Assystem - 2015 Registration Document

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RISK FACTORS

LEGAL, REGULATORY AND TAX RISKS

5.6 LEGAL, REGULATORY AND TAX RISKS

Type

Impact

Risk reduction measures

Risk of lack of control over the legal and tax aspects of the Group’s business and operations in a context of globalisation, and lack of regulatory compliance. Risk that changes to French or foreign tax regulations, or their interpretation by the relevant authorities, may be contrary to the Group’s interests or may restrict the Group’s ability to organise or develop its business.

Negative impact on the Group’s image and operating profit.

The contract acceptance process systematically includes a legal and tax review. These reviews are used to ensure, in particular, that there are no conditions that are unacceptable for the Group. The definition and formal classification of these conditions are notified to all line managers. The Group has also introduced quarterly risk reports for France that are submitted to the finance, legal/insurance, accounting/tax and Management Control Departments. The Group’s Tax Department, in conjunction with operations staff, carries out ongoing monitoring of changes to tax regulations of relevance to the Group and their corresponding interpretations. Where necessary, it suggests ways of adapting the Group’s organisation and its business in order to mitigate the impacts of such changes.

Negative impact on operating profit and/or consolidated profit.

Legal dispute with ASG In 2015, in the legal dispute between the ASG company and the Acergy (now Subsea 7) and Iska Marine companies, due to an incident occurring in January 2010 (fire outbreak on board a vessel, the Acergy Falcon, placed in dry dock in Brest for maintenance operations), a development occurred in 2015 with the submission by the judicial expert of the definitive judicial expert report. To date and as for the previous years, notwithstanding the judicial expert’s submitted report indicating that mistakes may have been made by the ASG company, consequently holding ASG co-liable without quantification for the occurrence and extent of the incident, Assystem considers that no concrete element is able to establish the notion that the ASG company may have made any mistake, or that its liability could necessarily be engaged, either totally or partially. In addition, the Group confirms, as in previous years, that in the event liability is proven, this incident would be covered by the Group’s third party liability insurance policies.

tax authorities which is applicable to all of the French companies concerned. Assystem entirely disputes the validity of the reassessment, based notably on expert opinions expressed at the end of 2014 and repeated at the end of 2015. Nevertheless the Group has decided to make provision in its 2015 accounts for 50% of the disputed amount ( i.e. € 6.8 million) in view of the changes in jurisprudence in 2015 concerning subjects of a similar nature. In addition, the Group made provision in its 2014 accounts for €2.0 million for procedural costs to be paid with respect to this dispute. The estimate of these costs was revised in 2015 at €0.5 million and the corresponding provision was consequently revised to stand at €1.5 million. NIGERIA A tax assessment conducted by the Federal administration was completed in February 2015 at MPH Nigeria. The adjustment notification has not yet been received, but the potential adjustment amounts are covered by the provisions recorded in the MPH Nigeria balance sheet at the time Assystem acquired it in 2012. At this stage, the Group considers that no additional provision is necessary. At the date of this Registration Document, the Group is not aware of any other governmental, judicial or arbitration proceedings, including any pending or potential proceedings, that could have or have had in the last 12 months, a significant impact on the financial situation or profitability of the Company and/or the Group.

Tax inspection

FRANCE At the end of 2014, Assystem France received notification of a €13.5 million tax reassessment relating to research tax credit amounts. This reassessment is based on a general position taken by the French

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ASSYSTEM

FINANCIAL REPORT 2015