENSATION

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 fi xed, variable and exceptional elements composing the total compensation and benefi ts of any kind attributable to the Executive Directors in respect of their terms of offi ce as described in the report on corporate governance on pages 30 et seq. of the Company’s 2017 Registration Document.

8.7 APPROVAL OF THE COMPONENTS OF COMPENSATION PAID OR ALLOCATED PURSUANT TO THE FISCAL YEAR ENDED DECEMBER 31, 2017 TO JACQUES D’ARMAND DE CHATEAUVIEUX, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, G AËL B ODÉNÈS AND C HRISTIAN L EFÈVRE, C HIEF O PERATING O FFICERS AND TO A STRID DE L ANCRAU DE BRÉON, CHIEF FINANCIAL OFFICER

In application of Article L. 225-100 of the French Commercial Code, we submit to your vote the fi xed, variable and exceptional components composing the total compensation and benefi ts of any kind paid or allocated pursuant to the fi scal year ended December 31, 2017 to Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer, Christian Lefèvre and Gaël Bodénès, Chief Operating Offi cers and Astrid de Lancrau de Bréon, Chief Financial Offi cer.

For more information, please refer to the report on corporate governance shown on pages 30 et seq. of the Company’s 2017 Registration Document.

8.8 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 €23 per share, thus giving a maximum total budget of €89,124,080.

These purchases may be made with a view to:

3 stimulate the secondary market or maintaining the liquidity of BOURBON Corporation 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 benefi t 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 the possible canceling of the shares thus acquired, subject to the authorization to be granted by this Shareholders’ Meeting in its sixteenth extraordinary resolution.

These share purchases may be made by any means, including acquisition of blocks of shares, at such times as the Board may choose.

The Company reserves the right :

3 to use options and derivatives within the bounds of applicable regulations;

3 to authorize the Board, within the stated cancellation objective, to cancel as the Board sees fi t and in one or more steps, within the limit of 10% of the authorized capital per period of 24 months all or any of the shares which the Company holds or may come to hold after repurchases made in accordance its buyback program and to thereby reduce the legal capital accordingly.

This authorization will be given for a period of 24 months, as of the date of the meeting.


MANAGEMENT REPORTReport explaining the Board of Directors’ resolutions proposed to the Combined Shareholders’ Meeting of may 30, 2018

3

8.9 FINANCIAL DELEGATION

The Shareholders’ Meeting is requested to grant to the Board of Directors, for a period of 26 months, its power to increase the share capital, in accordance with the provisions of Articles L. 225-129-2 and L. 225-130 of the French Commercial Code, on one or more occasions, at the times and according to the procedures it sees fi t, through the incorporation of reserves, profi ts, premiums or other amounts that may be capitalized, by issuing or allocating bonus shares or by increasing the par value of existing ordinary shares, or through the combination of these two processes. The amount of the capital increase resulting from issues made must not exceed the nominal amount of €7,000,000, not taking into account the amount necessary to preserve, in accordance with the law, the rights of holders of marketable securities giving entitlement to shares.

8.10 REALIGNMENT OF THE BYLAWS OF THE COMPANY

It is moved that the Shareholders’ Meeting:

3 delegate to the Board of Directors the ability to align the Company’s Articles of Association with legislative and regulatory provisions, subject to ratifi cation of such modifi cations by the next Extraordinary General Meeting;

3 in application of the provisions of Article L. 225-27-1 of the French Commercial Code, fi rstly to introduce into the bylaws an Article 13 bis “Directors representing employees” to allow the appointment of a Director representing employees following an election by the employees of the Company and its direct or indirect subsidiaries, for which their registered offi ces are located in France, and secondly, to consequently modify the title of Article 13 “Appointment of Directors”, which would thus be entitled “Appointment of Directors with the exception of Directors representing employees”, the content of Article 13 remaining unchanged.

Our recommendation is that you approve the resolutions proposed to this meeting.

The Board of Directors.


MANAGEMENT REPORT3 Financial results of the parent company over the last fi ve years

FINANCIAL RESULTS OF THE PARENT COMPANY OVER THE LAST FIVE YEARS

Description 2017 2016 2015 2014 2013

Capital stock at year-end

Capital (in € thousands) 49,228 48,493 45,485 47,361 47,361

Number of ordinary shares outstanding 77,499,214 76,342,603 71,606,331 74,559,688 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 793,700 3,542,909 3,925,650 6,193,275 6,375,325

Operation and net income for the period (in € thousands)

Revenues excluding taxes - - - - -

Income before tax, employee profi t-sharing

and amortization, depreciation and provisions 38,100 22,295 53,114 50,593 51,495

Income tax (29,337) (10,909) (11,980) (17,984) (4,320)

Employee profi t-sharing for the fi scal year - - - -

Income after tax, employee profi t-sharing

and amortization, depreciation and provisions 71,925 28,371 63,627 71,726 52,784

Distributed net income -(1) 18,979(2 ) 71,207(3 ) 71,580(4 ) 71,589(5 )

Earnings per share (in €)


but before amortization, depreciation and provisions 0.87 0.43 0.91 0.92 0.75


and amortization, depreciation and provisions 0.93 0.37 0.89 0.96 0.71

Dividend per share 0.00(1) 0.25(2) 1.00(3) 1.00(4) 1.00(5)

Personnel

Average number of employees during the fi scal year 2 1 0 0 0

Amounts paid in respect of employment benefi ts

for the fi scal year (social security, social welfare, etc.) 170 19 0 0 0

(1) no distribution of dividends as proposed by the Board of Directors on March 14, 2018(2) i.e. €0.25 per share as recommended by the Board of Directors on March 13, 2017, after deducting dividends attached to treasury shares.(3) i.e. €1 per share as recommended by the Board of Directors on March 7, 2016, after deducting dividends attached to treasury shares.(4) i.e. €1 per share as recommended by the Board of Directors on February 23, 2015, after deducting dividends attached to treasury shares.(5) i.e. €1 per share as recommended by the Board of Directors on March 3, 2014, after deducting dividends attached to treasury shares.


MANAGEMENT REPORT

3

Report by one of the Statutory Auditors, appointed as independent third party, on the consolidated humanresources, environmental and social information included in the management report

REPORT BY ONE OF THE STATUTORY AUDITORS, APPOINTED AS INDEPENDENT THIRD PARTY, ON THE CONSOLIDATED HUMAN RESOURCES, ENVIRONMENTAL AND SOCIAL INFORMATION INCLUDED IN THE 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 31st 2017

To the Shareholders,

In our capacity as Statutory Auditors of BOURBON Corporation, (the “Company”), appointed as independent third party and certifi ed by COFRAC under number(s) 3-1048(1), we hereby report to you on the consolidated human resources, environmental and social information for the year ended December 31st, 2017 included in the management report (hereinafter named “CSR Information” ), pursuant to article L.225-102-1 of the French Commercial Code (Code de commerce).

COMPANY’S RESPONSIBILITY The Board of Directors is responsible for preparing a company’s management report including the CSR Information required by article R.225-105-1 of the French Commercial Code in accordance with the reporting protocols and guidelines used by the Company (hereinafter the “Guidelines” ), summarised in the management report and available on request from the company’s head offi ce.

INDEPENDENCE AND QUALITY CONTROL Our independence is defi ned by regulatory texts, the French Code of ethics (Code de déontologie) of our profession and the requirements of article L.822-11 of the French Commercial Code. 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.

STATUTORY AUDITOR(S)’S RESPONSIBILITYOn the basis of our work, our responsibility is to:

3 attest that the required CSR Information is included in the management report or, in the event of non-disclosure of a part or all of the CSR Information, that an explanation is provided in accordance with the third paragraph of article R.225-105 of the French Commercial Code (Attestation regarding the completeness of CSR Information);

3 express a limited assurance conclusion that the CSR Information taken as a whole is, in all material respects, fairly presented in accordance with the Guidelines (Conclusion on the fairness of CSR Information).

It is not our responsibility to provide any conclusion on the compliance with other applicable legal expectations, in particular those concerning the French law 2016-1691 (fi ght against corruption).

Our work involved six persons and was conducted between November 2017 and March 2018 during a six week period. We were assisted in our work by our sustainability experts.

We performed our work in accordance with the order dated 13 May 2013 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(2) concerning our conclusion on the fairness of CSR Information.

1. Attestation regarding the completeness of CSR InformationNature and scope of our workOn the basis of interviews with the individuals in charge of the relevant departments, we obtained an understanding of the Company’s sustainability strategy regarding human resources and environmental impacts of its activities and its social commitments and, where applicable, any actions or programmes arising from them.

(1) Whose scope is available at www.cofrac.fr.(2) ISAE 3000 – Assurance engagements other than audits or reviews of historical fi nancial information.


MANAGEMENT REPORT3 Report by one of the Statutory Auditors, appointed as independent third party, on the consolidated humanresources, environmental and social information included in the management report

We compared the CSR Information presented in the management report with the list provided in article R.225-105-1 of the French Commercial Code.

For any consolidated information that is not disclosed, we verifi ed that explanations were provided in accordance with article R.225-105, paragraph 3 of the French Commercial Code.

We verifi ed that the CSR Information covers the scope of consolidation, i.e., the Company, its subsidiaries as defi ned by article L.233-1 and the controlled entities as defi ned by article L.233-3 of the French Commercial Code within the limitations set out in the methodological note, presented in section 5.4 of the management report.

ConclusionBased on the work performed and given the limitations mentioned above, we attest that the required CSR Information has been disclosed in the management report.

2. Conclusion on the fairness of CSR InformationNature and scope of our workWe conducted around twenty interviews with the persons responsible for preparing the CSR Information in the departments in charge of collecting the information and, where appropriate, responsible for internal control and risk management procedures, in order to:

3 assess the suitability of the Guidelines in terms of their relevance, completeness, reliability, neutrality and understandability, and taking into account industry best practices where appropriate;

3 verify the implementation of data-collection, compilation, processing and control process to reach completeness and consistency of the CSR Information and obtain an understanding of the internal control and risk management procedures used to prepare the CSR Information.

We determined the nature and scope of our tests and procedures based on the nature and importance of the CSR Information with respect to the characteristics of the Company, the human resources and environmental challenges of its activities, its sustainability strategy and industry best practices.

Regarding the CSR Information that we considered to be the most important(1):

3 at the consolidating entity level, we referred to documentary sources and conducted interviews to corroborate the qualitative information (organisation, policies, actions), performed analytical procedures on the quantitative information and verifi ed, using sampling techniques, the calculations and the consolidation of the data. We also verifi ed that the information was consistent and in agreement with the other information in the management report;

3 at the level of a representative sample of entities selected by us(2) on the basis of their activity, their contribution to the consolidated indicators, their location and a risk analysis, we conducted interviews to verify that procedures are properly applied and we performed tests of details, using sampling techniques, in order to verify the calculations and reconcile the data with the supporting documents. The selected sample represents 16% of headcount and between 11% and 20% of quantitative environmental data disclosed.

For the remaining consolidated CSR Information, we assessed its consistency based on our understanding of the company.

We also assessed the relevance of explanations provided for any information that was not disclosed, either in whole or in part.

(1) Quantitative information Social: Total Group workforce as at December 31, 2017 (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 under contract ashore, and at sea and by geographical zone; Distribution of the workforce between internal agencies and external agencies; Number of hiring and departures by category; Absenteeism rate by category; Number of training hours by category; Percentage of subsidiaries with their own salary scales in place; 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 subsidiaries which have their onshore and/or seagoing personnel covered by private medical insurance; Total Recordable Incidents Rate (TRIR); Lost Time Injury Rate (LTIR); Number of occupational illnesses recognised in 2017.

Environmental: Total volume of waste generated; Volume of used oil treated; Marine Gas Oil consumption; CO2 emissions and main category of indirect emissions; SOx emissions; NOx emissions

Societal: Percentage of local procurement in purchases of parts and supplies; Percentage of local workforce for each operating zone.

Qualitative information Social: Operational Safety Management Standard (OSM); Monthly accident prevention tool “safety post”; Development of collective competence; Environment: Training in good operational practices of crews (environment); Societal: Supplier Code of conduct; Compliance program.(2) Sonasurf (SA), Bourbon Management (BM) and Bourbon Offshore MMI (BOMMI)


MANAGEMENT REPORT

3

Report by one of the Statutory Auditors, appointed as independent third party, on the consolidated humanresources, environmental and social information included in the management report

We believe that the sampling methods and sample sizes we have used, based on our professional judgement, are suffi cient to provide a basis for our limited assurance conclusion; a higher level of assurance would have required us to carry out more extensive procedures. Due to the use of sampling techniques and other limitations inherent to information and internal control systems, the risk of not detecting a material misstatement in the CSR information cannot be totally eliminated.

ConclusionBased on the work performed, no material misstatement has come to our attention that causes us to believe that the CSR Information, taken as a whole, is not presented fairly in accordance with the Guidelines.

Marseille, March 30th 2018

One of the Statutory Auditors

Deloitte & Associés

Christophe Perrau Julien Rivals

Partner Partner, Sustainability Services


MANAGEMENT REPORT3


4CONSOLIDATED FINANCIAL STATEMENTS

FINANCIAL POSITION STATEMENT 106

STATEMENT OF COMPREHENSIVE INCOME 107

STATEMENT OF CONSOLIDATED CASH FLOWS 109

STATEMENT OF CHANGES IN EQUITY 111

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 114

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS (YEAR ENDED DECEMBER 31, 2017) 180


CONSOLIDATED FINANCIAL STATEMENTS4 Financial position statement

FINANCIAL POSITION STATEMENT

(in € millions) Notes December 31, 2017 December 31, 2016

Goodwill 3.1 25.2 25.2

Intangible assets 3.2 13.2 14.0

Property, plant and equipment 3.3 1,923.2 2,437.6

Investments in affi liates under the equity method 3.4 19.9 14.8

Non-current fi nancial assets 3.5 20.6 167.6

Deferred taxes 3.16 11.5 21.8

Total non-current assets 2,013.5 2,681.0

Inventories and work in progress 3.6 65.2 83.9

Trade and receivables 3.7 347.6 454.5

Current fi nancial assets 3.7 45.0 31.0

Other current assets 3.7 27.5 27.9

Cash and cash equivalents 3.8 243.6 281.5

Total current assets 728.9 878.8

Non-current assets held for sale - -

TOTAL ASSETS 2,742.4 3,559.8

Capital 3.9 49.2 48.5

Share premiums 100.8 91.0

Consolidated reserves, group share (including profi t for the year) 421.3 1,004.2

Total shareholders’ equity, group share 571.3 1,143.7

Non-controlling interests 72.3 111.8

Total shareholders’ equity 643.6 1,255.5

Borrowings and fi nancial liabilities 3.14 183.8 218.7

Employee benefi t obligations 3.13 15.0 14.9

Other provisions 3.13 69.4 74.0

Deferred taxes 3.16 22.8 30.8

Other non-current liabilities 15.7 31.4

Total non-current liabilities 306.8 369.7

Borrowings and fi nancial liabilities (< one year) 3.14 1,348.5 1,237.8

Bank overdrafts and short-term lines 3.14 76.4 293.3

Provisions (< one year) 3.13 25.8 30.9

Trade and other payables 334.7 349.9

Tax liabilities 3.8 3.3

Other current liabilities 2.8 19.4

Total current liabilities 1,792.0 1,934.5

Liabilities directly associated with non-current assets classifi ed as held for sale

Total liabilities 2,098.8 2,304.3

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2,742.4 3,559.8


CONSOLIDATED FINANCIAL STATEMENTSStatement of comprehensive income

4

STATEMENT OF COMPREHENSIVE INCOME

(in € millions) Notes December 31,2017 December 31,2016

Revenues 4 793.6 1,020.6

Direct costs excluding bareboat leases 4 (456.4) (538.8)

General and administrative costs 4 (97.2) (115.0)

Bareboat leases 4 (164.4) (188.7)

Capital gains 4 (0.2) 0.4

EBITDA 75.4 178.5

Increases and reversals of amortization, depreciation and provisions (288.9) (316.4)

Impairment (196.8) (36.0)

Capital gains on equity interests sold - -

Operating income (EBIT) (410.3) (173.9)

Share of results from affi liates under the equity method 3.4 3.7 (1.4)

Operating income (EBIT) after share of results from companies under equity method (406.6) (175.3)

Cost of net debt 3.15 (54.6) (43.0)

Other fi nancial expenses and income 3.15 (134.9) (20.8)

Income from current operations before income tax (596.1) (239.1)

Income tax 3.17 (12.8) (23.9)

Net income before discontinued operations net income (608.9) (263.0)

Net income from discontinued operations/operations held for sale - -

NET INCOME (608.9) (263.0)

Group share (576.3) (279.6)

Non-controlling interests (32.6) 16.6

Basic net earnings per share 5.2.1 (7.47) (3.68)

Diluted net earnings per share 5.2.2 (7.45) (3.67)

Net earnings per share – excluding income from discontinued operations/operations held for sale 5.2.1 (7.47) (3.68)

Diluted net earnings per share – excluding income from discontinued operations/operations held for sale 5.2.2 (7.45) (3.67)

Net dividend allocated to each share adjusted - (1) 0.25

(1) Further to the proposal made by the Board of Directors’ meeting of March 14, 2018.


CONSOLIDATED FINANCIAL STATEMENTS4 Statement of comprehensive income

(in € millions) Notes 2017 2016

Profi t (loss) for the period (608.9) (263.0)

Other comprehensive income (16.2) (8.6)

of which share of other comprehensive income from affi liates under the equity method (1.6) 0.1

Other components of comprehensive income that can be reclassifi ed in the income statement in subsequent periods

Change in the fi xed assets revaluation reserve - -

Tax effect - -

Profi ts and losses from the currency translation of the statements of foreign subsidiaries (31.0) (7.8)

Profi ts and losses from the revaluation of available-for-sale fi nancial assets - -

Tax effect - -

Effective portion of gains and losses on cash fl ow hedge instruments 3.19.2 18.3 3.2

Tax effect (3.7) (3.2)

Other components of comprehensive income that cannot be reclassifi ed in the income statement in subsequent periods

Actuarial differences 3.13 0.2 (0.9)

Tax effect - 0.1

TOTAL PROFIT/LOSSES (625.1) (271.6)

of which group share (588.6) (281.8)

of which portion made up of non-controlling interests (36.5) 10.2


CONSOLIDATED FINANCIAL STATEMENTSStatement of consolidated cash fl ows

4

STATEMENT OF CONSOLIDATED CASH FLOWS

(in € millions) Notes 2017 2016

Consolidated net income (608.9) (263.0)

Share of results from affi liates under the equity method 3.4 (3.7) 1.4

Tax (expense)/income 3.17 12.8 23.9

Net amortization, depreciation and provisions 490.3 340.1

Gains and losses from changes in fair value 39.3 (18.6)

Calculated income and expenses related to stock options and similar benefi ts 3.10 – 3.11 1.3 2.0

Gains and losses on disposals 0.3 (0.6)

Income tax paid (13.0) (25.9)

Dividends received from affi liates under the equity method 3.4 1.5 1.1

Restatement of non-cash rental expense 2.1 92.5 14.8

Other 27.4 4.1

Cash fl ows 39.7 79.3

Effect of changes in working capital 56.5 91.6

Dividends received (0.1) (0.1)

Cost of net debt 3.15 54.6 43.0

Cash fl ows from operating activities (A) 150.7 213.8

Acquisition of consolidated companies, net of cash acquired - (0.1)

Sale of consolidated companies, including cash transferred - -

Effect of other changes in the consolidation scope - (0.2)

Payments for property, plant and equipment and intangible assets 3.2 – 3.3 (47.1) (154.3)

Proceeds from disposals of property, plant and equipment and intangible assets 3.2 – 3.3 24.2 5.2

Payments for acquisitions of long-term fi nancial assets (0.0) -

Proceeds from disposal of long-term fi nancial assets 0.1 -

Dividends received 0.1 0.1

Change in loans and advances granted 20.5 (28.8)

Cash fl ows from investment activities (B) (2.3) (178.0)

Capital increase - 0.2

Capital repayment - -

Net sales (acquisition) of treasury shares (0.2) (4.5)

Proceeds from borrowings 3.14 269.2 293.0

Repayments of borrowings 3.14 (175.1) (309.2)

Issue of Perpetual Deeply Subordinated Notes 3.9 - -

Dividends paid to parent company shareholders (8.5) (25.5)


Net fi nancial interest paid (56.2) (47.2)

Cash fl ows from fi nancing activities (C) 21.6 (111.8)

Impact from the change in exchange rates (D) (11.0) 0.4

Effect of changes in accounting principles and other reclassifi cations (D) 20.0 -

Change in net cash (A) + (B) + (C) + (D) 179.0 (75.6)

Cash at beginning of period (11.8) 63.8

Cash at end of period* 167.2 (11.8)

CHANGE IN CASH 179.0 (75.6)

* of which:

- Marketable and other securities 3.8 - -

- Cash and cash equivalents 3.8 243.6 281.5

- Bank overdrafts 3.14 (76.4) (293.3)


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

Reclassifi cation 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 fl ow hedge (IAS 39) 3.19.2 - - - -

Employee benefi t obligations 3.13 - - - -

Profi ts and losses from the currency translation of the 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 3.11 - - - -

Reclassifi cation of treasury shares 3.12 - - 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


CONSOLIDATED FINANCIAL STATEMENTSStatement of changes in equity

4

Unrealized or deferred profi t/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 Statement of changes in equity

(in € millions) Notes

Capital and related reserves

Capital

Share premium and reserves

related to share capital

Reclassifi cation of treasury

shares

Perpetual Deeply

Subordinated Notes

Shareholders’ equity as of January 1, 2016 45.5 46.0 (5.0) 118.5

Net income for the period - - - -

Other components of comprehensive income (net of tax): - - - -

Cash fl ow hedge (IAS 39) 3.19.2 - - - -

Employee benefi t obligations 3.13 - - - -

Profi ts and losses from the currency translation of the fi nancial statements of foreign subsidiaries - - - -

Comprehensive income for the period - - - -

Capital increase 3.9 - - - -

Dividends paid in cash - - - -

Dividends paid in shares 3.0 42.7 - -

Capital repayment - - - -

Issue of Perpetual Deeply Subordinated Notes - - - -

Recognition of share-based payments 3.11 - - 3.8 -

Reclassifi cation of treasury shares 3.12 - - (4.5) -

Other changes - -

Total transactions with shareholders 3.0 42.7 (0.7) -

SHAREHOLDERS’ EQUITY AS OF DECEMBER 31, 2016 48.5 88.7 (5.7) 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 bear 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 fi nal impact (after taking into account the treasury shares) on BOURBON’s consolidated fi nancial statements for the second half of 2017 is 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).


CONSOLIDATED FINANCIAL STATEMENTSStatement of changes in equity

4

Unrealized or deferred profi t/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

(5.2) (28.8) (2.9) - (11.4) 1,276.8 1,433.4 130.9 1,564.3

- - - - - (279.6) (279.6) 16.6 (263.0)

(26.0) 24.0 (0.8) - 0.7 - (2.2) (6.4) (8.6)

- - - - 0.7 - 0.7 (0.7) 0.0

- - (0.8) - - - (0.8) - (0.8)

(26.0) 24.0 - - - - (2.1) (5.7) (7.8)

(26.0) 24.0 (0.8) - 0.7 (279.6) (281.8) 10.2 (271.6)

- - - - - - - - -

- - - - - (25.5) (25.5) (14.6) (40.1)

- - - - - (45.8) - - -

- - - - - - - - -

- - - - - - - - -

- - - - - (1.8) 2.0 - 2.0

- - - - - - (4.5) - (4.5)

- - - - - 20.0 20.0 (14.6) 5.4

- - - - - (53.0) (7.9) (29.2) (37.2)

(31.3) (4.8) (3.7) - (10.7) 944.3 1,143.7 111.8 1,255.5


CONSOLIDATED FINANCIAL STATEMENTS4 Notes to the consolidated fi nancial statements

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1/ Accounting policies and methods 1151.1 General information 115

1.2 Basis of preparation of the consolidated financial statements 115

1.3 Adoption of the new IFRS standards 116

1.4 Use of estimates and assumptions 117

1.5 Summary of accounting policies and methods 1181.5.1 Foreign currency translation 1181.5.2 Business combinations and goodwill 1191.5.3 Negative goodwill 1191.5.4 Intangible assets 1191.5.5 Property, plant and equipment 1191.5.6 Equity interests in associates and joint ventures 1201.5.7 Investments and other financial assets 1201.5.8 Inventories and work in progress 1221.5.9 Cash and cash equivalents 1221.5.10 Non-current assets held for sale and discontinued

operations 1221.5.11 Treasury shares 1221.5.12 Provisions and contingent liabilities 1221.5.13 Employee benefits 1221.5.14 Financial liabilities 1231.5.15 Finance leases 1241.5.16 Revenue 1241.5.17 Current income tax and deferred tax 1241.5.18 Derivative instruments and hedge accounting 124

1.6 Translation of the financial statements of foreign subsidiaries 125

2/ Significant information for the year ended December 31, 2017 126

2.1 Significant events over the period 126

2.2 Changes in the scope of consolidation 1272.2.1 Newly consolidated companies 1272.2.2 Deconsolidated companies 1272.2.3 Transactions in non-controlling interests 127

3/ Notes to the consolidated financial statements 128

3.1 Goodwill 128

3.2 Other intangible assets 131

3.3 Property, plant and equipment 133

3.4 Investments in affiliates under the equity method 1363.4.1 Aggregate financial information 1373.4.2 Commitments given or received for associated or

joint venture companies 1373.4.3 Transactions with associates and joint ventures 137

3.5 Non-current financial assets 137

3.6 Inventories and work in progress 139

3.7 Trade and other receivables, current financial assets and other current assets 139

3.8 Cash and cash equivalents 140

3.9 Shareholders’ equity 140

3.10 Stock option subscription or purchase plans 141

3.11 Bonus share allocation 142

3.12 Treasury shares 142

3.13 Employee benefit obligations and other provisions 143

3.14 Gross financial liabilities 145

3.15 Financial income/(loss) 147

3.16 Deferred taxes 148

3.17 Income tax 149

3.18 Financial risk management objectives and policy 1493.18.1 Credit/counterparty risk 1493.18.2 Liquidity risks 1503.18.3 Market risks 152

3.19 Financial instruments 1563.19.1 Financial assets 1563.19.2 Derivative financial instruments 1573.19.3 Financial liabilities 1583.19.4 Fair value of financial assets and liabilities 1593.19.5 Management of the risks related to financial

instruments 159

3.20 Contingent liabilities 160

4/ Operating segments 160

5/ Other information 1635.1 Contractual obligations and other off-balance

sheet commitments 1635.1.1 Off-balance sheet commitments related to the

Group scope of consolidation 1635.1.2 Off-balance sheet commitments related to financing 1635.1.3 Off-balance sheet commitments related to the

Group’s operating activities 164

5.2 Net earnings per share 1655.2.1 Basic net earnings per share 1655.2.2 Diluted net earnings per share 166

5.3 Workforce and payroll 166

5.4 Significant events after the end of the reporting period 167

5.5 Related-party transactions 167 Relations with the SINOPACIFIC Group 167 Relations with an executive 167 Relations with JACCAR Holdings 167

5.6 Executive compensation 1685.6.1 Compensation paid to the Chairman and Chief

Executive Officer and the Executive Vice Presidents 1685.6.2 Commitments of any kind made by the Company to

its corporate officers 1725.6.3 Stock options exercised during the year by each

Executive Director 172

5.7 Statutory Auditors’ fees 173

5.8 Scope of consolidation 1745.8.1 List of BOURBON Corporation’s fully consolidated

companies 1745.8.2 List of companies consolidated by BOURBON

Corporation using the equity method 178

6/ Financial Glossary 179


CONSOLIDATED FINANCIAL STATEMENTSAccounting policies and methods

4

1/ Accounting policies and methods

1.1 GENERAL INFORMATION

The consolidated fi nancial statements were approved by BOURBON Corporation’s Board of Directors on March 14, 2018 and again on April 20, 2018, to take into account events after the reporting date . BOURBON Corporation 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 fi nancial statements include the fi nancial statements of BOURBON Corporation, its subsidiaries and companies controlled by the Group as of December 31 of each year. The fi nancial statements of the subsidiaries and companies controlled by the Group 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 fi nancial 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 signifi cant 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, twelve 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; as a result, its business is signifi cantly infl uenced by that of its clients. However, since October 2014, the price of oil per barrel has dropped signifi cantly. The price of Brent crude fell from USD99 per barrel in 2014 to less than USD40 in late 2015, reaching a low of USD27 in the fi rst quarter of 2016. The collapse in oil price triggered an immediate response from oil companies, which cut global spending on exploration and production for the second consecutive year, by 25% in 2015 and 24% in 2016 (source: IFP Energies nouvelles). This cyclical downturn in the market affected the companies that provide services to oil companies. In the face of this economic slowdown in oil activity, 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 Group had conducted discussions with its fi nancial partners in order to restructure its fi nancing for the coming years. These discussions resulted in the signature of an agreement on March 6, 2017 with a number of fi nancial institutions and partners to restructure its principal debt in the amount of €910.8 million.

At the same time as these negotiations, which led to the restructuring of its principal debt, BOURBON also 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.

The agreement entered into with the Group’s principal fi nancial partners, described in detail in the notes to the 2016 fi nancial statements, thus restructured the repayments of its club deal loans, its bilateral loans, its fi nance 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 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 Group’s forecasts on which the March negotiation had been based, and the unfavorable market environment weighed heavily on the Group’s revenue and, consequently, on its net income. The cash fl ows generated by operations, although their circulation was not fully unrestricted due to the Group’s legal structure and limitations relating to some of its geographic locations, remain positive. However, they are insuffi cient to service its debt in the near future. The cash generated by operations nevertheless enables the Group to cover its current operating requirements for the next 12 months.

Furthermore, for the same reasons, the Group was not able to comply with the various covenants defi ned in its credit documentation which could have allowed the relevant banks to demand immediate repayment of their loans.

This situation on the closing date of the fi scal year requires the Company, in accordance with IFRS standards, to refl ect the payability of its debt by reclassifying it as a short-term liability, even though its lenders have not requested repayment .

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 .




CONSOLIDATED FINANCIAL STATEMENTS4 Accounting policies and methods

In this perspective, the Group has maintained its going concern assumption in the preparation of its consolidated fi nancial statements for the year ended December 31, 2017.

Statement of compliance

BOURBON Corporation’s consolidated fi nancial statements for the year ended December 31, 2017 have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted in 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 fi nancial statements for the year ending December 31, 2017 are those published in the Offi cial Journal of the European Union, the application of which was mandatory as of December 31, 2017.

Pursuant to Article 28 of European Regulation No. 809/2004 of April 29, 2004, the following information is included by reference:

3 the consolidated fi nancial statements for the year ended December 31, 2016 and the Statutory Auditors’ report on those statements, provided in the Registration Document fi led on April 25, 2017, with the Autorité des marchés fi nanciers (on pages 91 to 163 and 164);

3 the consolidated fi nancial statements for the year ended December 31, 2015 and the Statutory Auditors’ report on those statements, provided in the Registration Document fi led on April 22, 2016, with the Autorité des marchés fi nanciers (on pages 83 to 148 and 150).

Consolidated financial statements – Basis of preparation

The Group’s consolidated fi nancial statements have been prepared on the historical cost basis, with the exception of derivative instruments and available-for-sale fi nancial assets, which are measured at fair value. The consolidated fi nancial statements are presented in millions of euros.

The subsidiaries are consolidated from the effective date of acquisition, which is the date on which the Group obtains control, until the date on which this control ceases to be exercised.

Non-controlling interests represent the share of profi t or loss and net assets which are not held by the Group. They are presented in the income statement and in shareholders’ equity on the consolidated balance sheet separately from the Group’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 Group’s normal business cycle;

3 they are essentially held for trading.

All other assets are classifi ed 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 Group’s normal business cycle;

3 they are essentially held for trading;

3 the Group does not have an unconditional right to defer payment for a period of at least 12 months after closing.

All other liabilities are classifi ed as non-current liabilities.

1.3 ADOPTION OF THE NEW IFRS STANDARDS

The accounting policies applied as of December 31, 2017 are consistent with those of the previous year.

The application of standards and interpretations that have become mandatory since January 1, 2017 has not had a signifi cant impact on the Group’s fi nancial statements.

In connection with the application of the rules on alternative performance indicators (ESMA Guideline – AMF Position No. 2015-12), the Group has included a fi nancial glossary in its disclosure since June 30, 2016. In this Registration Document, the Financial Glossary is included in note 6 hereto.

The Group also decided not to opt for the early application of the standards and interpretations for which application was not mandatory as of January 1, 2017, namely:

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 . IFRS 15 defi nes revenue recognition according to a fi ve-step process: i) identify the contract, ii) identify the per for mance oblig-a tions, iii) determine the trans ac tion price, iv) allocate the trans-ac tion 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.

However, the application of this mandatory standard as from January 1, 2018, will have no signifi cant impact on the Group’s fi nancial statements.

The Group recognizes more than 85% of its revenue over time, based on a day-rate refl ecting the transfer of control to clients.

Moreover, the Subsea business still has a moderate number of turnkey projects, accounting for around 10% of its revenue. The revenue from those projects, which is spread over relatively short periods (less than six months), is already recognized over time through a stage of completion method, in particular via costs in accordance with the new IFRS 15.



4

3 IFRS 9 “Financial instruments”.

For the Group, the main potentially signifi cant 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 enters into the scope of the new provisions for the recognition of restructured debts specifi ed by IFRS 9 and applicable retroactively.

However, since the adjusted debt is immediately due on the closing date, it must be recognized at par and is therefore not affected by the application of the aforementioned provisions.

In conclusion, the application of IFRS 9 will not have any signifi cant impact on the Group’s opening balance-sheet position on January 1, 2018.

3 IFRS 16 “Leases”.

This standard which introduces the concept of control of the leased asset, fundamentally changes the way that lessees account for leases.

At this point, the Group believes that application of IFRS 16, which becomes mandatory on January 1, 2019, will have a signifi cant impact on its consolidated fi nancial statements, on the balance sheet, with respect to the value of property, plant, and equipment, and on the income statement with respect to an improvement in EBITDA through a decrease in rent and, on the other hand, an increase in depreciation.

As of December 31, 2017, leases relating to 57 vessels are liable to be affected by the application of this standard.

1.4 USE OF ESTIMATES AND ASSUMPTIONS

Preparation of the fi nancial 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 fi nancial 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.

Retirement benefit obligations

The cost of defi ned benefi t plans and other post-employment medical coverage benefi ts 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 Group 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 signifi cant. The net liabilities built up for these benefi ts granted to employees as of December 31, 2017 were €14.4 million (€14.3 million in 2016). Further details are given in note 3.13.

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 fl ows method is used to value other fi nancial instruments.

Impairment test on goodwill

At least once a year, the Group assesses whether it is necessary to depreciate 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 defi ned as the higher of the useful value and the fair value (net of disposal costs).

A CGU (cash-generating unit) is the smallest identifi able group of assets whose continued use generates cash infl ows that are largely independent of cash infl ows from other assets or groups of assets.

The determination of CGUs must be consistent with the way in which management manages and controls the Group’s activities and with the level at which strategic decisions or asset acquisition/disposal decisions are made.

Accordingly, the Group identifi ed 4 distinct CGUs:

3 Marine Services – DEEP for all of our deep offshore operations;

3 Marine Services – SHALLOW for our Continental Offshore operations;

3 Marine Services – CREW for 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 infl ows that are largely independent of the cash infl ows of other vessels. As such, as defi ned 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 , defi ned as discounted total future cash fl ows, is determined based on the economic, business, and income assumptions deemed by the Group’s management to be the most probable.



The expected future cash fl ows used to calculate the useful value of each CGU are calculated based on the Group’s fi ve-year business plans, prepared using adjusted fi nancial data (see note 4 “Segment information”). The fl ows are discounted at a rate measured on the basis of the average weighted cost of the capital determined for the Group. 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 fl ow” method used to measure the value in use of the CGUs to which the goodwill is allocated is uncertain, the actual future cash fl ows can vary from the future cash fl ow projections used to determine the useful value.

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.

Impairment tests on assets

Intangible assets with defi nite useful life and property, plant and equipment are tested for possible impairment as soon as there is any indication that the assets may be impaired (see notes 1.5.5 and 1.5.6), i.e. when events or specifi c circumstances indicate a risk of impairment loss. In order to conduct these tests, non-current assets are grouped into CGUs and their net book value is compared to the recoverable value of said units. Recoverable value is defi ned as the higher of the useful value (see previous section) and the fair value (net of disposal costs).

1.5 SUMMARY OF ACCOUNTING POLICIES AND METHODS

1.5.1 Foreign currency translation

The consolidated fi nancial 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 Group 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 reclassifi ed from equity to profi t or loss on disposal of the net investment (IAS 21.48).

Hyperinfl ationary economiesThe hyperinfl ationary nature of an economy is defi ned 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 rel a tively stable foreign currency. Amounts of local currency held are immediately invested to maintain purchasing power;

3 the general pop u la tion regards monetary amounts not in terms of the local currency but in terms of a rel a tively stable foreign currency. Prices may be quoted in that currency;

3 sales and purchases on credit take place at prices that com pen-sate for the expected loss of pur chas ing 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 infl ation 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 hyperinfl ationary economy, the following treatment is applied:

3 initially, the entity’s fi nancial 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 fi gures for the prior fi nancial 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);



4

3 the entity’s fi nancial statements, as restated above, are translated at the closing rate, from the functional currency into the reporting currency of the consolidated fi nancial 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 identifi able assets (including intangible assets not previously recognized) and identifi able 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 Group’s interest in the net fair value of the identifi able 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 Group’s CGUs likely to benefi t 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 Group’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 Group assesses whether the useful life of an intangible asset is fi nite or indefi nite.

Intangible assets with a fi nite 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 method for amortizing an intangible asset with a fi nite 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 benefi ts 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 fi nite 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 valueProperty, plant and equipment consist primarily of vessels valued on the date they are included in the Group’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 fi nance 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 identifi ed and recognized separately using the component-based approach.

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 classifi cation 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 fi rst overhaul of the vessel.

B) DepreciationDepreciation 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 Group would obtain today from the sale of this asset at the end of its use by the Group.

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 defi ned according to the expected utility of the asset for BOURBON based on the use planned by the Group.

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 Group’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 defi ned 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 signifi cant infl uence; 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 Investments and other financial assets

Financial assets included in the scope of application of IAS 39 are classifi ed as “fi nancial assets at fair value through profi t or loss”, as “loans and receivables”, as “held-to-maturity investments”, or as “available-for-sale fi nancial assets”. When initially recognized, fi nancial assets are measured at fair value, plus transaction costs in the case of investments which are not recognized at fair value through profi t or loss. Initially, the Group analyzes the possible existence of embedded derivatives in the contracts. Embedded derivatives are separated from the host contract if the contract is not recognized in its entirety at fair value through the income statement, and if analysis shows that the economic features and the risks of the embedded derivatives are not closely related to those of the host contract.

The Group determines the classifi cation of its fi nancial assets at the time of initial recognition and reviews this classifi cation at each yearly closing when this is authorized and appropriate.

All “normalized” purchases and sales of fi nancial assets are recognized on the transaction date, i.e. the date on which the Group agrees to purchase the asset. “Normalized” purchases or sales are purchases or sales of fi nancial assets under a contract, the terms of which require the delivery of the asset within the period generally defi ned by the regulations or by a convention on the market in question.

Financial assets at fair value through profi t or lossThe category of “fi nancial assets at fair value through profi t or loss” includes fi nancial assets held for trading purposes and fi nancial assets designated at the initial accounting as fi nancial assets at fair value through profi t or loss. Further details are given in note 3.19.

Loans and receivablesLoans and receivables are non-derivative fi nancial assets, with fi xed or determinable payments, which are not listed on an active market. After initial recognition, loans and receivables are measured at amortized cost using the effective interest rate method, less, if applicable, an impairment loss. The amortized cost is calculated by taking into account any initial additional cost or discount, and includes commissions which are an integral part of the effective interest rate, as well as transaction costs.



4

Gains and losses are recognized as income/loss when the loans and receivables are derecognized or depreciated and through the mechanism of amortized cost.

Held-to-maturity investmentsHeld-to-maturity investments are non-derivative fi nancial assets, with fi xed and determinable payments and a fi xed maturity, which the Group has the positive intent and the ability to hold to maturity. After initial recognition, held-to-maturity investments are measured at amortized cost.

Available-for-sale fi nancial assetsAvailable-for-sale fi nancial assets are non-derivative fi nancial assets that are designated as available for sale or that are not categorized in any of the three following categories: Financial assets at fair value through profi t or loss, Held-to-maturity investments, Loans and receivables.

After initial recognition, available-for-sale fi nancial assets are measured at fair value, and the gains and losses on such assets are booked directly as shareholders’ equity in a separate line (“Unrealized net gains”) until the investment is derecognized or until the investment is identifi ed as being subject to impairment, in which case the cumulative gain or loss previously booked as shareholders’ equity is then included in profi t or loss.

Determining the fair value of fi nancial instrumentsThe fair value of the fi nancial instruments that are actively traded on organized fi nancial markets is determined by reference to the market prices published on the closing date. For investments 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 fl ow 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 profi tability.

Impairment of fi nancial assetsOn each closing date, the Group assesses whether a fi nancial asset or a group of fi nancial assets is impaired.

Assets carried at amortized costsIf there is objective evidence that an impairment loss on loans and receivables carried at amortized cost has been incurred, the amount of loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows (excluding future credit losses that have not been incurred), discounted at the fi nancial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset shall be reduced through the use of an allowance account. The amount of loss shall be recognized in profi t or loss.

The Group fi rst assesses whether objective evidence of impairment exists on an individual basis for individually signifi cant fi nancial assets, and then, on an individual or collective base, for fi nancial assets which are not individually signifi cant. If it determines that there is no objective evidence of depreciation for a fi nancial asset considered individually, in a signifi cant or non-signifi cant amount, this asset is included in a group of fi nancial assets presenting similar credit risk characteristics, and this group of fi nancial assets is subject to a collective impairment test. Assets subject to an individual impairment test, for which impairment is recognized or continues to be recognized, are not included in a collective impairment test.

If the amount of the impairment decreases during a subsequent year, and if this decrease can be objectively tied to an event that occurred after recognition of the impairment, the impairment previously recognized is reversed. A reversal of impairment is booked as income/loss provided the book value of the asset does not become greater than the amortized cost on the date the impairment is reversed.

For trade receivables, impairment is recognized when there is an objective indication (such as a probability of bankruptcy or signifi cant fi nancial diffi culties for the debtor) that the Group will be unable to recover the amounts owed under the contractual terms of the invoice. The book value of the trade receivable is reduced using a valuation allowance account. Impaired outstanding amounts are recognized as a loss when they are deemed unrecoverable.

Available-for-sale fi nancial assetsIf an available-for-sale asset is impaired, an amount calculated as the difference between its acquisition cost (net of any repayment of principal and any depreciation) and its current fair value, less any impairment previously booked as income/loss, is transferred from shareholders’ equity to income. Impairment on equity instruments may not result in a reversal booked as income. Impairment on debt instruments is reversed as income if the increase in the fair value of the instrument may be objectively related to an event that occurred after recognizing the impairment in the income statement.



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 fi nished goods.

When the production cost of fi nished 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 classifi ed as “held for sale” if their carrying amount will be recovered primarily through a sale transaction rather than continuing use. This classifi cation 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 fi nd a buyer and fi nalize 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 classifi ed as assets held for sale.

Non-current assets (or disposal groups) intended to be sold and classifi ed 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 classifi ed as assets held for sale.

Discontinued operationsA discontinued operation is an activity or a signifi cant geographic region for the Group which is either being sold or classifi ed as an asset held for sale. The items of the income statement and the cash fl ow statement for these discontinued operations or operations being sold are presented on specifi c lines of the fi nancial statements for all periods presented. As a result, certain elements of the income statement and the cash fl ow 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 profi t 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 outfl ow of resources embodying economic benefi ts 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 signifi cant, the provisions are discounted on the basis of a pre-tax rate which refl ects the risks specifi c 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 fi nance 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 outfl ow 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 fi nancial statements (see note 3.20). They correspond to:

3 a possible obligation that arises from past events and whose existence will be confi rmed 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 outfl ow of resources embodying economic benefi ts will be required to settle the obligation; or ii) the amount of the obligation cannot be measured with suffi cient reliability.

1.5.13 Employee benefits

Employee benefi ts include retirement indemnities, seniority awards, incentives and profi t-sharing.

Retirement benefi t obligationsGroup employees receive retirement indemnity in addition to the legal retirement benefi ts in effect in the countries in which they are employed.

Pursuant to IAS 19 “Employee benefi ts”, retirement benefi t 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.



4

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 infl ation rate;

3 turnover: established for each company using the average turnover observed over the last fi ve years;

3 assumptions on salary increases;

3 calculation of the rights based on collective agreements or specifi c agreements in force in each entity/country.

Pursuant to IAS 19, the Group recognizes it actuarial differences directly in shareholders’ equity.

IncentivesIncentives are based on several types of criteria:

3 profi tability 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 fi rst 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.

Profi t sharingProfi t 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 profi t 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” method.

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 benefi ciaries, 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 fi nancial 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.

Profi ts 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 fi nance leases are recognized as assets of the Group, i.e. when in substance, the contract grants to the Group most of the risks and benefi ts 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 defi ned in note 1.5.5.

1.5.16 Revenue

Revenue is recognized when it is probable that the future economic benefi ts will fl ow to the Group and when the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, other taxes on sales and customs duties.

Income from ordinary activities includes, in particular, chartering revenues and related services as well as assistance services.

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 fi nancial 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 profi t and accounting profi t;

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 classifi ed 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 classifi ed as:

3 fair value hedges when they hedge the exposure to changes in the fair value of a recognized asset or liability, or a fi rm commitment (except for the exchange risk);

3 cash fl ow hedges when they hedge the exposure to variability in cash fl ows that is attributable either to a specifi c risk associated with a recognized asset or liability, or to a highly probable forecast transaction or to the exchange risk on a fi rm commitment;

3 hedges of a net investment in a foreign operation.

The hedge on the foreign currency risk of a fi rm commitment is recognized as a cash fl ow 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 identifi cation of the hedging instrument, the item or transaction hedged, the nature of the risk being hedged and how the Group will assess the effectiveness of the hedging instrument in offsetting the exposure to the changes in fair value of the item hedged or cash fl ows attributable to the hedged risk. The Group expects that the hedge will be highly effective in offsetting changes in fair value or in cash fl ows. The hedge is assessed on an ongoing basis in order to demonstrate that it has actually been highly effective during all the years covered by the fi nancial statements for which it has been designated.

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 fi rm commitment, or an identifi ed portion of such fi nancial assets or liabilities, which is attributable to a specifi c 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 fi rm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the fi rm commitment attributable to the hedged risk is accounted for as an asset or a liability, and the corresponding profi t 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 if the hedge instrument reaches maturity or is sold, terminated or exercised, if the hedge no longer meets the criteria for hedge accounting, or when the Group cancels the designation.



4

Cash fl ow hedgeA cash fl ow hedge is a hedge on the exposure to changes in cash fl ow attributable to a specifi c risk associated with a recognized asset or liability or with a highly probably planned transaction, which can affect the results. The profi t 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.

The amounts recognized directly in shareholders’ equity shall be recognized in profi t or loss in the same period or periods during

which the hedged item affects profi t or loss (for example, for assets that are hedged, at the rate of the amortization made).

If the hedging instrument reaching maturity is sold, terminated or exercised without being replaced or renewed, or if its designation as a hedging instrument is revoked, 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 income/loss.

1.6 TRANSLATION OF THE FINANCIAL STATEMENTS OF FOREIGN SUBSIDIARIES

The exchange rates used are as follows:

Currencies Average rate

for 2017Closing rate

as of 12.31.2017Closing rate

as of 12.31.2016

AON Angolan Kwanza 187.4330 198.9927 174.8784

AUD Australian Dollar 1.4732 1.5346 1.4596

BRL Brazilian Real 3.6054 3.9669 3.4351

CHF Swiss Franc 1.1117 1.1702 1.0739

CNY Yuan 7.6290 7.8044 7.3202

INR Indian Rupee 73.5324 76.6055 71.5935

MXP Mexican Peso 21.3286 23.6612 21.7719

MYR Malaysian Ringgit 4.8527 4.8536 4.7287

NGN Nigerian Naira 381.5597 432.6480 331.4540

NOK Norwegian krone 9.3270 9.8403 9.0863

QAR Qatari Riyal 4.1821 4.3592 3.8101

RON New Romanian Leu 4.5688 4.6585 4.5390

RUB Ruble 65.9383 69.3920 64.3000

SGD Singapore Dollar 1.5588 1.6024 1.5234

TRY Turkish Lira 4.1206 4.5464 3.7072

UAH Ukrainian Hryvnia 30.2267 33.7266 28.4660

USD American Dollar 1.1297 1.1993 1.0541

XAF CFA Franc 655.9570 655.9570 655.9570


CONSOLIDATED FINANCIAL STATEMENTS4 Signifi cant information for the year ended December 31, 2017

2/ Signifi cant information for the year ended December 31, 2017

2.1 SIGNIFICANT EVENTS OVER THE PERIOD

On March 8, 2017, BOURBON announced the restructuring of the majority of its fi nancial indebtedness, amounting to €910.8 million, of which the major characteristics are the following:




On July 28, 2017, the conditions precedent for the implementation of the debt rescheduling agreement were met and BOURBON confi rmed the effective restructuring of its debt (see note 3.14).


This agreement provides for a USD240 million reduction in BOURBON’s charter payments between 2016 and 2018 in consideration for the two-year extension of the initial bareboat charter period at a rate of 8% and more favorable commercial terms for ICBC Financial Leasing. This agreement will not have a material impact on the Group’s consolidated fi nancial statements since it does not affect the qualifi cation of the bareboat chartering contract of the vessels. In accordance with IFRS, bareboat charter expenses will be recognized on a straight-line basis from the date of renegotiation and for the remaining term of the contract. The non-cash impact of the charter expenses following these negotiations and the required straight-line accounting amounted to €92.5 million for 2017.

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 market environment weighed heavily on the Group’s revenue in 2017 and, consequently, on its net income. The cash fl ows generated by the activity are thus insuffi cient to service the debt in the short term.

Furthermore, for the same reasons, the Group was not able to comply with various covenants defi ned in its credit documentation. The Group has asked its lenders to formally suspend, for the expected duration of the discussions, the exercise of their rights under the credit agreements, in particular their repayment. On the date of writing this report, a number of responses are still pending, but the Group is confi dent that it will obtain these waivers and stand-stills.

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 debt with the expected gradual recovery in the market and the corresponding upturn in the Group’s performance .

On February 12, 2018, BOURBON Corporation’s Board of Directors approved the new strategic action plan – #BOURBONINMOTION – initiated at the end of 2017. It should 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. BOURBON’s goal is to accelerate its transformation in order to be ready for the expected recovery.

The #BOURBONINMOTION action plan is based on two priorities:

3 providing better service to clients by reorganizing the Group’s activities into three distinctive subsidiaries: BOURBON Marine & Logistics, BOURBON Subsea Services and BOURBON Mobility. Each of these 3 entities will implement its own strategy and have a dedicated governance structure (management team in which the Chief Executive Offi cer will report to a Board of Directors). They will focus on profi table growth through the development of their models towards more integrated services;

3 capitalizing on the digital revolution to stand out through a connected fl eet. With the aim of improving operational excellence at the optimum cost, the “Smart Shipping” program will connect BOURBON Marine & Logistics’ fl eet of 132 modern supply vessels (called the “smart fl eet”). This program represents an investment of €75 million over a period of three years. It will reduce the vessels’ operating costs over the long term.


CONSOLIDATED FINANCIAL STATEMENTSSignifi cant information for the year ended December 31, 2017

4

The three new subsidiaries will benefi t from privileged market access thanks to the numerous partnerships already in place in the main countries where BOURBON currently operates, in compliance with the rules of the countries involved, particularly in terms of local content.

Within BOURBON Marine & Logistics’ traditional fl eet of 65 vessels, the 41 oldest vessels, which cannot be connected (known as the “non-smart fl eet”), will be sold “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 fi nancial statements (see note 3.3). note that a provision of €1.4 million was consequently booked for these vessels’ spare parts recorded in inventories (see note 3.6).

Under this strategy, the Group also decided to dispose of seven specialized vessels considered as non-strategic for the Group. These vessels will also be sold “as is where is” and according to the same process, generating an impairment charge of -€29.6 million (see note 3.3).

2.2 CHANGES IN THE SCOPE OF CONSOLIDATION

2.2.1 Newly consolidated companies

Six companies were created and fully consolidated in 2017, with a non-signifi cant impact on the consolidated fi nancial statements.

The list of the consolidated companies is provided in note 5.8.

2.2.2 Deconsolidated companies

No disposals took place in 2017. The only deconsolidations involved company liquidations/dissolutions and had no signifi cant impact on the consolidated fi nancial statements.

2.2.3 Transactions in non-controlling interests

BOURBON completed transactions for the acquisition or disposal of certain non-controlling interests during 2017. 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, 2017 was as follows:

(in € millions)

Acquisition price of the shares 0.0

Restated portion acquired 3.8

IMPACT ON SHAREHOLDERS’ EQUITY, GROUP SHARE – ACQUISITION OF NON-CONTROLLING INTERESTS (3.8)

(in € millions)

Acquisition price of the shares 20.2

Group interests disposed of 4.9

IMPACT ON SHAREHOLDERS’ EQUITY, GROUP SHARE – DISPOSAL OF NON-CONTROLLING INTERESTS 15.3



3/ Notes to the consolidated fi nancial statements

3.1 GOODWILL

As of December 31, 2017, the net balance of goodwill totaled €25.2 million, broken down as follows:

(in € millions) Gross Impairments Net

01.01.2016 33.5 - 33.5

Acquisitions - - -

Disposals - - -

Impairment - (8.2) (8.2)

Currency translation adjustment - - -

Change in consolidation scope - - -

Reclassifi cation and other changes - - -

12.31.2016 33.5 (8.2) 25.2

Acquisitions - - -

Disposals - - -

Impairment - -

Currency translation adjustment - - -

Change in consolidation scope - - -


12.31.2017 33.5 (8.2) 25.2

Allocation of goodwill by CGU was as follows:

(in € millions) 12.31.2016 Impairment 12.31.2017

Marine Services – DEEP - - -

Marine Services – SHALLOW 6.1 6.1

Marine Services – CREW - -

Subsea Services 19.2 19.2

Other

TOTAL 25.2 - 25.2

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.

As of December 31, 2017, the still diffi cult conditions in the Oil & Gas sector, combined with the fact that BOURBON’s market capitalization (€542 million with a share price of €7.00 as of December 31, 2017) is less than its shareholders’ equity as of the same date (€644 million), constitute indications of impairment under IAS 36, section 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, defi ned as total discounted future cash fl ows.

Determination of going concern values is based on economic assumptions and forecasts of activity and results deemed by Group

management to be the most probable. The principal assumptions and forecasts are presented below:

3 fi ve-year business plan covering the 2018-2022 period for each of the CGUs, prepared on the basis of adjusted fi nancial data (see note 4);

3 use of normative cash fl ows beyond the fi fth year; the discounted standardized cash fl ows represent approximately 82% of the 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 infl ation rates);

3 discount rate of 9%, determined by an independent third party and considered as refl ecting the Group’s weighted average cost of capital (WACC); based in particular on a risk-free rate of 1.2%, a market risk premium of 6.5% and a specifi c 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 rate is also corroborated by the average WACC used by the fi nancial analysts that follow BOURBON;


CONSOLIDATED FINANCIAL STATEMENTSNotes to the consolidated fi nancial statements

4

3 exchange rate (business plan and normative cash fl ows): €1 = USD1.20.

Over the past three 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.

While the oil companies now seem to have resumed their investments in corporate acquisitions, shale gas, onshore projects and renewable energies, the gradual growth in investments in the offshore sector is not expected until 2019.

The Group expects the contraction of the market for offshore oil and gas services to continue somewhat in 2018, which would then be comparable to 2017 in terms of activity, before a gradual resumption of the oil companies’ offshore investments and exploration expenses in 2019, to meet demand and overcome the depletion of existing fi elds.

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$60-65 in 2018, reaching US$65-70 in 2020, with a possible shortfall of supply relative to demand (predicted by the International Energy Agency – IEA) following oil companies’ historic reduction in exploration and production investments since mid-2014.

The fi rst phase of the recovery should result in a progressive increase in utilization rate beginning in 2019.

Some players (Clarksons, Petrodata) predict that utilization rates will rise to over 70% as of late 2018 while other, more conservative, ones

(Pareto), see them rising more gradually, in the region of 65% in late 2018. The Group has adopted a rather conservative approach in the face of this gradual recovery in activity, given that over 30% of the worldwide fl eet of offshore oil and gas support vessels is currently stacked (source: Clarksons) due to vessel overcapacity, affecting the Deepwater Offshore and Shallow Water Offshore commodity segments. The Group believes that most of these stacked vessels will return to operation and that daily rates are not likely to increase before 2020-2021, while other market players deem that a large proportion of the vessels will never return to operation and are expecting an increase in rates by the end of 2018 or the beginning of 2019.

The Crewboats segment has held up relatively well, as it is a less expensive and safer alternative to the helicopter, whereas the Subsea segment continues to diversify by expanding its range of activities (“turnkey” projects, ROV construction support, diving, fl oatel, and well stimulation).

On the other hand, the Deepwater Offshore and Shallow Water Offshore segments are expected to recover more slowly due to the overcapacity of vessels affecting these convenience segments.

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 effi cient 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 commodity segments, where the reduction of 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 12.31.2017

including goodwill* ** Value in use *

Excess of estimated value in use over

the value* of assets including goodwill**

Marine Services – DEEP - 686.1 737.1 51.0

Marine Services – SHALLOW 6.1 610.7 694.6 83.9

Marine Services – CREW - 290.5 732.6 442.1

Subsea Services 19.2 424.7 838.3 413.6

* 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 did not generate the recognition of any impairment at December 31, 2017.

BOURBON 2017 Registration Document130

Consolidated finanCial statements4 Notes to the consolidated financial statements

The results of the value in use assessment as at December 31, 2016 are as follows:

(in € millions) Goodwill

Economic assets as of 12.31.2016

including goodwill* **Estimated going

concern value*

Excess of estimated going concern value over

the value* of assets including goodwill**

Marine Services – DEEP 8.2 960.3 924.3 (36.0)

Marine Services – SHALLOW 6.1 867.0 962.4 95.4

Marine Services – CREW - 368.0 906.8 538.8

Subsea Services 19.2 534.2 884.5 350.3

* Adjusted data: operating joint ventures over which the Group exercises joint control are fully consolidated.** Economic assets = goodwill, intangible assets and property, plant and equipment, and working capital requirement.

Taken together, these valuations of value in use resulted in recording impairment on the Marine Services DEEP CGU in the amount of €36 million.

For the year ended December 31, 2017, the results of the sensitivity analyses performed on individual changes in the assumptions used are presented below and represent the impacts as compared with the estimated values in use presented in the previous table:

Sensitivity of the value in use measurement of the CGUs

(in € millions)

Decrease of 0.5 pt in the

discount rate

Increase of 0.5 pt in the

discount rate

Decrease of 0.5 pt in the growth rate

Increase of 0.5 pt in the growth rate

10% decrease in cash flows

10% increase in cash flows

Marine Services – DEEP 67.4 (57.7) (47.5) 55.5 (73.7) 73.7

Marine Services – SHALLOW 76.0 (64.9) (54.5) 63.6 (69.5) 69.5

Marine Services – CREW 54.2 (46.6) (37.4) 43.7 (73.3) 73.3

Subsea Services 73.3 (62.8) (51.5) 60.1 (83.8) 83.8

Taking into account the individual changes to the assumptions used, the surplus of the estimated values in use over the assets’ values of each CGU would be as follows:

Value in use of CGUs

(in € millions)

Decrease of 0.5 pt in the

discount rate

Increase of 0.5 pt in the

discount rate

Decrease of 0.5 pt in the growth rate

Increase of 0.5 pt in the growth rate

10% decrease in cash flows

10% increase in cash flows

Marine Services – DEEP 118.4 (6.7) 3.5 106.5 (22.7) 124.7

Marine Services – SHALLOW 159.9 19.0 29.3 147.5 14.4 153.3

Marine Services – CREW 496.3 395.4 404.6 485.7 368.8 515.3

Subsea Services 486.9 350.8 362.0 473.7 329.7 497.4

Under each scenario, the individual rates according to which an impairment would have to be recorded are the following:

DEEP SHALLOW CREW SUBSEA

Discount rate of: 9.4% 9.7% 21.5% 14.8%

Growth rate of:1.9% 1.7%

no impairment even in the event of a growth rate of zero

Decrease in cash flows of: 6.9% 12.1% 60.3% 49.3%



4

Moreover, the 2018-2022 business plan and normative cash fl ows were established on the basis of a euro/US dollar exchange rate of 1.20. The table below shows the impact of an exchange rate fl uctuation of +/-5 euro cents on these estimated values in use:

Impact on the CGUs’ value in use

(in € millions)USD/EUR rate: -5 cts,

i.e. EUR1 = USD1.15USD/EUR rate: +5 cts,

i.e. EUR1 = USD1.25

Marine Services – DEEP 67.6 (59.3)

Marine Services – SHALLOW 63.0 (41.1)

Marine Services – CREW 68.7 (85.1)

Subsea Services 74.0 (65.0)

Taking into account these EUR/USD exchange rate fl uctuations, the value in use of each CGU would be as follows:

Impact on the CGUs’ value in use

(in € millions)USD/EUR rate: -5 cts,

i.e. EUR1 = USD1.15USD/EUR rate: +5 cts,

i.e. EUR1 = USD1.25

Marine Services – DEEP 118.6 (8.3)

Marine Services – SHALLOW 146.8 42.8

Marine Services – CREW 510.8 356.9

Subsea Services 487.6 348.5

3.2 INTANGIBLE ASSETS

Intangible assets can be analyzed as follows:

(in € millions) GrossAmortization

and impairment Net

01.01.2016 41.0 (23.9) 17.2

Acquisitions 2.9 (6.4) (3.5)

Disposals (0.0) 0.0 -

Change in scope (0.0) 0.0 (0.0)

Currency translation adjustment 0.4 (0.1) 0.3


IFRS 5 reclassifi cation* - - -

12.31.2016 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)

Reclassifi cation and other changes (0.3) 0.3 (0.0)

IFRS 5 reclassifi cation* - - -

12.31.2017 43.2 (30.0) 13.2

* Reclassifi cation 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

01.01.2016 0.1 23.7 - 13.5 3.8 41.0

Acquisitions - 0.1 - 0.4 2.4 2.9

Disposals - (0.0) - - - (0.0)

Change in scope - - - - -

Currency translation adjustment - 0.0 - 0.4 - 0.4

Reclassifi cation and other changes - 4.0 - (0.1) (3.9) -

IFRS 5 reclassifi cation* - - - - - -

12.31.2016 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)

Reclassifi cation and other changes - 3.7 1.0 (1.4) (3.6) (0.3)


12.31.2017 0.1 29.7 0.9 11.6 0.9 43.2


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

01.01.2016 (0.1) (19.5) - (4.3) - (23.9)

Acquisitions - (3.9) - (0.5) - (4.4)

Impairment - (0.5) - (1.1) (0.3) (1.9)

Disposals - 0.0 - - - 0.0

Change in scope - - - - - -

Currency translation adjustment - (0.0) - (0.1) - (0.1)

Reclassifi cation and other changes - (0.1) - 0.1 - -


12.31.2016 (0.1) (24.0) - (6.0) (0.3) (30.4)

Acquisitions - (2.1) - (0.2) - (2.3)

Impairment - - -

Disposals - 1.8 - 0.2 - 1.9


Currency translation adjustment - 0.0 0.1 0.4 - 0.4

Reclassifi cation 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)

The impairment recorded in 2016 is the result of allocating the impairment to the DEEP CGU, pro rata to their book value as of December 31, 2016.




4

3.3 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment was worth €1,9230.2 million as of December 31, 2017, and broke down as follows:

(in € millions) Gross

Depreciation, amortization

and provisions Net

01.01.2016 3,883.9 (1,380.9) 2,503.0

Acquisitions 192.7 (302.1) (109.4)

Disposals (104.3) 59.4 (44.9)

Change in scope 0.0 (0.0) 0.0

Currency translation adjustment 38.0 (23.7) 14.3

Reclassifi cation and other changes 2.2 0.1 2.2

IFRS 5 reclassifi cation* 72.4 - 72.4

12.31.2016 4,084.9 (1,647.3) 2,437.6

Acquisitions 65.6 (444.7) (379.1)

Disposals (122.7) 75.7 (47.1)

Change in scope - - -

Currency translation adjustment (161.5) 74.6 (86.9)

Reclassifi cation and other changes (3.9) 2.7 (1.2)

IFRS 5 reclassifi cation* - -

12.31.2017 3,862.3 (1,939.0) 1,923.2


Over fi scal year 2017, interim borrowing costs capitalized in the cost of the vessels amounted to €0.6 million.

3 Details of gross property, plant and equipment:

(in € millions) Land BuildingsInvestment properties

Technical facilities

Vessels, overhaul

and capital expenditures

on leased vessels

Other property, plant and

equipment

Property, plant and

equipment in progress Total

01.01.2016 1.6 41.6 0.7 10.8 3,714.3 11.6 103.3 3,883.9

Acquisitions - - - 0.6 66.0 0.2 125.9 192.7

Disposals - - - (0.4) (57.8) (1.3) (44.8) (104.3)

Change in scope - - - - - 0.0 - 0.0

Currency translation adjustment 0.0 1.0 - (0.3) 37.6 0.2 (0.6) 38.0

Reclassifi cation and other changes - (0.3) - 0.6 105.4 (0.6) (103.0) 2.2

IFRS 5 reclassifi cation* - - - - 72.4 - - 72.4

12.31.2016 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)

Reclassifi cation and other changes - (0.1) - 0.2 0.3 0.1 (4.5) (3.9)

IFRS 5 reclassifi cation* - - - - - - -

12.31.2017 1.6 37.7 0.7 10.8 3,724.5 9.5 77.4 3,862.3




3 Details of depreciation and impairment on property, plant and equipment

(in € millions) Land BuildingsInvestment properties

Technical facilities

Vessels and maintenance


equipment

Property, plant and

equipment in progress Total

01.01.2016 - (12.6) - (7.7) (1,351.3) (9.4) - (1,380.9)

Provisions for amortization - (3.1) - (1.1) (271.0) (1.0) - (276.3)

Impairment (2.0) - (0.3) (13.7) (0.1) (9.8) (25.8)

Disposals - - - 0.1 57.7 1.5 - 59.4

Change in scope - - - (0.0) - (0.0)

Currency translation adjustment - (0.4) - 0.2 (23.3) (0.2) - (23.7)

Reclassifi cation and other changes - - - (0.1) (0.3) 0.5 - 0.1

IFRS 5 reclassifi cation* - - - - -

12.31.2016 - (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)

Impairment - - (196.0) (0.8) (196.8)

Disposals - 0.7 - 0.4 74.3 0.3 - 75.7


Currency translation adjustment - 1.5 - 0.3 72.1 0.7 - 74.6

Reclassifi cation and other changes - 0.0 - 0.2 (0.1) 0.1 2.6 2.7

IFRS 5 reclassifi cation* - - - - -

12.31.2017 - (18.5) - (8.7) (1,895.3) (8.5) (8.0) (1,939.0)


For the 2016 and 2017 fi scal years, “Disposals” primarily include the sale of “overhaul” components that had already been fully depreciated (and therefore had a net book value of zero).

In 2016, they also included the outright sale of two surfers that had also been fully depreciated, generating a capital gain of €0.4 million.

In 2017, four vessels were sold, including the cement carrier Endeavor. Overall, these sales resulted in a capital loss of €0.2 million.

Impairment recorded in 2016 results from the allocation of impairment on the DEEP CGU (see note 3.1).

In 2017, as announced at the meeting of February 13, 2018 presenting BOURBON’s new strategic action plan, impairment was recognized for 41 vessels that cannot be connected (known as the “non-smart fl eet”), as well as seven other specialized vessels. The impairments recognized for the year totaled €196.8 million (see note 2.1). 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.

As indicated in the press release dated February 13, 2018, within BOURBON Marine & Logistics’ traditional fl eet of 65 vessels, the 41 oldest vessels, which cannot be connected (known as the “non-smart fl eet”), will be sold “as is where is” at the current market price.

In accordance with IFRS 5, these assets were not classifi ed as non-current assets held for sale in the fi nancial statements for the year ended December 31, 2017. In this regard, these assets would have had to meet the following fi ve conditions by the closing date: i) the assets are 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), iii) sale expected to take place within one year, iv) low likelihood that the plan will be sig nifi cantly changed or withdrawn, v) book value of the assets mainly recovered through their sale, rather than continuous use. As the decision was taken by the Board of Directors on February 12, 2018, it has been deemed that the matter relates to the 2018 fi scal year.

In addition, given that the criterion of immediate availability of all vessels had not been met on the closing date, and that these vessels’ disposal schedule could exceed the maximum one-year period, these assets are still not classifi ed as non-current assets held for sales under IFRS 5.

However, the decision had an impact on the valuation of these assets as of December 31, 2017. The #BOURBONINMOTION, strategic plan authorized by the Board of Directors in 2018, was initiated and defi ned by management in 2017. This event considered that the vessels were no longer part of their respective CGUs as of December 31, 2017, and thus needed to be tested for impairment individually.

In accordance with IAS 36, the recoverable amount of an asset or cash generating unit is defi ned 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 are insignifi cant, the Group opted for measurement on the basis of fair value less disposal costs (these costs being considered as insignifi cant by management), pursuant in particular to IAS 36.21, which states that if there is no reason for assuming that an asset’s useful value considerably exceeds its fair value less disposal costs, this fair value less disposal costs can be used as the asset’s recoverable amount, as is often the case when an asset is held for sale.



4

The provisions of IFRS 13 were 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”, with transaction and reactivation costs payable by the purchasers.

This planned sale of 41 fully-owned vessels thus generated an impairment charge of -€167.2 million in the 2017 fi nancial statements (see note 3.2). N ote that a provision of €1.4 million was booked for the spare parts earmarked for these vessels in inventories (see note 3.6).

Similarly, as mentioned in note 2.1, the Group decided to dispose of seven specialized vessels considered as non-strategic. These sales, initiated and approved at the same time as for “non-smart” vessels, will also be “as is where is” and according to the same process. Based on the same IFRS 5 analysis, these vessels are not considered as assets held for sale as of December 31, 2017 nor at the closing date. Likewise, pursuant to the same standards, each asset has been pulled out its CGU and tested individually for impairment, generating impairment of -€29.6 million.

Property, plant and equipment presented above include assets held under fi nance leases which break down as follows:

3 Details of gross property, plant and equipment held under fi nance leases:

(in € millions) Land BuildingsTechnical facilities



equipment Total

01.01.2016 - - - 63.5 - 63.5

Acquisitions - - - 16.0 - 16.0

Disposals - - - (1.7) - (1.7)


Currency translation adjustment - - - (0.1) - (0.1)

Reclassifi cation and other changes - - - 31.4 - 31.4

12.31.2016 - - - 109.2 - 109.2

Acquisitions - - - 0.6 - 0.6

Disposals - - - - - -


Currency translation adjustment - - - (0.1) - (0.1)


12.31.2017 - - - 127.0 - 127.0



Financial liabilities related to fi xed assets under fi nance lease arrangements correspond to the discounted value of the minimum payments for the lease. The amounts of the fi nancial liabilities as well as their due dates are presented in note 3.14.

3 Details of depreciation and impairment on property, plant and equipment under fi nance leases

(in € millions) Land BuildingsTechnical facilities



equipment Total

01.01.2016 - - - (15.4) - (15.4)

Provisions for amortization - - - (8.4) - (8.4)

Disposals - - - 1.7 - 1.7

Impairment - - - - - -


Currency translation adjustment - - - 0.0 - 0.0

Reclassifi cation and other changes - - - (9.7) - (9.7)

12.31.2016 - - - (31.9) - (31.9)

Provisions for amortization - - - (9.5) - (9.5)

Disposals - - - - - -

Impairment - - - - - -


Currency translation adjustment - - - 0.0 - 0.0


12.31.2017 - - - (37.8) - (37.8)

3.4 INVESTMENTS IN AFFILIATES UNDER THE EQUITY METHOD

The interests in affi liates under the equity method include associates over which the Company has a signifi cant infl uence as well as jointly controlled joint ventures.

As of December 31, 2017, investments in associates amounted to €19.9 million.

(in € millions)Investments in affi liates

under the equity method

01.01.2016 16.6

Share of net income 0.3

Dividends paid (2.3)

Change in consolidation scope and other 0.0

Currency translation adjustment 0.2

12.31.2016 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

As of December 31, 2017, investments in affi liates 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, 2017 totaled €0.1 million.

The share in income (loss) of affi liates under the equity method shown in the statement of comprehensive income includes the provision for the negative net assets recognized at December 31, 2017 (see note 3.13).

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 fi nancial items of the companies consolidated by the equity method are presented below (fi gures indicated at 100%, unless otherwise indicated); as well as individual data for the most signifi cant company:

(in € millions) 12.31.2017of which

Sonasurf Angolaof which

IAS 29 impact 12.31.2016of which

Sonasurf Angola

Non-current assets 86.3 14.4 6.9 96.6 10.3

Current assets 81.9 51.2 0.9 97.4 53.5

Total assets 168.2 65.6 7.8 194.1 63.8

Non-current liabilities 79.0 9.3 5.5 50.9 9.9

Current liabilities 88.3 55.5 2.3 143.2 53.8

Total liabilities 167.3 64.7 7.8 194.1 63.8

Revenues 145.5 70.8 5.5 182.0 77.8

Net income 7.9 1.5 2.3 (2.6) (0.7)

Other comprehensive income: share of affi liates under the equity method (1.8) ns ns 0.1 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 hyperinfl ationary as from 2017. Accordingly, the fi nancial 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 5.7.2.

3.4.2 Commitments given or received for associated or joint venture companies

At December 31, 2017, loans guaranteed by mortgages or pledges of equipment or securities totaled €32.1 million, as against €46.5 million at December 31, 2016. The total value of pledged assets was €55 million.

3.4.3 Transactions with associates and joint ventures

The fi nancial statements include certain commercial transactions between the Group and its associates and joint ventures. The main transactions were the following:

(in € millions) 12.31.2017 12.31.2016

Revenues 41.9 71.3

Direct costs (12.2) (13.9)

Trade receivables 47.0 53.8

Trade payables 30.0 28.4

3.5 NON-CURRENT FINANCIAL ASSETS

The non-current portion of the fi nancial assets is detailed below:

(in € millions) 12.31.2017 12.31.2016

Available-for-sale assets 0.1 0.1

Receivables from non-consolidated companies - -

Loans and securities 16.1 160.9

Financial assets at fair value - 0.1

Other non-current fi nancial assets 4.3 6.6

Derivative fi nancial instruments 0.0 0.0

TOTAL 20.6 167.6

Loans and securities mainly include vendor loans associated with certain vessel disposals (see note 2).



The following tables show the change in the gross values and impairment on the available-for-sale assets, loans and guarantees as well as the fi nancial assets at fair value.

3 Change in gross values:

(in € millions)

Available-for-sale assets

Other receivables from non-consolidated

companiesLoans,

guarantees

Financial assets

at fair value Total

01.01.2016 0.6 - 172.1 0.1 172.8

Acquisitions - - 19.8 - 19.8

Disposals (1.1) - (16.6) - (17.7)

Change in consolidation scope - - - -

Currency translation adjustment 0.0 - 1.6 - 1.6

Reclassifi cation and other changes 0.7 - (16.0) - (15.3)

12.31.2016 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)

Reclassifi cation and other changes - - (133.7) - (133.7)

12.31.2017 0.2 - 25.4 (0.0) 25.6

3 Change in impairments:

(in € millions)


Other receivables from non-consolidated

companiesLoans,

guarantees

Financial assets

at fair value Total

01.01.2016 (0.2) - (0.0) - (0.2)

Acquisitions - - - - -

Disposals - - - - -

Change in consolidation scope - - - - -

Currency translation adjustment - - - - -

Reclassifi cation and other changes - - - - -

12.31.2016 (0.2) - (0.0) - (0.2)

Acquisitions - - (9.4) - (9.4)

Disposals - - - - -

Change in consolidation scope - - - - -

Currency translation adjustment - - 0.2 - 0.2

Reclassifi cation and other changes - - - - -

12.31.2017 (0.2) - (9.2) - (9.4)

Derivative instruments are outlined in note 3.19.



4

3.6 INVENTORIES AND WORK IN PROGRESS

With a net value of €65.2 million as of December 31, 2017, inventories and work in progress broke down as follows:

3 Gross values:

(in € millions) 12.31.2017 12.31.2016

Gross

Raw materials and supplies 69.1 83.1

Work in progress 1.2 1.0

Finished and intermediate products 0.0 0.0

Merchandise - -

TOTAL 70.3 84.1

3 Impairments:

(in € millions) 12.31.2017 12.31.2016

Impairment

Raw materials and supplies (5.1) (0.2)

Work in progress - -

Finished and intermediate products - -

Merchandise - -

TOTAL (5.1) (0.2)

The provision of €(5.1) million recognized in 2017 is partly linked to the new strategy and the decision to sell 41 vessels considered as “non-smart”, the spare parts for this fl eet having been impaired in the

amount of €(1.4) million. It also includes a provision of €(1.9) million for over-stocked spare parts. The residual provision of €(1.8) million relates to the current market environment.

3.7 TRADE AND OTHER RECEIVABLES, CURRENT FINANCIAL ASSETS AND OTHER CURRENT ASSETS

Receivables with maturity of under one year are classifi ed as current assets.

The current portion of the fi nancial assets is detailed below:

(in € millions)

12.31.2017 12.31.2016

Gross Impairments Net Gross Impairments Net

Trade and receivables 382.1 (34.5) 347.6 476.2 (21.7) 454.5

Current fi nancial assets 63.5 (18.5) 45.0 35.0 (4.0) 31.0

Other current assets 27.5 - 27.5 27.9 - 27.9

TOTAL 473.0 (53.0) 420.0 539.1 (25.7) 513.3

Current fi nancial assets and the other current assets break down as follows:

(in € millions) 12.31.2017 12.31.2016

Loans and securities 40.3 24.0

Accrued interest on loans and receivables 4.2 4.8

Financial assets at fair value through profi t and loss - -

Derivative fi nancial instruments 0.4 2.2

TOTAL CURRENT FINANCIAL ASSETS 45.0 31.0

State, Income tax 10.8 8.5

Prepaid expenses 16.7 19.4

TOTAL OTHER CURRENT ASSETS 27.5 27.9

Derivative instruments are presented in note 3.19.



3.8 CASH AND CASH EQUIVALENTS

Cash and cash equivalents break down as follows:

(in € millions) 12.31.2017 12.31.2016

Marketable securities - -

Other investments - -

Accrued interest 0.2 0.4

Cash and cash equivalents 243.5 281.1

TOTAL 243.6 281.5

This cash must be assumed to be net, taking into account the €76.4 million in bank overdrafts at December 31, 2017.

This net cash cannot be used to service the Group’s debt, although it can be used to meet the operational needs of local subsidiaries when necessary.

3.9 SHAREHOLDERS’ EQUITY

Share Capital

As of December 31, 2017, 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 fi rst half of 2014, BOURBON Corporation performed its fi rst bond issue of €100 million in the form of Perpetual Deeply Subordinated Notes (TSSDI). These perpetual securities give BOURBON Corporation the right to repay them at par starting in October 2017. They will bear a coupon payable every 6 months at a fi xed rate of 4.70% for the fi rst three years.

Following the fi rst three years, the loan will be repayable at par solely at the Company’s initiative. In the event of non-repayment on such date, the coupon will be stepped up as follows:

3 years 4 to 6: “Reset 3-year Midswap Fixed Interest Rate” +650 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.

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 classifi cation as an equity instrument defi ned by IAS 32.

As of December 31, 2017, €1.4 million has been recognized as accrued interest not due (see note 3.19.3) corresponding to the portion of the interest that is due to be paid during the fi rst half of 2018. This amount takes account of the activation of the step-up clause in October 2017 at the end of the fi rst three years. N ote that the holders of perpetual deeply subordinated notes (TSSDIs) were called to attend a General Meeting on April 20, 2018.

Bourbon sought and has secured the approval of the General Meeting of holders of perpetual deeply subordinated notes (TSSDIs) to defer by one year the next interest payment date due under the Bonds 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 corresponding to the applicable rate to the Bonds . (see note 5.4)



4

Non-controlling interests

The non-controlling interests stood at €72.3 million as of December 31, 2017.

(in € millions) 2017 2016

At January 1 111.8 130.9

Profi t (loss) for the period: portion made up of non-controlling interests (32.6) 16.6


Portion of non-controlling interests in other comprehensive income: (3.8) (6.4)

Cash fl ow hedge (IAS 39) 0.1 (0.7)

Employee benefi t obligations - -

Profi ts and losses from the currency translation of the statements of foreign subsidiaries (4.0) (5.7)

Effect of changes in the percentage interest in consolidated affi liates 6.9 (14.6)

At December 31 72.3 111.8

3.10 STOCK OPTION SUBSCRIPTION OR PURCHASE PLANS

BOURBON Corporation issued 11 stock option subscription or purchase plans, two of which were in force as of December 31, 2017, representing 793,700 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:

November 2012 December 2013

Date of authorization by the Combined General Meeting June 1, 2011 June 1, 2011

Date of authorization by the Board of Directors November 30, 2012 December 2, 2013

Number of stock options authorized 29,700 1,037,000

Total number of allotted stock options adjusted as at 12.31.2017 29,700 764,000

Number of benefi ciaries 2 68

Start date November 2016 December 2017

Expiration date November 2018 December 2019

Subscription price in euros adjusted as at 12.31.2017 €19.82 €19.68

Subscription price in euros (before adjustment) €21.80 €19.68

Price per share:

Price per share on the grant date (before adjustment) €21.72 €19.11

Fair value of options:

Fair value of the options with no original market condition (before adjustment) €4.96 €3.09

Fair value of the options with original market condition (before adjustment) n/a €2.67

Risk-free interest rate 2.05% 0.82%

Dividend yield 3.4% 4.1%

Volatility 36.10% 31.57%

Contractual acquisition period 4 years 4 years

N.B.: the only ground for early exercise is the death of the employee.

The expense recognized during the fi scal year for the stock option or purchase plans was -€0.1 million (-€0.7 million in 2016).



3.11 BONUS SHARE ALLOCATION

The Combined General Meeting of June 1, 2011 authorized the Board of Directors, in its 18th extraordinary resolution, in accordance with and under the conditions stipulated in Articles L. 225-197-1 to L. 225-197-5 of the French Commercial Code, to allocate, in one or several stages, to salaried Company employees or certain categories among them, and/or to the Directors referred to in Article L. 225-197-1 II of the French Commercial Code, and to salaried personnel and Directors of the companies or economic interest groupings linked to the Company under the conditions outlined in Article L. 225-197-2 of the French Commercial Code, free Company shares, existing or new.

In 2013, the Board of Directors authorized a restricted stock award of existing or new shares to the salaried members of staff, or certain categories of them, of all of BOURBON Corporation’s subsidiaries.

The vesting of the shares was subject to fulfi llment of the conditions and criteria laid down by the Board of Directors, as described below:

3 60% of the shares were contingent on employment at the end of two years: recipients still employed by BOURBON on December 2, 2015 fulfi lled this condition;

3 40% of the shares were subject to employment at the end of two years and the attainment of performance criteria:


3 20% was granted if the fl eet availability rate in 2015 was greater than or equal to 95%; 100% of this criterion was attained with an average of 96.4%.


The main features and assumptions used were as follows:

December 2, 2017

Date of authorization by the Combined General Meeting June 1, 2011

Date of authorization by the Board of Directors December 2, 2013

Total number of allotted bonus shares adjusted as at 12.02.2015 631,400


Price per share:

Price per share on the grant date (before adjustment) €19.11

Fair value:

Original fair value (before adjustment) €17.53 / €16.08

Dividend yield 4.1%

Contractual acquisition period 2 to 4 years

N.B.: the only grounds for early exercise are the death or disability (subject to certain conditions) of the employee.

The fi nal expense recognized during the fi scal year for the bonus share award plan was -€1.2 million (versus -€1.4 million in 2016).


3.12 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 2017 was -€1.2 million, as compared with -€5.7 million as of December 31, 2016. The number of BOURBON treasury shares as of December 31, 2017 was 127,140 after fi nal allocation to the bonus share plan.



4

3.13 EMPLOYEE BENEFIT OBLIGATIONS AND OTHER PROVISIONS

Provisions can be analyzed as follows:

(in € millions)

Employee benefi t

obligationsBusiness

risksTax

audits

Other tax

risks

Other provisions for

risks and contingencies

Provisions for major

maintenance Total

01.01.2016 15.5 5.6 4.7 11.2 7.4 49.8 94.3

of which current portion 1.9 1.1 - - - 11.5 14.4

Provisions for the year 1.8 0.2 10.2 2.7 5.8 22.5 43.3

Used during the year (0.9) (1.8) - (3.9) (1.7) (6.6) (15.0)

Unused amount reversed (0.5) (0.1) (0.3) (1.9) (0.8) (2.1) (5.7)

Change in consolidation scope - - - - - - -

Currency translation adjustment (0.0) 0.6 - 0.7 0.6 1.0 2.8

Reclassifi cation and other changes 0.9 - (0.7) - - - 0.2

12.31.2016 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 - - - - - - -

Currency translation adjustment (0.0) (0.4) - (0.7) (0.3) (2.0) (3.3)

Reclassifi cation and other 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

The change in provisions for major maintenance in 2017 mainly derives from the review and optimization of plans to overhaul vessels. The utilizations for the period correspond to the major classifi cation maintenance that actually took place during 2017.

For the 2016 fi scal year, provisions for tax audits were recorded following an analysis of the adjustment notices received with respect to tax audits in France (with respect to which the Group is contesting the conclusions) as well as following the fi rst appeals. In 2017, an addition provision of -€1.0 million was recognized after receipt of another adjustment notice in France.

It should be noted that the short-term portion (current portion) of the provisions is reported in the statement of fi nancial position on the line “Provisions – current portion”.

Employee benefit obligations

Employee benefi t obligations include the provision for retirement benefi t obligations and the provision for long-service awards.



Retirement benefi t obligationsThe table below shows the main assumptions used in valuing retirement benefi t commitments:

3 5-YEAR VALUATION ASSUMPTIONS:

2017 2016 2015 2014 2013

Discount rate: 1.55% 1.45% 2.00% 1.50% 3.00%

Infl ation rate:2% in most cases, except for certain countries where a different 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) 12.31.2017 12.31.2016

Present value of the obligation at the beginning of the year 14.3 13.3

Current service cost 0.9 0.9

Interest cost 0.2 0.2

Retirement indemnities paid (1.3) (0.9)

Actuarial (gains)/losses 0.3 0.9

Past service cost - -

Currency translation adjustment (0.0) (0.0)

Reclassifi cations - -

Effects of changes in consolidation scope and changes in consolidation method - -

Present value of the obligation at closing 14.4 14.3

o/w less than 1 year 1.8 1.9

The current service cost is the present value of benefi t 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 benefi ts. It represents the cost of one year of non-discounting.

The items recognized in the income statement over 2017 for retirement benefi t obligations were:

(in € millions) 12.31.2017 12.31.2016

Current service cost (0.9) (0.9)

Past service cost - -

Interest cost (0.2) (0.2)

TOTAL EXPENSES RELATED TO RETIREMENT OBLIGATIONS (1.1) (1.1)



4

3.14 GROSS FINANCIAL LIABILITIES

For the whole of this note, see also point 3.18.2 Liquidity risks

On March 8, 2017, BOURBON announced the restructuring of the majority of its fi nancial indebtedness, amounting to €910.8 million, of which the major characteristics are the following:




On July 28, 2017, the conditions precedent for the implementation of the debt rescheduling agreement were met and BOURBON confi rmed the restructuring of its debt.

In accordance with IAS 39.AG62, a qualitative and quantitative analysis of each restructured loan was conducted on that date in order to determine whether there had been a substantial modifi cation of any of the loans. In the event of substantial modifi cation, the former loan would have been considered as extinguished and thus de-recognized, along with the recognition of a new liability.

The tests conducted by the Group showed the absence of any substantial modifi cation in any of the loans involved. Consequently, given the absence of any substantial modifi cation, the loans were maintained in the balance sheet and the relevant fees were set off against the loans and amortized over their residual terms.

The closing of the debt rescheduling agreement should allow the reclassifi cation of the debts as long and medium-term.

At December 31, 2017, under the conditions mentioned in section 1.2, the Group examined all of its existing loans as at that date, in view of the situation of each of these loans:

3 loans with payment defaults;

3 loans with covenant breaches;

3 review of contractual clauses of each loan, 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:

3 for loans with payment defaults: at December 31, 2017 a payment default was recorded on a single balloon loan for an amount of NOK104 million (around €10.6 million), covered by a standstill agreement until January 31, 2018. Since its initial maturity was less than one year, it was not reclassifi ed into the current portion of the debt;

3 for rescheduled borrowings whose covenants were breached:

At December 31, 2017, several covenants concerning the debt renegotiated on July 28, 2017 had not been complied with:

3 failure to comply with the repayment schedule for the JACCAR advance to the Group for €6 million,

3 failure to obtain new fi nancing at the expected level,

3 breach of coverage ratio (value to loan) for the 3 Club Deal borrowings (contractual ratio of 125%) and for the syndicated loan set up in the frame of the refi nancing of treasury facilities (contractual ratio of 75%),

3 breach of fi nancial covenants, of which the main ones are: (i) a debt-to-equity ratio taking into account certain off-balance sheet items (until the effective date of IFRS 16) that must be lower than 3.2, (ii) a liquidity ratio designed to ensure minimum cash balances within the Group, notably €50 million for the cash centralizing subsidiary, and (iii) a minimum adjusted EBITDAR commitment;

In accordance with IAS 1.75, even though stand-stills were requested and granted for certain loans, the non-current portion of these loans was reclassifi ed in current liabilities in the amount of €619.9 million as of December 31, 2017, since the grace period has a duration of less than 12 months following the closing date;

3 for other borrowings whose covenants were breached:

For a certain number of bilateral borrowings, in particular foreign loans, the fi nancial ratio covenants defi ned in the debt rescheduling agreement were breached. Likewise, certain ratios concerning the borrowing companies’ local accounts had not been met at December 31, 2017.

In accordance with IAS 1.75, even though stand-still agreements were granted for some of the loans, the non-current portion of these loans was reclassifi ed in current liabilities in the amount of €369.3 million as of December 31, 2017, since the grace period has a duration of less than 12 months following the closing date;



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 defi ned under the debt rescheduling agreement: Net debt/Shareholders’ equity) for the 2017 fi scal year.

Finally, 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, 2017, it being specifi ed that such clauses had not been triggered as of the closing date. The long-term portion of the loans subject to this theoretical acceleration totaled €131.2 million as of December 31, 2017.

In accordance with IFRS 7.18, the details of the reclassifi cations are presented below:

Nature of the loan

Before reclassifi cation After reclassifi cation

Balance as of December 31,

2017

of which current portion

of which non-current

portion

Impact of reclassifi cation

on current liabilities

of which current portion

of which non-current

portion

Restructured borrowings whose covenants were breached:

CLUB DEAL – €320M 32.0 9.8 22.2 22.2 32.0 -

CLUB DEAL – €340M 326.0 11.5 314.5 314.5 326.0 -

CLUB DEAL – €450M 168.8 13.8 154.9 154.9 168.8 -

Bilateral borrowings 149.5 21.1 128.4 128.4 149.5 -

Other borrowings with covenants that have been breached:


Borrowings containing cross-default or similar clauses:


1,245.9 125.3 1,120.5 1,120.5 1,245.9 -

Gross fi nancial liabilities (€1,608.8 million as of December 31, 2017) appear on the balance sheet under “Borrowings and fi nancial liabilities”, “Borrowings and fi nancial liabilities (portion less than one year)”, and “Bank overdrafts and short-term lines”.

a) Analysis by maturity

The maturities on the gross fi nancial liabilities are as follows:

(in € millions) 12.31.2017 12.31.2016

Bank overdrafts and short-term lines 76.4 293.3

Debt < 1 year 1,348.5 1,237.8

Debt between 1 and 5 years 143.0 147.0

Debt > 5 years 40.9 71.7

TOTAL 1,608.8 1,749.7

Of which:

Finance lease liabilities 74.1 62.5

Debt < 1 year 45.3 30.8

Debt between 1 and 5 years 28.8 27.8

Debt > 5 years 0.0 3.9

The signifi cant balance of fi nancial liabilities due in less than one year results essentially from the reclassifi cation 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 fi scal year (IAS 1.69 d).



4

b) Analysis by interest rate

Gross fi nancial liabilities break down as follows:

(in € millions) 12.31.2017 12.31.2016

Fixed rate or swapped-to-fi xed rate 663.0 860.9

Bank overdrafts (fi xed or swapped-to-fi xed rate) - -

Variable rate 862.1 587.9

Bank overdrafts (variable rate) 76.4 293.2

TOTAL BORROWINGS AND BANK LOANS 1,601.5 1,742.0

Accrued interest 7.3 7.7

TOTAL FINANCIAL DEBT 1,608.8 1,749.7

c) Analysis by currency

As of December 31, 2017, gross debt excluding accrued interest breaks down as follows:

(in € millions) 12.31.2017 12.31.2016

EUR – Euro 1,249.2 1,273.0

USD – US Dollar 328.3 429.5

NOK – Norwegian kroner 24.0 39.6

TOTAL (EXCLUDING ACCRUED INTEREST) 1,601.5 1,742.0

d) Change in the debt, by type

(in € millions) 12.31.2016 Issue RepaymentAmortized

cost

Impact of foreign

currency fl uctuations Reclassifi cation 12.31.2017

Financial liabilities 1,386.3 246.3 (162.1) 17.8 (50.7) 13.4 1,451.1

Finance lease liabilities 62.5 22.9 (12.9) 0.4 (0.2) 1.4 74.1

Bank overdrafts 293.2 (196.8) (20.0) 76.4

TOTAL BORROWINGS AND BANK LOANS 1,742.0 269.2 (371.8) 18.2 (50.9) (5.1) 1,601.5

e) Debt secured by collateral

As of December 31, 2017, bank borrowings secured by mortgages, pledges of equipment or marketable securities represented a total of €1,382.0 million.

The assets pledged are primarily vessels. These mortgages were recorded with the Bureau des Hypothèques (Mortgage Registry) between 2002 and 2017 for a total value of €5,269.4 million.

3.15 FINANCIAL INCOME/(LOSS)

Financial income/(loss) breaks down as follows:

(in € millions) 12.31.2017 12.31.2016

Cost of net debt (54.6) (43.0)

- cost of gross debt (61.0) (53.9)

- income from cash and cash equivalents 6.5 10.9

Other fi nancial expenses and income (134.9) (20.8)

- net foreign exchange income/loss (82.9) (3.1)

- other fi nancial expenses (41.9) (24.2)

- other fi nancial income 17.9 10.6

- net allocations to fi nancial assets and provisions (28.0) (4.0)



Cost of net debt equals all interest expenses and income produced by the elements composing the fi nancial debt during the year.

Other fi nancial income and expenses include realized and unrealized exchange rate gains and losses as well as the fair value of derivative instruments.

The other fi nancial income and expenses as of December 31, 2017 are broken down below:

(in € millions) 12.31.2017

Other fi nancial expenses and income (134.9)

- Net foreign exchange income/loss (82.9)

of which unrealized foreign exchange income/loss (72.7)

- Other fi nancial expenses* (41.9)

of which fair value of derivative instruments (13.0)

- Other fi nancial income 17.9

of which fair value of derivative instruments 16.4

- Net allocations to fi nancial assets and provisions (28.0)

* At December 31, 2017, other fi nancial expenses included an expense of -€12.9 million relating to the non-amortized cost of the debt payable immediately, due to the absence of suffi cient details on the progress of the renegotiation of this debt and to the uncertain nature of related future fl ows.

Likewise, interest rate swaps were attached to some of these borrowings, whose future fl ows are no longer expected, resulting in the elimination of the item covered and the disqualifi cation of these hedging instruments. The change in the fair value of these instruments has been recognized in net income (loss). The same applies to the stock of fi nancial instruments previously recognized in other comprehensive income, now reclassifi ed to net income (loss) in the amount of €(6.6) million.

3.16 DEFERRED TAXES

As of December 31, the balances for deferred tax assets and liabilities were as follows:

(in € millions) 12.31.2017 12.31.2016

Deferred tax assets 11.5 21.8

Deferred tax liabilities (22.8) (30.8)

Net deferred tax (11.3) (8.9)

Analysis of deferred taxes

(in € millions) 12.31.2017 12.31.2016

Deferred tax assets 11.5 21.8

Retirement benefi t obligations 0.0 1.4

Consolidation restatements 2.4 10.8

Restatements of depreciation and amortization 7.3 7.7

Other temporary differences 1.8 1.9

Deferred tax liabilities (22.8) (30.8)

Consolidation restatements (4.0) (4.4)

Restatements of depreciation and amortization (0.3) (6.0)

Other temporary differences (18.4) (20.3)

At December 31, 2017, in light of the tax position of the companies concerned, no deferred tax assets were recognized on the tax losses, which amounted to €726.2 million.



4

3.17 INCOME TAX

(in € millions) 12.31.2017 12.31.2016

Current income tax (13.4) (29.1)

Deferred taxes 0.6 5.1

Tax (expense)/income (12.8) (23.9)

As of December 31, 2017, the theoretical corporate income tax of €199.4 million was calculated by applying the prevailing tax rate in France to income before tax, the share in income/loss of affi liates under the equity method, net gains on equity interests sold and net income from discontinued operations:

(in € millions) 12.31.2017 12.31.2016

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: (599.8) (237.7)

French domestic income tax prevailing as of 12.31.2015:

33.33% 199.9 79.2

3.30% (0.5) (1.9)

Theoretical income tax 199.4 77.4

Income tax expense (12.8) (23.9)

DIFFERENCE (212.2) (101.3)

The difference between the tax recognized and the theoretical tax is as follows:

(in € millions) 12.31.2017 12.31.2016

Companies not liable for corporate income tax (companies subject to tonnage tax, foreign companies not liable for taxation) (112.8) (51.0)

Loss-making companies (tax consolidated and non-tax consolidated companies and foreign companies) (65.8) (53.4)

Difference in tax rate (1.7) 3.5

Other differences (31.9) (0.3)

TOTAL (212.2) (101.3)

3.18 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.

3.18.1 Credit/counterparty risk

The Group’s policy is to verify the fi nancial health of all customers seeking credit payment terms. Furthermore, the Group continually monitors client balances. The fi nancial 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 65% of 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 fi ve clients represented €364 million (45.9% of revenue) while the top ten clients accounted for nearly 65.8% (€522 million).

A statement of anteriority of credits and other debtors is presented in note 3.19.5. to the consolidated fi nancial statements.

In 2017, the portion of BOURBON’s revenue generated in countries at risk politically, such as Equatorial Guinea, Libya, and Myanmar, was very marginal (barely 1% of total revenue).

Concerning the credit risk on the Group’s other fi nancial assets, i.e. cash and cash equivalents, available-for-sale fi nancial assets and certain derivative instruments, the Group works only with top-ranking banks, particularly with the major French banks, and pays particular attention to the choice of banking institutions. 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.



3.18.2 Liquidity risks

Financing comes under a Group policy implemented by the Finance and Administration Department. This policy consists of fi nancing the Group’s needs through a combination of operating cash fl ows, disposal of assets, bank borrowings and market transactions, and in the context of the industry downturn, through a strategy of cash fl ow preservation that led to redefi ning BOURBON’s fi nancing platform for 2017 and the following years.

To manage the cyclical downturn seen in the offshore oil and gas market, the Group undertook discussions with its fi nancial partners in order to redefi ne its fi nancing platform for the forthcoming years. These discussions resulted in the signature of an agreement on March 6, 2017 with a number of fi nancial institutions and partners to restructure its principal debt in the amount of €910.8 million.


The agreement entered into with the Group’s principal fi nancial partners – described in detail in the notes to the 2016 fi nancial statements – thus restructured the repayments of its club deal loans, its bilateral loans, its fi nance 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 agreed to a number of restrictions, in particular regarding its 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 Group’s forecasts on which the March negotiation had been based, and the unfavorable market environment weighed heavily on the Group’s revenue and,

consequently, on its net income. The cash fl ows generated by the activity are thus insuffi cient to service the debt in the short term. The cash generated by the activity enables the Group to cover its current operating requirements for the next 12 months.

Furthermore, and for the same reasons, the Group was not able to comply with the various covenants defi ned in its credit documents.

This situation of breach of covenants on the closing date of the fi scal year constrains the Company, in accordance with IFRS standards, to refl ect the fact that the debt is due by reclassifying it as a short-term liability, even though its lenders have not demanded payment.




In accordance with IAS 1.69 d, as of December 31, 2017: 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 reclassifi ed in current liabilities (see note 3.14 the details of the reclassifi cations performed).

BOURBON’s gross fi nancial debt amounted to €1,609 million, including €183 million at more than one year.

The repayment schedule for the medium and long-term debt is presented in note 3.14 to the consolidated fi nancial statements. The residual term of the long- and medium-term debt is fi ve years and four months, before taking IAS 1 into account.

The following table shows the composition of long and medium-term debt as of December 31, 2017 (excl. accrued interests not yet due):

(in € millions)Portion of medium/long-term

debt under one yearMedium/

long-term debt Total




EIG/SNC OUTSOURCED 61 67 128

Financing – Norway fl eet 70 - 70

48 other bilateral loans 684 115 799

TOTAL 1,341 182 1,523

The Group had cash assets of €244 million as of December 31, 2017. Bank overdrafts and short-term credit lines have been drawn down in the amount of €76 million due to the unit-linked agreements signed with two fi nancial institutions allowing the Group to combine available balances in US with euro balances.



4

Non-discounted contractual fl ows on the outstanding balance of the net fi nancial liabilities by maturity date, including interest fl ows and taking into account the reclassifi cations performed pursuant to IAS 1, are as follows:


sheet total

Bonds - - - - - - -



Borrowings on fi nance 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)




Interest on bonds 7.8 8.2 8.6 11.3 11.5 25.7 73.1


Future variable-rate interest fl ows were determined using the predicted rates of the indexes in question at year-end. Interest fl ows on bonds takes into account interest adjustment clauses (See note 3.9).

At December 31, 2016


sheet total

Bonds - - - - - - -



Borrowings on fi nance leases 30.8 10.1 9.1 5.7 2.9 3.9 62.5 62.5

Other bank loans 1,199.4 37.0 35.4 23.2 23.6 67.8 1,386.3 1,386.3


Borrowings 1,237.8 47.1 44.5 28.9 26.5 71.7 1,456.4 1,456.4




Net cash 11.8 - - - - - 11.8 11.8




Interest on bonds* 5.7 8.0 8.2 8.6 11.3 37.6 79.4


* Withdrawn by construction over a period of 10 years from the date of the beginning of the loan, i.e. until 2024.



Medium- and long-term borrowingsMedium- and long-term borrowings comprise mainly “club deal” fi nancings and bilateral loans.

The majority of these borrowings are backed by assets (vessels) held as security (fi rst-ranking mortgage or negative pledge). The vessels are clearly identifi ed 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 fi nancial 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 refl ect 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, 2017;

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 €169 million as of December 31, 2017;

3 a €318 million “club deal” loan taken out in July 2009 for which the redemption phase began in 2011, fully repaid in July 2017;

3 a €340 million “club deal” loan taken out in 2015 for which the redemption phase began in June 2016, with an outstanding balance of €326 million as of December 31, 2017 .

These three outstanding “club deal” loans are covered by the debt rescheduling agreement signed on July 28, 2017 and described above. 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. Therefore, in 2017:

3 a fi nancing agreement for €50 million was signed and drawn down in July 2017 for the refi nancing of fi ve deep-sea tugboats;

3 a fi nance lease for €23.3 million was signed and drawn down in July 2017 for the fi nancing of a PSV class Bourbon Explorer;

3 short-term credit lines totaling €216.8 million were transformed into a syndicated loan and two medium-term loans in June and July 2017.

In many instances, contractual documentation includes compliance with a debt/equity ratio. The documentation relating to the loans affected by the restructuring agreement was modifi ed 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 fl ow, 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 fi nancial rating from a specialist agency.

3.18.3 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 fl uctuations is related to the Group’s medium- and long-term variable rate fi nancial debt. BOURBON regularly monitors its exposure to interest rate risk. This is coordinated and controlled centrally. It is the responsibility of the Assets, Finance and Treasury Director, who reports to the Chief Financial Offi cer.

The Group’s policy consists of managing its interest rate expense by using a combination of fi xed-rate and variable-rate borrowing. In order to optimize the overall fi nancing cost, the Group sets up interest rate swaps under which it exchanges, at pre-determined intervals, the difference between the amount of fi xed-rate interest and the amount of variable-rate interest calculated on a pre-defi ned nominal amount of borrowing.

These swaps are assigned to hedge the borrowings. As of December 31, 2017, after taking into account interest rate swaps, approximately 44% of the Group’s medium- and long-term debt had been contracted at a fi xed interest rate.



4

As of December 31, 2017, the interest rate swap contracts were on the Group’s borrowings, transforming variable rates into fi xed 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, 2017

in foreign currencyOutstanding as of December 31, 2017

in euros Maturity

Currency – Fixed-rate borrowing swaps

EUR 21.3 21.3 07.26.2018

EUR 15.3 15.3 06.28.2019

EUR 80.0 80.0 01.27.2020

EUR 7.3 7.3 12.31.2020

EUR 242.0 242.0 03.31.2021

EUR 3.4 3.4 07.29.2021

NOK 12.9 1.3 09.29.2018

NOK 55.6 5.6 12.30.2021

USD 15.7 13.1 08.19.2019

USD 13.1 10.9 09.30.2019

TOTAL 400

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 years


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 - - - - - - - - - - - - - -




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)


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





(in € millions)

At December 31, 2016

Less than 1 year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years


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 - 281.5 - - - - - - - - - - - 281.5

Term deposits - - - - - - - - - - - - - -




Deposits and securities received - - (0.3) - - - - - - - (0.3) -

Finance lease liabilities (26.5) (4.3) (10.1) - (9.1) - (5.7) - (2.9) - (3.9) - (58.2) (4.3)

Bank borrowings (136.6) (1,062.8) (14.7) (22.0) (15.1) (20.3) (15.4) (7.7) (15.0) (8.6) (26.7) (41.1) (223.5) (1,162.6)


Net position before hedging (139.1) (1,078.8) 8.4 (22.0) 2.1 (20.3) 4.1 (7.7) 11.5 (8.6) 16.0 (41.1) (97.1) (1,178.6)

Hedging (579.0) 579.0



Foreign exchange risk

ObjectivesThe Group’s policy is to reduce as far as possible the economic risk related to foreign currency fl uctuations over the medium term. The Group also tries to minimize the impact of the US dollar’s volatility on annual operating income.

Cash fl ows from operating activitiesThe main foreign exchange risks on operations are related to invoicing clients. BOURBON invoices a large portion (approx. 76%) of its services in US dollars. The Group has a natural foreign exchange hedge as it pays its expenses in dollars (representing about 35% 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 fl owsPolicy

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 fi nance 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 fi nance 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 fi scal years.



4

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 fi nance assets generating revenue in US dollars will be converted to US dollars and future acquisitions will again be fi nanced 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, 2017, foreign exchange derivatives covered fl ows in US dollars (USD) and broke down as follows:

At 12.31.2017Amount

(in millions of currency) MaturityAverage

exchange rate

Cross-currency swap

USD/EUR 9.6 06/30/2021 1.4146

USD/NGN 5.0 01/11/2018 361.00

The table below shows, as of December 31, 2017, 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 1,153.1 2.4 90.3 30.3

Monetary liabilities (669.4) (3.5) (134.8) (20.7)

Net position before management 483.8 (1.1) (44.5) 9.6

Hedges (8.0) - - -

Net position after management 475.8 (1.1) (44.5) 9.6

As of December 31, 2017, a 1% change in the euro exchange rate against all the currencies would represent a total impact at Group level of €4.6 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 2017 and 2016:

(in € millions) 12.31.2017 12.31.2016

Euro (EUR) 896.9 1,357.4

Brazilian Real (BRL) (204.5) (192.2)

Mexican Peso (MXN) 74.0 66.8

Norwegian kroner (NOK) (57.8) 11.7

US Dollar (USD) (70.6) 9.5

Swiss Franc (CHF) 0.0 (0.2)

Other 5.7 2.5

TOTAL 643.6 1,255.5

As of December 31, 2017, a 1% change in the exchange rates would represent an impact on consolidated shareholders’ equity of €2.1 million (€3.6 million as of December 31, 2016).



c) Equity risksAs of December 31, 2017, the Group had no cash investments.

As indicated in note 3.12 “Treasury Shares”, BOURBON Corporation held 127,140 treasury shares as of December 31, 2017. Treasury shares are presented as a deduction from consolidated shareholders’ equity.

A 10% change either up or down in the BOURBON Corporation share price would result in a change in the market value of the treasury shares of €0.1 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 signifi cant increase in operating costs. Clients generally take direct charge of the cost of fuel.

3.19 FINANCIAL INSTRUMENTS

3.19.1 Financial assets

As of December 31, 2017 and December 31, 2016, fi nancial assets were as follows:

(in € millions)

12.31.2017


Financial assets at fair

value through profi t and loss

Loans and receivables

Financial instruments

measured at fair value

Cash and cash

equivalentsBalance

sheet total

Non-current fi nancial assets 0.1 - 20.5 0.0 - 20.6

Trade and receivables - - 347.6 - - 347.6

Current fi nancial assets - - 44.5 0.4 - 45.0

Other current assets - - 27.5 - - 27.5

Cash and cash equivalents - - - - 243.6 243.6

TOTAL 0.1 - 440.0 0.5 243.6 684.2

(in € millions)

12.31.2016


Financial assets at fair

value through profi t and loss

Loans and receivables

Financial instruments

measured at fair value

Cash and cash

equivalentsBalance

sheet total

Non-current fi nancial assets 0.1 0.1 167.5 0.0 - 167.6

Trade and receivables - - 454.5 - - 454.5

Current fi nancial assets - - 28.8 2.2 - 31.0

Other current assets - - 27.9 - - 27.9

Cash and cash equivalents - - - - 281.5 281.5

TOTAL 0.1 0.1 678.7 2.2 281.5 962.5

a) Available-for-sale assetsAvailable-for-sale assets held by the Group totaled €0.1 million as of December 31, 2017. The profi ts and losses recorded in shareholders’ equity and in net income on available-for-sale assets represented €0.1 million in 2017 (-€1.0 million in 2016).

b) Financial assets at fair value through profi t and loss

As of December 31, 2017 the Group no longer has any fi nancial assets at fair value through profi t and loss.



4

c) Loans and receivables at amortized costLoans and receivables at amortized costs can be analyzed as follows:

(in € millions)

12.31.2017 12.31.2016

GrossValuation

allowance Net GrossValuation

allowance Net

Loans and receivables at amortized cost 110.9 (18.5) 92.4 228.2 (4.0) 224.2

Trade and receivables 382.1 (34.5) 347.6 476.2 (21.7) 454.5

TOTAL 493.0 (53.0) 440.0 704.4 (25.7) 678.7

Loans and receivables mainly include vendor loans associated with certain vessel disposals (see note 2).

Profi ts and losses recorded as equity and as income/loss on loans and receivables at amortized cost were as follows:

(in € millions)

12.31.2017

Interest

Subsequent valuation

Income from sale

Currency translation

adjustmentValuation

allowance

Shareholders’ equity - (4.8) - -

Income/loss 1.9 - (24.0) -

TOTAL 1.9 (4.8) (24.0) -

Proceeds from interest and impairment recorded relate primarily to payment for the seller loans associated with certain vessel sales.

(in € millions)

12.31.2016

Interest

Subsequent valuation

Income from sale

Currency translation

adjustmentValuation

allowance

Shareholders’ equity - 2.8 - -

Income/loss 5.1 - (4.0) -

TOTAL 5.1 2.8 (4.0) -

Proceeds from interest and impairment recorded relate primarily to payment for the seller loans associated with certain vessel sales.

d) Cash and cash equivalentsCash and cash equivalents totaled €243.6 million as of December 31, 2017 versus €281.5 million as of December 31, 2016. This item does not include liquid assets subject to restrictions.

The policy for managing fi nancial risks is presented in note 3.18. The cash and cash equivalents item is presented in note 3.8.

3.19.2 Derivative financial instruments

The fair value of the derivative fi nancial instruments as of December 31, 2017 and December 31, 2016 breaks down as follows:

Financial assets

(in € millions)

12.31.2017 12.31.2016

Current Non-current Total Total

Derivative instruments to hedge debt - 0.0 0.0 0.0

Derivative instruments to hedge revenue in foreign currencies and other 0.4 - 0.4 2.1

TOTAL 0.4 0.0 0.5 2.2



Financial liabilities

(in € millions)

12.31.2017 12.31.2016


Derivative instruments to hedge debt 0.5 8.9 9.4 18.4

Derivative instruments to hedge foreign currency and other risks - 5.0 5.0 25.3

TOTAL 0.5 14.0 14.4 43.7

Hedging the interest rate riskAs of December 31, 2017 and December 31, 2016, 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 fi rm commitments. The terms of these agreements had initially been negotiated to coincide with the terms of the fi rm commitments.

These interest rate swaps are all attached to borrowings whose future fl ows are no longer expected, resulting in the elimination of the item covered and the disqualifi cation of these hedging instruments.

The change in the fair value of these instruments has been recognized in net income. The same applies to the stock of fi nancial instruments previously recognized in other comprehensive income, now reclassifi ed to net income (loss) in the amount of -€6.6 million.

Hedging the foreign exchange riskAt December 31, 2017, the Group had no foreign exchange hedge 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 fi rm commitments.

For 2017, 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 €14.6 million, broken down as follows:

(in € millions) 2017 2016

Change in fair value of hedge derivatives 18.3 3.2

of which:

forward sales/revenue 3.3 (6.7)

interest rate swaps and others 15.0 9.9

Effect of deferred taxation (3.7) (3.2)

NET IMPACT 14.6 0.0

The derivative instruments are put in place in accordance with the Group’s risk management policy and are analyzed in note 3.19.

3.19.3 Financial liabilities

As of December 31, 2017 and December 31, 2016, fi nancial liabilities broke down as follows:

(in € millions)

12.31.2017 12.31.2016


Financial liabilities 1,425.0 183.8 1,608.8 1,749.7

Derivative fi nancial instruments 0.5 14.0 14.4 43.7

Trade and other payables 334.7 0.8 335.5 352.0

Other liabilities 6.1 1.0 7.0 8.3

TOTAL 1,766.2 199.5 1,965.8 2,153.7



4

a) Financial debtThe fi nancial debt is analyzed in note 3.14. It broke down as follows as of December 31, 2017 and December 31, 2016:

(in € millions)

12.31.2017 12.31.2016


Bonds - - - -

Commercial paper - - - -

Draws on credit facilities - - - -

Borrowings on fi nance leases 45.3 28.8 74.1 62.5

Other bank loans 1,296.0 155.1 1,451.1 1,386.3

Accrued interest 7.2 - 7.2 7.6

Total borrowings 1,348.5 183.8 1,532.3 1,456.4

Bank overdrafts and short-term lines 76.4 - 76.4 293.2

Accrued interest 0.0 - 0.0 0.1

TOTAL FINANCIAL DEBT 1,425.0 183.8 1,608.8 1,749.7

As of December 31, 2017, accrued interest not due includes €1.4 million of accrued interest for the bond issue (see note 3.9).

b) Derivative fi nancial instrumentsDerivative fi nancial instruments recognized as liabilities on the balance sheet are presented in note 3.19.2.

c) Trade and other payables

(in € millions) 12.31.2017 12.31.2016

Trade payables 198.3 194.2

Debt on non-current assets - 3.5

Social security liabilities 42.6 49.1

Tax liabilities 81.9 83.8

Other liabilities 11.9 19.4

Deferred income 2.3 4.0

TOTAL 337.0 353.9

The balance sheet value of all these debts represents a good approximation of their fair value.

3.19.4 Fair value of financial assets and liabilities

The method for valuing fi nancial assets and liabilities is detailed in notes 1.5.7 to 1.5.18.

3.19.5 Management of the risks related to financial instruments

The Group’s risk management policy is presented in note 3.18.

a) Credit riskReceivables outstanding and non-impaired broke down as follows as of December 31, 2017 and December 31, 2016:

(in € millions)

12.31.2017

Total

Assets outstanding at year-end

Assets impaired

Assets not impaired or outstanding< 30 days

31-60 days

61-90 days > 91 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


CONSOLIDATED FINANCIAL STATEMENTS4 Operating segments

(in € millions)

12.31.2016

Total

Assets outstanding at year-endAssets

impaired

Assets not impaired or outstanding< 30 days 31-60 days 61-90 days > 91 days Total

Loans and receivables at amortized cost - - - - - 4.0 224.2 228.2

Trade and other receivables 22.9 17.6 13.9 73.6 128.0 21.7 326.4 476.2

TOTAL 22.9 17.6 13.9 73.6 128.0 25.7 550.7 704.4

b) Liquidity riskThe Group’s exposure to liquidity risk is analyzed in note 3.18.

c) Market riskThe Group’s exposure to market risk is analyzed in note 3.18.

3.20 CONTINGENT LIABILITIES

Pursuant to IAS 37 with regard to “Provisions, contingent liabilities and contingent assets” it should be noted that one of the Group’s subsidiaries is involved in legal proceedings following a dispute regarding a duty similar to an indirect tax on certain invoiced services, for an estimated total of €28 million in principal and €66 million in penalties and default interest.

The claim by the local tax administration appears to be groundless, because it seems to rely on an erroneous classifi cation of the services invoiced by the subsidiary, which the court of fi rst instance in the country in question confi rmed in its judgment rendered on October 18, 2016, invalidating the adjustments notifi ed by the local tax administration.

The local tax administration has 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 confi rmed the decision of the trial court canceling the adjustments.

The Administration has a maximum of 30 business days from the date of publication of the ruling to appeal the decision before the competent court.

If the Administration succeeds in lodging an appeal, the matter would be considered as having been defi nitively ruled in favor of the Group company as far as the facts are concerned, as the court of appeal would only examine the questions of law raised by the challenged ruling.

It should be noted that in 2013, in a similar matter, the Superior Court of Justice in the same country also ruled for the taxpayer and against the local tax administration.

As a result, 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 is a contingent liability for which the likelihood of a signifi cant payout is currently slight.

Legal risks are described in “Legal Risks” in the Registration Document, in note 5 .3 .

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 internal reporting do not refl ect the application of the consolidation standards (IFRS 10, 11, 12, IAS 27 revised and IAS 28 revised). 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. Moreover, internal reporting – and therefore adjusted fi nancial information – does not refl ect the application

of IAS 29 (Financial Reporting in Hyperinfl ationary Economies), applicable for the fi rst time in 2017 (retroactively to January 1) to an operating joint venture based in Angola.

The operating segments as presented for purposes of providing segment information are as follows: “Marine Services” and “Subsea Services”. In turn, the “Marine Services” segment is broken down into “Deep”, “Shallow” and “Crew”.

Income and expenses that cannot be charged to the operating segments are classifi ed as “Other”.


CONSOLIDATED FINANCIAL STATEMENTSOperating segments

4

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 fi nancial instruments (assets and liabilities);

3 long-term fi nancial 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 2017 is as follows:

(in € millions)

Total Marine

Services

Of whichTotal

Subsea Services Other

Adjusted total by activity/

segment AdjustmentsConsolidated

TotalDeep Shallow Crew

Revenues 627.4 256.9 154.2 216.3 220.1 13.1 860.6 67.0 793.6

Direct costs excluding bareboat leases (386.5) (151.4) (101.6) (133.5) (106.3) (6.7) (499.6) (43.2) (456.4)

General and administrative costs (79.3) (32.5) (19.5) (27.3) (27.8) (1.6) (108.7) (11.5) (97.2)

EBITDAR* excluding capital gains 161.7 73.1 33.2 55.4 86.0 4.7 252.4 12.3 240.0

Bareboat charters (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) 42.4 11.3 (24.5) 55.5 40.6 4.9 87.8 12.3 75.4

EBIT (374.5) n/a n/a n/a (27.6) (1.8) (403.9) 2.7 (406.6)

Goodwill 6.1 - 6.1 - 19.2 - 25.2 - 25.2

Vessels 1,546.4 n/a n/a n/a 337.9 0.0 1,884.3 55.0 1,829.3

Installments on vessels under construction 10.4 n/a n/a n/a 48.0 - 58.4 0.2 58.2

Other non-current assets and liabilities 65.8 n/a n/a n/a 21.0 21.0 107.8 (7.8) 115.6

Working capital 67.9 n/a n/a n/a 23.8 (0.1) 91.6 (10.3) 102.0

Capital employed 1,696.6 n/a n/a n/a 449.9 20.8 2,167.4 37.1 2,130.3

Capital employed excluding installments on vessels under construction 1,686.3 n/a n/a n/a 401.9 20.8 2,109.0 36.8 2,072.1

* EBITDA excluding bareboat charters.


CONSOLIDATED FINANCIAL STATEMENTS4 Operating segments

The segment information for 2016 was as follows:

(in € millions)

Total Marine

Services

Of whichTotal

Subsea Services Other

Adjusted total by activity/

segment AdjustmentsConsolidated

TotalDeep Shallow Crew

Revenues 864.1 337.0 279.2 247.8 217.2 21.3 1,102.6 82.0 1,020.6

Direct costs excluding bareboat charters (484.3) (182.1) (154.4) (147.9) (93.5) (12.8) (590.6) (51.8) (538.8)

General and administrative costs (101.6) (39.6) (32.8) (29.1) (25.5) (1.9) (129.0) (13.9) (115.0)

EBITDAR* excl. capital gains 278.2 115.3 92.1 70.8 98.1 6.7 383.0 16.2 366.8

Bareboat leases (134.4) (67.9) (66.5) - (54.3) - (188.7) (0.0) (188.7)

Capital gains 0.4 - - 0.4 (1.4) - (1.0) (1.4) 0.4

Gross operating income (EBITDA) 144.2 47.4 25.6 71.2 42.4 6.7 193.3 14.8 178.5

EBIT (155.7) n/a n/a n/a (6.6) (2.8) (165.1) 10.2 (175.3)

Goodwill 6.1 - 6.1 - 19.2 - 25.2 - 25.2

Vessels 1,962.0 n/a n/a n/a 419.3 21.9 2,403.2 67.1 2,336.2

Installments on vessels under construction 11.6 n/a n/a n/a 47.2 - 58.8 - 58.8

Other non-current assets and liabilities 146.0 n/a n/a n/a 52.5 27.4 225.9 (8.4) 234.3

Working capital 145.0 n/a n/a n/a 36.4 0.9 182.3 (15.7) 198.0

Capital employed 2,270.7 n/a n/a n/a 574.6 50.2 2,895.5 43.0 2,852.5

Capital employed excluding installments on vessels under construction 2,259.1 n/a n/a n/a 527.4 50.2 2,836.7 43.0 2,793.7

* EBITDA excl. cost of bareboat leases.

The breakdown of BOURBON’s revenue by geographical region for 2017 and 2016 was as follows:

(in € millions) 2017 adjusted 2016 adjusted

Africa 497.7 616.4

Europe & Med./Middle East 123.0 158.3

American continent 147.6 216.6

Asia 92.3 111.3


CONSOLIDATED FINANCIAL STATEMENTSOther information

4

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) 12.31.2017 12.31.2016

Commitments given 3.4 1.3

TOTAL COMMITMENTS GIVEN 3.4 1.3

Commitments received - -

TOTAL COMMITMENTS RECEIVED - -

5.1.2 Off-balance sheet commitments related to financing

a) Lines of creditUnused lines of credit are listed below by period:

(in € millions) 12.31.2017 12.31.2016

Short-term lines of credit - 24.2

TOTAL COMMITMENTS RECEIVED (SHORT-TERM LINES) - 24.2

b) Guarantees relating to medium- and long-term debt

(in € millions) 12.31.2017 12.31.2016

Commitments given

Mortgages and pledges on loans (equipment or marketable securities used as collateral) 1,382.0 1,308.7

Guarantees given by the parent company on behalf of companies in the Group (excluding one mortgage) 1,240.0 1,577.5

TOTAL COMMITMENTS GIVEN 2,622.0 2,886.2

Commitments received 67.0 76.3

TOTAL COMMITMENTS RECEIVED 67.0 76.3

In connection with certain restructured “club deal” and bilateral fi nancings 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, 2017, although the total amount of mortgages recorded with the appropriate authorities stood at €5,269.4 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. €1,382.0 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 €1,240.0 million.


CONSOLIDATED FINANCIAL STATEMENTS4 Other information

5.1.3 Off-balance sheet commitments related to the Group’s operating activities

a) Operating activities

(in € millions) 12.31.2017 12.31.2016

Commitments given

Commitments given related to the performance of client contracts 12.7 16.7

Commitments given related to obligations towards the government 39.5 35.7

Commitments given related to the performance of supplier contracts 7.5 0.0

Other guarantees given 2.5 1.9

TOTAL COMMITMENTS GIVEN 62.2 54.3

Commitments received

Installment return guarantees 7.7 43.5

Subordinated guarantees on the vessel sales 0 101.1

Other guarantees received 12.5 17.2

TOTAL COMMITMENTS RECEIVED 20.2 161.8

i. Commitments givenIn 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 fi xed or unspecifi ed amount. As of December 31, 2017, all such guarantees given by the Group totaled €12.7 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, 2017, all such guarantees given by the Group totaled €39.5 million.

ii. Commitments receivedIn 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 €7.7 million as of December 31, 2017.



4

b) Contractual obligationsContractual obligations are as follows:

At 12.31.2017

Total

Payments due by period

(in € millions) < 1 year 1 to 5 years > 5 years

Finance leases 74.1 45.3 28.8 -

Operating leases (vessels) 1,130.8 84.3 659.5 387.1

Other operating leases 12.9 6.3 6.0 0.6

Balance payable on orders for vessels under construction 85.4 22.3 63.1 -

TOTAL 1,303.1 158.2 757.4 387.6

In connection with this fi nancing, the Group conducted fi nance lease operations under which the parent company of the entity signing the fi nance lease agreement guaranteed payment of the rents. The debt associated with these transactions amounted to €74.1 million as of December 31, 2017.

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 regarding these operations was €1,130.8 million as of December 31, 2017. The commitment relating to other operating leases was €12.9 million.

For the various orders placed with shipyards, the total amount of the installments remaining due while the vessels were being built amounted to €85.4 million as of December 31, 2017 . Discussions are in progress with the shipyards concerning the delivery of the vessels.

5.2 NET EARNINGS PER SHARE

5.2.1 Basic net earnings per share

The determination of the weighted average number of shares of common stock outstanding during each period is presented below:

12.31.201712.31.2016 (restated)

Weighted average number of shares over the period 77,499,214 77,499,214

Weighted average number of treasury shares held over the period (400,539) (435,935)

Weighted average number of shares outstanding during the period 77,098,675 77,063,279

* This number includes the 1,156,611 shares issued on July 17, 2017, effective immediately, in payment of the 2016 dividend.

The weighted average number of shares outstanding in 2017 and 2016 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 net earnings per share were determined as follows:

12.31.201712.31.2016 (restated)

Weighted average number of shares used to calculate the basic net earnings per share 77,098,675 77,063,279

Net income (in € millions)

Consolidated, group share (576.3) (279.6)

Consolidated, group share – excluding income from discontinued operations/operations held for sale (576.3) (279.6)

Net income from discontinued operations/operations held for sale – group share - -

Basic net earnings per share (in €)






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 earnings per share are established as follows:

Number of potential shares:

12.31.201712.31.2016 (restated)

Weighted average number of shares outstanding during the period 77,098,675 77,063,279

Weighted average number of shares, the issue of which is conditional during the period 292,600 345,400

Weighted average number of dilutive stock options during the period - -

Weighted average number of potential shares 77,391,275 77,408,679

In accordance with IAS 33, the determination of diluted net earnings per share for 2015 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 2016 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:

12.31.201712.31.2016 (restated)

Weighted average number of shares used to calculate diluted net earnings per share 77,391,275 77,408,679

Net income (in € millions)




Diluted net earnings per share (in €)




5.3 WORKFORCE AND PAYROLL

The Group’s workforce was as follows:

(workforce) 2017 2016

Onshore personnel 1,456 1,539

Seagoing personnel 3,755 4,251

- Offi cers 1,960 2,466

- Crews and other 1,795 1,761

TOTAL 5,211 5,790

The Group’s personnel costs were:

(in € millions) 12.31.2017 12.31.2016

Personnel costs 225.3 263.0



4

5.4 SIGNIFICANT EVENTS AFTER THE END OF THE REPORTING PERIOD

A sale and fi nance lease back contract worth €50 million for fi ve Abeilles vessels entered into force in January 2018 for a period of 10 years, to replace the fi nancing obtained in July 2017 for these same vessels under less favorable conditions.

Moreover, on February 12, 2018, BOURBON Corporation’s Board of Directors approved the new strategic action plan – #BOURBONINMOTION – initiated at the end of 2017. It should enable the Group to meet the need for competitiveness and to respond to customers’ new demands, in the context of a market that has challenged all market players in the Oil & Gas industry . BOURBON’s goal is to accelerate its transformation and prepare for the expected recovery (see note 2.1).







The company is confi dent in its ability to fi nd before year end a balanced solution with all its lenders - often long-standing partners - that suits all parties and allows the company to adapt its fi nancing to its future development .

5.5 RELATED-PARTY TRANSACTIONS

Relations with the SINOPACIFIC Group

The Chairman of the Board of Directors of BOURBON Corporation is a partner in the naval construction company Sinopacifi c, through JACCAR Holdings SAS, a subsidiary of Cana Tera S.C.A. Mr. Jacques d’Armand de Chateauvieux is also a Director of Sinopacifi c.

As of December 31, 2017 and 2016, there were current orders for two vessels. Orders amounted to USD72.4 million with prepayments generated of USD45.6 million, covered up to USD36.5 million by installment return guarantees granted by Sinopacifi c .

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 has 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 2017, a second installment of €110,000 gross was paid.

Relations with JACCAR Holdings

A Cash Management Agreement was signed between BOURBON through one of its subsidiaries, JACCAR Holdings SAS (which company is a shareholder of BOURBON).

As of December 31, 2017, the amount of the advance including interest granted to BOURBON was €16.8 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 of the Chairman and Chief Executive Offi cer

Until May 26, 2016, Jacques d’Armand de Chateauvieux, in his capacity as Chairman of the Board of Directors, received no direct compensation from BOURBON Corporation other than Directors’ fees.

On May 26, 2016, the General Meeting of Shareholders re-elected Jacques d’Armand de Chateauvieux to the Board. At a Board meeting held the same day, the Company’s Directors re-elected him as Chairman and resolved to combine the roles of Chairman of the Board of Directors and Chief Executive Offi cer of the Company and to appoint him as Chairman and Chief Executive Offi cer of BOURBON Corporation SA.

For the 2017 fi nancial yearAt its meeting on March 13, 2017, 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 2017 fi scal year would be as follows:

3 a fi xed annual salary of €144,000;

3 variable compensation, entirely linked to the Company’s performance, corresponding to 1% of surplus net income (group share) for the year in question and limited to a maximum of €500,000;

3 Directors’ fees paid by BOURBON Corporation.

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 specifi c 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 offi cers, 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.

At its meeting on March 14, 2018, the Board, after approving the Company’s fi nancial statements, noted that net income (group share) was negative. Therefore, no variable compensation will be paid to Jacques d’Armand de Chateauvieux for fi scal year 2017.

5.6.1.2 Compensation of the Executive Vice PresidentsThe compensation paid to Executive Vice Presidents has a fi xed component and a component which is variable annually. Some years they are also allocated stock options or stock purchase options linked to performance.

For the variable portion, several years ago the Board of Directors defi ned a calculation procedure based on fi xed compensation; variable compensation can reach 50% of fi xed compensation if the objectives are achieved, and up to 70% if the objectives are exceeded. The objectives are reviewed and voted on each year by the Board of Directors upon the proposal of the Nominating, Compensation, and Governance Committee, and aligned in part with the objectives of the Group’s key executives as well as with the objectives relating 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 confi dentiality.

The Executive Vice Presidents in offi ce at December 31, 2017 are also allocated unemployment insurance for senior executives. Gael Bodénès is provided with a company car and Astrid de Lancrau de Bréon with company accommodation.

For the 2017 fi nancial yearOn the basis of the objectives defi ned at the meeting of March 13, 2017, 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, fi xed the variable compensation to be paid for fi scal year 2017, subject to the approval of the Shareholders’ Meeting of May 30, 2018.

3 ACHIEVEMENT OF OBJECTIVES FOR FISCAL YEAR 2017

Target % % granted

Economic parameters: 40% 0%

- Target for EBITDA excl. capital gains 20% Not achieved

- Objective for Days Sales Outstanding (DSO) 20% Not achieved

Operational parameters/HSE: 40% 28%

- Target for average fl eet utilization rate 20% Not achieved

- Target for Group TRIR 20% Achieved

Personal contribution: 20% 20%

TOTAL 100% 48%



4

5.6.1.3 Summary table of the compensation, options, and shares granted to each Executive Director in offi ce as of December 31, 2017 (in euros)

Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer Fiscal year 2016 Fiscal year 2017

Compensation due for the year (detailed in table 5.6.1.5 ) 102,000 174,000


Value of stock options awarded during the year (detailed in 5.6.3 ) - -

Value of the performance stock granted during the year - -

TOTAL 102,000 174,000

Gaël Bodénès, Chief Operating Offi cer Fiscal year 2016 Fiscal year 2017





TOTAL 309,825 408,512

Astrid de Lancrau de Bréon, Chief Financial Offi cer (since October 1, 2017) Fiscal year 2016 Fiscal year 2017





TOTAL 29,000 283,508



5.6.1.4 Summary table of the compensation, stock options and shares granted to each Executive Director whose term of offi ce ended in 2017 (in euros)

Christian Lefèvre, Chief Operating Offi cer (until September 30, 2017) Fiscal year 2016 Fiscal year 2017





TOTAL 443,162 505,018

5.6.1.5 Summary table of the compensation of each Executive Director in offi ce at December 31, 2017 (in euros)

Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer


Due for the year

Paid over the year

Due for the year

Paid over the year

Fixed compensation 72,000 72,000 144,000 144,000

Variable compensation (1) - - 0 -



Directors’ fees(2) 30,000 30,000 30,000 30,000

Benefi ts in kind - - - -

TOTAL 102,000 102,000 174,000 174,000

(1) Variable compensation is payable the following year, after approval of the fi nancial statements by the Shareholders’ Meeting.(2) The amount due may vary according to the number of Board meetings held between annual Shareholders’ Meetings.

Gaël Bodénès, Chief Operating Offi cer


Due for the year

Paid over the year

Due for the year

Paid over the year





Directors’ fees for terms of offi ce served in the Group - - - -

Benefi ts in kind(2) 18,320 18,320 18,513 18,513

TOTAL 309,825 393,300 408,512 371,350

(1) Variable compensation is payable the following year, after approval of the fi nancial statements by the Shareholders’ Meeting.(2) Company car + unemployment insurance for senior executives.(3) Of which pay in lieu of vacation amounting to €61,204.



4

Astrid de Lancrau de Bréon, Chief Financial Offi cer (since October 1, 2017)


Due for the year

Paid over the year

Due for the year

Paid over the year

Fixed compensation - - 226,461 226,461(3)

Variable compensation(1) - - 52,800 -



Directors’ fees for terms of offi ce served in the Group 29,000 37,000 - 29,000

Benefi ts in kind(2) - - 4,247 4,247

TOTAL 29,000 37,000 283,508 259,708

(1) Variable compensation is payable the following year, after approval of the fi nancial statements by the Shareholders’ Meeting.(2) Housing until December 3, 2017; as of December 4, 2017, Astrid de Lancrau de Bréon has had unemployment insurance for senior executives. (3) Of which pay in lieu of vacation amounting to €6,460.

No supplementary scheme has been granted by BOURBON Corporation, nor any benefi ts in kind other than those mentioned in the tables above, for the Chairman and Chief Executive Offi cer and for each of the Executive Vice Presidents.

5.6.1.6 Summary table of compensation for each Executive Directors whose term of offi ce ended in 2017 (in euros)At its meeting on September 4, 2017, the Board of Directors terminated the appointment of Christian Lefèvre as Chief Operating Offi cer.

Christian Lefèvre, Chief Operating Offi cer (until September 30, 2017)


Due for the year

Paid over the year

Due for the year

Paid over the year




Exceptional compensation - - 65,000 -

Directors’ fees 30,000 30,000 29,000 30,000

Benefi ts in kind(2) 6,156 6,156 4,617 4,617

TOTAL 443,162 559,712 505,018 439,168

(1) Variable compensation is payable the following year, after approval of the fi nancial statements by the Shareholders’ Meeting.(2) Company car.(3) Of which pay in lieu of vacation amounting to €90,031.



5.6.2 Commitments of any kind made by the Company to its corporate officers

Executive Directors affected by the recommendation of AFEP-MEDEF

Employment contractSupplementary

pension scheme

Indemnity or benefi ts 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 Chateauvieux(1),Chairman and Chief Executive Offi cerStart of term of offi ce: 05.26.2016End of term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements of the fi scal year ending on 12.31.2018

x x x x

Gaël Bodénès(2),Executive Vice President - Chief Operating Offi cerStart of term of offi ce: 05.26.2016End of term of offi ce: General Meeting called to approve the fi nancial statements for the year ended 12.31.2018

(3) x x x

Astrid de Lancrau de Bréon,Executive Vice President - Chief Financial Offi cerStart of term of offi ce: 10.1.2017End of term of offi ce: Shareholders’ Meeting called to approve the fi nancial statements of the fi scal year ending on 12.31.2018

(4) x x x

Christian LefèvreExecutive Vice PresidentEnd of term of offi ce: 10.01.2017

(5)

(1) Jacques D’Armand de Chateauvieux has been Chairman of the Board since March 14, 2018. His term of offi ce will end following the Shareholders’ Meeting called to approve the fi nancial statements for the fi scal year ending on 12.31.2018.

(2) Gaël Bodénès has been Chief Executive Offi cer since March 14, 2018 and his term of offi ce will end following the Shareholders’ Meeting called to approve the fi nancial statements of the fi scal year ending on 12.31.2018.

(3) The employment contract signed by Gaël Bodénès with Bourbon Management has been suspended(4) The employment contract signed by Astrid de Lancrau de Bréon with Bourbon Management has been suspended(5) Christian Lefèvre stepped down as Chief Operating Offi cer on October 1, 2017. His employment contract with Bourbon Management ended on September 30, 2017

5.6.3 Stock options exercised during the year by each Executive Director

No subscription or purchase stock options were granted or exercised in 2017.



4

5.7 STATUTORY AUDITORS’ FEES

Statutory Auditors’ fees for fi scal year 2017 (in thousands of euros)

Deloitte EuraAudit C.R.C.

Statutory Auditors (Deloitte

& Associés) NetworkStatutory Auditors (EurAAudit CRC) Network

Amount % Amount % Amount % Amount %

Certifi cation of separate and consolidated fi nancial statements and half-year review

- Entity 104 28% n/a 65 38% n/a

- Controlled entities(1) 229 63% 441 99% 107 62% 0%

Subtotal A 333 91% 441 99% 172 100% - 0%

Mandatory services other than fi nancial statement certifi cation

- Entity - 0% - 0% - 0% - 0%

- Controlled entities(1) - 0% - 0% - 0% - 0%

Subtotal B - 0% - 0% - 0% - 0%

Services other than fi nancial statement certifi cation, provided at the entity’s request(2)

- Entity 33 9% - 0% - 0% - 0%

- Controlled entities(1) - 0% 4 1% - 0% - 0%

Subtotal C 33 9% 4 1% - 0% - 0%

Subtotal D = B + C 33 9% 4 1% - 0% - 0%

TOTAL E = A + D 366 100% 445 100% 172 100% - 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 consist in the auditing of the consolidated human resource, environmental and societal information of BOURBON Corporation 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’s fully consolidated companies

% control of capital held directly or indirectly

% interest in capital held directly or indirectly

Country2017 2016 2017 2016

BOURBON Corporation 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 49.00 100.00 Malaysia

Bahtera Sri Kandi Marine SDN.BHD (formerly Bourbon Offshore Mitra SDN.BHD) 100.00 100.00 49.00 49.00 Malaysia

Bahtera Sri Kandi Offshore Ltd (formerly Bourbon Offshore Labuan Ltd) 100.00 100.00 49.00 90.00 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 AD4 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 100.00 100.00 100.00 100.00 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 (ex 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 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 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 100.00 100.00 100.00 100.00 France

Bourbon Mauritius 100.00 0.00 100.00 0.00 Mauritius

Bourbon Mobility (formerly Saint Nikolas, formerly Setaf) 100.00 100.00 100.00 100.00 France



4



Country2017 2016 2017 2016

Bourbon Offshore (formerly Holding) 100.00 100.00 100.00 100.00 France

Bourbon Offshore Asia Pte Ltd 90.00 90.00 90.00 90.00 Singapore

Bourbon Offshore Craft 100.00 100.00 100.00 100.00 France

Bourbon Offshore Craft TT (formerly Cemtaf, formerly Tribor) 100.00 100.00 100.00 100.00 France

Bourbon Offshore DNT (formerly DNT Offshore) 100.00 100.00 100.00 100.00 Italy

Bourbon Offshore Gaia 100.00 100.00 100.00 100.00 France

Bourbon Offshore Greenmar 100.00 100.00 100.00 100.00 Switzerland

Bourbon Offshore Gulf 60.00 60.00 60.00 60.00 Bahrain (Manama)

Bourbon Offshore India Private Ltd 100.00 100.00 100.00 100.00 India

Bourbon Offshore Interoil Shipping-Navegação Lda 55.00 55.00 55.00 55.00 Portugal (Madeira)

Bourbon Offshore Marine Services (formerly Bourbon AD3) 100.00 100.00 100.00 100.00 France

Bourbon Offshore Maritima (formerly Delba Maritima Navegação) 100.00 100.00 100.00 100.00 Brazil

Bourbon Offshore MMI 100.00 100.00 100.00 100.00United Arab

Emirates

Bourbon Offshore Norway AS 100.00 100.00 100.00 100.00 Norway

Bourbon Offshore Pacifi c Pty Ltd 100.00 100.00 100.00 100.00 Australia

Bourbon Offshore Surf 100.00 100.00 100.00 100.00 France

Bourbon Offshore Triangle 51.00 51.00 51.00 51.00 Egypt

Bourbon Offshore Trinidad Ltd 100.00 100.00 100.00 100.00 Trinidad

Bourbon Offshore Ukraine (formerly Bourbon Marine Services Ukraine) 80.00 80.00 80.00 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 Offshore 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 100.00 100.00 100.00 100.00 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 0.00 100.00 0.00 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

Caroline 63 SAS 100.00 100.00 0.00 0.00 France

Caroline 8 SAS 100.00 100.00 100.00 100.00 France





Country2017 2016 2017 2016

Centre de Formation Offshore Pétrolier Bourbon-Hydro Marseille (1) 100.00 (1) 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 100.00 100.00 51.00 51.00 Portugal (Madeira)

Endeavor 100.00 100.00 100.00 100.00 France

Financière Bourbon 100.00 100.00 100.00 100.00 France

Grena-Navegação LDA 100.00 100.00 100.00 100.00 Portugal (Madeira)

Holland Propeller Services B.V 100.00 100.00 60.00 60.00 Netherlands

Inebolu Petroleum Marine Services Ltd Company 100.00 100.00 100.00 100.00 Turkey

Inspares 100.00 100.00 100.00 100.00United Arab

Emirates

Jade-Navegação LDA 100.00 100.00 100.00 100.00 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

Liberty 233 SNC 100.00 100.00 100.00 100.00 France

Liberty 234 SNC 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 100.00 100.00 51.00 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 51.00 51.00 France

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) 100.00 100.00 100.00 100.00 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

SNC Bourbon Diamond 100.00 100.00 100.00 100.00 France

SNC Bourbon Enterprise 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



4



Country2017 2016 2017 2016

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 Hamelin 100.00 100.00 100.00 100.00 France

SNC Bourbon Herald 100.00 100.00 100.00 100.00 France

SNC Bourbon Himalaya 100.00 100.00 100.00 100.00 France

SNC Bourbon Liberty 105 100.00 100.00 100.00 100.00 France




SNC Bourbon Liberty 119 (formerly B.L. 117) 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 100.00 100.00 100.00 100.00 France

SNC Bourbon Ruby 100.00 100.00 100.00 100.00 France

SNC Bourbon Sapphire 100.00 100.00 100.00 100.00 France

SNC Bourbon Sirocco (formerly TBN 6) 100.00 100.00 100.00 100.00 France

SNC Bourbon Supporter 100.00 100.00 100.00 100.00 France

SNC Bourbon Yack 100.00 100.00 100.00 100.00 France

SNC Liberty 201 100.00 100.00 100.00 100.00 France





Country2017 2016 2017 2016



SNC Liberty CE 121 100.00 100.00 100.00 0.00 France








SNC Surfer 2008 (1) 100.00 (1) 100.00 France

SNC Surfer 2008 TT (1) 100.00 (1) 100.00 France

SNC Surfer 2009 100.00 100.00 100.00 100.00 France

SNC Surfer 2009 TT 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 3603 (formerly TBN 1) 100.00 100.00 100.00 100.00 France

SNC TBN 12 100.00 0.00 100.00 0.00 France

SNC TBN 13 100.00 0.00 100.00 0.00 France

Sonasurf Internacional-Shipping LDA 51.00 51.00 51.00 51.00 Portugal (Madeira)

Sonasurf Unipessoal Lda (formerly Sonasurf Jersey Ltd) 100.00 100.00 51.00 51.00 Portugal (Madeira)

Sopade (Sté participation développement SAS) 100.00 100.00 100.00 100.00 France (Reunion)

Toesa 100.00 100.00 100.00 100.00 Uruguay

VSSA Limited (1) 100.00 (1) 100.00 Malta

(1) Liquidations/Dissolution

5.8.2 List of companies consolidated by BOURBON Corporation using the equity method



Country2017 2016 2017 2016

Bourbon Gulf 49.00 49.00 49.00 49.00 Qatar

Bourbon Marine Services Manila Inc 24.98 24.98 24.98 24.98 Philippines

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 Offshore LLC 24.50 24.50 24.50 24.50 United States

Oceanteam Bourbon 4 AS 50.00 50.00 50.00 50.00 Norway

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 50.00 50.00 50.00 50.00 United States


CONSOLIDATED FINANCIAL STATEMENTSFinancial Glossary

4

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 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). Moreover, internal reporting – and therefore adjusted fi nancial information – does not refl ect the application of IAS 29 (Financial Reporting in Hyperinfl ationary Economies), applicable for the fi rst time in 2017 (retroactively to January 1) to an operating joint venture based in Angola.

EBITDAR: revenue less direct operating costs (except bare-boat rental costs) and general and administrative costs.

EBITDA: EBITDAR less bareboat charter costs.

EBIT: EBITDA after depreciation, amortization and provisions and capital gains on equity interests sold, but excluding share of net income of companies under equity method.

Operating income (EBIT) after share of results from companies under equity method: Operating income (EBIT) after share of results from companies under the equity method

Capital invested or employed: including (i) shareholders’ equity, (ii) provisions (including net deferred tax), (iii) net debt; they are also defi ned as the sum of (i) net non-current assets (including advances on fi xed assets), (ii) working capital requirement, 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 installments on fi xed assets.

Free cash fl ow: net cash fl ows from operating activities after including incoming payments and disbursements related to acquisitions and sales of property, plant and equipment and intangible assets.


CONSOLIDATED FINANCIAL STATEMENTS4 Statutory Auditors’ report on the consolidated fi nancial statements (Year ended December 31, 2017)

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS (YEAR ENDED DECEMBER 31, 2017)

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, 2017.

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, 2017 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 FrameworkWe 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.

IndependenceWe conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2017 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

Without qualifying the above opinion, we draw your attention to the material uncertainty relating to events or circumstances that are likely to compromise the Company’s ability to continue as a going concern as described in Note 1.2 to the consolidated fi nancial statements.

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 excluding 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 STATEMENTSStatutory Auditors’ report on the consolidated fi nancial statements (Year ended December 31, 2017)

4

RECOVERABLE AMOUNT OF PROPERTY, PLANT AND EQUIPMENT

(Notes 1.4 – Asset impairment testing, 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 €1,923 million as of December 31, 2017 for total assets of €2,742.

Property, plant and equipment is subject to impairment tests once there is an indication of a loss in value, i.e. when specifi c events or circumstances indicate a risk of impairment for these assets.

As of December 31, 2017, ongoing diffi cult conditions in the Oil & Gas market and a Bourbon Corporation market capitalization (€542 million with a share price of €7.00 as of December 31, 2017) amounting to less than equity as of December 31, 2017 (€840 million before asset impairment) represented indications of impairment in accordance with IAS 36 – Impairment of assets.

In this context, the recoverable amount of the ships was determined using the methods described in Notes 3.1 and 3.3 to the consolidated fi nancial statements, mainly by making a distinction between ships that are to be sold under a new strategic action plan #BOURBONINMOTION (see Note 2.1 to the consolidated fi nancial statements), and the remaining fl eet: - for 41 old ships that cannot be digitally connected as well as 7

other specifi c decommissioned vessels that are to be sold as is within two years, the recoverable amount corresponds to the fair value less costs to sell; on this basis, an impairment loss of €196.8 million was recognized;

- for 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; no impairment loss was recognized during the year.

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 and performance; - the indications of impairment existing as of December 31, 2017; - 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 with prevailing accounting standards, as described in Note 3.3 to the consolidated fi nancial statements;

- 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 2018 budget preparation process; - assessed the reasonableness of the forecasts shown in the

2019-2022 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 and those used by the analysts who monitor the group;

- 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.



BORROWINGS: IMPACTS OF RESCHEDULING AND CLASSIFICATION (Note 3.14 to the consolidated fi nancial statements – Gross borrowings)

Key audit matter Our audit approach

On July 27, 2017, Bourbon Corporation fi nalized the rescheduling of its debt, as described in Notes 2.1 and 3.14 to the consolidated fi nancial statements. In accordance with IAS 39 – Financial instruments: recognition and measurement, the group carried out a qualitative and quantitative analysis of each rescheduled borrowing to determine if each borrowing had changed signifi cantly, in which case the former borrowing would have to be derecognized and at the same time a new borrowing recognized. The tests carried out revealed that none of the borrowings had changed signifi cantly. As of July 28, 2017, the borrowings were therefore maintained in the balance sheet.

As outlined in Note 3.14 to the consolidated fi nancial statements, Bourbon then reviewed all its borrowings as of December 31, 2017, in order to identify those that may be subject to early repayment as they: - presented payment defaults, and/or - contained covenants that were not respected, and/or - contained “cross default” or similar contractual clauses.

Following this review and in accordance with IAS 1 - Presentation of fi nancial statements, the non-current portion of the borrowings for which the group no longer held, at the closing date, an unconditional right to defer payment for a period of more than 12 months was reclassifi ed to current liabilities for a total of €1,120.5 million.

This situation led Bourbon Corporation to enter into negotiations with its fi nancial partners to avoid immediate repayment and obtain a new rescheduling for its borrowings. These negotiations were still ongoing on the date the fi nancial statements were approved by the Board of Directors.

We considered the accounting treatment of the debt rescheduling in July 2017 and the classifi cation of borrowings as of December 31, 2017 to be a key audit matter due to the material amounts involved, their impact on the presentation and understanding of the fi nancial statements as a whole, and the potential impacts on the accounting treatment of interest rate hedging instruments.

With the help of our specialists, we assessed whether the terms and conditions of the debt rescheduling in the summer of 2017 and their impacts on changes in cash fl ow, before and after the renegotiation, confi rmed the accounting treatment of the rescheduling adopted by the group (i.e. the borrowing was maintained in the balance sheet at its initial effective interest rate).

We corroborated the “current” / “non-current” classifi cation of the borrowings as of December 31, 2017 based on our own analysis of the borrowing terms and conditions.

We verifi ed that the accounting treatment of the derivative fi nancial instruments (interest rate instruments) was correct in this context.

Finally, we verifi ed the appropriateness of the disclosures in the notes to the consolidated fi nancial statements, especially Note 3.14 on the accounting treatment and fi nancial impacts of the corresponding transactions.

Verification of the Information Pertaining to the Group Presented in the Management Report

As required by law, 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.

Report on Other Legal and Regulatory Requirements

Appointment of the Statutory AuditorsDeloitte & 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, 2017, Deloitte & Associés and EuraAudit C.R.C were in the 13th and 15th years of total uninterrupted engagement, respectively.


CONSOLIDATED FINANCIAL STATEMENTSStatutory Auditors’ report on the consolidated fi nancial statements (Year ended December 31, 2017)

4

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 approachOur 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 the 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.



Report to the Audit CommitteeWe 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 24, 2018

The Statutory Auditors

EuraAudit C.R.CCabinet Rousseau Consultants


Jean-Marc ROUSSEAU Christophe PERRAU


PARENT COMPANY BALANCE SHEET – BOURBON CORPORATION SA 186

INCOME STATEMENT OF THE PARENT COMPANY BOURBON CORPORATION SA 188

NOTES TO THE COMPANY FINANCIAL STATEMENTS 189

STATUTORY AUDITORS’ REPORT ON THE ANNUAL FINANCIAL STATEMENTS (YEAR ENDED DECEMBER 31, 2017) 204

STATUTORY AUDITORS’ SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS 207

5PARENT COMPANY FINANCIAL STATEMENTS


PARENT COMPANY FINANCIAL STATEMENTS5 Parent company balance sheet – BOURBON Corporation SA

PARENT COMPANY BALANCE SHEET – BOURBON CORPORATION SA

Assets (in € thousands)

As of 12.31.2017 12.31.2016

Gross

Depreciation, amortization

and provisions Net Net

I. FIXED ASSETS

Intangible assets

Other intangible assets 1 - 1 -

Property, plant and equipment

Land - - - -

Buildings - - - -

Other property, plant and equipment - - - -

Property, plant and equipment in progress - - - -

Long-term fi nancial assets

Equity interests 42,507 8 42,499 42,499

Receivables from non-consolidated companies - - - -

Loans - - - -

TOTAL I 42,507 8 42,500 42,499

II. CURRENT ASSETS

Inventories

In progress - - - -

Advances and installments on orders - - - -

Accounts receivable

Trade and other receivables - - - 123

Other receivables 904,011 - 904,011 835,178

Other

Marketable securities 1,191 - 1,191 5,711

Cash and cash equivalents 204 - 204 429

Prepaid expenses 30 - 30 21

TOTAL II 905,437 - 905,437 841,462

Unrealized foreign exchange losses 0 - 0 -

TOTAL ASSETS 947,944 8 947,937 883,961


PARENT COMPANY FINANCIAL STATEMENTSParent company balance sheet – BOURBON Corporation SA

5

Liabilities (in € thousands) 12.31.2017 12.31.2016

I. SHAREHOLDERS’ EQUITY

Share Capital 49,228 48,493

Share premium 100,788 91,021

Legal reserve 7,878 7,878

Regulated reserves 15,395 15,395

Other reserves 431,443 431,442

Retained earnings 136,783 127,384

Profi t (loss) for the period 71,925 28,371

Investment subsidies

Income from issues of equity securities 119,723 119,723

TOTAL I 933,163 869,707

II. PROVISIONS FOR RISKS AND CONTINGENCIES

For risks 729 5,217

For contingencies 536 536

TOTAL II 1,265 5,753

III. LIABILITIES

Bank borrowings - -

Other borrowings and fi nancial liabilities 1,440 1,050

Trade and other payables 1,138 415

Tax and social security liabilities 303 143

Fixed asset and other payables - -

Other liabilities 10,629 6,892

Deferred income - -

TOTAL III 13,509 8,500

Unrealized foreign exchange gains - -

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 947,937 883,961


PARENT COMPANY FINANCIAL STATEMENTS5 Income statement of the parent company BOURBON Corporation SA

INCOME STATEMENT OF THE PARENT COMPANY BOURBON CORPORATION SA

(in € thousands) 2017 2016

I. OPERATING INCOME Income from services - -

Revenues - -Reversals of provisions (and amortizations), expense transfers 262 165Other income 0 -

TOTAL I 262 165II. OPERATING EXPENSES

Other purchases and external expenses 3,090 3,623Taxes and similar levies 484 705Wages & salaries 419 72Social security contributions 4,628 3,817Provisions for amortization - -Provisions for current assets - -Provisions for risks and contingencies - -Other expenses 429 493

TOTAL II 9,050 8,710

OPERATING INCOME/LOSS (8,788) (8,545)III. FINANCIAL INCOME

Financial income from investments 54,506 40,106Income from other securities and fi xed asset receivables - -Other interest receivable and similar income 1,113 1,291Reversals of provisions and expense transfers - -Foreign exchange gains 1 2Net income from sale of securities - -

TOTAL III 55,620 41,399IV. FINANCIAL EXPENSES

Depreciation allowance and provisions 0 -Interest and similar expenses 6,032 7,352Foreign exchange losses 0 -Net loss from sale of securities - -

TOTAL IV 6,032 7,352

FINANCIAL INCOME/LOSS 49,588 34,047

INCOME FROM CURRENT OPERATIONS 40,800 25,502V. NON-RECURRING INCOME

Income from management operations - -Income from capital transactions 154 244Reversals of provisions and expense transfers 4,570 500

TOTAL V 4,725 744VI. NON-RECURRING EXPENSES

Expenses on management operations 8 1Expenses on capital transactions 2,589 3,387Amortization, depreciation and provisions 340 5,396

TOTAL VI 2,936 8,784

NON-RECURRING INCOME 1,789 (8,040)VII. INCOME TAX (29,337) (10,909)

Total income 60,607 42,308Total expenses (11,319) 13,937

NET INCOME FOR THE PERIOD 71,925 28,371


PARENT COMPANY FINANCIAL STATEMENTSAccounting policies and methods

5

NOTES TO THE COMPANY FINANCIAL STATEMENTS

Notes to the balance sheet before appropriation of earnings for the fi scal year ended December 31, 2017, showing a total of €947,937 thousand and to the income statement for the fi scal year, presented in the form of a list and showing a profi t of €71,925 thousand.

The fi scal year covered a period of 12 months from January 1, 2017 to December 31, 2017.

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 14, 2018 and again on April 20, 2018, to take into account events after the reporting date .

1/ Accounting policies and methodsThe annual fi nancial statements for the fi scal year ended December 31, 2017 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; as a result, its business is signifi cantly infl uenced by that of its clients. However, since October 2014, the price of oil per barrel has dropped signifi cantly. The price of Brent crude fell from USD99 per barrel in 2014 to less than USD40 in late 2015, reaching a low of USD27 in the fi rst quarter of 2016. The collapse in oil price triggered an immediate response from oil companies, which cut global spending on exploration and production for the second consecutive year, by 25% in 2015 and 24% in 2016 (source: IFP Energies nouvelles). This cyclical downturn in the market affected the companies that provide services to oil companies. In the face of this economic slowdown in oil activity, 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 Group had conducted discussions with its fi nancial partners in order to restructure its fi nancing for the coming years. These discussions resulted in the signature of an agreement on March 6, 2017 with a number of fi nancial institutions and partners to restructure its principal debt in the amount of €910.8 million.

At the same time as these negotiations, which led to the restructuring of its principal debt, BOURBON also 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.

The agreement entered into with the Group’s principal fi nancial partners, described in detail in the notes to the 2016 fi nancial statements, thus restructured the repayments of its club deal loans, its bilateral loans, its fi nance 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 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 Group’s forecasts on which the March negotiation had been based, and the unfavorable market environment weighed heavily on the Group’s revenue and, consequently, on its net income. The cash fl ows generated by operations, although their circulation was not fully unrestricted due to the Group’s legal structure and limitations relating to some of its geographic locations, remain positive. However, they are insuffi cient to service its debt in the near future. The cash generated by operations nevertheless enables the Group to cover its current operating requirements for the next 12 months.

Furthermore, and for the same reasons, the Group was not able to comply with various covenants defi ned in its credit documentation , which could have allowed the relevant banks to demand immediate repayment of their loans.

This situation on the closing date requires the Company, in accordance with IFRS standards, to refl ect the payability of its debt by reclassifying it as a short-term liability, even though its lenders have not requested repayment .




In this perspective, the Group has maintained its going concern assumption in the preparation of its statutory company fi nancial statements for the year ended December 31, 2017.

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.


PARENT COMPANY FINANCIAL STATEMENTS5 Shareholders’ equity

2/ Shareholders’ equity

2.1 SHARE CAPITAL STRUCTURE

As at December 31, 2017, BOURBON Corporation’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 General 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

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 General Meeting of June 31, 2011 6,155,681 3,910


Options exercised between June 1, 2011 and November 2, 2011 22,756 14

Capital increase by issuance of bonus shares through the capitalization of paid-in capital (one bonus share for ten existing shares) following the Combined General 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 General 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 General Meeting of May 23, 2017 1,156,611 735

Share capital at December 31, 2017 77,499,214 49,227

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 €38,752,143 through the capitalization of a portion of the paid-in capital. This capital increase was completed by the issuance of 5,546,130 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 benefi ciary 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.


Following the decision taken by the Extraordinary General Meeting on June 1, 2011, the share capital was increased by €3,910,110 from €39,101,110 to €43,011,221 through the capitalization of a portion of the paid-in capital. This capital increase was completed by the issuance of 6,155,681 new shares allotted to shareholders in the ratio of one new share for ten existing shares.



PARENT COMPANY FINANCIAL STATEMENTSShareholders’ equity

5

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.

Following the decision taken by the Extraordinary General Meeting on May 28, 2013, the share capital was increased by €4,305,507 from €43,055,075 to €47,360,582 through the capitalization of a portion of the paid-in capital. This capital increase was completed by 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 €47,360,582 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 General 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 General Meeting of May 23, 2017 and the payment of the portion of the 2016 dividend in 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 yearReimbursed

during the year

Ordinary shares 77,499,214 1,156,611 -

3 NUMBER OF SHARES OUTSTANDING BETWEEN THE OPENING DATE AND THE CLOSING DATE

Class of securities 01.01.2017 Increases Decreases 12.31.2017

Number of shares 76,342,603 1,156,611 - 77,499,214

Number of treasury shares held (426,576) (698,286) 997,722 (127,140)

TOTAL 75,916,027 458,325 997,722 77,372,074

3 NUMBER OF SHARES WITH VOTING RIGHTS AS OF DECEMBER 31, 2017

Number of shares outstanding 77,499,214

Of which number of treasury shares with no voting rights 127,140

Number of shares with voting rights 77,372,074


PARENT COMPANY FINANCIAL STATEMENTS5 Stock option (subscription or purchase) plans, bonus share award plans

2.2 CHANGES IN EQUITY

(in € thousands)Share

CapitalShare

premiums

Reserves and retained

earnings

Profi t (loss) for the period Total

Balance as of December 31, 2016 prior to the appropriation of income 48,493 91,021 582,099 28,371 749,984

Capital increase 735 9,767 10,502

Appropriation of 2016 income 28,371 (28,371) -

Dividends paid(1) (18,973) (18,973)

Profi t (loss) for the period 71,925 71,925

Other changes -

BALANCE AS OF DECEMBER 31, 2017 PRIOR TO THE APPROPRIATION OF INCOME 49,228 100,788 591,498 71,925 813,440

(1) of which €10,502 thousand paid in shares.

3/ Stock option (subscription or purchase) plans, bonus share award plans

3.1 STOCK OPTION SUBSCRIPTION OR PURCHASE PLANS

BOURBON Corporation issued 11 stock option subscription or purchase plans, two of which were in force as of December 31, 2017, representing 793,700 stock options at that date. Their main features are shown in the table below:

November 2012 December 2013

Date of authorization by the Combined General Meeting June 1, 2011 June 1, 2011

Date of authorization by the Board of Directors November 30, 2012 December 2, 2013

Number of stock options authorized 29,700 1,037,000

Total number of allotted stock options adjusted as at 12/31/2017 29,700 764,000

Number of benefi ciaries 2 68

Start date November 2016 December 2017

Expiration date November 2018 December 2019

Subscription price in euros adjusted as at 12.31.2017 €19.82 €19.68

Subscription price in euros (before adjustment) €21.80 €19.68

N.B.: the only ground for early exercise is the death of the employee.


PARENT COMPANY FINANCIAL STATEMENTSOther equity capital

5

3.2 BONUS SHARE ALLOCATION

In 2013, the Board of Directors authorized a restricted stock award of existing or new shares to the salaried members of staff, or certain categories of them, of all of BOURBON Corporation’s subsidiaries. The vesting of the shares was subject to fulfi llment of the conditions and criteria laid down by the Board of Directors, as described below:

3 60% of the shares were contingent on employment at the end of two years: recipients still employed by BOURBON on December 2, 2015 fulfi lled this condition;

3 40% of the shares were subject to employment at the end of two years and the attainment of performance criteria:


3 20% was granted if the fl eet availability rate in 2015 was greater than or equal to 95%; 100% of this criterion was attained with an average of 96.4%.


December 2, 2017

Date of authorization by the Combined General Meeting June 1, 2011

Date of authorization by the Board of Directors December 2, 2013

Total number of allotted bonus shares adjusted as at 12.02.2015 631,400


Price per share:

Price per share on the grant date (before adjustment) €19.11

Fair value:

Original fair value (before adjustment) €17.53 / €16.08

Dividend yield 4.1%

Contractual acquisition period 2 to 4 years

N.B.: the only grounds for early exercise are the death or disability (subject to certain conditions) of the employee.

This bonus share allocation plan ended on December 2, 2017.

4/ Other equity capital

As of December 31, 2017, the bond issues totaled €119,723 thousand. These perpetual securities give BOURBON Corporation 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 fi rst three years, the loan will be repayable at par solely at BOURBON’s initiative. In the event of non-repayment on such date, the coupon will be stepped up as follows:



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.

As of December 31, 2017, €1.4 million has been recognized as accrued interest not due corresponding to the share in the interest that is due to be paid during the fi rst half of 2018.

Note that the holders of perpetual deeply subordinated notes (TSSDIs) were called to attend 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 due under the Bonds 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 corresponding to the applicable rate to the Bonds (see note 20).


PARENT COMPANY FINANCIAL STATEMENTS5 Gross long-term fi nancial assets

5/ Gross long-term fi nancial 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 (First In, First Out).

The change in gross long-term fi nancial assets can be analyzed as follows:

(in € thousands) 12.31.2017 Increases Decreases 12.31.2016

Equity interests 42,507 1 - 42,506

Receivables from non-consolidated companies - - - -

TOTAL 42,507 1 - 42,506

The increase over the year corresponds to the purchase of 126,340 shares of BOURBON Capital, which brings the number of shares held in that subsidiary to 126,390 as of December 31, 2017.

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) 12.31.2017 Increases Decreases 12.31.2016

Provisions for risks and contingencies:

Provisions for guarantee of liabilities on sales of investments(1) - - - -

Provisions for foreign exchange losses 0 0 - -

Provisions for taxes 536 - - 536

Other provisions for risks and contingencies(1)(2)(3) 729 340 (4,828) 5,217

Subtotal 1,265 340 (4,828) 5,753

Provisions for impairment:

Equity interests 8 - - 8

Accounts receivable - - - -

Current accounts - - - -

Marketable securities - - - -

Subtotal 8 - - 8

TOTAL 1,273 340 (4,828) 5,761

Of which allowances and reversals:

- from operating activities - (258)

- fi nancial 0 -

- non-recurring 340 (4,570)

(1) Following the most recent events in an old piece of litigation, the provision was recovered during the fi scal year.(2) In 2016, 319,000 treasury shares were allocated for free. Since the grant date was set at February 12, 2017, the provision created in the previous fi scal year was fully

reversed on December 31, 2017.(3) As of December 31, 2017, 60, 368 treasury shares had not been granted. The provision for risk created in the event that those shares would be canceled was

€340,000 for the fi scal year and reached €729,000 as of December 31, 2017.


PARENT COMPANY FINANCIAL STATEMENTSAdvances to executives

5

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 amount Less than 1 year More than 1 year

Accounts receivable:

Other trade receivables - - -

Income tax(1) 5,941 5,941 -

Value added tax 145 145

Group and associates(2) 897,926 897,926 -

Sundry receivables - - -

Prepaid expenses 30 30 -

TOTAL 904,042 904,042 -

(1) The tax receivable corresponds to the expected repayments on the additional contribution to income tax for dividend distributions paid by the Company over the 2014-2017 period.

(2) “Group and associates” receivables mainly refer to a current account advance in the amount of €872 million.

(in € thousands) Gross amount Less than 1 year one to fi ve years More 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 fi nancial liabilities 1,440 1,440 - -

Trade and other payables 1,138 1,138 - -

Social security & other social welfare bodies 175 175 - -

Income tax 115 115

Other taxes and similar payments 13 13 - -

Debt on non-current assets - - - -

Group and associates 9,653 9,653 - -

Other liabilities 977 977 - -

TOTAL 13,509 13,509 - -

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.


PARENT COMPANY FINANCIAL STATEMENTS5 Marketable securities

9/ Marketable securities

Marketable securities at December 31, 2017 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” (66,772 shares at December 31, 2017).

The statement of treasury shares held at the end of the year is as follows:

(in € thousands)Number shares

as of 12.31.2016Increase in fi scal year

Reduction in fi scal year(1)

Number shares as of 12-31-2017

Gross Values Provisions

Net Values

Excluding liquidity contract 379,568 - (319,200) 60,368 729 (729) -

Liquidity contract 47,008 698,286 (678,522) 66,772 462 - 462

TOTAL 426,576 698,286 (997,722) 127,140 1,191 (729) 462

(1) The reduction in the fi scal year corresponds to the allocation of bonus shares under the December 2, 2013 plan.

The marketable securities arising out of the KEPLER-CHEVREUX contract are the subject of a provision for risk of €729,000 (see note 6 “Provisions”).

Based on the share price at December 31, 2017, which was €6.86, the total value of treasury shares held amounted to €872 thousand.

10/ Cash and cash equivalents

Cash held in banks was valued at its par value, i.e. €204 thousand.

11/ Deferred income and expenses

(in € thousands) 12.31.2017 12.31.2016

Prepaid expenses 30 21

Deferred income - -

TOTAL 30 21

Prepaid expenses refer essentially to the account operation payment to CM CIC Securities. They must be recognized under the operating result.


PARENT COMPANY FINANCIAL STATEMENTSFactors impacting several balance sheet items

5

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, 2017, unrealized foreign exchange gains and losses were insignifi cant.

13/ Factors impacting several balance sheet items

13.1 ASSETS

(in € thousands) 12.31.2017 12.31.2016

Prepayments and accrued income: - -

Operating activities

Financial transactions -

Commercial paper

Related parties: 946,518 877,806

Equity interests 42,507 42,506

Receivables from non-consolidated companies - -

Loans - -

Trade and other receivables - 124

Other receivables(1) 904,011 835,176

TOTAL 946,518 877,806

(1) “Other receivables” mainly refers to a current account advance in the amount of €872 million.

13.2 LIABILITIES

(in € thousands) 12.31.2017 12.31.2016

Accruals and deferred income: - -

Operating activities - -

Financial transactions - -

Notes payable - -

Related parties: 10,447 6,481

Borrowings and other fi nancial liabilities - -

Trade and other payables 794 9

Group and associates 9,653 6,472

TOTAL 10,447 6,481


PARENT COMPANY FINANCIAL STATEMENTS5 Executive compensation

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 €359,000 in Directors’ fees in 2017 for performing their duties.

The Chairman of the Board of Directors received €144,000 for his offi ce.

Gaël Bodénès, Chief Operating Offi cer, received €44,210 in respect of his executive functions.

Astrid de Lancrau de Bréon, Chief Financial Offi cer (as of October 1, 2017), received €212,643 in salaries and benefi ts, and €18,065 in respect of her executive functions.

15/ Details of non-recurring income and expenses

(in € thousands) 2017

Non-recurring expenses 2,936

From management operations 8

From capital transactions 2,589

Net book value of equity interests sold -

Share buybacks 389

Penalties following tax audits -

Other 2,200

Non-recurring amortization, depreciation and provisions 340

Provisions for taxes -

Other provisions for risks and contingencies 340

Non-recurring income 4,725

From management operations -

From capital transactions 154

Income from sale of equity investments -

Share buybacks 88

Other 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

(in € thousands) 2017 2016

Financial expenses(1) 2 1,712

Financial income(2) 55,619 41,397

1) Financial expenses for 2016 consisted of the allocation of SNC FINANCIERE BOURBON’s 2015 loss.(2) Financial income corresponds to income from equity investments (dividends) in the amount of €54,496 thousand and interest on current account advances in the

amount of €1,123 thousand.


PARENT COMPANY FINANCIAL STATEMENTSIncrease and reduction in future tax liability

5

17/ Income tax

Distribution (in € thousands) Income before tax Tax due Net income after tax

Income from current operations 40,800 - 40,800

Short-term non-recurring income 1,789 - 1,789

Long-term non-recurring income - - -

Income tax following tax adjustments - - -

Tax on dividends(1) - 5,687 5,687

Tax grouping surplus - 23,650 23,650

ACCOUNTING INCOME 42,588 29,337 71,925

(1) Tax income on dividends consists mostly of expected repayments on the additional contribution to income tax on dividend distributions paid by the Company over the period 2014-2017.

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 for 2017 was €23,650 thousand after deducting the competitiveness and employment tax credit (CICE) for 2017 in the amount of €359 thousand.

As at December 31, 2017 BOURBON Corporation had tax loss carryforwards of €25,199 thousands and tax defi cits related to tax consolidation that can be carried forward of €533,734 thousand.

BOURBON Corporation opted to use the French tax consolidation scheme from January 1, 1998. The scope of consolidation as of December 31, 2017 consisted of the following companies:

BOURBON Corporation – Bourbon Maritime – Placements Provence Languedoc – Bourbon Offshore Surf – Les Abeilles – Bourbon

Mobility (formerly St Nikolas) – Bourbon Supply Investissements –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 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.

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 defi cit, kept by BOURBON Corporation, is treated as an immediate gain.

18/ Increase and reduction in future tax liability

(in € thousands) 12.31.2017 12.31.2016

Increase

Currency translation adjustments – Assets 0 -

TOTAL 0 -

Reduction

Contribution to age and disability pensions - -

Provisions (foreign exchange losses) 0 -

Provisions for risks and contingencies 1,265 4,895

Tax income from partnerships 364 4,522

Currency translation adjustments – liabilities - -

TOTAL 1,629 9,417


PARENT COMPANY FINANCIAL STATEMENTS5 Off -balance sheet commitments

19/ Off -balance sheet commitments

In connection with bareboat lease transactions and under a loan, BOURBON Corporation guaranteed a total of €1,037 million for its subsidiaries.


PARENT COMPANY FINANCIAL STATEMENTSEvents after the reporting period

5

20/ Events after the reporting period

A sale and fi nance lease back contract worth €50 million for fi ve Abeilles vessels entered into force in January 2018 for a period of 10 years, to replace the fi nancing obtained in July 2017 for these same vessels under less favorable conditions.

Moreover, on February 12, 2018, BOURBON Corporation’s Board of Directors approved the new strategic action plan – #BOURBONINMOTION – initiated at the end of 2017. It should enable the Group to meet the need for competitiveness and to respond to customers’ new demands, in the context of a market that has challenged all market players in the Oil & Gas industry . Bourbon’s goal is to accelerate its transformation and prepare for the expected recovery (see note 2.1).







The company is confi dent in its ability to fi nd before year end a balanced solution with all its lenders – often long-standing partners – that suits all parties and allows the company to adapt its fi nancing to its future development.


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’s share capital

A − Subsidiaries (more than 50% owned by BOURBON Corporation)

BOURBON Maritime – France SASU 3,049 327,704 100

Financière BOURBON – France SNC 626 319 52

B − Equity interests (10% to 50% of capital held by BOURBON Corporation)

Information regarding the other subsidiaries and equity interests

A − Subsidiaries (more than 50% owned by BOURBON Corporation)

1. French subsidiaries - - - -

2. Foreign subsidiaries - - - -

B − Equity interests (10% to 50% of capital held by BOURBON Corporation)

1. French subsidiaries - - - -

2. Foreign subsidiaries - - - -

N.B.: for foreign companies, the share capital and equity are converted at the closing rate, while the result and revenues are converted at the average rate.


PARENT COMPANY FINANCIAL STATEMENTSSubsidiaries and equity interests

5

Equity interestsBook value

Income/loss from the last

fi scal year

Loans and advances

granted by BOURBON

Corporation

Securities and endorsements

given by BOURBON

Corporation

Pre-tax revenues from the last

fi scal year

Dividends received by BOURBON

CorporationGross Provisions Net

41,722 - 41,722 24,231 - - 1,273 50,103

646 - 646 705 - - - -

40 0 40 - 0 0 - 0

0 0 0 - 0 0 - 0

3 0 3 - 0 0 - 0

49 8 41 - 0 0 - 0


PARENT COMPANY FINANCIAL STATEMENTS5 Statutory Auditors’ report on the annual fi nancial statements (year ended December 31, 2017)

STATUTORY AUDITORS’ REPORT ON THE ANNUAL FINANCIAL STATEMENTS (YEAR ENDED DECEMBER 31, 2017)

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.


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 fi nancial statements of Bourbon Corporation for the year ended December 31, 2017.

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, 2017 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 FrameworkWe 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.

IndependenceWe conducted our audit engagement in compliance with independence rules applicable to us, for the period from January 1, 2017 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

Without qualifying the above opinion, we draw your attention to the material uncertainty relating to events or circumstances that are likely to compromise the Company’s ability to continue as a going concern as described in Note 1 to the fi nancial statements.

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 excluding 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.

These matters were addressed in the context of our audit of the annual 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 fi nancial statements.

Verification of the Management Report and of the Other Documents Provided to Shareholders

We have also performed, in accordance with professional standards applicable in France, the specifi c verifi cations required by French law.

Information given in the management report and other documents provided to shareholders with respect to the fi nancial position and the fi nancial statementsWe 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.


PARENT COMPANY FINANCIAL STATEMENTSStatutory Auditors’ report on the annual fi nancial statements (year ended December 31, 2017)

5

Corporate governance informationWe 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 informationIn accordance with French law, we have verifi ed that the required information concerning the identity of the shareholders and holders of the voting rights has been properly disclosed in the management report.

Report on Other Legal and Regulatory Requirements

Appointment of the Statutory AuditorsDeloitte & 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, 2017, Deloitte & Associés and EuraAudit C.R.C were in the 13th and 15th 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 approachOur 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 the internal control;


PARENT COMPANY FINANCIAL STATEMENTS5 Statutory Auditors’ report on the annual fi nancial statements (year ended December 31, 2017)

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 CommitteeWe 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.

Lyon and Marseille, April 24, 2018


EurAAudit C.R.C

Cabinet Rousseau Consultants




PARENT COMPANY FINANCIAL STATEMENTSStatutory Auditors’ special report on regulated agreements and commitments

5

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 31 December 2017


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 authorized and entered into during the year

Pursuant to Article L. 225-40 of the French Commercial Code, the following agreements and commitments, previously authorized by the Board of Directors, have been brought to our attention:

With Mrs. Astrid de Lancrau de Bréon, Executive Vice-President and Chief Financial Officer of Bourbon Corporation

Nature and purpose: Following the appointment by the Board of Directors of Mrs. Astrid de Lancrau de Bréon, formerly Senior Vice-President, as Executive Vice-President, and Chief Financial Offi cer of Bourbon Corporation on September 4, 2017, the Board of Directors authorized the signature of an agreement on December 4, 2017 to suspend her employment contract as Senior Vice-President that will become effective during her term of offi ce as Executive Vice-President and Chief Financial Offi cer.

Persons involved: Mrs. Astrid de Lancrau de Bréon, Executive Vice-President and Chief Financial Offi cer of Bourbon Corporation.

Terms and conditions applicable during the year: Under this agreement, Mrs. Astrid de Lancrau de Bréon was paid the sum of €6,460.54 for days of paid leave acquired in her capacity as salaried Senior Vice-President and not used as of December 3, 2017.

Reasons justifying that such commitments and agreements are in the Company’s interest: Given the nature and scope of Mrs. Astrid de Lancrau de Bréon’s responsibilities under her term of offi ce, combined with those arising from her employment contract, it appeared that the validity requirements involving both an employment contract and a corporate offi cer mandate had not been met and that this dual situation could not be maintained. The validity of holding two positions depends on a combination of several requirements, including an ongoing distinction between the technical duties assumed under the employment contract and the responsibilities exercised under the corporate offi cer mandate.


PARENT COMPANY FINANCIAL STATEMENTS5 Statutory Auditors’ special report on regulated agreements and commitments

AGREEMENTS AND COMMITMENTS PREVIOUSLY APPROVED BY THE SHAREHOLDERS’ MEETING

Agreements and commitments approved in prior years

a) with continuing eff ect during the yearPursuant 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 Officer 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 31 December 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 1 January 2015, a series of payments totalling €300,000 (compensation in the form of a salary) shall be made on 31 January 2016, 31 January 2017 and 31 January 2018 at the latest. Thus, a gross payment of €110,000 was made in this respect in 2017.

b) without eff ect during the year1. With SINOPACIFIC Group companies

With ZHEJIANG SHIPBUILDING Co, LtdNature and purpose: Ship orders placed with ZHEJIANG SHIPBUILDING Co, Ltd, with advances on construction contracts.

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 31 December 2015 and December 2016: As at 31 December 2016, 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, LtdShip 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 31 December 2015 and to December 2016: The order totalled $204.8 million and is subject to the terms of the framework agreement signed on 25 June 2010. It replaces the initially planned order of 20 SPU 1000s. As at 31 December 2017, 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.

Lyon and Marseille, 24 April 2018


EurAAudit C.R.C

Cabinet Rousseau Consultants




GENERAL INFORMATION ABOUT BOURBON CORPORATION SA AND ITS SHARE CAPITAL 210

TRADEMARKS, LICENSES, PATENTS, PROPERTY, PLANT AND EQUIPMENT 224

AGENDA OF THE COMBINED SHAREHOLDERS’ MEETING OF MAY 30, 2018 227

DRAFT RESOLUTIONS FOR THE COMBINED GENERAL MEETING OF MAY 30, 2018 228

STATUTORY AUDITORS’ REPORT ON THE SHARE CAPITAL REDUCTION 233

PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND FOR THE FINANCIAL STATEMENT AUDIT 234

CROSS REFERENCE TABLES 235

6OTHER LEGAL AND FINANCIAL INFORMATION


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

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 offi ce address and phone number: 148, rue Sainte – 13007 Marseille – France. Phone: +33 (0)4 91 13 08 00

Legal form and law applicable to BOURBON Corporation: Incorporated company (Société anonyme) with a Board of Directors governed by the French Commercial Code. BOURBON Corporation is a French company.

Consultation of documents and information about the Company: the Company’s bylaws, fi nancial statements and reports, as well as the minutes of Shareholders’ Meetings may be consulted at the registered offi ce 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 fi nancing 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, fi nancial, agricultural, real estate and capital transactions that may relate directly to the aim of the Company, the various elements of which are specifi ed 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 (ARTICLES 12 AND 13 OF THE BYLAWS)

The Company is governed by a Board of Directors with a minimum of 3 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 offi ce lasts for three years. It ends after the Ordinary General Meeting ruling on the fi nancial 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 INFORMATIONInformation regarding the Company

6

III – An employee of the Company may be appointed as Director only if his employment contract corresponds to an actual job. He shall not lose the benefi t of such employment contract. The number of employee Directors may not exceed one third of the Directors in offi ce.

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 fi ll the vacancies on the Board.

Temporary appointments made by the Board shall be subject to ratifi cation by the next Ordinary General Meeting. Failing ratifi cation, 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 ratifi ed 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 offi ce, he shall be considered as having automatically resigned if he fails to remedy the situation within a period of six months.

1.4 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. The Board 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 offi ce, he or she shall be deemed to have resigned automatically and a new Chairman shall be appointed as provided for in the fi rst 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 Offi cer 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 offi ce 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 defi ned 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 − Confi dentiality obligationThe Directors and any other persons called to attend Board meetings are bound by a confi dentiality obligation with respect to confi dential 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 offi ce 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.


OTHER LEGAL AND FINANCIAL INFORMATION6 Information regarding the Company

Copies or extracts of meeting minutes are validly certifi ed by the Chairman of the Board of Directors, the Chief Executive Offi cer, 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 suffi cient to prove the number of Directors and their presence or representation at the meeting.

1.5 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 suffi ce to constitute such proof.

The Board of Directors shall conduct such audits and verifi cations 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.

1.6 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 Offi cer.

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.

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 modifi cation of the bylaws.

II – Chief Executive Offi cer

1. Appointment – RemovalDepending 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 Offi cer.

Where the Board of Directors chooses to separate the positions of Chairman and Chief Executive Offi cer, it shall appoint a Chief Executive Offi cer, 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 Offi cer must be less than 70 (seventy) years old. If the Chief Executive Offi cer reaches that age in offi ce, he or she shall be deemed to have resigned automatically and a new Chief Executive Offi cer shall be appointed.

The Chief Executive Offi cer may be removed at any time by the Board of Directors. Where the Chief Executive Offi cer 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. PowersThe Chief Executive Offi cer 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 Offi cer represents the Company in its relations with third parties. The Company shall be bound even by acts of the Chief Executive Offi cer 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 suffi ce to constitute such proof.

III – Executive Vice PresidentsUpon the proposal of the Chief Executive Offi cer, 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 Offi cer, which individuals shall bear the title of Executive Vice President.

The maximum number of such Executive Vice Presidents shall be fi ve (5).

The Board of Directors, by mutual agreement with the Chief Executive Offi cer, 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 Offi cer.



6

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 Offi cer, the Executive Vice Presidents shall retain their positions and powers until appointment of a new Chief Executive Offi cer, unless the Board of Directors shall decide otherwise.

1.7 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.

1.8 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 specifi ed 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 certifi ed 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 certifi cate 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 certifi cate 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.

1.9 OWNERSHIP THRESHOLDS

The bylaws do not stipulate specifi c requirements for ownership thresholds.

1.10 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 profi t 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 profi t 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 fi rst taken from the distributable earnings for the year.

The General 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 fi nancial statements by the shareholders and is charged against the profi ts 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 fi scal year unless this deadline is extended by court order.

However, when a balance sheet prepared during or at the end of the year and certifi ed by a Statutory Auditor shows that the Company has earned a profi t 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 fi nancial statements for the year. The amount of such dividends may not exceed the amount of the profi t as shown.


OTHER LEGAL AND FINANCIAL INFORMATION6 Information regarding the Company

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 benefi ciaries were aware of the irregular nature of this distribution at the time, or could not have been aware thereof, given the circumstances. Where applicable, claims for refund are limited to three years after the payment of these dividends.

Any dividends not claimed within fi ve 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.

For the fi rst time, for payment of the dividend to be distributed for the fi scal year ending December 31, 2017 and determined by the Annual Shareholders’ Meeting called in 2018, any shareholder who proves that his or her shares, as of the end of the fi scal year, have been held in registered form for at least two years and have remained in such form through the dividend payment date for such year, shall benefi t from an increase in the dividend on such registered shares equal to 10% of the dividend paid on the other shares, including in the case of payment of dividends in new shares, with the dividend thus being increased, if necessary, and rounded to the closest lower euro cent.

Moreover, any shareholder who proves, as of the end of a fi scal 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, profi ts, or premiums, through the issuance of bonus shares, shall benefi t 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.

1.11 PURCHASE BY THE COMPANY OF ITS OWN SHARES

(See management report – section 7.3.1 “Share buyback program”).

1.12 MODIFICATION OF SHAREHOLDER RIGHTS

The rights of shareholders as provided for in the Company’s bylaws may be modifi ed only by the Extraordinary General Meeting of Shareholders.

1.13 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.

1.14 FORM OF SHARES (EXTRACT FROM ARTICLES 9 AND 9 BIS OF THE BYLAWS)

Shareholders may chose 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.

1.15 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 provisions regarding the increased dividend, which will enter into effect for the fi rst time with respect to payment of the dividend for the year ended December 31, 2017, each share will give the right to profi ts and corporate assets in proportion to the percentage of the share capital that it represents.

In the absence of an agreement to the contrary notifi ed to the Company, benefi cial 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.



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By way of exception to the above, where the benefi cial owner and/or the bare owner benefi t, 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 benefi cial owner for decisions concerning the appropriation of net income and to the bare owner for all other decisions.

1.16 DOUBLE VOTING RIGHTS

All fully paid-up shares held in registered form for at least two years in the name of the same shareholder benefi t from double voting rights, in accordance with the Law of March 29, 2014.

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.

1.17 LIMITATIONS ON VOTING RIGHTS

There are no limitations on voting rights.

1.18 PARENT COMPANY-SUBSIDIARY RELATIONS

BOURBON Corporation SA is a holding company; the fi nancial fl ows with its subsidiaries correspond mainly to the dividends paid by them.

As of December 31, 2017, the fi gures for the parent company, BOURBON Corporation, 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 SNC

BOURBON Corporation

SA (listed company)

Revenues 65.3 189.3 69.7 10.5 0.2 2.8 - - -

Net property, plant and equipment 52.9 0.0 0.1 97.9 245.2 1.4 7.8 - -

Financial debt (excl. Group) 1.2 0.2 - 24.0 54.5 0.0 826.7 95.7 1.4

Cash and cash equivalents - 25.2 0.1 0.9 (0.5) 0.5 0.1 92.0 0.2

Dividends paid during the year returning to the listed company - - - - - - 50.1 - -

3 for operating companies: Bourbon Offshore Surf, Sonasurf Internacional Shipping, Bourbon Offshore Interoil Shipping Navegação, Bourbon Ships AS and Bourbon Supply Asia, which alone account for 43% of the Group’s revenue. The Group’s remaining revenue is generated by 37 operating companies;

3 for shipowning companies: Bourbon Offshore Surf, Bourbon Ships AS, Bourbon Supply Investissements and Bourbon Supply Asia represent 21% of the Group’s net property, plant and equipment. The other property, plant and equipment are owned

by 126 companies, shipowning being the sole activity (mainly tax vehicles) for 78 of them;

3 for fi nancing companies: Bourbon Offshore Surf, Bourbon Ships AS, Bourbon Supply Investissements, Bourbon Maritime and Financière SNC hold a little over 62% of the Group’s debt. The remaining fi nancial debt is carried by 59 companies, shipowning being the sole activity (mainly tax vehicles) for 32 of them. In general, transactions between members of the Group are managed by the centralized cash-clearing house, the subsidiary Financière Bourbon.


OTHER LEGAL AND FINANCIAL INFORMATION6 Information about the share capital

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 has been classifi ed by Euronext in the “Oil Services” sector.

As of December 31, 2017, BOURBON Corporation is listed on Compartment B of NYSE Euronext Paris.

2.1 SHARE CAPITAL

As of December 31, 2017, the number of shares (all of the same class) and theoretical voting rights amounted to 77,499,214. The amount of the share capital on that date totaled €49,227,780.

More than 9 million BOURBON Corporation shares were traded on NYSE Euronext Paris in 2017.

As of December 31, 2017, the Company’s market capitalization amounted to €542.49 million at a year-end price of €7.00 per share compared with €935.20 million as of December 31, 2016.

According to the criteria “number of shares traded”, “capital”, “rotation rate” and “market capitalization”, depending on the month and for 2017, BOURBON ranked between number 15 and number 215 among the companies listed on Euronext Paris.

As of December 31, 2017, there were 730 employee shareholders holding stock through the FCPE “BOURBON Expansion” mutual fund for a total of 594,329 shares, or 0.77% of the capital.

With the exception of treasury shares (127,140 as at December 31, 2017, or 0.16% of the shares), no company shares have limited voting rights.

2.2 POSITION OF STOCK OPTION PLANS ON DECEMBER 31, 2017

June 1, 2011

Meeting date Plan No. 9(1) Plan No. 10(1) Plan No. 11

Date of Board meeting December 5, 2011 November 30, 2012 December 2, 2013

Start date for exercising options December 5, 2015 November 30, 2016 December 2, 2017

Expiration date December 4, 2017 November 29, 2018 December 1, 2019

Original number of benefi ciaries 1,153 2 68

Total number of stock subscription or purchase options: 2,789,050 29,700 1,037,000

a) Corporate offi cers(2) 110,000(3) 140,000(3)

Jacques d’Armand de Chateauvieux - - -

Astrid de Lancrau de Bréon - -

Gaël Bodénès 38,500 - 60,000

b) Top 10 employee benefi ciaries 2,211,000 29,700 198,000

Subscription or purchase price €18.18 €19.82 €19.68

Discounts granted No No No

Options exercised at 12.31.2017 - - -

Options canceled or voided at 12.31.2017 2,789,050 - 273,000

Options remaining to be exercised at 12.31.2017(4) - 29,700 764,000

(1) Numbers of options and exercise prices are adjusted values, as required under applicable regulations, following trading in BOURBON Corporation stock.(2) List of corporate offi cers in post at December 31, 2017.(3) Options subject to performance conditions (see section 3.3.3.1 of the management report).(4) This stock option subscription or purchase plan ended on December 4, 2017.


OTHER LEGAL AND FINANCIAL INFORMATIONInformation about the share capital

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2.3 POSITION OF BONUS SHARES ALLOTTED AT DECEMBER 31, 2017

The Combined General Meeting of June 1, 2011 authorized the Board of Directors, in its 18th extraordinary resolution, in accordance with and under the conditions stipulated in Articles L. 225-197-1 to L. 225-197-5 of the French Commercial Code, to allocate, in one or several stages, to salaried Company employees or certain categories among them, and/or to the Directors referred to in Article L. 225-197-1 II of the French Commercial Code, and to salaried personnel and Directors of the companies or economic interest groupings linked to the Company under the conditions outlined in Article L. 225-197-2 of the French Commercial Code, bonus Company shares, existing or new.

In 2013, the Board of Directors authorized a restricted stock award of existing or new shares to the salaried members of staff, or certain

categories of them, of all of BOURBON Corporation’s subsidiaries. The vesting of the shares was subject to fulfi llment of the conditions and criteria laid down by the Board of Directors, as described below:

3 60% of the shares were contingent on continued employment at the end of two years: recipients still employed by BOURBON on December 2, 2015 fulfi lled this condition;

3 40% of the shares were subject to recipients’ continued employment at the end of two years and the attainment of performance criteria:

3 20% of the shares were awarded if the 2013/2014/2015 average TRIR (Total incidents recorded per million hours worked based on 24 hours per day) was 0.65 or less; 100% of this criterion was attained with an average of 0.60,

3 20% of the shares were granted if the fl eet availability rate in 2015 was greater than or equal to 95%; 100% of this criterion was attained with a rate of 96.4%.

The allotted shares were covered by the share buy-back that took place in 2015. The main features and assumptions used were as follows:

Meeting date June 1, 2011

Date of Board meeting December 2, 2013


Total number of bonus shares allocated 767,400

Corporate offi cers -

Vesting date of the shares for French residents December 2, 2015(1)

Vesting date of the shares for foreign residents December 2, 2017(1)

End of lock-up period December 2, 2017

Total number of canceled or voided shares 135,600

Shares awarded(1) to French residents at the end of two years 312,000

Bonus shares granted to foreign residents in 2017 319,200

(1) The vesting period is two years for French residents (followed by a two-year lock-up period) and four years for foreign residents (with no lock-up period).


2.4 POTENTIAL CAPITAL DILUTION AT DECEMBER 31, 2017

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, 2017:

Allocation

date

Maturity Number of potential

sharesPotential

dilution

Share Capital

(in shares)Start End

Number of shares at December 31, 2017 77,499,214

Stock option plans 11.30.2012 11.30.2016 11.29.2018 29,700 0.04%

Stock option plans 12.02.2013 12.02.2017 12.01.2019 764,000 0.99%

TOTAL STOCK SUBSCRIPTION OPTIONS 793,700 1.02%

POTENTIAL CAPITAL AT DECEMBER 31, 2017 78,292,914

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)

05.04.2015Cancellation of treasury shares as part of a capital reduction 1,875,983 2,953,357 45,484,599 71,606,331

12.31.2015

No stock options for new or existing options were exercised between January 1, 2015 and December 31, 2015 0 0 0 45,484,599 71,606,331

07.18.2016Payment of dividends in new shares 3,008,497 4,736,272 42,743,890 48,493,096 76,342,603

12.31.2016


07.17.2017Payment of dividends in new shares 734,683 1,156,611 9,767,344 49,227,780 77,499,214

12.31.2017


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».

2.6 SIGNIFICANT TRANSACTIONS AFFECTING THE DISTRIBUTION OF CAPITAL OVER THE PAST THREE YEARS

Following the transactions mentioned below, up to the registration date of the 2017 Registration Document and as far as the Company is aware, the companies Mach-Invest International and Monnoyeur SAS hold more than 5% of BOURBON Corporation’s share capital and the JACCAR Holdings company more than 50%.

Fiscal year 2017

The Combined Shareholders’ Meeting of BOURBON Corporation, 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.



6

Shareholder Number of shares % of capital

Number of theoretical voting rights

% of theoretical voting rights

Jacques de Chateauvieux & affi liated 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%

TOTAL 77,499,214 94,234,057

* 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.

Fiscal year 2016

The Combined Annual Shareholders’ Meeting of BOURBON Corporation, 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% 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 & affi liated companies* 39,798,362 59.25%

Henri de Chateauvieux & related companies** 6,185,918 9.67%

TOTAL COLLECTIVELY 45,984,280 68.92%

* 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.

Year 2015

At its meeting of February 23, 2015, implementing the delegation granted by the Annual General Meeting of Shareholders of May 20, 2014 in its 18th extraordinary resolution, the Board of Directors, after having reallocated to the objective to cancel the 2,953,357 treasury shares held by BOURBON Corporation to hedge its stock option plans, decided to cancel said shares representing 3.96% of the share capital by a capital reduction and gave authorization to its Chief Executive Offi cer for the material implementation of its decision, for which it set a deadline of May 4, 2015.

After this cancelation, the number of shares comprising the Company’s total share capital and the total number of theoretical voting rights was decreased from 74,559,688 to 71,606,331.

On May 4, 2015, Jacques de Chateauvieux declared that he had crossed, directly or indirectly, through the intermediaries of the companies JACCAR Holdings and Cana Tera SCA, which he controls, the thresholds of 50% of the capital and of the voting rights of BOURBON Corporation and held in concert with Henri de Chateauvieux (including the companies Mach-Invest International and Mach-Invest, which he controls) 42,270,454 BOURBON Corporation shares, representing the same number of voting rights, i.e. 59.03% of the capital and voting rights of the Company, distributed as follows:

Shares and voting rights % share capital and voting rights

JACCAR Holdings 35,937,825 50.19

Cana Tera 126,141 0.18

Jacques d’Armand de Chateauvieux 27,438 0.04

Total Jacques d’Armand de Chateauvieux 36,091,404 50.40

Mach-Invest International 5,754,191 8.04

Mach-Invest 7,700 0.01

Henri d’Armand de Chateauvieux 417,159 0.58

Total Henri d’Armand de Chateauvieux 6,179,050 8.63

TOTAL COLLECTIVELY 42,270,454 59.03



2.7 CHANGES IN THE SHAREHOLDER BASE

Shareholder

Position at 12/31/2017

Number of shares

% of capital stock

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% 41,176,212 43.70% 41,176,212 43.75%

Henri de Chateauvieux & related companies ** 6,187,422 7.98% 12,318,602 13.07% 12,318,602 13.09%

Total Collectively 47,073,544 60.74% 53,494,814 56.77% 53,494,814 56.84%

Monnoyeur 4,398,813 5.68% 4,398,813 4.67% 4,398,813 4.67%

Treasury shares 127,140 0.16% 127,140 0.13% 0 0.00%

Employees 594,329 0.77% 594,329 0.63% 594,329 0.63%

Public 25,305,388 32.65% 35,618,961 37.80% 35,618,961 37.85%

TOTAL 77,499,214 100.00% 94,234,057 100.00% 94,106,917 100.00%

* 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 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, 2017.



6

Position at 12/31/2016 Position at 12/31/2015

Number of shares

% of capital stock

Number of shares and % of theoretical

voting rights ***

Number of shares and % of actual voting rights ***

Number of shares

% of capital stock and theoretical

voting rights% of actual

voting rights

39,798,362 52.13% 75,471,710 59.25% 75,471,710 59.45% 36,091,404 50.40% 50.69%

6,185,918 8.10% 12,317,098 9.67% 12,317,098 9.70% 6,179,050 8.63% 8.68%

45,984,280 60.23% 87,788,808 68.92% 87,788,808 69.15% 42,270,454 59.03% 59.36%

4,398,813 5.76% 4,398,813 3.45% 4,398,813 3.47% 3,986,167 5.57% 5.60%

426,576 0.56% 426,576 0.33% 0 0% 401,792 0.56% 0.00%

360,862 0.47% 360,862 0.28% 360,862 0.28% 556,652 0.78% 0.78%

25,172,072 32.97% 34,397,420 27.01% 34,397,420 27.10% 24,391,266 34.06% 34.26%

76,342,603 100% 127,372,479 100% 126,945,903 100% 71,606,331 100% 100%



2.8 DISTRIBUTION OF CAPITAL AND VOTING RIGHTS

Total number of shares (December 31, 2017) 77,499,214

Total number of theoretical voting rights* (December 31, 2017) 94,234,057**

Total number of voting rights exercisable in Shareholders’ Meetings (December 31, 2017) 94,106,917**

Approximate number of shareholders (TPI shareholder identifi cation 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, 2016):

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 offi cers 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, 2017, the Company owned 127,140 of its own shares (including 66,772 under the supervision and liquidity contract with CIC), or 0.16% of the capital.

In addition, as of the same date, 730 employees owned 0.77% of the capital, with 594,329 shares.

2004 Agreement

Since December 31, 2004, there has been a shareholders’ agreement stipulating a collective undertaking to retain shares of BOURBON Corporation 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 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 Offi cer.

2015 ISF Agreement

Since December 18, 2015, there has been a shareholders’ agreement stipulating a collective undertaking to retain shares of BOURBON Corporation 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 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 indefi nite period.

The signatories of this agreement are Jacques d’Armand de Chateauvieux, Chairman of the Board of Directors and Chief Executive Offi cer, 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 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 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 Offi cer, 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 fi rst 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 indefi nite 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 euros millions)

2016

October 12.500 10.350 560,500 6.39

November 12.000 10.850 515,643 5.88

December 12.400 10.900 521,972 6.06

2017

January 12.760 10.960 774,189 9.20

February 12.650 11.060 678,140 8.13

March 12.700 9,800 1,158,928 12.57

April 10.680 9.850 416,592 4.25

May 10,800 10.010 407,881 4.18

June 10.150 8.350 1,113,263 9.91

July 8.760 7.750 1,012,932 8.30

August 7.900 7.180 701,462 5.19

September 7.750 6.900 929,166 6.77

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

(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 AND PATENTS

BOURBON Corporation 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 INSPARES with the INPI (National Industrial Property Institute).

BOURBON Corporation has registered two European boat design models with the OHMI (European Union Intellectual Property Offi ce).

2. PROPERTY, PLANT AND EQUIPMENT

The vessel fl eet constitutes most of the Group’s property, plant, and equipment: vessels accounted for almost 99% of net property, plant and equipment at December 31, 2017. During 2017, the average utilization rate for the fl eet in service was 53.7%. Between 2016 and 2017, the fl eet composition underwent the following changes:

Marine Services

Subsea ServicesDeepwater offshore Shallow water offshore Crew boats

By year

2017 2016 2017 2016 2017 2016 2017 2016

Number of vessels (end of period) 86 89 131 133 269 269 22 22

Average utilization(1) rate 61.2% 68.4% 40.8% 57.9% 56.9% 63.6% 60.7% 57.1%

Average daily rates (US dollar) $14,389 $16,524 $8,669 $10,848 $4,418 $4,394 $35,328 $38,624

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

At December 31, 2017, the offshore fl eet consisted of the following:

Position at 12.31.2017 OwnedBareboat

charteringOperating

vessels Average ageAverage

utilization rate (%)

Marine Services

Deepwater offshore vessels 71 15 86 10.2 61.2%

Shallow water offshore vessels 94 37 131 7.5 40.8%

Crew boats 269 - 269 9.1 56.9%

TOTAL MARINE SERVICES 434 52 486 8.8 53.4%

Subsea Services

IMR vessels 15 7 22 8 60.7%

TOTAL VESSELS 451 59 508 8.8 53.7%


OTHER LEGAL AND FINANCIAL INFORMATIONVessel deliveries and fi nancing

6

BOURBON also has 25 ROVs with an average age of 7 years.

At December 31, 2017, 36.8% of offshore support vessels were under long-term contracts(1), with an average residual contract duration of 4.6 months, excluding crew boats.

BOURBON’s fl eet 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 specifi c 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 suffi cient 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, 2017 and the net book value of offshore support vessels on that date, the unrealized capital gains stand at approximately €380 million (versus €435 million at year-end 2016 and €480 million at year-end 2015).

The change in the underlying capital gain between 2017 and 2016 is mainly related to the fl eet of 41 non-smart vessels and seven other non-strategic vessels which have been subject to impairment (see note 3.3 to the consolidated fi nancial statements – page 133 to 136) and whose value has been determined according to offers or estimates by independent brokers, considering that these stacked vessels would be sold on an “ as is where is” basis with the buyers bearing the reactivation costs.

As indicated in the notes to the consolidated fi nancial statements, maintenance operations are performed on all our vessels at regular intervals according to a multi-year plan for compliance with the classifi cation 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 fi nancial 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 fi nancial statements. In addition, in section 4.2, the management report describes the environmental risks and BOURBON’s approach to them.

3. VESSEL DELIVERIES AND FINANCING

BOURBON took delivery of no vessels in 2017.

The table below summarizes the number of vessel deliveries forecast for the period 2018-2019. It takes account of the fact that BOURBON has yet 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 of December 31, 2017 (excluding fi nancing costs) expressed in € million, and not the amounts disbursed on delivery (advance payments are made at different stages of construction).

(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 defi ned as one with a residual duration of six months or more.


OTHER LEGAL AND FINANCIAL INFORMATION6 Real estate

Scheduled deliveries in 2018 or 2019 Total

Deepwater offshore vesselsNumber 1 1

Value (before fi nancing costs) €25 million €25 million

Vessels (shallow water offshore)

Number - -

Value (before fi nancing costs) - -

Crew boatsNumber - -

Value (before fi nancing costs) - -

IMR vesselsNumber 1 1

Value (before fi nancing costs) €48 million €48 million

TOTALNUMBER 2 2

VALUE (BEFORE FINANCING COSTS) €73 MILLION €73 MILLION

4. REAL ESTATE

As of December 31, 2017, the Group had access, either through leases or through direct ownership, to the following real estate:

Country Location Purpose Legal status

France Paris Head offi ce Lease

Brazil Rio de Janeiro Offi ces, warehouse Lease

China Shanghai Offi ces Lease

United Arab Emirates Dubai Offi ces, other Lease

Egypt Cairo – Agouza Offi ces Lease

France Le Havre, Marseille, Paris Offi ces, other Ownership/Lease

Gabon Port Gentil Offi ces, logistics base, other Lease

Indonesia Balikpapan, Jakarta, Tamapole Offi ces, logistics base Ownership/Lease

Italy Ravenna Offi ces Lease

Luxembourg Luxembourg Offi ces Lease

Malaysia Labuan, Kuala Lumpur Offi ces, other Lease

Mexico Tampico, Ciudad del Carmen, Dos Bocas Offi ces Lease

Nigeria Lagos, Port Harcourt, Onne Offi ces, logistics base, other Ownership/Lease

Norway Fosnavaag Offi ces Lease

Netherlands Beneden Offi ces Lease

Portugal Funchal Offi ces Lease

Romania Bucharest Offi ces Lease

Russia St Petersburg Offi ces Lease

Singapore Singapore Offi ces, other Lease

Trinidad Le Brea Offi ces, other Lease

Ukraine Odessa Offi ces 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 Group is the owner of buildings located in Marseille, which house the main corporate departments as well as the head offi ces 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 fi nancial statements showing contractual obligations.


OTHER LEGAL AND FINANCIAL INFORMATIONAgenda of the Extraordinary General Meeting

6

AGENDA OF THE COMBINED SHAREHOLDERS’ MEETING OF MAY 30, 2018

1. AGENDA OF THE ORDINARY GENERAL MEETING

3 Approval of the annual fi nancial statements for the year ended December 31, 2017.

3 Approval of the consolidated fi nancial statements for the year ended December 31, 2017.

3 Appropriation of net income for the fi scal year.

3 Special report by the Statutory Auditors on related party agreements and commitments, and approval of the new agreement entered into during the fi scal year ended December 31, 2017.

3 Ratifi cation of the transfer of the corporate offi ce.

3 Ratifi cation of the provisional appointment of Mr. Adrien de Chomereau de Saint André as Director.

3 Reappointment of Ms. Agnès Pannier-Runacher as Director.

3 Reappointment of Mr. Mahmud B. Tukur as Director.

3 Appointment of Antoine Grenier as Director.

3 Approval of the principles and criteria for the determination, distribution and allocation of the fi xed, variable and exceptional components of total compensation and benefi ts of any kind payable to Executive Directors.

3 Approval of the compensation components paid or granted to Mr. Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Offi cer, in respect of the fi scal year ended December 31, 2017.

3 Approval of the compensation components paid or granted to Mr. Gaël Bodénès, Chief Operating Offi cer, in respect of the fi scal year ended December 31, 2017.

3 Approval of the compensation components paid or granted to Mr. Christian Lefèvre, Chief Operating Offi cer, in respect of the fi scal year ended December 31, 2017.

3 Approval of the compensation components paid or granted to Ms. Astrid de Lancrau de Bréon, Chief Financial Offi cer, in respect of the fi scal year ended December 31, 2017.

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 Delegation granted to the Board of Directors to increase the capital by incorporating reserves, profi ts and/or premiums, duration of delegation, maximum nominal amount of the capital increase, fractional shares.

3 Delegation to be granted to the Board of Directors to realign the Company’s bylaws with the applicable laws and regulations.

3 Introduction of an Article 13 bis “ Directors representing employees” into the bylaws – subsequent modifi cation of the title of Article 13 of the Company’s bylaws.

3 Powers for the completion of formalities.


OTHER LEGAL AND FINANCIAL INFORMATION6 Draft resolutions for the Combined General Meeting of May 30, 2018

DRAFT RESOLUTIONS FOR THE COMBINED GENERAL MEETING OF MAY 30, 2018

1. RESOLUTIONS FOR THE ORDINARY GENERAL MEETING

First resolution − Approval of the annual financial statements for the year ended December 31, 2017

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 of the Statutory Auditors with respect to the fi scal year ended December 31, 2017, approves, as presented, the annual fi nancial statements prepared up to this date, which show a profi t of €71,925,257.90.

Second resolution − Approval of the consolidated financial statements for the year ended December 31, 2017

The General Meeting, ruling under the conditions of majority and quorum required for Ordinary General Meetings, having reviewed the

reports of the Board of Directors, of the Chairman of the Board and of the Statutory Auditors on the consolidated fi nancial statements at December 31, 2017, approves these fi nancial statements as presented.

Third resolution − Appropriation of net income for the fiscal year

The General Meeting, ruling under the conditions of majority and quorum required for Ordinary General Meetings, upon the proposal of the Board of Directors, decides to allocate the net income from the fi scal year ended December 31, 2017 as follows:

Origin

Net income for the period €71,925,257.90


Appropriation

Legal reserve €0.00

Other reserves €178,707,928.88


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 abatementunder Article 158-3-2 of the CGI

Revenue not eligible for tax abatement under

Article 158-3-2 of the CGIDividends Other revenue distributed

2014€71,579,994.00*

or €1 per share - -

2015€71,204,986.00*

or €1 per share - -

2016€8,422,460.00*

or €0.25 per share

* This corresponds to the amount actually paid and does not include unpaid dividends on treasury stock, which is carried forward.


OTHER LEGAL AND FINANCIAL INFORMATIONDraft resolutions for the Combined General Meeting of May 30, 2018

6

Fourth resolution − Special report by the Statutory Auditors on related party agreements and commitments, and approval of the new agreement entered into during the fiscal year ended December 31, 2017

The Shareholders’ Meeting, ruling, under the conditions of majority and quorum required for Ordinary General Meetings, on the special report by the Statutory Auditors submitted to it on related party agreements and commitments, approves the new agreement entered into during the fi scal year ended December 31, 2017, mentioned in accordance with Articles L. 225-38 et seq. of the French Commercial Code.

Fifth resolution – Ratification of the transfer of the corporate office

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, resolves to transfer the corporate offi ce from

33 rue du Louvre – 75002 PARIS (France) to 148 rue Sainte – 13007 Marseille (France), as decided by the Board of Directors on December 4, 2017.

Sixth resolution – Ratification of the provisional appointment of Mr. Adrien de Chomereau de Saint André as Director

The Shareholders’ Meeting, ruling under the conditions of majority and quorum required for Ordinary General Meetings, ratifi es the Board of Directors’ June 19, 2017 provisional appointment of Mr. Adrien de Chomereau de Saint André as Director to replace Mr. Guillaume d’Armand de Chateauvieux, who stepped down from the Board.

Consequently, Mr. Adrien de Chomereau de Saint André will take over the position for the remainder of his predecessor’s term, i.e. until the close of the Shareholders’ Meeting to be held in 2020 to approve the fi nancial statements of the past fi scal year.

Seventh resolution – Reappointment of Ms. Agnès Pannier-Runacher as Director

The Shareholders’ Meeting, ruling under the conditions of majority and quorum required for Ordinary General Meetings, resolves to reappoint Ms. Agnès Pannier-Runacher as Director for a term of three years ending at the close of the Shareholders’ Meeting to be held in 2021 to approve the fi nancial statements for the past fi scal year.

Eighth resolution – Reappointment of Mr. Mahmud B. Tukur as Director

The Shareholders’ Meeting, ruling under the conditions of majority and quorum required for Ordinary General Meetings, resolves to reappoint Mr. Mahmud B. Tukur as Director for a term of three years ending at the close of the Shareholders’ Meeting to be held in 2021 to approve the fi nancial statements for the past fi scal year.

Ninth resolution – Appointment of Antoine Grenier as Director

The Shareholders’ Meeting, ruling under the conditions of majority and quorum required for Ordinary General Meetings, resolves to appoint Mr. Antoine Grenier, who resides in Paris (75116) at 21 rue de Lübeck, as Director for a term of three years ending at the close of the Shareholders’ Meeting to be held in 2021 to approve the fi nancial statements for the past fi scal year.

Tenth 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 Executive Directors

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 prepared pursuant to Article L. 225-37-2 of the French Commercial Code, approves the principles and criteria for determining, allocating and granting the fi xed, variable and exceptional components of the overall compensation and benefi ts of any kind to be awarded to the Executive Directors in respect of their duties, as described in such report and set out in paragraph 3.8 of the Company’s 2017 Registration Document.

Eleventh resolution – Approval of the compensation components paid or granted to Mr. Jacques d’Armand de Chateauvieux, Chairman and Chief Executive Officer, in respect of the fiscal year ended December 31, 2017

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 fi xed, variable and exceptional components of the overall compensation and benefi ts of any kind paid or granted to Mr. Jacques d’Armand de Chateauvieux in respect of his position as Chairman and Chief Executive Offi cer for the fi scal year ended December 31, 2017, as described on pages 49 et seq. of the 2017 Registration Document.

Twelfth resolution – Approval of the compensation components paid or granted to Mr. Gaël Bodénès, Chief Operating Officer, in respect of the fiscal year ended December 31, 2017

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 fi xed, variable and exceptional components of the overall compensation and benefi ts of any kind paid or granted to Mr. Gaël Bodénès in respect of his position as Chief Operating Offi cer for the fi scal year ended December 31, 2017, as described on pages 49 et seq. of the 2017 Registration Document.



Thirteenth resolution – Approval of the compensation components paid or granted to Mr. Christian Lefèvre, Chief Operating Officer, for the fiscal year ended December 31, 2017

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 fi xed, variable and exceptional components of the overall compensation and benefi ts of any kind paid or granted to Mr. Christian Lefèvre in respect of his position as Chief Operating Offi cer until September 30, 2017 inclusive for the fi scal year ended December 31, 2017, as described on pages 49 et seq. of the 2017 Registration Document.

Fourteenth resolution – Approval of the compensation components paid or granted to Ms. Astrid de Lancrau de Bréon, Chief Financial Officer, in respect of the fiscal year ended December 31, 2017

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 fi xed, variable and exceptional components of the overall compensation and benefi ts of any kind paid or granted to Ms. Astrid de Lancrau de Bréon in respect of her position as Chief Financial Offi cer since October 1, 2017 for the fi scal year ended December 31, 2017, as described on pages 49 et seq. of the 2017 Registration Document.

Fifteenth 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

The General Meeting, ruling under the conditions of majority 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 General Meeting of May 23, 2017 in its 16th ordinary resolution.

The shares may be purchased for any purpose permitted by law, including:

3 stimulating the secondary market or maintaining the liquidity of BOURBON Corporation shares through an investment service provider under a liquidity contract in accordance with the AMAFI Code of professional practice as approved by the French Financial Markets Authority (AMF);

3 holding shares to cover stock option plans and/or bonus share allotment plans (or similar plans), for the benefi t 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 offi cers 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 sixteenth 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 fi xed 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 above-mentioned sum will be adjusted proportionally (multiplication coeffi cient 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 transaction is thus fi xed at €89,124,080.

The General Meeting grants full powers to the Board of Directors, which may delegate those powers, to proceed with these operations, to fi x the terms and conditions thereof, to enter into any agreements and to satisfy all formalities.



6

2. RESOLUTIONS FOR THE EXTRAORDINARY GENERAL MEETING

Sixteenth 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

The General Meeting, ruling under the conditions of majority 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 fi t 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.

Seventeenth resolution – Delegation of authority to be granted to the Board of Directors to increase the capital through the incorporation of reserves, profits, and/or premiums

The Shareholders’ Meeting, ruling notwithstanding the provisions of Articles L. 225-96 of the French Commercial Code under the conditions of majority and quorum required for Ordinary General Meetings, having reviewed the report of the Board of Directors, and in compliance with the provisions of Articles L. 225-129-2 and L. 225-130 of the French Commercial Code:

1) delegates its power to the Board of Directors to decide to increase the share capital on one or more occasions, at the times and according to the procedures it sees fi t, through the incorporation of reserves, profi ts, premiums or other amounts which may be capitalized, by issuing or allocating bonus shares or by increasing the par value of existing ordinary shares, or through a combination of these two processes;

2) limits the validity of this delegation to 26 months, as of the date of this meeting;

3) decides that the amount of the capital increase resulting from the issues carried out under this resolution shall not exceed the nominal amount of €7,000,000, not including the amount required to preserve, as required by law, the rights of holders of marketable securities giving access to Company shares;

4) this ceiling is independent of all other ceilings stipulated in the other resolutions of this meeting;

5) grants full powers to the Board of Directors, which may sub-delegate those powers, to implement this resolution, and, generally, to take all steps and carry out any required formalities for the proper completion and recording of each share capital increase and amend the bylaws accordingly;

6) notes that this delegation cancels, as of the present date, any unused portion of any prior delegation of authority for this same purpose.

Eighteenth resolution – Delegation to be granted to the Board of Directors to realign the Company’s bylaws with applicable laws and regulations.

The General Meeting, ruling under the conditions of majority and quorum required for Extraordinary General Meetings, having reviewed the report of the Board of Directors, grants all powers to the Board to bring the Company’s bylaws into compliance with laws and regulations, subject to ratifi cation of such modifi cations by the next Extraordinary General Meeting.

Nineteenth resolution – Introduction of an Article 13 bis «Directors representing employees» into the bylaws – subsequent modification of the title of Article 13 of the Company’s bylaws

The Shareholders’ Meeting, ruling under the conditions of majority and quorum required for Extraordinary General Meetings, having reviewed the report of the Board of Directors, resolves, in compliance with the provisions of Article L. 225-27-1 of the French Commercial Code, to add an Article 13 bis «Directors representing employees» to the Company’s bylaws, in order to allow the election of a Director representing employees.

Accordingly, Article 13 bis «Directors representing employees» is added as follows:

«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 Group’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 of 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 offi ce of any of the employee representatives on the Board shall remain unchanged.

The term of offi ce of a Director representing employees is set at three years. This term of offi ce may be renewed.

If a Director’s seat becomes vacant for any reason whatsoever, the vacant seat shall be fi lled in accordance with the provisions of Article L. 225-34 of the French Commercial Code.

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 confi dentiality of the vote, by the employees of the Company and its directly and indirectly held subsidiaries whose corporate offi ces are in France.»

Consequently, to take account of the incorporation of Article 13 bis «Directors representing employees» in the Company’s bylaws, we propose the modifi cation of the heading of Article 13 «Appointment of Directors» in order to specify that Article 13 of the Company’s bylaws does not apply to Directors representing employees. The heading of Article 13 shall accordingly be modifi ed to «Appointment of Directors other than Directors representing employees». The content of Article 13 shall not be modifi ed.

Twentieth resolution − Powers for completion of formalities

The Shareholders’ Meeting, ruling under the conditions of majority 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 fi ling and legal publication required by law.



6

STATUTORY AUDITORS’ REPORT ON THE SHARE CAPITAL REDUCTION Combined Shareholders’ Meeting of 30 May 2018 (16th resolution)

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 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 30 May 2018, 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.

Lyon and Marseille, 24 April 2018


French original signed by

EurAAudit C.R.C Cabinet Rousseau Consultants

Jean-Marc ROUSSEAU


Christophe PERRAU


OTHER LEGAL AND FINANCIAL INFORMATION6 Persons responsible for the Registration Document and for the fi nancial statement audit

PERSONS RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND FOR THE FINANCIAL STATEMENT AUDIT

1. PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT

1.1 PERSON ASSUMING RESPONSIBILITY FOR THE REGISTRATION DOCUMENT

Mr. Gaël Bodénès, Chief Executive Offi cer.

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, fi nancial 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 refl ects the changes in the business, results and fi nancial 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 fi nancial position and the fi nancial statements given in this Registration Document and have read the entire Registration Document.

Paris, April 25, 2018

The Chief Executive Offi cer

2. STATUTORY AUDITORS

Statutory Auditors

Date fi rst appointed End of tenure

Deloitte & AssociésRepresented by Christophe Perrau185 C, avenue Charles-de-Gaulle92200 Neuilly-Sur-Seine

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 Jean-Marc RousseauImmeuble “Le CAT SUD” – Bâtiment B68, cours Albert Thomas69008 Lyon – France

Appointed by the Combined Shareholders’ Meeting of May 30, 2002


December 31, 2022

Alternate

Date fi rst appointed End of tenure

BEAS195, avenue Charles-de-Gaulle92200 Neuilly-Sur-Seine

Appointed by the Combined Shareholders’ Meeting of June 7, 2005


December 31, 2019


OTHER LEGAL AND FINANCIAL INFORMATIONCross reference tables

6

CROSS REFERENCE TABLES

This Registration Document contains all of the components of the annual fi nancial 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 fi nd below the references to the extracts of the Registration Document corresponding to the various parts of the annual fi nancial report.

Annual fi nancial reportRegistration

Document

1. Statement made by the persons responsible for the annual fi nancial report 234 § 1 and § 2

2. Management report 19 to 104

3. Statutory fi nancial statements 185 to 203

4. Statutory Auditors’ report on the Statutory fi nancial statements 204 to 208

5. Consolidated fi nancial statements 105 to 179

6. Statutory Auditors’ report on the consolidated fi nancial statements 180 to 184

7. Fees paid to the Statutory Auditors and members of their networks 173 § 5.7

8. Report of the Board of Directors on corporate governance 30 to 63

9. Statutory Auditors’ report on the report of the Board of Directors on corporate governance 204 to 206

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 234 § 1

1.2 Attestation by the person responsible for the Registration Document 234 § 1

2. Statutory Auditors 234 § 2

3. Selected fi nancial information 4-6; 22-27

4. Risk factors 67 -80

5. Information about the issuer

5.1 History and development of the Company

5.1.1 Corporate name and trade name 210

5.1.2 Place of registration and registration number 210

5.1.3 Date of incorporation and term 210

5.1.4 Registered offi ce, legal structure, applicable legislation 210

5.1.5 Signifi cant events in the conduct of business activities 10; 20-21

5.2 Investments

5.2.1 Main investments made over the last three years 28 § 2.3; 109; 133-136

5.2.2 Main investments –ongoing 225 § 3; 226

5.2.3 Main investments –planned 14 § 4; 28 § 2.3

6. Business overview

6.1 Main activities 11-13

6.2 Main markets 14-15

6.3 Exceptional events 21 § 1.2; 167 § 5.4

6.4 Extent to which the issuer is dependent on patents or licenses, industrial, commercial or fi nancial contracts or new manufacturing processes 70 § 5.2; 71-72; 224

6.5 Competitive position 14 § 5; 15; 69 § 5.1.2

7. Organizational structure

7.1 Description of the Group 11


OTHER LEGAL AND FINANCIAL INFORMATION6 Cross reference tables


7.2 List of major subsidiaries 174-178; 215 § 1.18

8. Property, plant and equipment

8.1 Signifi cant property, plant and equipment 133-136

8.2 Environmental issue liable to affect the use of property, plant and equipment70-72; 90 § 6.3.2 and

§ 6.3.3

9. Examination of fi nancial position and earnings

9.1 Financial position 106-111; 186-188

9.2 Operating income/loss

9.2.1 Important factors with a signifi cant impact on operating income 22-27

9.2.2 Explanation of changes in net revenue or net income 22-27

9.2.3 External factors that have had (or may have) a signifi cant impact on activities 67-70

10. Capital resources

10.1 Information on the issuer’s capital110-111; 140-141; 190-192;

216 § 2-223

10.2 Source and amount of the issuer’s cash fl ows 100

10.3 Borrowing terms and fi nancial structure of the issuer73 § 5.5-80; 149 § 3.18-156;

163 § 5.1-165

10.4 Restrictions on the use of capital that may have a signifi cant impact on operations 73 § 5.5-80

10.5 Anticipated sources of funds needed to fulfi ll commitments related to investments 28 § 2.43

11. Research and development, patents and licenses 14; 224

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 fi scal year 29 § 2.6

12.2 Known trends, uncertainties, requests, commitments or events likely to have a signifi cant impact on the current year’s outlook 14-16; 29 § 2.6; 67-80

13. Income forecasts or estimates 28-29 § 2.5

14. Administrative and management bodies

14.1 Information on the members of administrative and management bodies 7; 30-63

14.2 Interests of executives 44 § 3.4-46

14.3 Internal control procedures 64-66

15. Compensation and benefi ts

15.1 Amount of compensation paid and benefi ts in kind49 § 3.7-55; 168 § 5.6-172;

198 § 14

15.2 Total provisions or amounts set aside by the issuer to pay pensions, retirement benefi ts or other benefi ts 49-55; 168 § 5.6-172

16. Operation of administrative and management bodies

16.1 Date current term expires 30-43

16.2 Service contracts binding members of administrative and management bodies 167 § 5.5; 207-208

16.3 Information on the Audit Committee and the Compensation Committee 7; 46 § 3.6-48


OTHER LEGAL AND FINANCIAL INFORMATIONCross reference tables

6


16.4 Declaration of compliance with corporate governance rules 30

17. Employees

17.1 Number of employees 166 § 5.3

17.2 Equity interests, stock options and bonus share award plans50; 53-55; 95-96 ;

141-142

17.3 Arrangements for involving the employees in the capital of the issuer96 § 7.3.3 ; 144-60 § 3.11 ;

61 ; 216 § 2.1

18. Major shareholders

18.1 Allocation of capital 94; 216 § 2.1-222

18.2 Existence of different voting rights 214-215 ; 216 § 2.1

18.3 Control of the issuer 219-221

18.4 Arrangements that may result in a change of control60 § 3.11-62; 96 § 7.4;

222 § 2.8

19. Related-party transactions 167 § 5.5; 207-208

20. Financial information concerning the issuer’s assets, fi nancial position and results

20.1 Historical fi nancial information 105-179; 185-203

20.2 Pro forma fi nancial information N/A

20.3 Financial statements 105-179; 185-203

20.4 Audit of annual historical fi nancial information

20.4.1 Audit of historical fi nancial information 180-184; 204-206

20.4.2 Other information included in the Registration Document and audited by the Statutory Auditors 204-208; 101-103; 233

20.4.3 Financial information included in the Registration Document and not taken from the issuer’s certifi ed fi nancial statements N/A

20.5 Date of latest fi nancial information December 31, 2017

20.6 Interim fi nancial information

20.6.1 Quarterly or half-year fi nancial information prepared since the date of the last audited fi nancial statements N/A

20.6.2 Interim fi nancial information for the fi rst six months of the year following the end of the last audited fi scal year N/A

20.7 Dividend policy94 § 7.2;

228 § 1; 213 § 1.10-214;

20.8 Legal and arbitration procedures 72 § 5.3-73; 160 § 3.20

20.9 Signifi cant change in fi nancial or trading position 20 § 1.1-21; 126-127

21. Additional information

21.1 Share Capital

21.1.1 Subscribed and authorized capital 94 § 7.1; 96

21.1.2 Shares not representing capital N/A

21.1.3 Shares held by the issuer or its subsidiaries 94-96; 196 § 9

21.1.4 Marketable securities giving future access to the issuer’s capital stock

96 § 7.4; 60 § 3.11-62; 53-55; 142 § 3.12;

216 § 2-223

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 Group subject to an option N/A

21.1.7 History of the issuer’s capital stock over the last three years 218 § 2.5

21.2 Memorandum and bylaws

21.2.1 Corporate purpose of the issuer 210


OTHER LEGAL AND FINANCIAL INFORMATION6 Cross reference tables


21.2.2 Statutory provisions and charters concerning members of administrative and management bodies 30-43; 210-215

21.2.3 Rights, preferences and restrictions attached to each class of existing shares60 § 3.11-62; 96 § 7.4;

216 § 2-223; 227

21.2.4 Actions required to change shareholders’ rights 60 § 3.11-62; 96 § 7.4

21.2.5 Notices to attend the Shareholders’ Meetings and conditions for admission 227

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 213 § 1.9; 220-222

21.2.8 Conditions more stringent than the law for modifying the capital stock N/A

22. Signifi cant 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 174-178; 202-203

N/A: not applicable.

Pursuant to Article 28 of European Commission regulation No. 809/2004, the following information is included by reference:

3 the consolidated and Company fi nancial statements, together with the corresponding Statutory Auditors’ reports, are found on pages 91 to 188 of the 2016 Registration Document fi led with the French Financial Market Authority (Autorité des marchés fi nanciers – AMF) on April 25, 2017, under number D. 17-0424;

3 the consolidated and Company fi nancial statements, together with the corresponding Statutory Auditors’ reports, are found on pages 83 to 170 of the 2015 Registration Document fi led with the French Financial Market Authority (Autorité des marchés fi nanciers – AMF) on April 22, 2016, under number D. 16-0387;

3 parts not included in these documents are either irrelevant for the investor or included elsewhere in this Registration Document.


NOTES

BOURBON CorporationA French Société anonyme with capital of 49,227,780 euros

Company registration: RCS MARSEILLE 310 879 499

Corporate offi ce:

148, rue Sainte - 13007 MARSEILLE - France

Tél. : +33 (0)4 91 13 08 00

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

Investor-relations, analysts, sharehorlders:

[email protected]

BOURBONOFFSHORE.COM

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