Sogeclair S.A.

Quarterly Report • Sep 29, 2017

SOGECLAIR

S.A. WITH CAPITAL OF €2,900,000

HEADQUARTERS: 7 avenue Albert Durand - CS 20069 - 31703 BLAGNAC Cedex R.C.S. : 335 218 269

Half-Yearly Financial Report for the half year ending 30 June 2017 (L 451-1-2 III of Monetary and Financial Law Article 222-4 et seq. of the General Regulations of the AMF (Financial Markets Authority)

Here we present the half-yearly financial report for the half year ending 30 June 2017 drawn up in accordance with the provisions of Articles L. 451-1-2 III of Monetary and Financial Law and 222-4 et seq. of the General Regulations of the AMF (Financial Markets Authority).

This report has been distributed in accordance with the provisions of Article 221-3 of the general regulations of the AMF. In particular, it is available on the company's website: www.sogeclair.com.

Content

• I. Declaration of the person responsible
• II. Half-yearly management report
• III. Complete accounts for the past half year presented in consolidated form
• IV. Auditors' report

I. Declaration of the person responsible

"I certify that, to my knowledge, the accounts for the last half have been established in accordance with the applicable accounting standards and give a true and faithful picture of the asset base, financial situation and results of the company and of all the companies included in the consolidation, and that the management report for the half-year on page 3 presents a true and faithful picture of the important events of the first six months of the financial year, of their impact on the accounts, the main transactions between the related companies as well as a description of the main risks and uncertainties for the remaining six months of the financial year."

29/09/2017

Philippe ROBARDEY President & Chief Executive Officer

II. Half-yearly management report

1. Key figures for the half year (in € million)

The SOGECLAIR Board of Directors met on 8 September 2017, and examined the accounts for the first half 2017. The limited examination procedures relative to the half-yearly accounts were carried out and the limited examination report was submitted on 8 September 2017.

The company issued a half-yearly financial report as soon as possible after the end of the first half on 13 September 2017 by means of a press release.

This report has been distributed in accordance with the provisions of Article 221-3 of the general regulations of the AMF. In particular, it is available on the company's website: www.sogeclair.com.

1.1. Consolidated turnover

(in € million)	H1 2017	H1 2016	Variation
Group	74.34	67.73	+9.75%
Aerospace	64.53	60.88	+6.00%
Vehicle	1.55	0.73	+111.49%
Simulation	8.26	6.12	+34.96%
International	39.62	35.89	+10.38%

1.2. Consolidated results

(in € million)	H1 2017	H1 2016	Variation
EBITDA 1	4.77	3.85	+24.03%
as % of turnover	6.4%	5.7%
Operating result	2.64	1.36	+94,58%
Net result	1.22	1.23	-0,65%
including group share	1.02	1.16

1.3. Financial structure

(in € million)	H1 2017 H1 2016		2016
Equity capital	44.04	40.02	45.55
Gearing 2	24%	37%	16%
WCR	30.36	29.99	27.92

¹ Operating result - Other operating income and expenses + amortisation expenses and operating provisions

² Net debts excluding qualified pre-payments / equity capital

2. General description of the financial situation and results of the issuing company and its subsidiaries during the first half

The half-year was marked by:

• A 9.75% turnover increase, boosted by the product's activity, concerns all the divisions (Aerospace, Simulation, Vehicle),
• Geographic expansion with significant growth in turnover outside France (+10,38% vs June 2016),
• A net improvement of operational results: good economic performance with an EBITDA standing at 4.77M€ (+24%) and an EBIT of 2.64M€ (+95%),
• The net result of 1.22 M€ is stable with a tax expense of 0.49 M€ against an 0.19 M€ tax benefit during the 1st semester 2016.

Equity capital amounts to €44.04 million. Cash totals nearly €13.85 million with gearing (excluding qualified pre-payments) at 24%.

3. Explanation of the important operations and events in the first half and of their impact on the situation of the issuing company and its subsidiaries

Aerospace Division (turnover €64.5 million – EBITDA €2.5 million)

The activity progressed (+6%), sustained by the good performance of Canada and composite material activities (inspection access doors).

The EBITDA decreases slightly while the EBIT increases up to 0.57M€ so that's 100% increase.

Simulation Division (turnover €8.3 million – EBITDA €1.4 million)

The activity progressed (+35%) driven by simulation activities for the development of autonomous vehicle and by defense. AVS company was created with RENAULT (press release dated from the 4th July 2017) to speed up the development of autonomous vehicle.

EBITDA progressed by 89% with respect to the first half 2016.

Vehicle Division (turnover €1.5 million – EBITDA €0.2 million)

Recovery of the activity and profitability of the division thanks to take orders. The division progressed (+111%) with an acceleration on Q2 2017.

It displays an EBITDA at 13.8% of the turnover.

4. Description of the main risks

The risks linked to SOGECLAIR's activity are detailed in the 2016 reference document, available on the SOGECLAIR website (www.sogeclair.com).

The customers invoiced during the first half cover all our sectors of activity, thus representing a sufficient degree of diversity both in terms of customer base and of the number of contracts.

Our cooperation programmes and partnerships are progressing satisfactorily and do not lead us to anticipate any risks for the group's business.

SOGECLAIR is engaged in "risk-sharing" contracts, in the framework of customer programmes:

• Airbus A380 since 2001,
• Airbus A350 since 2009,
• Bombardier CSeries since 2011.

To date, these are the only contracts involving SOGECLAIR in financing and commercial risks shared with its customers. The main quantified data regarding these programmes are given in paragraph 1.2.2 of the attached appendix to the consolidated accounts.

5. Perspectives

SOGECLAIR is strengthened by its business and profit's growth, with a strong balance sheet and forecasts a new profitable organic growth year. Over time, leading strategic partnerships (PrintSky, AVS,…) will keep growth and value creation going for the Group.

III. Accounts for the past half-year presented in consolidated form

1. Consolidated accounts

1. CONSOLIDATED FINANCIAL SITUATION

ASSETS (in €k)	NOTES	H1 2017	H1 2016	2016
Goodwill	1.3.1 & 4.1	12,200	12,478	12,596
Intangible assets	4.1	7,064	8,050	7,692
Property, plant and equipment	4.2	5,926	5,259	5,528
Equity method affiliates		68	-39	66
Investments in associates	4.3	1,312	1,237	1,308
Non-current assets		26,571	26,985	27,191
Inventories	4.4	8,267	7,306	8,790
Trade and other receivables	4.5	48,378	48,272	46,103
Available-for-sale financial assets		15,020	13,425	13,249
Current tax asset	4.6	5,018	4,855	4,427
Cash and cash equivalents	4.7	13,851	9,477	14,878
Current assets		90,534	83,335	87,447
TOTAL ASSETS		117,104	110,320	114,638

LIABILITIES (in €k)	NOTES	H1 2017	H1 2016	2016
Capital	4.8	2,900	2,900	2,900
Share premium account		2,630	2,630	2,630
Own shares	4.8	-712	-712	-712
Reserves and accrued profits		33,616	30,139	34,966
Equity capital, group share		38,434	34,957	39,784
Minority interest	4.9	5,605	5,064	5,761
Equity capital, consolidated group		44,039	40,021	45,545
Long-term provisions	4.10	3,826	3,043	2,875
Long-term qualified pre-payments	4.11	2,462	2,958	2,953
Borrowings	4.11	13,007	15,167	12,965
Other long-term liabilities		1	1	1
Non-current liabilities		19,296	21,169	18,795
Short-term qualified pre-payments	4.11	741	399	634
Current part of loans and long-term financial liabilities	4.11	4,238	3,030	3,868
Payables and other financial liabilities	4.11	7,241	6,112	5,325
Short-term borrowings	4.12	208	328	244
Trade and other payables		13,020	12,143	13,896
Tax and social liabilities		21,139	20,152	19,702
Deferred tax liabilities	4.13	35	247
Other liabilities		7,147	6,720	6,628
Current liabilities		53,769	49,130	50,298
TOTAL LIABILITIES		117,104	110,320	114,638

2. CONSOLIDATED INCOME STATEMENT

INCOME STATEMENT (in €k)	NOTES	H1 2017	H1 2016	2016
Sales	4.14	74,340	67,734	136,253
Other income from the activity	4.15	655	506	3,312
Cost of goods sold		-30,090	-25,451	-52,210
Personnel charges		-39,417	-38,168	-73,812
Taxes and duties		-588	-556	-1,172
Amortisation and provisions		-2,098	-2,425	-3,853
Other charges		-131	-220	-339
Current operating income		2,671	1,420	8,449
Income from sale of consolidated holdings	4.16
Other operating income and charges	4.17	-36	-9	-184
Operating profit before contribution of equity method affiliate income		2,635	1,411	8,265
Share of equity method affiliates in profit		2	-56	-47
Operating profit		2,637	1,355	8,218
Income from cash flow and cash flow equivalents		-622	-18	53
Gross finance costs		-291	-330	-629
Net finance costs	4.18	-913	-347	-577
Other financial income and charges	4.19	-18	26	-159
Income before taxes		1,706	1,034	7,482
Income tax expense	4.20	-487	194	-1,099
Net profit		1,220	1,228	6,383
Group share		1,020	1,156	5,881
Minority interest		200	72	502
(in Euros)		H1 2017	H1 2016	2016
Profit per share		0.35	0.40	2.03
Diluted profit per share		0.35	0.40	2.03
NET INCOME STATEMENT AND GAINS AND LOSSES ENTERED DIRECTLY AS EQUITY CAPITAL (in €k)		H1 2017	H1 2016	2016
Net profit		1,220	1,228	6,383
Elements that will subsequently be reclassified as net result:		-485	462	553
Conversion rate adjustment for foreign entities		-485	462	583
Fair value restatement of assets and long-term debts				-31
Elements that will not subsequently be reclassified as net profit:		-335	-43	29
Actuarial gains and losses on defined benefit schemes		-511	-65	45
Related taxes		176	22	-15
Total gains and losses entered directly as equity capital		-820	419	582
Consolidated income		399	1,647	6,965
Parent company owners' share		359	1,416	6,247
Non-controlling interests		40	230	717
Consolidated income		399	1,647	6,965

3. CASHFLOW

3.1. CONSOLIDATED CASHFLOW STATEMENT

CONSOLIDATED CASHFLOW STATEMENT (in €k)	H1 2017	H1 2016	2016
Net result of integrated companies (including minority interests)	1,220	1,228	6,383
+/- Net amortisation and provisions (excluding those relative to current assets)	2,126	2,591	4,304
-/+ Unrealised gains and losses linked to fair value variations	-8	-3	-6
-/+ Other recognised revenue and expenses
-/+ Transfer capital gains and losses	-69	-9	-30
+/- share in results of associates consolidated by the equity method	-2	56	47
- Dividends (non-consolidated securities)		-31	-31
Cashflow after net finance costs and tax	3,266	3,831	10,666
+ Net finance costs	184	247	516
+/- Tax charge (including deferred taxes)	487	-194	1,099
Cashflow before net finance costs and tax (A)	3,936	3,885	12,281
- Taxes paid (B)	-789	974	-792
+/- Variation in WCR linked to the activity (including debt linked to staff benefits) (C)	-1,548	-5,447	-3,528
= NET CASHFLOW GENERATED BY THE ACTIVITY (D) = (A + B + C)	1,599	-588	7,962
- Cash outflows linked to the acquisition of tangible and intangible assets	-2,225	-1,937	-2,779
+ Cash inflows linked to the sale of tangible and intangible assets	46	37	247
- Cash outflows linked to the acquisition of financial assets (non-consolidated securities)	-1		-96
+ Cash inflows linked to the sale of financial assets (non-consolidated securities)			42
+/- Impact of changes of scope + Dividends received (equity method affiliates, non-consolidated securities)* see alternative presentation	22		237
7.2 +/- Variation in loans and advances granted	8	31 -11	31 -142
+ Investment subsidies received
+/- Other flows linked to investment operations
= NET CASHFLOW LINKED TO INVESTMENT OPERATIONS (E)	-2,149	-1,879	-2,459
+ Sums received from shareholders at time of capital increases
- paid by shareholders of the parent company
- paid by minority shareholders of consolidated companies
-/+ Buy-back and resale of own shares
- Dividends paid out during the financial year
- Dividends paid to parent company shareholders	-1,708	-1,101	-1,101
- Dividends paid to minority shareholders of consolidated companies	-217	-186	-186
+ Receipts linked to new borrowings	2,528	5,118	5,828
- Reimbursement of borrowings (including leasing contracts)	-2,825	-2,300	-4,513
- Net financing interest paid (including leasing contracts)	-117	-162	-422
+/- Other flows linked to financing operations
= NET CASHFLOW LINKED TO FINANCING OPERATIONS (F)	-2,338	1,369	-395
+/- Impact of changes in currency change rates (G)	-55	-60	-79
= NET VARIATION OF CASHFLOW (D + E + F + G)	-2,943	-1,159	5,029

3.2. NET FINANCIAL DEBT VARIATION STATEMENT

NET FINANCIAL DEBT (in €k)		OPENING	VARIATION	FAIR VALUE VARIATIONS	EXCHANGE DIFFERENCIES	RECLASSI FICATION	CLOSING
Gross cashflow	(a)	14,878	-947		-80		13,851
Debit balances and bank loans and overdrafts	(b)	5,325	1,942		-25		7,241
Net cashflow	(c) = (a) - (b)	9,553	-2,888		-55		6,610
Gross financial debt	(d)	20,421	24	5	-2		20,448
Net financial debt	(d) - ©	10,868	2,912	5	53		13,839

The debt ratios are given in chapter 3 of the 2016 reference document. The financing sources for investments are detailed in chapters 8 and 10 of the 2016 reference document. During the half-year SOGECLAIR has had to refinance the commercial and tax debts of a subsidiary for a balance of €3,516k on 30 June 2017.

SOGECLAIR also has an own share-holding with an off-balance sheet stock market value (excluding liquidity contract), based on the stock market value on 30 June 2017, amounting to €6.23 million, not posted in the cashflow.

4. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

				Group share
(in k €)	CAPITAL	Reserves linked to the capital	Own shares	Consolidated reserves and profit	Gains and losses entered directly in capital	Equity capital, group share	Equity capital, minority interests	Total equity capital
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Equity capital, year-end N (31 December 2015)	2,900	2,630	-712	29,476	-657	33,635	6,044	39,679
Operations on capital Share-based payments Operations on own shares
Dividends				-1,101		-1,101	-186	-1,288
Result for the period Gains and losses entered directly as equity capital				5,881	367	5,881 367	502 215	6,383 582
Net gains and losses entered directly as equity capital				5,881	367	6,247	717	6,965
Variation of scope Other movements				1,023	-20	1,003	-814	189
Equity capital, year-end N (31 December 2016)	2,900	2,630	-712	35,279	-311	39,785	5,761	45,546
Operations on capital Share-based payments Operations on own shares
Dividends				-1,708		-1,708	-217	-1,925
Result for the period Gains and losses entered directly as equity capital				1,020	-660	1,020 -660	200 -160	1,220 -820
Net gains and losses entered directly as equity capital				1,020	-660	359	40	399
Variation of scope
Other movements				1	-2	-1	21	20
Equity capital, year-end N (30 June 2017)	2,900	2,630	-712	34,591	-973	38,435	5,605	44,040

1.1.1. Appendixes to the consolidated accounts

The half-yearly accounts have been drawn up in accordance with IAS 34, with the exception of the equity changes table for which the reference period adopted ends on 31 December 2016 instead of 30 June 2016. This option has been taken to make it easier to read the statements.

1 - INFORMATION RELATIVE TO THE ACCOUNTING BASELINE, THE CONSOLIDATION PROCEDURES AND THE VALUATION METHODS AND RULES

1.1. Standards applied

Pursuant to regulation N°1606/2002 adopted on 19 July 2002 by the European Parliament and Council, the half-year accounts of the SOGECLAIR group have been established in accordance with the IFRS baseline such as adopted in the European Union and presented in accordance with recommendation No. 2013-03 dated 7 November 2013 issued by the Conseil National de la Comptabilité (National Accounting Council).

Standards, amendments and interpretations of the IFRS standards applicable as from 1st January 2017

The new standards and amendments applicable as of 1st January 2017 did not have any significant impact on the accounts to 30 June 2017.

Standards not applied by SOGECLAIR:

• Standards, amendments and interpretations of the IFRS standards, already published by the IASB and adopted by the European Union, but whose application was not yet obligatory on 1st January 2017 and that have not been applied in anticipation by the SOGECLAIR Group when they apply to it.

• The new standards, revisions of the IFRS standards and interpretations published by the IASB not yet adopted by the European Commission are not applied by the SOGECLAIR Group.

1.2. CONSOLIDATION PROCEDURES

The companies of significant size, controlled exclusively and in which the group exercises a direct or indirect control over more than 50% of their capital have been consolidated by overall integration.

The subsidiaries are companies controlled by the group. Control supposes the exercising of a power over relevant activities, the exposure to variable returns as well as the capacity to use its power to have an influence over those returns. The applicable consolidation methods are covered by the IFRS 11 standard as far as the partnerships are concerned.

The shares in non-consolidated shareholdings are posted in the "Investments in associates" item for their cost of acquisition.

Furthermore, companies are excluded from the scope of consolidation when they only represent a negligible interest and their exclusion cannot negatively impact the faithful image principle.

Here, this concerns:

ADM (35% subsidiary of SOGECLAIR AEROSPACE SAS).

During the first semester 2017, A.V Simulation (AVS) was created in France as well as two new American companies in the USA: Aerospace Corp et MSB Aerospace LLC.

1.3. EVALUATION METHODS AND RULES

1.3.1. Conversion of the foreign companies' accounts

The group's presentation currency is the euro, the operating currency of the group's foreign companies is their local currency (pound sterling for Sogeclair Aerospace Ltd, Tunisian dinar for Sogeclair Aerospace Sarl, Canadian dollar for Sogeclair Aerospace Inc, MSB Design Inc and Ressources Globales Aéro Inc, and the US dollar for MSB Global Resources Corp., MSB Aerospace Corp et MSB Aerospace Llc.).

The accounts of the group's foreign companies are posted in their operating currency, and their accounts are then converted into the group's presentation currency as follows:

• The balance sheet items, with the exception of the equity capital which is maintained at its historical cost, are converted using the closing date exchange rate.
• The income statement items are converted using the average rate for the period.

The income statement exchange differential is included in the other consolidated income items and therefore does not have any impact on the net result (it will be recycled as income when control is lost over the subsidiary).

The goodwill posted at the time of grouping with foreign companies is booked in the acquired company's assets and liabilities: it is therefore included in their operating currency and converted into euros at the closing exchange rate. There are therefore variations in the value of the assets which are explained in the consolidated income statement.

1.3.2. Goodwill and assimilated

In compliance with the IFRS standards, goodwill was frozen in 2004 and is no longer amortised, but depreciation tests are performed annually (and/or half-yearly should indications of losses of value appear).

Depreciation is recorded once the recoverable value of the CGU to which the goodwill is assigned is lower than its net book value.

A Cash Generating Unit (CGU) is the smallest identifiable group of assets whose continuous utilisation generates cash inflows that are largely independent from the cash inflows generated by other assets or groups of assets.

Thus, the CGUs identified in the group are the legal entities, it being stated that when the legal entities have strong economic ties several entities are grouped together within one CGU.

Furthermore, a CGU necessarily and exclusively belongs to one of the operational sectors chosen by Sogeclair by way of application of IFRS 8.

In this respect, the legal entities named Sogeclair Aerospace (GmbH in Germany, Ltd in the United Kingdom, SA in Spain, SARL in Tunisia, SAS in France) have been grouped together in a single CGU given their indivision as transactional economic assets and their strong ties with the aeronautical industry. Likewise for the Canadian MSB Ressources Globales Inc and MSB Design Inc which have been grouped together in a single CGU.

The Oktal SA and Oktal Synthetic Environment SAS entities are grouped together in a single CGU due to their technical synergy.

The recoverable values are determined per legal entity, but their appreciation is analysed within the CGU to which they are attached.

The recoverable value is the highest value between the net fair value of the cost of disposal, when that can be determined, and the going concern value.

The net fair value of the costs of disposal corresponds to the best estimate of the net value that could result from a transaction made under the conditions of normal competition between well-informed and consenting parties. This estimate is determined on the basis of the market information available taking any special situations in to account.

The going concern value adopted by Sogeclair corresponds to the present value of the cash-flows from the identified CGUs. These flows are determined in the framework of the following economic assumptions and forecast operating conditions:

• the cashflows used are derived from three-year "Medium-Term Plans" for the entities concerned available on the valuation date and are extended to a five-year horizon,
• beyond that horizon, the terminal value corresponds to the capitalisation to infinity of the last flow within the horizon, on the basis of a rate to infinity of 2%,
• the actualisation rate stood at 8.61% at the end of 2016, on the basis of:
• o of the 10-year risk-free rate of 0.68%,
• o and of a market premium of 6.5% to which an average over five years of the Beta coefficient specific to Sogeclair is assigned, confirmed by other sources (Bloomberg, Thomson, Infinancials), of 1.22.

A "shock" called "mathematical shock" is applied to the most sensitive underlying parameters (growth of the activity, level of the operating margin, investments) to test the sensitivity of the estimation to an unfavourable change in the CGU's economic environment; the hypotheses adopted for the mathematical shock consist of halving the activity's growth rate and reducing the level of the operating margin (EBITDA) by 30%, and halving the amount of the investments, with respect to the values of the basic business plan.

The recoverable values, based on the going-concern values, are then compared with the net book values of the goodwill for determining any depreciation.

There were no indications on 30 June 2017 putting into question the impairment tests.

1.3.3. Intangible assets – development expenses

Concerning the work immobilised as development expenses, the amounts posted as assets include all of the development expenses through to completion of the work in accordance with IAS 38 along with the related financial costs in accordance with IAS 23.

The amounts immobilised are straight-line amortised over a period of 3 to 10 years depending on the programmes, according to the most probable perspectives of the economic return on the results of the work.

There are currently seven main programmes that have led to the assetisation of development expenses and the related financial expenses are posted as assets:

(in €k)	Assetisation period	Amortisation period	Gross amount	Amount still to be amortised
Aerospace Division
Thermo-compression aeronautical subassemblies	Since 2009	10 years starting from series deliveries	7,397	4,607
Modular aeronautical training platform	Since 2014	4 years starting from commercialisation of the modules	61	55
Aircraft interior monuments	Since 2009	7 years starting from series deliveries	1,001	590
Aircraft modification authority label	Since 2014	3 years starting from assetisation	76	16
Vehicle Division
Multi-mission terrestrial drone	Since 2013	5 years starting from assetisation	173	60
Simulation Division
Terrain modellers (Agetim, Ray and Fast products) for simulators	Since 2003	3 years starting from assetisation	2,045	212
Simulation engines for the following sectors: - automobile (ScanNer product), - rail (OkSimRail product) -air traffic (ScanAds product)	Since 2005	3 years starting from assetisation	2,468	249

1.3.4. Financial instruments

In respect of IFRS 7 it is stated that loans contracted by the group are fixed-rate loans and that there are no off-balance sheet financial instruments, nor any securitisation of the customer posting.

In the framework of its exposure to exchange rate risks, SOGECLAIR has been covering some of its contracts in US and Canadian dollars since the beginning of 2012. These are guaranteed-rate instruments and do not involve any adjustment in respect of hedge accounting. Any coverage losses or profits are entered as a result when accomplishing the exchange operation and at their fair value at each half-year/year-end closing date.

As of 30 June 2017, SOGECLAIR has not taken out any exchange rate hedging.

To date there are no commitments within SOGECLAIR SA or the group involving complex financial instruments.

1.3.5. Current assets

In accordance with the IAS 1 standard (Presentation of financial statements), an asset is classified current if you are intending to realise or sell it in the framework of the normal operating cycle, or realise it within the twelve months following the balance sheet date, or lastly if it is a cash asset.

The following assets are therefore classified as being current:

• inventory
• advances and down payments
• trade and other receivables
• deferred tax assets
• cash and cash equivalents
• prepaid expenses
• other receivables

1.3.6. Use of estimates

The preparation of financial statements in respect of IFRS requires the use of estimates and assumptions that may have an impact on the carrying amount of some elements in the balance sheet and income statement.

These estimates and assessments are updated by the Direction on the basis of the continuity of the exploitation in function of information available at the balance sheet date. They may evolve according to events or information that may call into question the circumstances under which they were developed.

These estimates mainly concerns:

• Recognition of turnover (Note 1.3.8)
• Deffered tax assets (Note 4.6)
• Termination benefits and provisions (Note 4.10)
• The assessment of goodwill (Note 1.3.2)

1.3.7. Current and non-current liabilities

In accordance with the IAS 1 standard (Presentation of financial statements) liabilities are classified current and noncurrent.

A liability is classified current if it must be settled in the framework of its normal operating cycle, or settled within the twelve months following the balance sheet date.

The following contingent liabilities are therefore classified current:

• the part of finance costs and qualified prepayments that are reimbursable within less than one year following the balance sheet date
• trade and other payables
• tax and social liabilities
• short-term provisions
• deferred tax liabilities
• other liabilities

The other contingent liabilities are classified non-current.

1.3.8. Sales recognition

Sales correspond to the amount of the work performed for customers by all of the companies that enter into the scope of consolidation. The sales and costs recognition method depends on the type of intervention.

Consulting and support activities

These contracts are subject to an obligation regarding the means. Sales for the consulting and support activities are posted gradually as the works are performed.

All-in development contracts and the associated systems, products and services

These contracts are subject to an obligation to achieve a given result and a performance-related commitment. Sales and the result are recorded in application of the IAS 18 standard using the percentage of completion method defined by the IAS 11 standard. Completion is calculated as a percentage of the costs borne for the works performed with respect to the total costs re-adjusted each month. When it is probable that the total of the re-adjusted costs of the contract will be higher than the total sales generated by the contract, the expected loss on completion is immediately posted as a liability in the Financial Situation Statement.

1.3.9. Dividends paid

The distribution of dividends paid out to the parent company's shareholders during the half ending 30 June 2017, in respect of the year ending 31 December 2016, is as follows:

• single voting right €497 k
• double voting right €1,211 k

1.3.10. Events after the balance sheet date

None.

1.3.11. Other information

SOGECLAIR has posted the fair value of the exchange rate coverage instruments as permitted by the IAS39 standard. It should be noted that, in an economic logic, only non-interest bearing financial commitments made or received are covered by IAS 39.

For the period, SOGECLAIR has posted accrued income, deducted from the personnel expenses, in respect of the CICE (Enterprise Competitiveness Tax Credit) for an overall amount of €705 k.

2 – SCOPE

1. List of consolidated companies

NAME	COUNTRY	ACTIVITY	% OF CONTROL IN 2017	% OF CONTROL IN 2016
Companies consolidated by full consolidation *
Aviacomp SAS	France	Aeronautical and defence structural subassemblies	100.00%	100.00%
A.V. Simulation	France	Simulators	63.70%
Checkaero SARL	Luxembourg	Expertise in the area of stress	75.00%	75.00%
MSB Aerospace LLC	USA	Aircraft interior subassemblies	80.00%
MSB Aerospace Corp	USA	Sub-holding	80.00%
MSB Design Inc**	Canada	Aircraft interior subassemblies	80.00%	80.00%
MSB Global Resources Corp**	USA	Aerostructure, Systems installation, Configuration management, Equipment	80.00%	80.00%
Oktal SAS	France	Simulators	98.00%	97.98%
Oktal Synthetic Environment SAS	France	Virtual environments	54.94%	54.94%
Ressources Globales Aéro Inc**	Canada	Aerostructure, Systems installation, Configuration	80.00%	80.00%

		management, Equipment
Rain Luxembourg SA	Luxembourg	Sub-holding	100.00%	100.00%
Séra Ingénierie SAS	France	Vehicles	80.00%	80.00%
Sogeclair SA	France	Holding	Parent	Parent
Sogeclair Aerospace GmbH	Germany	Aerostructure, Systems installation, Configuration management, Equipment	100.00%	100.00%
Sogeclair Aerospace Inc	Canada	Sub-holding	100.00%	100.00%
Sogeclair Aerospace Ltd	United Kingdom	Aerostructure, Systems installation, Configuration management, Equipment	100.00%	100.00%
Sogeclair Aerospace SA	Spain	Aerostructure, Systems installation, Configuration management, Equipment	87.95%	87.95%
Sogeclair Aerospace Sarl	Tunisia	Aerostructure, Systems installation, Configuration management, Equipment	100.00%	100.00%
Sogeclair Aerospace SAS	France	Aerostructure, Systems installation, Configuration management, Equipment	100.00%	100.00%

Equity method affiliates

S2E Consulting SAS	France	Systems engineering and electricity	46.98%	46.98%
* excluding 2 holding companies in Canada without any operational activities

** From an accounting viewpoint the acquisition has been analysed as a firm purchase with deferred payment for the 20% minority holding by 2017. This deferred payment has been posted for its updated amount such as contractually stipulated (fair value estimate on the basis of the business plans) as minority holdings.

In order to protect the company's interests, SOGECLAIR does not wish to communicate further on the price of the transaction or, consequently, on the method of recognition of the debt posted with respect to minority interests.

3 - INFORMATION MAKING IT POSSIBLE TO COMPARE THE ACCOUNTS

Method

No change in accounting methods or valuation methods relating to the treatment of financial information, which may have an influence on the comparability of the accounts, occurred during the period.

4 - EXPLANATIONS ON THE ITEMS ON THE CONSOLIDATED BALANCE SHEET AND INCOME STATEMENT

4.1. Intangible assets

GROSS VALUES (in thousands of Euros)	AT BEGINNING OF YEAR	INCREASES	ASSETS GENERATED IN HOUSE	WITH-DRAWALS	EXCHANGE RATE DIFFERENCES	REASSIGNMENT	AT YEAR END
Goodwill	13,635				-351		13,285
Development expenses	25,423		50		-48		25,425
Software and brands	7,852	256			-50	84	8,142
Current assets	225	52		-5		-84	189
Total	47,136	309	50	-5	-449		47,042

AMORTISATION & PROVISIONS (in thousands of Euros)	AT BEGINNING OF YEAR	AMORTISATION AND LOSSES OF VALUE	WITH DRAWALS	EXCHANGE RATE DIFFERENCES	REASSIGNMENT	AT YEAR-END
Goodwill	-1,039	-46				-1,085
Development expenses	-19,044	-613		20		-19,638
Software and brands	-6,765	-312		22		-7,055
Total	-26,848	-972		42		-27,778
Net value	20,288					19,264

The detail of the immobilised expenses is given in paragraph 1.3.3 of this document.

4.2. Tangible assets

GROSS VALUES (in thousands of Euros)	AT BEGINNING OF YEAR	INCREASES	WITHDRAWALS	EXCHANGE RATE DIFFERENCES	REASSIGNMENT	AT YEAR-END
Technical installations, plant & equipment	2,986	428		-40	1,407	4,780
Installations & fittings	2,604	283		-31	44	2,899
IT & office hardware	8,260	328		-56	129	8,662
Current assets	1,901	369			-1,789	480
Others	2,009	-32	-45	-6		1,926
Total	17,759	1,376	-45	-132	-210	18,747
AMORTISATION & PROVISIONS (in thousands of Euros)	AT BEGINNING OF YEAR	AMORTISATION AND LOSSES OF VALUE	WITHDRAWALS	EXCHANGE RATE DIFFERENCES	REASSIGNMENT	AT YEAR-END
Technical installations, plant & equipment	-1,852	-201		25		-2,028
Installations & fittings	-1,625	-112		11		-1,726
IT & office hardware	-7,493	-298		46		-7,745
Others	-1,260	-137	74	2		-1,321
Total	-12,230	-748	74	84		-12,820
Net value	5,528					5,926

The exchange rate differences concern the American, British, Canadian and Tunisian subsidiaries: MSB Aerospace LLC, MSB Global Ressources Corp, Sogeclair Aerospace Ltd, MSB Design Inc, Ressources Globales Aero Inc, Sogeclair Aerospace Inc et Sogeclair Aerospace Sarl.

Additional information concerning the financial leasing contracts (IAS 17):

Net book value of the current financial leasing contracts:

(in thousands of Euros)	GROSS AMOUNT	AMORTISATION	NET BOOK VALUE
Intangible assets	1,894	-1,493	402
Tangible assets	6,259	-5,287	972
Total	8,153	-6,780	1,373

Term for outstanding leasing contracts:

in thousands of Euros	< 1 YEAR	1 TO 2 YEARS	3 TO 5 YEARS
Total	578	406	390

4.3. Investments in associates

GROSS VALUES (in thousands of Euros)	AT BEGINNING OF YEAR	INCREASES	WITHDRAWALS	VARIATION IN FAIR VALUE	EXCHANGE RATE DIFFERENCES		REASSIGNMENT	AT YEAR END
Shareholdings	110	1		2				113
Fixed investments Loans, guarantees and other
receivables	1,295	31	-39	13		-2		1,298
Total	1,405	32	-39	15		-2		1,411
AMORTISSEMENTS & PROVISIONS (in thousands of Euros)	BEGINNING OF YEAR	AT	AMORTISATION	WITHDRA WALS	VARIATION IN FAIR VALUE	EXCHANGE RATE DIFFERENCES	REASSIGN MENT	AT YEAR END
Shareholdings		-30						-30
Fixed investments
Loans
Total		-30						-30
Net value		1,374						1,380

4.4. Inventory

GROSS VALUES (in thousands of Euros)		AT BEGINNING OF YEAR	VARIATION	WITHDRAWALS	EXCHANGE RATE DIFFERENCES	REASSIGNMENT	AT YEAR END
Stock of raw materials, supplies and other procurements		3,025	978		-51		3,951
Stock of work in process		4,008	-865		-11		3,131
Stock of finished and intermediate products		2,394	-658		-11		1,725
Total		9,427	-546		-73		8,808
PROVISIONS AND DEPRECIATION (in thousands of Euros)	AT BEGINNING OF YEAR		PROVISIONS FOR DEPRECIATIONS AND LOSSES OF VALUE	WRITE-BACKS OF DEPRECIATIONS AND LOSSES OF VALUE	EXCHANGE RATE DIFFERENCES	REASSIGNMENT	AT YEAR END
Depreciation of raw materials, supplies and other procurements
Depreciation of work in process	-362		-324	362			-324
Depreciation of finished and intermediate products	-275		-176	234			-217
Total	-637		-500	596			-541

Net value of stock	8,790	8,267

The gross value of the goods and procurements is evaluated at the purchase price (including the associated costs minus deductions, discounts, and reductions).

The products manufactured are valued at the standard cost of production including:

• consumption of goods and procurements,
• consumption of subcontracting according to the generally observed cost,
• consumption of standard machine and man hours as stipulated in the manufacturing procedures,
• structural costs.

The provisions for stock depreciation essentially concern manufactured products whose cost price is higher than the sale price owing to the learning curve.

4.5. Trade and other receivables

The customers' terms of payment have shortened over the half-year and are monitored closely.

4.6. Deferred tax asset

DEFERRED TAX ASSET (in thousands of Euros)	H1 2017	H1 2016	2016
Temporary differences	1,392	1,334	1,134
Tax deficits	3,515	3,257	3,116
Restatements	111	263	177
Total	5,018	4,855	4,427

A deferred tax asset is constituted on the tax losses and temporary differences if it is probable that the company will dispose of future tax profits to which they may be charged.

SOGECLAIR limits the amount of the deferred taxes on the tax deficits of the subsidiaries concerned, to 10% of the sales for the year, at year-end, or of the annual budget at the time of the half-year accounts. Only the deferred tax on the tax deficits of newly created companies is posted in its entirety.

The amount of the accumulated non-assetised deficits on 30 June 2017 totalled €1.6 million, representing a non-posted deferred tax of €0.5M.

4.7. Cash and cash equivalents

(in thousands of Euros)	H1 2017	H1 2016	2016
Cash	6,868	2,541	7,895
Cash equivalents	6,983	6,935	6,983
Total	13,851	9,477	14,878

On 30 June 2017, the cash equivalents concerned liquid investments in:

• renewable one-month fixed-term account
• interest-bearing account,
• European capital fund with minimum guaranteed interest and the possibility of immediate, penalty-free sale of a significant proportion.

4.8. Equity capital, group share

The equity capital, set at €2,900k, now consists of 2,900,000 shares with a nominal value of €1 each.

It must be remembered that in accordance with notification 2002-D of the Emergency Committee of the CNC on 18 December 2002 and according to the deliberation of the Board of Directors of SOGECLAIR held on 23 December 2002, the self-owned shares are deducted from the consolidated shareholders' equity.

On 30 June 2017, the balance of these shares on the company's books amounted to 144,340 shares (4.98% of the capital), unchanged since 31 December 2016. This restatement leads to an accumulated reduction of the consolidated equity capital of €712 k.

4.9. Minority interests

(in thousands of Euros)	H1 2017	H1 2016	2016
At beginning of year	5,761	6,044	6,044
Variation of reserves	-356	-1,052(1)	-785(1)
Total income and expenditure entered during the period	200	72	502
At end of period (1) Including buy-back of minority interest in Aviacomp for €1,030k	5,605	5,064	5,761

4.10. Long-term provisions

AT BEGINNING OF YEAR	CONT RIBUT IONS	SALES AND DISPOSALS	WRITE BACKS	VARIATION IN FAIR VALUE	EXCHANGE RATE DIFFERENCES	REAS SIGNMENT	AT YEAR END
1,908	228			511			2,647
39	3				-1		41
100	164		-100				164
828	148				-2		974
							3,826
	2,875	543		-100	511	-4

The other provisions for risks mainly concern social and tax risks.

There is no event later than 30 June 2017 liable to put into question the notion of going concern, nor any non-measurable risk and loss.

The impact of the reclassification of the actuarial gains (IAS19R) to the reserves amounts to €511k.

The discount rate used corresponds to TEC 10 which stood at 0.8% on 30 June 2017.

4.11. Current and non-current financial debts

NON-CURRENT FINANCIAL DEBTS (in thousands of Euros)	AT BEGINNING OF YEAR	INCREASE	REDUCTION	VARIATION IN FAIR VALUE	EXCHANGE RATE DIFFERENCES	REAS SIGNMENT	AT YEAR END
Qualified prepayments (+ 1 year)	2,953			5		-496	2,462
Borrowings and debts with credit institutions (+ 1 year)	10,333	2,820	-3			-2,255	10,896
Sundry non-current loans and financial liabilities	2,632	26	-547				2,111
Total	15,918	2,846	-550	5		-2,751	15,469
CURRENT FINANCIAL DEBTS (in thousands of Euros)	AT BEGINNING OF YEAR	INCREASE	REDUCTION	VARIATION IN FAIR VALUE	EXCHANGE RATE DIFFERENCES	REASSIGN MENT	AT YEAR END
Current qualified prepayments (-1 year)	634		-389			496	741
Current borrowings and debts with credit institutions (-1 year)	3,813	18	-1,952		-2	2,255	4,132
Bank loans and overdrafts	5,325	1,942			-25		7,241
Sundry current loans and financial liabilities	55	-13	64				106
Total	9,827	1,946	-2,277		-27	2,751	12,221

The medium/long-term bank loan trends, excluding leases, are detailed below:

MEDIUM/LONG TERM BANK LOANS (excluding leases) (in thousands of Euros)	2017
Taken out during the half-year	2,594
Reimbursed during the half-year	1,594

The gross financial debts schedule is given below:

GROSS LONG-TERM DEBT SCHEDULE (in thousands of Euros)	TOTAL	< 1 year	1 to 2 years	2 to 3 years	3 to 4 years	Longer
Qualified prepayments (+ 1 year)	2,462		1,046	361	1,029	26
Borrowings and debts with credit institutions (+ 1 year)	10,896		3,814	3,431	1,845	1,806
Sundry non-current loans and financial liabilities	2,111		893	605	238	374
Non-current financial liabilities	15,469		5,753	4,397	3,112	2,206
Characteristics of the loans taken out	Fixed-date financial debts (1)	Terms	Due dates	Coverage		Financial covenants
Fixed-rate amortisable	13,622	From 0.57 to 2.1%	2012-2023	N/A		None
Fixed-rate amortisable in Canadian dollars	8	Interest free	2012-2017	N/A		None

(1) Total amount to be reimbursed on 30 June 2017

4.12. Short-term provisions

LONG-TERM PROVISIONS (in thousands of Euros)	AT BEGINNING OF YEAR	CONTRI BUTIONS	SALES AND DISPOSALS	WRITE BACKS	EXCHANGE RATE DIFFERENCES	REASSIGN MENT	AT YEAR END
Provisions for restructurings
Other provisions for charges
Other provisions for risks	244	52		-88			208
Total	244	52		-88			208

4.13. Deferred tax liabilities

DEFERRED TAX LIABILITIES (in thousands of Euros)	H1 2017	H1 2016	2016
Temporary differences
Restatement	35	247
Total	35	247

4.14. Turnover

In accordance with IFRS 8, turnover is presented division by division in paragraph 5 of this appendix.

4.15. Other income from the activity

OTHER OPERATING INCOME (in thousands of Euros)	H1 2017	H1 2016	2016
Production in stock
Production immobilised
Operating and investment subsidies	560	422	1,005
Write-back on provisions, amortisations
Other income	95	85	2,307
Total	655	506	3,312

The operating subsidies mainly concern innovation projects. They have been posted at their allocation date and are attached to the period according to the programmes' degree of advancement.

4.16. Results of disposal of consolidated holdings

No consolidated shareholdings have been recorded during the last three financial years.

4.17. Other operating income and charges

The other operating income and charges correspond to the result of other non-current operations during the period.

OTHER OPERATING INCOME AND CHARGES (in thousands of Euros)	H1 2017	H1 2016	2016
Tax risks (provisions, write-backs, charges and income for the period)
Social risks (provisions, write-backs, charges and income for the period)	-2	-6	-101
Reimbursement on write-offs
Gains or losses on sale of property, plant and equipment	38	9	30
Gains or losses on goodwill
Other income and charges	-72	-12	-113
Total	-36	-9	-184

4.18. Cost of net financial debt – Other financial charges and income

The cost of net financial debt includes:

• the income from cash and cash equivalents, that is to say:
• o the interest generated by the cash and cash equivalents
• o the result of the transfer of cash equivalents
• the cost of the gross financial debt, which essentially corresponds to the interest charges on financing operations and to exchange rate variations.

The net exchange rate losses amounted to -€729 k on 30 June 2017.

4.19. Other financial charges and income

The other financial income and charges amount to €-18k for the half-year and include the income and charges linked to the other financial assets such as income from shareholdings, provisions and write-backs on financial provisions and exchange rate adjustments.

4.20. Income tax

The SOGECLAIR SA company has opted for the integrated tax system for the following companies: SOGECLAIR SA, SOGECLAIR AEROSPACE SAS, OKTAL SAS and AVIACOMP on 30 June 2017.

TAX CHARGE (in thousands of Euros)	H1 2017	H1 2016	2016
Deferred tax	435	688	600
Tax payable (1)	-1,126	-648	-1,646
Income or charge linked to tax integration	332	250	46
Carry-back		3
Contributions on dividend distributions Sponsorship tax credit	-128	-99	-99
Total (1) Including CVAE (Corporate Value Added Contribution)	-487	194	-1,099
Tax proof is presented below:
TAX PROOF (in thousands of Euros)	H1 2017	H1 2016	2016
Pre-tax profit (loss)	1,706	1,034	7,482
Parent company's tax rate Theoretical income (charge) tax on profits	34,43% -587	34.43% -356	34,43% -2,576
Permanent differences and others	-111	-116	-102
Tax-exempted revenue and non-fiscally deductible charges	477	254	320
Impact of foreign tax rate differences and variations	13	2	7
Income taxed at reduced rates (1)	-287	-349	-562
Impact of deferred tax deficits and amortisations	-268	558	632
Tax credits	277	201	1,182
Income tax benefit (charge) posted	-487	194	-1,099
(1) Impact of CVAE in France and of the Trade Tax in Germany
4.21. Average workforce
WORKFORCE full-time equivalence	H1 2017	H1 2016	2016
Engineers, managers and senior technicians	1,034	1,035	1,033
Technicians and other non-managerial	322	399	305

Total 1,356 1,344 1,338

4.22. Financial commitments

OFF-BALANCE SHEET COMMITMENTS (in thousands of Euros)	H1 2017	H1 2016	2016
Commitments made:
Relative to financing the company
None
Relative to the issuer's operating activities
Counter-guarantee on securities		13	13
Counter-guarantee securities on markets	15	15	15
Sub-total	15	28	28
Commitments received:
Relative to the issuer's operating activities
Counter-guarantee securities on markets	3
From customers on long-term programmes (1)	114,000	120,327	119,000
Relative to financing the company Payment guarantees received from customers
Sub-total	114,003	120,327	119,000

1) We draw your attention to the fact that SOGECLAIR has received commitments from its customers on its long-term contracts dependent on their sales. On the basis of firm orders received by those customers, the value of this future income, according to the TEC 20 of 1.45% on 30 June 2017, is €107,000 k.

Additional information on the programmes subject to risk-sharing is provided in paragraph 1.6 of chapter 26 of the 2016 reference document.

- SECTOR-BASED INFORMATION

In accordance with IFRS 8, the issuer has chosen to present the group's activity in three operational sectors corresponding to the sectors reviewed by the main operational decision-maker. It should be noted that no grouping of sectors has been made.

NOM	PAYS	ACTIVITE
Division Aerospace*
Aviacomp SAS	France	Aeronautical and defence structural subassemblies
Checkaero SARL	Luxembourg	Expertise in the area of stress
MSB Aerospace LLC	USA	Aircraft interior subassemblies
MSB Design Inc	Canada	Aircraft interior subassemblies
MSB Global Resources Corp	USA	Aerostructure, Systems installation, Configuration management, Equipment
Ressources Globales Aéro Inc	Canada	Aerostructure, Systems installation, Configuration management, Equipment
Sogeclair Aerospace GmbH	Germany	Aerostructure, Systems installation, Configuration management, Equipment
Sogeclair Aerospace Ltd	United Kingdom	Aerostructure, Systems installation, Configuration management, Equipment
Sogeclair Aerospace SA	Spain	Aerostructure, Systems installation, Configuration management, Equipment
Sogeclair Aerospace Sarl	Tunisia	Aerostructure, Systems installation, Configuration management, Equipment
Sogeclair Aerospace SAS	France	Aerostructure, Systems installation, Configuration management, Equipment
S2E Consulting SAS	France	Systems engineering and electricity
Simulation Division
A.V. Simulation	France	Simulators
Oktal SAS	France	Simulators
Oktal Synthetic Environment SAS	France	Virtual environments
Division Véhiculier
Séra Ingénierie SAS	France	Vehicles
Holding
Sogeclair SA	France	Holding
Rain Luxembourg (Holding Am Du Nord)	Luxembourg	Sub-holding
Sogeclair Aerospace Inc	Canada	Sub-holding
MSB Aerospace Corp	USA	Sub-holding
* excluding 2 holding companies in Canada without any operational activities

SOGECLAIR's main customers are listed in the reference document available on the company's website (www.sogeclair.com).

SOGECLAIR has facilities in France, Germany, Spain, Canada, Luxembourg, the UK, Tunisia and the USA.

Besides the countries where it has facilities, the countries addressed by SOGECLAIR in 30 June 2017 are: South of Africa, Australia, Austria, China, Cyprus, South Korea, Denmark, India, Ireland, Israel, Italy, Japan, Latvia, Netherlands, Portugal, Qatar, Romania, Singapore, Slovenia, Spain, Sweden, Switzerland and Turkey.

4.1 Consolidated financial situation per division

	AEROSPACE		VEHICLE		SIMULATION			HOLDING
ASSETS (in thousands Euros)	H1 2017	2016	H1 2017 2016		H1 2017	2016	H1 2017	2016
Goodwill	10,548	10,899			1,649	1,694	3	3
Intangible assets	6,309	6,765	60	78	492	634	203	215
Property, plant and equipment	4,934	4,567	528	497	302	271	161	193
Equity method affiliates	68	66
Investments in associates	885	891	25	6	229	239	173	172
Share eliminations	-21,511	-21,511	-200	-200	-2,823	-2,823	24,535	24,534
Non-current assets	1,234	1,678	414	381	-152	15	25,074	25 117
Inventory and work in-process	8,234	8,745			33	45
Trade and other receivables	40,104	39,491	2,495	1,167	5,726	5,440	52	5
Other circulating assets	5,146	3,974	270	218	1,343	1,228	8,261	7,829
Deferred income tax	4,296	3,740	85	100	345	365	292	222
Cash and cash equivalents	4,041	2,739	6		1,419	1,546	8,384	10,593
Current assets	61,820	58,688	2,857	1,485	8,867	8,624	16,990	18,649
TOTAL ASSETS	63,054	60,366	3,271	1,867	8,715	8,639	42,065	43,767
							HOLDING
	AEROSPACE		VEHICLE			SIMULATION
LIABILITIES (in thousands of Euros)	H1 2017	2016	H1 2017	2016	H1 2017	2016	H1 2017	2016
Capital							2,900	2,900
Capital contribution							2,630	2,630
Own shares							-712	-712
Reserves and accumulated results	12,196	13,854	1,585	1 559	5,698	6,195	14,137	13,358
Equity capital, group share	12,196	13,854	1,585	1 559	5,698	6,195	18,955	18,176
Minority interests	3,836	3,880	446	440	1,322	1,441
Consolidated equity capital	16,032	17,734	2,032	1 999	7,020	7,636	18,955	18,176
Long-term provisions	2,098	1,584	121	103	1,187	945	421	243
Long-term qualified pre-payments	2,450	2,881			12	72
Long-term borrowings and financial debts	4,120	3,257	84	11	64	102	8,739	9,594
Other long-term liabilities	1	1
Non-current liabilities	8,669	7,724	205	114	1,263	1,120	9,160	9,837
Short-term qualified pre-payments	632	407			110	227
Current part of provisions for other liabilities and charges	1,255	1,139	40	21	78	82	2,864	2,626
Short-term borrowings and financial debts	7,192	5,072		4	32	248	17	1
Short-term provisions	156	244	52
Trade and other payables	9,928	12,388	450	92	1,636	1,100	1,006	316
Tax and social liabilities	16,591	15,027	629	413	2,615	2,770	1,305	1,492
Deferred tax liabilities	35
Other liabilities	3,564	2,887	279	68	3,304	3,673
Intra-group eliminations	-999	-2,256	-416	-845	-7,343	-8,218	8,759	11,318
Current liabilities	38,353	34,908	1,034	-246	432	-117	13,950	15,754
TOTAL LIABILITIES	63,054	60,366	3,271	1 867	8,715	8,639	42,065	43,767

4.2 Consolidated income statement per division

	AEROSPACE			VEHICLE		SIMULATION		HOLDING
INCOME STATEMENT (in thousands of Euros)	H1 2017 H1 2016			H1 2017 H1 2016		H1 2017 H1 2016		H1 2017 H1 2016
Sales	64,534	60,882	1,546	731	8,260	6,120
Other income from the activity	328	100	1	2	320	400	6	4
Cost of goods sold	-24,962	-22,325	-738	-153	-3,113	-2,040	-1,276	-934
Personnel charges	-34,493	-33,117	-568	-527	-3,512	-3,446	-843	-1,077
Taxes and duties	-395	-381	-32	-21	-77	-77	-84	-77
Amortisation and provisions	-1,397	-2,080	-150	-52	-377	-284	-173	-10
Other charges	-38	-175		3	-37	-9	-56	-39
Intra-Group operations	-2,464	-2,279	4	-79	-428	-202	2,888	2,561
Current operating income	1,112	625	62	-95	1,034	463	462	427
Other operating income and charges	18	-4	-2	2	-32		-20	-6
Operating profit before contribution of equity method affiliate income	1,130	621	60	-94	1,002	463	443	421
Share of equity method affiliates in profit Operating profit	2	-56
OPERATING INCOME	1,132	565	60	-94	1,002	463	443	421

5 - RELATED COMPANIES

5.1 Commercial lease

SCI SOLAIR, has a link with the directors of SOGECLAIR and there are shareholders who have voting rights greater than 10% (refer to chapter 8.3 of the 2016 reference document).

The contractual terms and conditions were drawn up according to market rules.

To 30 June 2017, the contractual relations with SCI SOLAIR have been exercised correctly and do not lead us to anticipate any risk for SOGECLAIR. There are no debts with respect to SCI SOLAIR on 30 June 2017.

The future payments will concern the payments of the rentals and charges relative to the rental contracts.

5.2 Board of Directors

The number of independent directors exceeds the minimum threshold recommended by the Middlenext Code. The remuneration paid to the members of the Board of Directors is shown in paragraph 5.4 of the Board of Directors' report to the AGM in chapter 26 of the 2016 reference document.

You are also reminded that there is a life annuity paid for the benefit of Mr Jean-Louis ROBARDEY, further to the purchase of a business completed on 27 December 1985 (Refer to chapter 16.2.2 of the 2016 reference document).

5.3 Directors

No changes have been made during the period to the main directors' short- and long-term benefits.

S.A. SOGECLAIR

7, avenue Albert Durand 31700 - BLAGNAC

AUDITORS' REPORT ON THE HALF YEARLY FINANCIAL INFORMATION

Period of 1st January 2017 to 30th June 2017

To the shareholders,

In performing the duty entrusted to us by your General Meeting and in application of article L.451-1-2 III of Monetary and Financial Law, we have proceeded with:

• a limited examination of the half-yearly consolidated accounts of the company SOGECLAIR SA, relative to the period from 1st January to 30th June 2017, such as appended to this report;
• a verification of the information provided in the half-yearly management report.

These half-yearly consolidated financial statements were drawn up under the responsibility of your Board of Directors. It is our duty to express an opinion on these financial statements based on our limited examination.

I OPINION ON THE ACCOUNTS

We conducted our limited examination in accordance with the professional auditing standards in France. A limited examination essentially consists of interviewing the board members in charge of the accounting and financial aspects and of implementing analytical procedures. These tasks are less extensive than those required for an audit performed according to the professional auditing standards that apply in France. Consequently, the assurance – obtained in the framework of a limited examination – that the accounts taken as a whole do not include any significant anomalies is moderate, and is lower than that obtained in the framework of an audit.

On the basis of our limited examination, we have not noted any significant anomalies that could put into question, with respect to the IFRS baseline such as adopted in the European Union, the regularity and sincerity of the consolidated half-yearly accounts and the true and faithful picture they give of the asset base, financial situation at the end of the half-year, and of the result for the past half-year of the group made up of the people and entities comprised in the consolidation.

II SPECIFIC VERIFICATION

We have also verified the information provided in the half-yearly management report relative to the half-yearly consolidated accounts on which we performed our limited examination. We have no special comment to make regarding their fairness and conformity with the half-yearly consolidated accounts.

Drawn up in Toulouse, on 8 September 2017

The Auditors,

E X C O F I D U C I A I R E D U S U D O U E S T JEAN-MARIE FERRANDO

M O R E R E A U A U D I T ROBERT MOREREAU