KEOLIS S.A. FINANCIAL REPORT 2017 · n HIGHLIGHTS OF THE FINANCIAL YEAR Keolis S.A. carried out a...

KEOLIS S.A.FINANCIAL REPORT 2017

CONTENTS 1. MANAGEMENT REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Management Report of the Board

of Directors at the Annual General Meeting

on 3 May 2018.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Appendix 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9

Appendix 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Appendix 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

2. CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . 34Key figures for the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Notes to the consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

Statutory auditors’ report on theconsolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

3. UNAUDITED MANAGEMENT FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Key figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Income statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

Statement of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

Statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100

4. ANNUAL FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 101Financial statements at 31 December 2017 . . . . . . . . 103

Notes to the Annual Financial Statements . . . . . . . . . . . 106

Information on subsidiaries and non-consolidated investments . . . . . . . . . . . . . . . . . . . . . . . . 119

Statutory auditors’ report on the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133

1. MANAGEMENT REPORT

CONTENTSA MANAGEMENT REPORT OF THE BOARD

OF DIRECTORS AT THE ANNUAL GENERAL MEETING ON 3 MAY 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

n HIGHLIGHTS OF THE FINANCIAL YEAR . . . . . . . . . . . 4n CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . 6n ANNUAL FINANCIAL STATEMENTS . . . . . . . . . . . . . . . 6n SUBSIDIARIES AND HOLDINGS . . . . . . . . . . . . . . . . . . 6n NOTIFICATION OF MAJOR HOLDINGS

AND ACQUISITIONS OF CONTROL . . . . . . . . . . . . . . . 6n RESEARCH AND DEVELOPMENT ACTIVITY . . . . . . . 6n FORESEEABLE TRENDS AND FUTURE OUTLOOK . 6n SIGNIFICANT EVENTS SINCE

THE END OF THE YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . 7n NON-FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . 7n INFORMATION ON SUPPLIER

PAYMENT DEADLINES . . . . . . . . . . . . . . . . . . . . . . . . . . . 7n ALLOCATION OF PROFIT . . . . . . . . . . . . . . . . . . . . . . . . 8n SHAREHOLDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8n EMPLOYEE SHARES IN COMPANY CAPITAL . . . . . . 8n AGREEMENTS COVERED BY ARTICLE

L. 225-38 OF THE COMMERCIAL CODE . . . . . . . . . . . 8n DIRECTORS AND CONTROL OF THE COMPANY . . . 8

B APPENDIX 1 REPORT ON COMPANY GOVERNANCE . . . . . . . . . . . . . . 9

C APPENDIX 2 NON-FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . .11

1 n METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.2. Scope and reference period . . . . . . . . . . . . . . . . . . . 111.3. List of information and definitions . . . . . . . . . . . . . . 12

2 n CONDITION 1: COMPLIANCE WITH THE GROUP GENERAL RULES AND POLICIES . . . . . . . . . . . . . . 13

2.1. The Konformité programme . . . . . . . . . . . . . . . . . . . 132.2. The Safety Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.3. The Group Environment Policy . . . . . . . . . . . . . . . . . 142.4. The Diversity and Inclusion Policy . . . . . . . . . . . . . 142.5. The Purchasing Policy . . . . . . . . . . . . . . . . . . . . . . . . 15

3 n CONDITION 2: ENGAGEMENT WITH OUR CUSTOMERS AND OTHER STAKEHOLDERS . . . . 16

3.1. Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163.2. Partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

4 n COMMITMENT TO OUR CUSTOMERS: SAFETY AND ACCESSIBILITY . . . . . . . . . . . . . . . . . 18

4.1. Customer Experience . . . . . . . . . . . . . . . . . . . . . . . . . 184.2. Accessibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

1 n COMMITMENT TO OUR EMPLOYEES: SAFETY, DIVERSITY AND INCLUSION . . . . . . . . . . 20

5.1 Health and safety in the workplace . . . . . . . . . . . . . 205.2. Diversity and Inclusion . . . . . . . . . . . . . . . . . . . . . . . . 215.3. Gender equality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225.4. Employing people with a disability . . . . . . . . . . . . . 235.5. Combating discrimination . . . . . . . . . . . . . . . . . . . . . 235.6. Other employment data . . . . . . . . . . . . . . . . . . . . . . 245.7. Organisation of work . . . . . . . . . . . . . . . . . . . . . . . . . 255.8. Organisation of social dialogue . . . . . . . . . . . . . . . . 255.9. Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

6 n COMMITMENT TO THE ENVIRONMENT: ENERGY, WASTE AND WATER . . . . . . . . . . . . . . . . . 27

6.1. Energy efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 276.2. Reducing impact on the climate . . . . . . . . . . . . . . . 296.3. Waste management . . . . . . . . . . . . . . . . . . . . . . . . . . 306.4. Water consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

7 n COMMITMENT TO REGIONS: SOLIDARITY, EDUCATION AND CULTURE. . . . . . . . . . . . . . . . . . . . 31

7.1. Solidarity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317.2. Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

8 n CONCLUSION AND OUTLOOK . . . . . . . . . . . . . . . . . 32

D APPENDIX 3 TABLE OF EARNINGS FOR THE PAST FIVE FINANCIAL YEARS . . . . . . . . . . . . . . . . . . . . . . . . .33

1. MANAGEMENT REPORT | KEOLIS S.A. 2017

3

MANAGEMENT REPORT OF THE BOARD OF DIRECTORSAT THE ANNUAL GENERAL MEETING ON 3 MAY 2018A


4

Ladies and Gentlemen,

We have convened this Ordinary Annual General Meeting, in accordance with legal, regulatory and statutory requirements to report to you on the activities of our Company during the year ended 31 December 2017 and submit for your approval the annual and consolidated accounts of that year.

In addition, your Auditors will also read their reports to you.

For our part, we are at your disposal to provide any clarification and further information that you might find desirable.

We will review below, successively, the various items of informa-tion as required by applicable regulations.

n HIGHLIGHTS OF THE FINANCIAL YEAR

Keolis S.A. carried out a share capital increase of €65,981,400 which was fully subscribed to and paid for by its shareholder GROUPE KEOLIS S.A.S., through the issuance of 5,498,450 new shares.

Business activity and development

France n The group recorded solid commercial results, with the full-year revenue of contracts won amounting to €761 million. In the Major Networks division, the Lille and Rennes contracts were renewed with profitable conditions. Among its Large City networks, the Group had its contract renewed in Caen and Amiens, and also won a new contract in Besançon. Keolis however lost the Lorient and Montbéliard networks. In the French Regions and Greater Paris, contract renewal was generally satisfactory.

n Measured by value, the offensive bids won by the Group compensated for the defensive contracts that were lost.

n Passenger revenue on city contracts held up well, with 4.6% growth across Keolis’ 14 largest city transport networks compared to their 2016 figure.

International n Outside France, the Group’s business grew significantly, with the launch of a number of new operations: tram networks in Manchester (United Kingdom) and Aarhus (Denmark), the TWN rail network (Germany), train and bus networks in Zwenzwoka and Almere (Netherlands), the Foothill bus network (United States), the multimodal network in Newcastle (Australia), the extension of the Gold Coast tram network (Australia), the launch of the Hyderabad metro (India) and the wins of the Doha metro and tram network

(Qatar) and the Pudong metro (China). The Group lost the London Midland rail franchise in the United Kingdom.

n The year was also marked by the turnaround of the Boston and Las Vegas contracts, while in Continental Europe, results failed to improve.

Acquisitions and investments

In France, the Group acquired the companies Les Coccinelles and Les Kangourous 2 (Greater Paris) which provide transport services to people with reduced mobility (PRM).

Outside France, the Group acquired Compagnie des Autobus Liégeois in Belgium and the company Goolwa (school buses) in Australia.

The company’s financial position

At 31 December 2017, the Group had net financial debt of €246 million, chiefly comprising a borrowing facility arranged with its shareholder GROUPE KEOLIS S.A.S. for €93 million, and exter-nal borrowings contracted in France and other countries which mature between now and 2025.

To manage its liquidity risk, the Group uses bank overdrafts, short term financing facilities and daily liquid investments.

The Group manages its counterparty risk by only borrowing from banks falling within the “Authorised” bank category. This cate-gory is defined according the banks’ ratings and their participa-tion towards the financing of the Group.

As a result of its operational, financial and investment activities, the Group is exposed to the following financial market risks:

n Interest rate risk; n Foreign exchange risk; n Commodities risk.

To manage this exposure, the Group uses standard, liquid and market-available derivative financial instruments:

n forward and futures sales and purchases; n swaps; n call options; n put options used in combination with call options to provide symmetric or asymmetric collars.

The Group’s interest rate risk exposure results from its financial debt, part of which is subject to variable interest rates. It is the-refore exposed to rate rises. The objective of risk management is to protect the Group’s financial income/expense from an increase in interest rates, while taking advantage of any decrease in rates to the greatest possible extent.


5

The Group also makes investments in foreign entities. To cover the foreign exchange risks engendered by these investments, the Group uses derivative financial instruments to maintain a reference exchange rate defined for the year.

The Group is exposed to the risk of fluctuation in the price of diesel. This risk is partially hedged in the concession contracts signed with public transport authorities. For the remaining expo-sure, the Group implements a hedging policy using derivative financial instruments whose objective is to minimise the volatility of Group profits.

Main risks and uncertainties

The Group conducts its business in a constantly-evolving eco-nomic, competitive and technical environment. Identifying and anticipating risks and finding ways of controlling them lie at the heart of the Group’s concerns.

The Group’s geographical footprint, its status as a market leader and key player on different modes of transport, and the nature of the passenger transportation business all entail both intrinsic and external risks for the Group.

n Continuity risks are caused by sudden and serious events which affect business continuity and potentially harm its image and credibility. This could be the case, for example, with a major passenger accident, a terrorist attack or a widespread data hack.

n Performance risks are a threat to the company’s results. They arise from operational management issues, such as an inability to win key contracts, a lack of necessary exper-tise in the complexity of railway operations, an inadequacy of skills to match needs, and non-compliance with regula-tory requirements.

n Transformational risks threaten the future of the company and necessitate deep and rapid corrective action. This type of risk can be illustrated by poor capitalisation of data, the arrival of new unlicensed market players and a partly non-mature matrix organisation.

In the perspective of managing these risks rigorously, the Group has introduced a risk monitoring and control system sponsored by the members of the Executive Committee.

The Group’s financial results

The Group’s recurring turnover for 2017 amounts to €5,138.6 million, an increase of €272.6 million, or +5.6%, on 2016. The currency impact is negative at €(24.9) million in particular against sterling, the Swedish krone and the American dollar. There is a negative technical effect of €(6.9) million due to the effects of IFRIC 12.The consolidation scope effect is positive at +€13 million, inclu-ding +€3.7 million in France (Les Coccinelles and Les Kangourous 2), and +€9.3 million abroad (Skyport in Canada, Autobus Liégeois and Cars Gembloutois in Belgium, Goolwa in Australia).

The portfolio impact of contracts won and lost stands at +€101.2 million, comprising €(29.7) million in France (losses of the Tadao contract in Lens/Béthune, Keolis Alençon and the Caen PRM transport service, which were partly compensated by the T11 Transkeo tram-train with Transilien and the wins of Côte Basque-Adour and PAM 94), and +€130.9 million abroad (in particular, the wins of Manchester in the United Kingdom, Utrecht in the Netherlands, Newcastle in Australia and Foothill in the USA.). Organic growth within existing contracts stands at +€190.3 or +3.9%, comprising +€63.8 million in France (Major networks +€29.6 million, Large City networks +€13.6 million, Regions +€16.1 million, Greater Paris +€0.8 million and Other +€3.7 million), +€127.0 million for international activities (United Kingdom +€4.3 million, Continental Europe +€32.2 million, North America +€58.5 million, Australia +€30.7 million, Regions for Development +€1.4 million), and €(0.6) million in the corporate holding company. Organic growth of turnover including portfolio growth amounts to +€291.4 million or +6.0%.

Consolidated recurring EBITDA stands at €259.9 million, up by €18.4 million, or 7.6%, on 2016. The foreign exchange impact is stable at €(0.1) million.The technical impact is negative at €(2.2) million.The consolidation scope effect improves recurring EBITDA by €2.6 million, including +€0.6 million in France (Les Coccinelles and Les Kangourous 2), and +€2.0 million internationally (Skyport in Canada, Autobus Liégeois and Cars Gembloutois in Belgium).The portfolio impact of contracts won and lost amounts to +€4.0 million, of which €(2.8) million in France (notably the loss of Tadao, partly compensated by win of Côte Basque-Adour), and +€6.9 million outside France (in particular Manchester in the United Kingdom, Utrecht and Almere in the Netherlands). Organic growth within existing contracts amounts to +€14.0 million or +5.8%, comprising €18.3 million in France (Major networks +€11.5 million, Large city networks +€1.4 million, Regions +€1.4 million, Greater Paris €(3.7) million and Other +€7.8 million), €(0.6) million for international activities (United Kingdom +€1.1 million, Continental Europe €(17.7 million), North America +€12.7 million, Australia +€1.8 million, Regions for Development +€1.5 million), and €(3.8) million in the corporate holding company. Organic growth of recurring EBITDA including portfolio growth is +€18.0 million or 7.5%.

Recurring operating profit amounts to €94.5 million, an impro-vement of €27.0 million or 39.9% in relation to 2016.

Net income (Group share) for 2017 amounts to €39.4 million as against €24.0 million in 2016.

Free cash flow generation with application of IFRS 10-11 amounts to €(95.4) million in 2017. Excluding acquisitions, it stands at €(84.7) million, compared to the ex-acquisition free cash flow of +€62.4 million in 2016, thus representing a decline of €(147.1) million. This can be mainly attributed to the change in the variation of working capital.


6

The Group’s net debt with application of IFRS 10-11 amounts to €246.5 million at end of December 2017 compared with €276.3 million at end of December 2016. Excluding acquisitions, it stands at €234.9 million compared with €221.3 million at end of December 2016.

n CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements are prepared in accor-dance with IFRS as adopted by the European Union.

Revenue from ordinary activities amounts to €5,160.2 million.

After taking into account all operating costs, operating profit after investments under the equity method amounts to €93.2 million.

Net profit (group share) for the year ending 31 December 2016 amounts to €39.4 million.

n ANNUAL FINANCIAL STATEMENTS

The financial statements of the Company are prepared in accor-dance with French GAAP.

Operating profit/(loss), including share of joint ventures, stands at (€20,011) thousand.

The Company recorded a financial loss of €(73,525) thousand.

After the posting of an exceptional profit of €4,737 thousand and a corporate income tax credit of €18,017 thousand, Keolis’ financial statements show a net loss of (€70,782) thousand.

n SUBSIDIARIES AND HOLDINGS

The table attached to our balance sheet provides all the necessary information concerning our company’s subsidiaries and holdings.

n NOTIFICATION OF MAJOR HOLDINGS AND ACQUISITIONS OF CONTROL

During the financial year 2017, Keolis S.A. acquired or took control of:

Acquisition of Companies in France /Shareholding investments

Name Date Percentage

Les Coccinelles 31/03/2017 100% Keolis S.A.

Les Kangourous 2 31/03/2017 100% Les Coccinelles

Acquisition of companies abroad / Shareholding investments

Name Date PercentageCompagnie des Autobus Liégeois 31/01/2017 100% Eurobus

Holding

Keolis China Limited (ex PPBT Hong-Kong) 05/01/2017 100% Keolis S.A.

Keolis (Wuhan) Public Transport Operation Management Co Ltd. (ex PPBT Wuhan)

05/01/2017 100% Keolis S.A.

Establishment of companies in France


KLP 19 31/12/2017 100% Keolis S.A.

KLP 20 31/12/2017 100% Keolis S.A.

KLP 21 31/12/2017 100% Keolis S.A.

KLP 22 31/12/2017 100% Keolis S.A.

KLP 23 31/12/2017 100% Keolis S.A.

KLP 24 31/12/2017 100% Keolis S.A.

Establishment of companies abroad


RKH Qitarat LLC 30/07/201751% Hamad

Trading Group LLC 49% RDK

Keolis Downer S 6 Pty Ltd 10/08/2017

100% Keolis Downer Bus &

Coachlines Pty Ltd

Keolis Rail Quebec Inc. 15/08/2017 100% Keolis Canada Inc.

Keolis Asia Pte. Ltd 06/09/2017 100% Keolis S.A.

Operations REM SEC 20/10/2017

74.99% Autocars Orléans Express

Inc. 0.01% Keolis Rail

Quebec

Maintenance REM SEC 25/10/2017 19.99% Autocars Orléans Express

n RESEARCH AND DEVELOPMENT ACTIVITY

The company did not incur any research-related expenditure during the year. Many development activities for new products and services are, however, carried out closer to the operational managers to ensure their ability to meet market requirements. The corresponding expenses are not isolated in profit or loss and have not been specifically monitored.

n FORESEEABLE TRENDS AND FUTURE OUTLOOK

In France, 2018 will be a busy year for the Group, with six contracts up for renewal among its city networks (Tours, Orleans, Nimes, Brest, Angers and Aix-en-Provence). The main avenues for growth in France, in the medium term, are targeted acquisitions in the increasingly concentrated suburban market and ongoing preparations in light of the Île-de-France market opening up to competition.


7

Outside France, the Group will continue to pursue its profit reco-very in Boston and at KTA (Las Vegas, USA), implement turna-round plans in Germany, Sweden and at GTR (UK) and continue to seek productivity gains in all areas and all countries.The group will additionally mobilise for the MR4 contract at Yarra Trams (Australia) and the Doha contract in Qatar, and will moni-tor the performance of the many contracts it won in 2017.

n SIGNIFICANT EVENTS SINCE THE END OF THE YEAR

There are no significant post-balance sheet events to report.

n NON-FINANCIAL INFORMATION

In application of article 225 of the Act of Parliament of 12 July 2010 on the national commitment to the environment, the so-called “Grenelle II”, Keolis S.A., as a non-listed company whose balance

sheet or net revenue exceeds 100 million euros and whose ave-rage number of permanent employees during the financial year exceeds 500, is obliged to publish its non-financial data in its management report.

For the benefit of readers, we publish all of this information in the chapter “Non-financial data” appended to this document.

In accordance with legislation and regulations in force, the infor-mation supplied in this appendix is verified by an independent third-party body certifying the existence and validity of the dis-closed information. Its report is at the disposal of the Annual General Meeting. Furthermore, four Keolis subsidiaries will publish their own non-financial data insofar as they attain the thresholds for the applica-tion of the abovementioned article 225. These subsidiaries are Keolis Bordeaux Métropole, Keolis Lille, Keolis Lyon and Keolis Rennes.

n INFORMATION ON SUPPLIER PAYMENT DEADLINES

In accordance with articles L 441-6-1 and D 441-4 of the Commercial Code, we breakdown, as at the end of the last financial year, the balance of amounts owing to our suppliers and owed by our customers by due date:

Invoices received and not paid at year end0 days

(indicative) 1 - 30 days 31 - 60 days 61 - 90 days 91 days and more

Total (1 day and

more)

(A) Overdue payment bracketsNumber of invoices 1,231 - - - - 511Total value of invoices (incl. VAT) 8,274 68 191 34 1,507 1,800Percentage of total value of purchases (excl. VAT) for the year 11.0% 0.1% 0.3% 0.0% 2.0% 2.4%

Percentage of total turnover (excl. VAT) for the year - - - - - -

(B) Invoices not included in (A) relating to disputed or non-booked liabilities Number of invoices not included

Value of invoices not included (excl. VAT) (C) Reference payment due date used (contractual or legal)

Due date used to calculate overdue payments ✓❑ Contractual due date ❑ Legal due date

Invoices issued and not settled at year end0 days

(indicative) 1 - 30 days 31 - 60 days 61 - 90 days 91 days and more

Total (1 day and

more)

(A) Overdue payment bracketsNumber of invoices 195 - - - - 406Total value of invoices (incl. VAT) 19,476 1,629 360 324 3,789 6,102Percentage of total value of purchases (excl. VAT) for the year - - - - - -

Percentage of total turnover (excl. VAT) for the year 9.4% 0.8% 0.2% 0.2% 1.8% 3.0%

(B) Invoices not included in (A) relating to disputed or non-booked receivables Number of invoices not included

Value of invoices not included (excl. VAT) (C) Reference payment due date used (contractual or legal)

Due date used to calculate overdue payments:✓❑ Contractual due date ❑ Legal due date


8

n ALLOCATION OF PROFIT

We propose to allocate the loss for the year, amounting to €70,781,998.78 to Retained Earnings; the new balance of which will become €(74,954,553.54).

We additionally propose that the negative balance of Retained Earnings be fully assigned to Other Reserves, reducing their amount to €57,083,810.67.

In accordance with legal requirements, you are requested to note that the amount of the dividend distributed and that of the cor-responding dividend tax credit for the three previous financial years were as follows:

FIN

AN

CIA

L YE

AR

Div

iden

d

Dis

trib

uted

inco

me

elig

ible

for

the

allo

wan

ce

Dis

trib

uted

inco

me

not e

ligib

le fo

r th

e al

low

ance

2016 Nil - -

2015 Nil - -

2014 €19,130,937.70 €4.90 per share - €19,130,937.70

Non-tax-deductible expenses We inform you that in the course of the past financial year, non-tax-deductible expenses, within the meaning of Articles 223 quater and 223 quinquies of the General Tax Code, totalled €277 thousand.

n SHAREHOLDINGS

On 31 December 2017, GROUPE KEOLIS S.A.S. owned 100% of the capital.

n EMPLOYEE SHARES IN COMPANY CAPITAL

On 31 December 2017, there were no employee shares in the Company’s capital.

n AGREEMENTS COVERED BY ARTICLE L. 225-38 OF THE COMMERCIAL CODE

You will be read the Statutory Auditors’ report on agreements made during the fiscal year and authorised by your Board pur-suant to Article L.225-38 of the Commercial Code.

n DIRECTORS AND CONTROL OF THE COMPANY

Situation of board directors’ mandates

We inform you that Mr Michel Lamboley, a director appointed as a representative of the shareholders, has resigned from his posi-tion as director. You will be asked to appoint Mrs Kathleen Wantz O’Rourke to replace him, for the remaining duration of her pre-decessor’s term of office, i.e. until 3 March 2022.

Mrs Patricia Meunier, a director appointed as an employee repre-sentative, died at the end of 2017. In accordance with legal and regulatory provisions currently in force, her successor Mrs Fabienne Jousni now sits on the Board of Directors as employee representative, for the remaining duration of the term of office of the other employee representatives, i.e. until 3 March 2022.

We hope that you will approve the above proposals and vote the resolutions to be submitted to you.

THE BOARD OF DIRECTORS

APPENDIX 1 REPORT ON COMPANY GOVERNANCEB


9

1. Mode of exercise of the General Management

We report, in accordance with Article 148 of the Decree of 23 March 1967, that your Board of Directors has opted to combine the functions of Chairman of the Board and CEO.

Mr Jean-Pierre Farandou was re-appointed Chairman and CEO during the Board of Directors’ deliberations of 3 March 2016.

2. Terms of office and functions exercised by each of the executive officers

We list hereafter the terms of office and functions performed in all companies by each executive officer during the year:

Jean-Pierre FARANDOU

Chairman & CEO and Director

Keolis S.A.

President / Sole Member of the Executive Board

GROUPE KEOLIS S.A.S.

Chairman of Board of Directors

UNION DES TRANSPORTS PUBLICS ET FERROVIAIRES

(until 30/06/2017)Chairman of Board of Directors

ORCHESTRE NATIONAL D’ILE-DE-FRANCE

(until 31/07/2017)

Isabelle BALESTRA

Director Keolis S.A.Director KEOLIS LILLEDirector TRANSPOLE

(since 19/10/2017)

Bruno DANET

Director Keolis S.A.Director INSTITUT KEOLISChairman INSTITUT KEOLISChief Executive KEOLIS BORDEAUXDirector KEOLIS BORDEAUX

METROPOLEDirector KEOLIS RENNES

Xavier HUBERT

Director Keolis S.A.Director KEOLIS RENNES Director KEOLIS ORLEANS VAL DE LOIREDirector KDR VICTORIA PTY LTDDirector KDR GOLD COAST PTY LTDDirector KEOLIS DOWNER PTY LTD

Michel LAMBOLEY

Director Keolis S.A.Director KEOLIS LYONDirector KEOLIS LILLEDirector KEOLIS BORDEAUX METROPOLEDirector LION / SENECA FRANCEDirector TRANSPOLE

(since 19/10/2017)Director EUROBUS HOLDING (Belgium)Director KEOLIS ESPANA

Arnaud VAN TROEYEN

Director Keolis S.A.Chief Executive STE DE GESTION DE

L'AEROPORT D'ANGERS-MARCE

(since 05/01/2017)Director and Chairman of Board of Directors

STE. D’EXPLOITATION AEROPORT ALBERT PICARDIE

Managing Director and Member of the Management Board

STÉ D’EXPLOITATION AEROPORT DOLE JURA

Director ONEPARK Company Director KEOMOTION

(until 17/10/2017)Member of Strategy Committee

DRIVERLITE (since 08/12/2017)

Member of Strategy Committee

KEOLIS SANTE (since 04/07/2017)

Member of the Supervisory Board

Keolis Nederland B.V.

Marc HINFRAY

Staff representative Director Keolis S.A.


10

Patricia MEUNIER

Employee Director Keolis S.A.Director KEOLIS ALPES MARITIMESDirector KEOLIS BAIE DES ANGES

(until 01/01/2017)

Éric PATOUX

Employee Director Keolis S.A.Operational Director STE DES TRANSPORTS DE

L’AGGLOMERATION DE CHAUNY

Member of Administrative Board

KEOLIS ARTOIS-GOHELLE

Director KEOLIS AMIENS

3. List of agreements entered into directly or through third parties, between an executive director or a shareholder holding more than 10% of the voting rights of the Company, and another company in which the Company directly or indirectly holds a share in excess of 50%, notwithstanding ordinary transactions concluded at normal terms and conditions.

Nil.

4. Summary of currently valid delegations of powers and authorities granted by the general assembly of shareholders with regard to capital increases, in application of articles L. 225-129-1 and L. 225-129-2 of the Commercial Code, and mentioning the use made of these delegations during the financial year.

Nil.

APPENDIX 2 NON-FINANCIAL DATAC

Keolis, a leading public transport provider, operates and maintains urban, suburban and inter-urban transport networks on behalf of more than 300 contracting authorities (Public Transport Authorities, public or private clients) whose end customer is the passenger.Keolis is headquartered in Paris. The Group’s activities extend to 16 countries (Australia, Belgium, Canada, China, Denmark, France, Germany, India, Luxembourg, the Netherlands, Norway, Portugal, Qatar, Sweden, the United Kingdom and the United States). Keolis S.A. is wholly-owned by GROUPE KEOLIS S.A.S., which itself is 70%-owned by SNCF and 30%-owned by Caisse de Dépôt et Placement du Québec (CDPQ).Keolis contributes to sustainable development through a wide range of corporate initiatives and has injected these projects into its corporate programme KeoLife. The different aspects of Keolis’ Social Responsibility are thus shared between the Departments concerned. The Health, Safety and Environment department is responsible for its overall coordination. Social Responsibility is an item on the agenda of Keolis’ Executive Committee at least once a year in order to review work undertaken, approve new initiatives and select topics for emphasis.In addition to this, Keolis draws on discussions with its internal and external stakeholders to define the strategy and recommendations for the entire Group.

1 n METHODOLOGY

1.1. Background 2017 is the fourth year in which non-financial data is published in the Keolis S.A. financial report, in accordance with Article 225 of the Act of 12 July 2010 on the national commitment to the environment. The entity concerned is Keolis S.A., a non-listed company for which the balance sheet total or net revenue is in excess of 100 million euros and in which the average number of permanent employees throughout the financial year exceeds 500. The list of themes to be covered appears in Article 225-105-1 of the French Commercial Code.

This publication is structured in alignment with the Keolis Group’s Social Responsibility strategy which, using the international standard ISO26000 as a framework, sets out two conditions and four commitments:

n Condition 1: Compliance with the Group General Rules and Policies.

n Condition 2: Engagement with our customers and other stakeholders.

n Commitment to our customers: safety and accessibility. n Commitment to our employees: safety, diversity and inclu-sion

n Commitment to the environment: energy, waste and water n Commitment to regions: solidarity, education and culture.

To cater to the expectations of our stakeholders, this publication also incorporates the principles of the international standard GRI (Global Reporting Initiative) G4, first level “In accordance – core”.

A table illustrating the correlation between this publication and the various guidelines can be obtained on request from [email protected]

1.2. Scope and reference periodNon-financial data is consolidated on the same scope as Keolis S.A’s financial data (excluding EFFIA S.A., Technical Assistance and subsidiaries for which Keolis is not the majority shareholder). This reporting scope is referred to hereafter as “Group”, “the Keolis Group” or “Keolis”.

The scope of consolidation for employee and social data is the calendar year, from 1 January to 31 December, and applies to 100% of the Group headcount.

The reference period for environmental data is the also calendar year, from 1 January to 31 December. If this is not the case, rules for estimation or consolidation on a deferred timescale are pro-posed to subsidiaries in the set of indicators. In 2016, environmental data was calculated from data covering 84% of Group staff, represented by 98 subsidiaries. In 2017, it covers 85% of Group staff represented by 98 subsidiaries. The list of subsidiaries covered may be obtained on request from [email protected]

Quantitative information is supplied for the last two calendar years, from 1 January to 31 December 2016 and 2017.


11

1.3. List of information and definitions

The list below provides definitions for each set of quantitative data and the reporting scope when smaller than that stated in point 1.2 above.

New quantitative data has been added; this appears in italics in the list below. The data for these items is only available for 2017.

Some items of data published in the 2016 Keolis S.A. financial report and reproduced in this publication have been adjusted to account for corrections/additions supplied after the publication of last year’s report. These are indicated in the rest of this publi-cation by an asterisk appended to the updated figure. Where relevant, significant differences are explained in the main text.

Quantitative data frequently appears alongside information of a qualitative nature in order to provide additional details as to the applicable policy and/or the variation between years Y and Y-1.

When specific themes appearing in article 225-105-1 of the French Commercial code are not considered relevant, an expla-nation is provided for this in the main text.

1.3.1 Employment

Workforce: Workforce registered as at 31 December.

Breakdown of workforce by geographical zone: Breakdown by country of workforce registered as at 31 December.

Breakdown of workforce by age bracket: Breakdown of total registered Group and Keolis S.A. workforces by age brac-ket.

Percentage of women in the total workforce: Percentage of women registered in the total workforce of the Group and Keolis S.A.

Percentage of women managers in the total number of managers (France): Percentage of women managers in the total number of managers in France and in Keolis S .A .

Percentage of women managers in the total number of managers (International): Percentage of women managers in the total number of managers (excluding France and Keolis S .A) . Total number of new employees: Cumulative number of new employee entries for the year, (including the integration of new subsidiaries), regardless of type of employment contract.

Total number of departures: Cumulative number of depar-tures for the year, regardless of the reason for leaving, including the loss of subsidiaries during the year.

Total number of dismissals: Cumulative number of departures during the year relating to dismissals.

Total number of resignations: Cumulative number of resigna-tions during the year .

Payroll: Personnel expenditure, including wages and social charges, duties and taxes on remuneration and other personnel expenses (ancillary costs, directors’ fees, employee profit sha-ring, temporary staff and staff on secondment).

Change in payroll: Change in payroll between years Y and Y-1 in gross value and expressed as a percentage.

Percentage of part-time employees: Percentage of employees with a part-time contract in the total workforce as at 31 December.

Percentage of drivers/transport staff: Percentage of driver employees in the total Group workforce as at 31 December.

Percentage of woman drivers/transport staff in total workforce: Percentage of women driver employees in the total number of drivers/transport employees in the Group .

Total number of training hours (excluding Sweden): Total number of hours of training given to employees.

Number of employees having received training (excluding Sweden): Total number of employees who followed at least one training course during the year, specifying the number of employees with a managerial status in France and considered as managers abroad.

Total number of workers with a disability (number of employees - France): Number of workers with a disability registered as at 31 December, listed as part of the mandatory annual declaration of the employment of workers with a disabi-lity submitted to the Agefiph (DOETH) in France.

Rate of absence for sick leave: Number of hours of absence due to sickness/number of hours worked, expressed proportio-nately to the entry and departure dates of the employee (part-time work on health grounds included).

Industrial action rate (France): Number of days of industrial action per employee in the year .

Workplace accident frequency rate (France): Frequency of workplace accidents declared per quarter leading to at least one day of leave. This rate represents the average number of work-place accidents leading to leave by a group of employees having worked one million hours over the period considered. NB: This rate includes violent behaviour. It does not take into account all ongoing dispute procedures.

Severity rate of workplace accidents (France): Severity of accidents. Calculated by assessing the total number of leave days due to workplace accidents, excluding the day of the acci-dent itself. This represents the number of days compensated for 1,000 hours worked, in other words the number of days lost due


12

to temporary invalidity for 1,000 hours worked.

1.3.2. Environment

Number of employees covered by an ISO14001 certifica-tion: Number of employees registered in the workforce at 31 December exercising an ISO 14001 certified activity (i.e. the number of employees concerned by the area of application assessed by the certification body).

Percentage of employees covered by an ISO 14001 certi-fication: Percentage of employees exercising an ISO14001 certified activity as a proportion of the total Group workforce.

Total quantity of hazardous waste: Tonnage of hazardous waste produced over the year in question, regardless of the type of processing. Hazardous waste is waste defined as such in the regulations applicable to the production site.

Total quantity of non-hazardous waste: Tonnage of non-hazardous waste produced over the year in question, regardless of the type of processing. Non-hazardous waste is waste defi-ned as such in the regulations applicable to the production site.

Quantity of hydrocarbon sludge: Tonnage of waste from hydrocarbon/water separators.

Percentage of recovered hazardous waste: Percentage of hazardous waste recovered over the year in question, regardless of the type of processing. Recovery is a type of waste processing operation defined as such in the regulations applicable to the production site.

Percentage of recovered non-hazardous waste: Percentage of non-hazardous waste recovered over the year in question, regardless of the type of processing. Recovery is a type of waste processing activity defined as such in the regula-tions applicable to the production site.

Total water consumption: Volume of drinking water pur-chased by the subsidiary over the period in question, charged to buildings, processes, and maintenance of tracks (including in particular planted tram lines).

Share of water consumption in water-shortage areas (per country): Percentage of drinking water consumption in Keolis countries where water stress is very high (between 40 and 80%) or extremely high (over 80%).

Traction energy consumption for commercial vehicle fleets (in TOE, excluding rail): Quantity of energy purchased within the framework of commercial services (dead mileage included), expressed in tonnes of oil equivalent (TOE). The vehi-cles concerned are those operated/owned by the company used for commercial services, on behalf of others (passengers, Public Transport Authorities, other transport providers, corporate customers). The indicator incorporates all means of transport (bus, coach, metro, tram, trolleybus).

Traction energy consumption for commercial railway use (in TOE): Quantity of traction energy purchased within the fra-mework of commercial services provided by rail (electrical or thermal traction), dead mileage included, expressed in tonnes of oil equivalent (TOE).

Energy consumption of company facilities (in TOE): Quantity of energy consumed or purchased on the sites, exclu-ding traction energy, expressed in tonnes of oil equivalent (TOE).

GHG emissions from commercial transport and company facilities: Greenhouse Gases emitted by the corresponding use of energy, expressed in tonnes of CO2 equivalent.

1.3.3. Community

Number of pupils benefitting from an awareness initiative: Number of pupils covered by an awareness initiative at school carried out by one or several employees from the subsidiary concerned.

Total purchases made from SSE (France): Total purchases made over the year from organisations working in the social and supportive economy (“économie sociale et solidaire”), divided into organisations offering people with a disability access to work, helping people into a job and others, expressed in euros excluding VAT .

2 n CONDITION 1: COMPLIANCE WITH THE GROUP GENERAL RULES AND POLICIES

The Keolis Group has organised these commitments into seve-ral policies: Safety, Diversity and Inclusion, Konformité, Environment and Purchasing. They are all reproduced in the Group General Rules and in its corporate programme.

2.1. The Konformité programmeThe Keolis Group has for many years asserted its commitment in the area of fair business practice and its rejection of all forms of corruption. The Group voluntarily established the “Konformité” programme in 2013 which calls on all employees to work and exercise their duties in compliance with legislation and business ethics. The “Konformité” programme covers three areas appli-cable in all subsidiaries: strict compliance with free and fair com-petition, prevention of corruption and fraud, and the protection of personal data.A Konformité section for use by all employees was opened on the Group’s social platform. Everyone can consult all of the programme’s reference docu-ments. With regard to the prevention of corruption, the main guidelines provided to the Group’s managers are:

n The Guide for Ethical Business Conduct, n The brochure “Konformité at a Glance”, n The practical guide “The Right Attitudes to prevent corrup-tion”.


13

In addition, the Group defined three procedures which managers are responsible for following, with the possibility of adjustments outside France where necessary, to comply with local law if it is stricter:

n Gifts and hospitality, n Sponsorship and Charitable contributions, n Relations with business partners.

In 2017, the Group continued to pursue its anti-corruption initia-tives by taking into consideration the provisions of the French Act of 9 December 2016 on transparency, the fight against corruption and the modernisation of economic life, known as the Sapin 2 Act.

A memo from the Group President was circulated to all the Group’s senior managers to remind them of the necessity of ensuring that the programme was properly applied and adapted in all of the Group’s entities, by:

n distributing the Guide to Ethical Business Conduct n making the targeted employees follow the anti-corruption training module

n applying the Group Guide to Relations with Business Partners

n applying the Group Policy for Charitable Contributions and Sponsorship

n establishing an internal procedure for gifts and hospitality, following Group directives

n guaranteeing the traceability of initiatives conducted.

Further action was also taken to reinforce the commitment of line management in deploying and effectively applying Group proce-dures. The Keolis Ethics and Compliance Committee continues to convene periodically to discuss subjects of topical interest.

Awareness and training initiatives continued in 2017. The anti-corruption training module aimed at Keolis S.A. managers all over the world was followed by 1,663 employees representing 80% of the initial target. This training course which promotes rules, best practices and the right attitudes to adopt will be repeated again in 2018.In accordance with the new requirements of the Sapin 2 Act, the Keolis Group will open a new whistleblowing system at the beginning of 2018 entitled “Keolis Ethic Line.”This system offers a simple and totally secure procedure for employees and temporary staff to report events of which they have been personally made aware and which fall within the scope of the legal provisions. The procedure will initially be open to all entities in France following notification and consultation of staff representative bodies. International entities may also become members of the group procedure if their national legis-lation so allows. Whistleblowing alerts will be treated in full confidentiality.

2.2. The Safety Policy of the Keolis Group states that safety is a fundamental topic and value for the Group and all of its subsidiaries. This applies to all employees who are required to take into consideration their health and safety as well as those of their colleagues, customers and any other people in their working

environment, on their route or on assignment. This policy is divided into ten chapters:

n Develop a strategy, governance and safety leadership so that our culture excels and our practices are exemplary, in particular through continuous improvement initiatives;

n Clearly define the organisation, the roles and responsibilities in the company and stakeholders;

n Proactively identify sources of danger and mitigate risks in compliance with regulations, standards, rules and practices;

n Develop rules and procedures that are accessible and administrated in an effective document management tool for our service activities, our actions, those of our sub-contractors and partners and for the safety of visitors;

n Define and regularly reassess the management of emer-gency situations and the required service continuity resulting from it;

n Develop and maintain skills and knowledge through training, prevention and communication, also towards passengers and the general public;

n Guarantee the safety of assets and goods managed or placed under our responsibility;

n Conduct the necessary inquiries in the event of incidents, accidents or warning signs so as to identify the appropriate measures, develop return on experience, draw conclusions and deploy them in the company;

n Develop quantitative and quality performance indicators and measurable objectives;

n Ensure that the continuous appraisal of safety is compliant and efficient through regular verifications and audits.

The initiatives and results are presented in the following chapters: “Safety and security of passengers and third parties” and “Health & Safety in the workplace.”

2.3. The Group Environment Policy refers to six commitments and is applicable to all of its activities (operations, maintenance, business activities, administration):

n Fulfilling its obligations based on regulatory requirements and other contractual or voluntary commitments with its stakeholders;

n Protecting the environment by controlling its environmental impact and reducing pollution;

n Engaging in a dynamic movement of continuous improve-ment;

n Improving its energy efficiency n Increasing its waste recovery rate; n Controlling its water consumption.

Initiatives and results are presented in the following chapter: “Commitment to the environment: energy, waste and water.”

2.4. The Diversity and Inclusion Policy of the Keolis Group lays down five commitments:

n Comply with employment law in the regions in which the Group is established and with international standards rela-ting to respect for Human rights and fundamental freedoms, non-discrimination and non-harassment and the promotion of professional equality

n Create a fair and inclusive working environment where each


14

employee feels valued for their skills in their job, their com-mitment and their performance;

n Respect each person, their dignity and their culture within the limitations of health and safety imperatives and internal regulations;

n Adopt an open and empathic attitude towards each person considered individually to understand their needs and expectations;

n Promote diversity and professional gender equality towards our stakeholders.

Initiatives and results are presented in the following chapter: “Diversity and Inclusion”

2.5. The Purchasing Policy The Purchasing Charter defines the general principles relating to purchasing within the Group and sets out rules regarding ethics and behaviour applicable to all internal and external actors involved in the purchasing process. All employees acting on behalf of the Group or one of its subsidiaries must be familiar with, comply with and promote its principles in the interests of fairness and transparency.In accordance with the Group’s CSR commitments, all employees involved in purchasing must promote sustainable development with their business partners. All employees involved in a purchasing process must therefore pass on these concerns to their own suppliers and sub-contractors, encourage suppliers to develop a social and environmental progress plan, and ensure compliance with national laws, regulations and inter-national agreements concerning the protection of individuals

(employees, sub-contractors, product or service users) and the environment.

The Group’s Purchasing Policy is supplemented by three com-mitments to promote Sustainable and Supportive Purchasing:

n The first relates to the supportive economy and local soli-darity, promoting the use of sheltered work organisations as suppliers, contributing to the social economy community and reaffirming a local presence.At group level, Keolis promotes the development of initia-tives relating to the social and supportive economy towards its subsidiaries.With regard to the sheltered work sector, the Keolis group is a partner of the Association Handéco (see “Partnerships” paragraph below). This partnership gives French subsidia-ries access to information on organisations in the sector, an online directory of firms and a dedicated purchasing plat-form on which to publish their tenders.Furthermore, Keolis has subscribed to the UBIZZ offer. This tool (a web platform) offers Keolis better visibility of the firms approached and helps the group to compile its list of bene-ficiary units in France. A framework agreement was also concluded with the sheltered work organisation “Imprimerie Solidaire”. Furthermore, temporary employment companies under framework agreements also promote disability and access to work by offering, whenever possible, assign-ments to people out of work.

In 2017, Keolis thereby spent more than €22 million on purchases from organisations working in the Social and Supportive Economy (SSE):

Article code

Subject of decree 2017 data 2016 data Indicator

I-3-c-1

Taking social and environmental issues into consideration in the purchasing policy

1,989,018 -

Total purchases made from SSE organisations: Disabilities

(associations temping agencies and sheltered work sector)

(in euros)

19,995,120 -

Total purchases made from SSE organisations: Vocational

integration (employment outreach firms, temporary employment

outreach firms and associations) (in euros)

291,765 -

Total purchases made from SSE organisations: other (associations,

SCOP and cooperatives, etc .) (in euros)

22,275,902 -Total purchases made from SSE

organisations (in euros)


15

n The second commitment incorporates several factors into the procurement process: Keolis’ environment policy, risks to the safety of people and goods, and the protection of our data and know-how.Keolis includes analysis criteria relating to the environment and safety when it draws up certain sets of purchasing specifications.During supplier consultation phases, candidates are asked to provide a presentation of their firm with a specific focus on their corporate responsibility policy. Keolis’ supplier selection questionnaire includes several questions on the environment and safety that are relevant to the purchasing segment concerned. In addition to regulations, specific attention is paid to the product life-cycle in terms of energy consumption, circular economy (recycling reuse and waste processing) and risk of pollution.A number of specific clauses relating to waste processing and care for the environment also written into framework agreements on sensitive products (in particular vehicle manu-facturers, batteries, tyres, lubricants, etc.). Product selection takes into account the presence of labels or certification.In the area of safety, Keolis ensures that purchased pro-ducts comply with regulations, in particular in the areas of road safety and occupational health and safety. The third commitment relates to generalising the total cost approach, ensuring transparency and equality of treatment of suppliers and reducing the risk of reciprocal dependence and of monopoly.

Over the past few years, many supplier listings have been developed in line with this second commitment:

● Vehicles running on alternative fuels have been listed. This applies to both company vehicles and vehicles used for transport provision

● A ‘green’ range of cleaning products, an organic part degreasing washer, printers with Imprim’Vert certifica-tion or from the sheltered work sector, have also been listed. These initiatives have been reinforced recently to take into consideration the fight against CMR subs-tances, which translated into listing a biodegradable coolant and distributors of industrial supplies that offer a range of “green” products.

● To reduce fuel consumption, Keolis also recommends using “ecofuel” lubricants.

● A new supplier has been listed for the reconditioning of particulate filters; this comes in addition to the recent initiatives already conducted in the area of the circular economy such as re-treading tyres, processing waste and the practice of “standard exchange”.

n The third commitment relates to generalising the total cost approach, ensuring transparency and equality of treatment of suppliers and reducing the risk of reciprocal dependence and of monopoly.

Since 2016, in the aim of achieving better control of supplier risk and pursuant to regulations on undeclared labour, Keolis has introduced an online supplier monitoring solution to collect documents and monitor their updates throughout

the duration of contracts (taxation and welfare contribu-tions, detailed list of foreign workers, etc.)

For purchasing conducted locally such as security, cleaning, gardening or certain IT purchases, the group Purchasing Department offers subsidiaries specific purchasing kits containing recommendations relating to social responsibi-lity. These purchasing lines are significant items in subsidiary expenditure and require a close relationship.

Furthermore, following the entry into force of new laws on the corporate duty of vigilance and the fight against corrup-tion (known as the Sapin 2 Act), the Group Purchasing Department, in association with other departments (Legal, Internal Audit, HSE and HR) is organising working groups to identify and assess the level of CSR risk by purchasing category in four areas:

● Human rights and fundamental freedoms ● the Environment ● Health and safety in the workplace ● Corruption.

In parallel, the Purchasing Department is working on the implementation of a solution to assess its suppliers’ CSR risks. Initially, the study will be conducted in France, before being extended to all of the group’s international regions.

3 n CONDITION 2: ENGAGEMENT WITH OUR CUSTOMERS AND OTHER STAKEHOLDERS

3.1. StakeholdersEach subsidiary produces their own stakeholder maps. These maps not only identify stakeholders but help to ascertain their expectations. This allow some complaints or disputes to be averted or certain misunderstandings to be rectified. Projects may also be co-created with stakeholders according to their nature.Keolis also provides its subsidiaries with tools and methods to allow them to enter into and/or organise dialogue with their own stakeholders. They are thus provided with a mapping model and prioritisation criteria to be used depending on the challenges and the goal of the dialogue entered into. This includes a list of stake-holders split into three categories: contract stakeholders (PTAs, employees, suppliers), nationwide stakeholders (institutions, ministry, etc.) and local stakeholders (associations, residents, etc.). Subsidiaries are also supplied with a template of the “rules of the game” in their engagement with their stakeholders.

At Group level, Keolis brought together its external stakeholders in October 2017 for the seventh consecutive year: association representatives, central government, Public Transport Authorities, trade federations, firms and experts. Keolis designed this dialogue event in the aim of obtaining feedback from these stakeholders about our activities, our stances and our corporate programme. Members of the Executive Committee were also involved. At this 2017 event, discussions took place around the subject of diversity and secularism.


16

3.2. PartnershipsKeolis has entered into several partnerships to achieve progress and engage in dialogue around its social responsibility:

Points d’Information Mutualisés Multi-Services (PIMMS)Shared Multi-Service Information Offices PIMMS are places for local contact and social solidarity where community workers, professionals in social liaison, help people in their dealings with public services. PIMMS also aim to create career development paths for these community workers to help them into sustainable and qualified employment. Keolis is one of the founding members of the PIMMS national union, esta-blished in 1998.

Association de Coopération pour le Développement et l’Amélioration des Transports Urbains et périurbains (Codatu)Cooperation for the Development and Improvement of Urban and Suburban Transport Association Through its activities, Codatu aims to promote dialogue between major urban transport stakeholders to leverage all of its skills to promote the improvement in transport conditions in towns and cities in the south of France. Keolis is partnering Codatu with the aim of acting for viable mobility in growing towns. Every year, Keolis funds a grant and welcomes a student from the Master’s degree programme in Transport and Sustainable Mobility in African cities. This offers valuable exchange on operating circumstances which vary widely from one country to another.

France Nature Environnement (FNE)FNE is the French federation of environmental and nature protec-tion associations, active all over France, on the mainland, in over-seas territories and in Europe. In their partnership which started in 2013, France Nature Environnement and Keolis work together on all issues relating to mobility, a subject which can be found at the crossroads of economic, social and environmental concerns.

HandecoHandeco is a charity founded in 2008 at the initiative of the largest French associations and federations involved in helping people with disabilities. Handeco promotes the use of sheltered work organisations. It provides firms with a purchasing platform on which to post requests for proposals from this sector, and also publishes a supplier directory. The partnership with Handeco, set up in 2015, contributes to spreading the commitment to sustainable and supportive pur-chasing across the Group’s entities.

HandéoHandéo is an association which acts to improve support to people with a disability and senior citizens and offer them better access to community life.This partnership was established in 2016 under the label “Cap’Handéo Services de mobilité”. This is defined by quality guidelines describing the basic minimum service expected in order to provide guaranteed and safe mobility so as to make the service offering easier to understand and more accessible by people with a disability.

Laboratoire de Mobilité InclusiveInclusive Mobility LaboratoryFounded at the initiative of Wimoov and Total, the goal of the Laboratoire de la Mobilité Inclusive is to bring together major actors in mobility – private and public sector, civil society – to analyse the difficulties faced by the most vulnerable members of the population, and put forward solutions. Keolis has been an active contributor to these exchanges since 2015 alongside other partners such as ADEME (French environment agency), CGET (General Commissariat for Territorial Equality), Fondation MACIF and Pôle emploi.

Fédération des Usagers de la Bicyclette (FUB)Bicycle Users FederationKeolis is a partner of FUB. Founded in 1980, FUB is an associa-tion which promotes cycling as a means of everyday transport, by linking up local associations, lobbying government organisa-tions and running public communication campaigns. Keolis has been part of this partnership for several years, with the aim of being attentive to the needs of cyclists and working locally with cycle stakeholders.

Défense MobilitéThe partnership established between Keolis and Défense Mobilité, the career transition department of the French Ministry of Defence, has enabled more than 650 former Armed Forces staff to join our group since 2009.Communication will be stepped up towards this unit so as to promote opportunities in the different job areas offered by Keolis, in particular that of maintenance.

Service Militaire Volontaire de la MarineVoluntary Military Service of the NavyOn 21 June 2017, the Keolis group signed a partnership with the voluntary military service of the Navy. Through this agree-ment, Keolis supports young people with few or no qualifications in entering the world of work, and offers them the means to get into a job.

Partnership with a disabled athleteArnaud Assoumani is a disabled athlete who has been spon-sored by Keolis since his first world title in 2007. For several years, this partnership has enabled Keolis to raise awareness among its employees through specific meetings and publicity.

Fondation SNCFKeolis joined the SNCF Foundation in 2016 to promote the values of the group and reassert its regional, national and inter-national roots.In 2017 Keolis and the SNCF Foundation contributed to funding the following NGOs and associations:

n “Western Chances” in Australia offers grants to around 100 young people from Melbourne;

n “Aide et Action”, in India, helps migrant children and families whose children suffer from a mental disability;

n “Zellidja” promotes equality of opportunity and the advan-cement of women in France by giving travel grants to 120 young people.


17

4 n COMMITMENT TO OUR CUSTOMERS: SAFETY AND ACCESSIBILITY

As Keolis is convinced that shared mobility is a powerful lever for the sustainable development of a region, its first commitment is to passengers.

4.1. Customer ExperienceUnder the impact of a fast-changing public transport market – increasingly individual and flexible solutions for proactive citizens – Keolis is evolving within in its profession and asserting its status as an operator and integrator of all forms of everyday transport. Our ambition is to co-design a humanised form of mobility offe-ring ever greater “mobile well-being”. The Customer Experience, currently undergoing major transformation, is at the centre of the concerns of Public Transport Authorities to whom Keolis is requi-red to prove its excellence.2016 was marked by the ambition to create a common and differentiating discourse on the Customer Experience. This tan-gible and collaborative programme is based on three concrete promises and elements of proof: Collective Design, Smart Choices and Richer Experience. In 2017, Keolis increased the number of examples of this, and deployed the 2016 pilots in other networks.

4.1.1. Collective DesignTo design an efficient transport service and thus encourage the mobility of people, Keolis makes a point of acting upstream, observing individuals behind the passenger flows. To do this, Keolis conducts national and local research studies entitled Keoscopie, examining passengers’ life and travel patterns to gain a better understanding of the needs of each passenger in each region. This continuous observation is an educational tool on which Keolis draws to highlight the suitability of its proposals and thus enlist support for change.

In April 2017, Keolis presented the findings of the first internatio-nal survey conducted by its observatory for digital mobility at the UNESCO headquarters in Paris. Keolis and its partner Netexplo studied 13 major world cities (Abidjan, Boston, Dubai, Hong Kong, Hyderabad, London, Lyon, Melbourne, Montréal, São Paulo, Shanghai, Stockholm and Tokyo) and analysed 400 solu-tions collected during this world tour, from the most essential to the most disruptive. The survey revealed three major expecta-tions shared by all passengers regardless of their cultural and regional specificities: real-time, ultra-personalisation and step-by-step coaching. In view of these three universal expectations, Keolis defined the 10 criteria to satisfy for a successful mobility experience in the smart city. This enables the group to support cities today in the co-construction of the “smart mobility” of the future.

In addition to these initiatives, Keolis employees and the econo-mic community also have a vital role to play upstream in the design of service offerings. Public Transport Authorities them-selves are increasingly interested in, and use, these co-construc-tion approaches. Keolis’ objective is to encourage the emergence of innovations shared by all stakeholders. With customers,

through the intermediary of committees, focus groups, with employees, on interactive platforms to exchange idea and via calls for projects and partnerships to engage with start-ups.

4.1.2. Smart ChoicesIn an aim to satisfy inhabitants in each region, Keolis has deve-loped unique expertise in designing transport service offers. This expertise can lead to the transformation of a transport network to make it both more efficient and more attractive to customers. This method is based on observing the customer and on a wide range of diagnostic tools developed by the Group which offer an in-depth analysis of the existing service offer and of the region’s specific characteristics. In 2017, emphasis was placed on the complementarity between public transport and new mobility solutions (carpooling, car sharing) to improve territorial coverage and offer customers an end to end transport solution.

To gain in agility, Keolis deploys an active policy partnering French and international start-ups. Leveraging their innovation potential, the Group co-creates new mobility solutions and ser-vices with them.In the area of collaborative mobility, Keolis continued to develop carpooling, in partnership with the firm Instant System. This responsive and multi-modal car-sharing solution that supple-ments public transport is already operational in Bordeaux and is currently being deployed in Bayonne, Caen, Dijon, Lille and Rennes.

Keolis believes that the customer journey is not just a matter of the time spent by the passenger in our vehicles. Keolis thinks like its passengers: from door to door. This approach includes for example walking, renting a bike or using a bike-share bike. 2017 saw the introduction of bike-share electric bikes in Laval and Orleans, the takeover of the bike-share service previously ope-rated by Clear Channel in Dijon, the launch of bike rental services in Chaumont, Arras, Sarrebourg, etc.in 2017, Keolis continued to pursue its actions in favour of pedestrian multimodal interchange routes. When creating trans-portation hubs, pedestrian signage offers easy connections and smoother pedestrian circulation.Finally, in 2017, Egis was designated the winner of a “New mobi-lity” call for projects issued by Grand Paris. With its new partner Flexinéo Cmabulle, Keolis is conducting a six-month experiment on a solution to assist families for travel to school and outside school.

Every passenger at some point requires assistance to get direc-tions, find a departure time or buy their ticket. Keolis responds to this expectation by providing and mastering the entire service chain (both digital and human) on all channels. As human contact is the preferred channel for a great many passengers who are unfamiliar with digital technology, the Group attaches conside-rable importance to the presence of its teams and of the quality of customer contact demonstrated by its drivers and its staff in stations.In 2017, Keolis went even further with the deployment of the M-ticket across the entire Orleans network. Keolis Orleans is the first subsidiary to offer an exhaustive version - for networks equipped with a travelcard system - of the digital solution “Plan


18

Book Ticket”. This offers passengers the opportunity to plan their journey, buy their ticket (book) and also validate it (ticket) through a single digital application. This application had already been deployed in around 10 French networks in a less extensive ver-sion.

In accordance with the Keolis value “We Care”, Keolis subsidia-ries’ external communications are also steered towards passen-gers’ concerns. By avoiding the jargon specific to the transport world, the network comes across as something which makes life easy and supports their plans and desires. On all communi-cations channels (advertising, website, mobile apps, customer-facing staff, leaflets, etc.) the Keolis discourse places emphasis on the promise to provide every customer with the customised passenger experience that fulfils their own expectations. Keolis believes that the keys to winning over and retaining customers are creating the desire to ride the network and creating bonds. Each contact with the customer is an opportunity to create new travelling wants and offer the customer new services tailored to their patterns and needs.

4.1.3. Richer ExperienceBeyond the service offer, being able to count on accessible, reliable, comfortable clean and welcoming transport is a key factor to win the trust of the passenger.Keolis believes that service quality has three purposes:

n Obtain passenger loyalty by showing them every day that they matter;

n Act as a partner to the local authority by delivering on com-mitments and improving service;

n Instil a “customer mind set” at the centre of the firm and the desire for progress.

To make our passengers want to travel on our networks, we have to know how to accompany them, with the right personal attitudes and a welcoming posture. Customer relations can only be effective if they are rooted in a genuine customer culture. This is what has led several Group subsidiaries such as Lyon Orleans, Hyderabad or Melbourne to co-design programmes with their employees to develop the service spirit in the workforce. Managers are the leading ambassadors of this spirit, both inter-nally towards their own teams and externally by regularly coming into contact with customers (meetings with passengers, “mys-tery passenger” operations, etc.). The objective here is to help everyone gain better insight into the expectations of passengers so as to make the right decisions to improve their satisfaction.

By capitalising on the trust of our passengers and on our ges-tures of consideration for our customers, Keolis continues to develop more opportunities to contribute to the high points of cities’ calendars and to its economic and cultural vitality. The objective is also to make good use of the time spent in transport and make it enjoyable. Keolis strives to support and promote actions, projects or events in regions and cities, and draws atten-tion to them through partnerships or communications cam-paigns.

4.2. AccessibilityWhen a public transport authority selects Keolis to operate its public transport network, it entrusts Keolis with much more than just the management of vehicles and infrastructure. It also assigns Keolis with a public service mission. Keolis perceives this role as being at the service of all of its audiences and offering them equal access to its networks. This ambition, which is part of its commitment in the area of social responsibility, requires that transport be reinvented to take into consideration all situations of vulnerability, whether permanent or temporary, which anyone could face one day.

To rise to this challenge, Keolis makes universal accessibility a permanent requirement and a reflex for each of its employees.

Keolis strives to raise its employees’ awareness to the issues of accessibility and to constantly reinforce its expertise in particular through its partnership with Handéo and which launched its label “Cap’Handéo service de mobilité” at the end of 2016. The unique objective of this approach is to enable everyone to get around, smoothly and simply, every day. Keolis Montargis was the first city network to receive certification in 2017.

Communication and information are two major vectors that make transport more accessible, particularly during disruption. Keolis signed a framework agreement with Elioz, a firm which works to improve the inclusion of the deaf and hard of hearing in society, by offering a call centre staffed by experienced ope-rators qualified in sign language, real-time transcription of the spoken word and cued speech. This service is offered at Keolis Caen and Bayonne under their “accessibility for all” policy.

The PAM 75 service, available to Parisians with reduced mobility and operated by Keolis, develops connected mobility. These vehicles transport nearly 800 disabled passengers a day.

In 2017, Keolis signed a series of agreements with local asso-ciations. For example, in Caen, to provide easier mobility during disruption, Keolis signed a partnership with Handuo Tandem. This association allows users of paratransit services to discover the public transport network, improving their independence. Similarly, in Lyon, the KPMR Rhone service appointed Médialys to conduct accompanied journeys on the TCL city transit network. Médialys is a service association which helps and assists public transport users in the Greater Lyon area. Also in its role as an employment outreach association, the people working at Médialys receive specific support to help them build a career path, resolve certain social difficulties, and finally pro-gress gradually into sustainable employment.

Outside France, Keolis continues to deploy similar actions to offer better access to vulnerable passengers through the new contracts that it won in 2017 such as in Melbourne and in Montréal. In Belgium with its subsidiary Melkior, Keolis already offers a taxi service using specially-adapted vehicles to accom-modate people with reduced mobility, sold at the same fares as regular taxi services. In London a network of ambassadors helps people with reduced mobility to get around. These ambassadors


19

are tasked with providing real-time information on network accessibility and physically assisting passengers in their journey.

4.3. Safety and security of passengers and third parties

Within the scope of the Keolis Group’s activities, the safety of passengers and third parties refers to the safety of operations relating to passenger transport services. Security, on the other hand, means prevention and measures enforced to prevent violent or aggressive behaviour and attacks on the company’s activities from outside the organisation.

In 2017 several initiatives were developed in a range of transport modes. To guarantee the safety of Docklands Light Railway passengers in London, a digital tool to assess skills and knowledge helps to improve operators’ proficiency in safety rules, whether working on the network or in operations control centres.

Keolis became involved in an innovation project funded by the MAIF foundation to improve the safety of school transport. This project aims to apply the “nudge” approach (which received the Nobel Prize for economics in 2017) based on behavioural ana-lysis. The aim is to substantially increase the number of high school pupils who attach their seatbelt.

Keolis also provided its French subsidiaries with a range of pre-vention tools. For example, a communications kit entitled “Guaranteeing safe transport to our passengers” was deployed in June 2017. This disseminates best practices and lists the tasks that the driver should carry out before, during and after the transport service. Several new training programmes were also deployed on the theme of safety, security and fare dodging. One deals with risk management and another with crisis manage-ment; these were deployed towards more than 100 subsidiary managers. Driving training was also enhanced by two further programmes: managing road risk in the event of loss of grip, delivered on a private circuit, and the “educational coach” which trains drivers in dealing with fire, evacuating a vehicle in an acci-dent situation, and administering first aid, all through specific role-play situations.

Keolis’ contribution to security comes in the form of tackling fare evasion and antisocial behaviour through the following actions: reinforced patrols by inspection teams on the ground, the increase in video surveillance, targeted communication cam-paigns, the intervention of liaison officers to resolve any conflicts, the increase of its participation in community outreach offices (PIMMS) and the maintenance of close relations with law enfor-cement bodies and the public prosecutor in particular in the form of partnership agreements.

Keolis implements a number of measures to protect passen-gers, staff, sensitive facilities, rolling stock information and com-munications means. Since 2015, several networks have equipped their inspectors with personal safety cameras in the stated aim of protecting them from antisocial and violent behaviour. New front-facing cameras are now fitted to trams in order to

prevent accidents and projectile attacks. These are deployed in Dijon, Bordeaux, Lille and Orleans.Keolis also conducts initiatives to prevent antisocial behaviour by teenagers and young people through visits to schools. In 2017, 59,122 school pupils received a Keolis visit.

Gender equality has been designated as the “Major National Cause” of the five-year presidential term by the French pres-ident. One of the government’s priorities is to fight against sexist and sexual abuse, in particular in the public domain.As part of the National Plan against sexual harassment and sexual abuse in public transport, the group’s subsidiaries carried out a range of initiatives such as exploratory walks, the introduc-tion of on-demand stops, and awareness campaigns relating to sexual harassment. In September 2017, Keolis Bordeaux Métropole launched a campaign against sexual harassment and sexual abuse. An external communications campaign was published to designate and flag sexist behaviour. An information campaign towards staff was also conducted in parallel to remind them of the legal framework and set out the right practices to adopt towards this type of situation. The same type of campaign was also carried out in Tours and in Lyon over the course of the year.Keolis Lyon is also the first French city transport network to have implemented the principle of exploratory walks which began in 2015. Exploratory walks consist of carrying out a diagnostic of a risk or feeling of insecurity on a given route by small groups of women. These walks take place twice a year and have helped, for example, to improve communication on the network against sexual harassment (awareness campaign, a guide to sexual harassment), convert certain stops and roads or improve the way that victims of sexual harassment are dealt with.

In 2017, Keolis stepped up its actions relating to anti-terrorism. New subsidiary directors, operating directors in charge of secu-rity, “seedlings” (young graduates following the Keolis incubator course) and around 20 IKeS correspondents (Keolis Security Institute) were given training on this subject, on the duty of vigi-lance, and on how to inform authorities when necessary. This awareness course, conducted as part of the French “Vigipirate” security programme also gave them access to security reports supplied by the French national defence and security agency, SGDNS.

1 n COMMITMENT TO OUR EMPLOYEES: SAFETY, DIVERSITY AND INCLUSION

5.1 Health and safety in the workplaceGuaranteeing the safety of employees and subcontractors is our obligation in all of the Keolis group’s activities.All employees are asked to ensure that they and their colleagues are safe in their work activities. The group’s policy requires that risks for teams are clearly identified before all else, and that protection measures are strictly applied. This approach gua-rantees accident prevention. It develops and adapts collective or individual protection measures. The group’s vision remains


20

that of “zero harm” which is a guide for the everyday actions and commitment of the entire management, chain with the aim of getting as close to zero harm as possible.

The approach to harmonise maintenance management prac-tices, entitled “KHIM”, fully contributes to Keolis’s safety objec-tive. Through this approach, teams are required to apply the same essential safety rules whether working on a bus in Perth, a tram in Manchester, the electrical power supply on the Lille metro or a rail switch on the Boston railway network. The method introduces the “five-minute safety brief” to remind people of the rules to apply or share situations that employees have encoun-tered that might have led to an accident.

In 2017, a survey was conducted on a perimeter of subsidiaries encompassing more than 70% of occupational accidents which happened in France. This survey studied the causes and cir-cumstances, the consequences of accident situations, and finally the associated organisation and management. It concluded that nearly 84% of accidents happened in operational and revenue protection activities. This survey led to the experi-mentation of a scheme to develop the safety culture which will be extended to other subsidiaries in 2018 and 2019. It aims to involve managers and employees so as to reduce the number of accidents by making them aware of the vigilance that they should exercise and of the essential protection measures that they should apply.

Another important initiative related to a structured approach to deal with the risk of falling asleep while driving. Its principles and processes were validated on networks such as Dijon and Nimes before being deployed more widely in France and abroad. It addresses all of the measures which could be taken, such as for example encouraging a healthy lifestyle or incorporating rest periods into rostering.

Keolis signed an “Employee Safety on the Road” charter with the French Ministry of the Interior and Ministry of Employment. Alongside SNCF and a large number of other firms, Keolis undertakes to continue the work it has started on preventing and reducing employees’ road accidents (home-work journey and driving as part of professional duties for drivers in particular).

The charter comprises on seven main principles: n Prohibiting the use of a telephone while driving unless in an emergency

n Zero alcohol on the road n Wearing a seat belts n Obeying speed limits n Including breaks in the calculation of journey times n Promoting road safety training n Encouraging motorbike drivers to use better protection.

Article code


II-1-d-1

– workplace accidents, notably their frequency and severity, and occupational illness

46.06 Keolis S.A.: 0.00

44.21 Keolis S.A.: 2.86

Workplace accident frequency rate

4.49 Keolis S.A.: 0.04

4.29 Keolis S.A.: 0.07

Severity rate of workplace accidents

5.2. Diversity and InclusionSince 2016, the introduction of Diversity and Inclusion pro-grammes has been incorporated within the Group’s corporate programme entitled Keolife. This is a common framework for all subsidiaries for the deployment of specific projects. Keolis ensures that its subsidiaries share the group’s commitments in the area of diversity and inclusion, and support them to gua-rantee equality between all employees wherever they may be.

As part of the support, a self-assessment tool is provided to subsidiaries to allow them to assess their performance level in terms of diversity and inclusion.

Guideline objectives have also been defined to assist subsidia-ries in building action plans to help them improve and carry out their actions in a perspective of continuous progress (regulatory compliance, definition of objectives and indicators, initiatives to encourage diversity, promoting and spreading the approach, etc.).

When subsidiaries reach the highest performance level in the Keolife guidelines, they receive certification in gender and/or diversity quality, delivered by an external audit office.


21

5.3. Gender equality

Code article


I-1-a-1

– Total workforce and breakdown of employees by gender, age and geographical location

19.8 %22.2 %40.3 %16.8 % 12.4 %16.8 %24.5 %13.5 %16.8 %15.7 %16.5 %26.7 %19.8 %10.2 %30.3 %50.0 %

GroupFranceKeolis S.A.InternationalSweden Australia USA Belgium Denmark NetherlandsUnited Kingdom CanadaGermany India Norway United Arab Emirates

- Percentage of women in the total workforce by country

35.9% Keolis S.A. 36.4 % -

Percentage of women managers in the total number of managers

(France)

International 24.3% - Percentage of women managers in the total number of managers

17.5 % France 19.5 %

International 14.8 %- Percentage of women in the total

number of drivers/transport staff

The Keolis Group has conducted initiatives in the area of gender equality for more than ten years.

Keolis’ four main objectives in the field of professional gender equality are as follows:

n 1. Achieve gender mix in the workforce in all specialities; n 2. Guarantee women better access to positions of res-ponsibility;

n 3. Make all employees aware of the importance of gender equality and inclusion;

n 4. Ensure that the principle of equal pay is applied in all subsidiaries: “same work, same pay”.

in 2016 Keolis became the first passenger transport group to obtain the Gender European Equality and International Standard (GEEIS) which is awarded to companies which undertake action to promote gender equality. Through its subsidiaries, Keolis has also held the French “gender equality” certification delivered by the French standards agency AFNOR since 2009.

To date, 18 Keolis subsidiaries have obtained GEEIS and/or the French gender equality label. 33% of group employees are thus covered by a professional gender equality certification.

Among the certified subsidiaries, Keolis Downer (Melbourne) particularly distinguished itself through its project “Driven Women.” Since 2013, the Australian subsidiary has developed a programme to attract more female applicants to driving jobs

through recruitment campaigns, open days, human resource process reviews and partnerships with specialist employment agencies. Since the project was launched, the number of women working at Keolis Downer has risen by 67%. Keolis Downer now has 20% of women in its workforce.

In 2017, Keolis Hyderabad became the first Indian company to obtain GEEIS. To gain this certification, the company conducted a series of initiatives to increase the percentage of women in the subsidiary. For example, it produced and published a film focusing on the opportunity of maintaining a work-life balance when wor-king in the company. It also concluded an agreement with police to make female employee journeys from home to work safer.

Keolis employees have the opportunity to act effectively in favour of equality regardless of their job, by becoming a member of one of the internal equality and diversity networks (Keolis Pluriel in France, WoW - Women on Workforce in India, WIN in the USA).Keolis Pluriel is an ambassador for the “SNCF au Féminin” network which has 6,300 members in France and is one of the largest internal networks in terms of membership and budget in France.The WIN (Women Initiative Network) at Keolis Commuter Services (Boston) promotes increased female participation, from the make-up of teams in the subsidiary to supplier firms. It pro-motes mutual aid between members and mentoring. It also aims to attract more women to the transport sector by supporting female entrepreneurship.


22

Keolis ensures that it applies equal pay between men and women across its entire organisation. In France, category pay grids are applied in all subsidiaries to prevent any risk of inequa-lity between holders of the same job. For employees to whom category grids do not apply (exclusively management functions), studies are regularly conducted to measure the pay gap between men and women. The latest study conducted at the beginning of 2016 with equal pacE, assessed the pay gap at -4.2% between women and men.In international subsidiaries a managerial pay monitoring system will be implemented.

In accordance with its legal obligations, its convictions and its commitments, the Group decided in 2017 to include more women in the membership of boards of directors of companies governed by French law under S.A. or S.A.S. status, controlled by Keolis S.A.

The group also promotes its commitments to gender equality outside the company.

Keolis is a founding member of the gender equality think tank Arborus.

The group took part for the second year running in the Women’s Forum Global Meeting. The chairman of the Board of Directors, Jean-Pierre Farandou, spoke at a workshop on the inclusive organisation of the future. Laurent Kocher, Executive Director for Marketing, Innovation and Services, and Benjamin Cardoso, director of LeCab, also contributed their expertise during round tables. Finally, seven female employees also took part in various workshops organised over two days.

As explained in the previous chapter illustrating its commitments to passengers, Keolis continued to conduct initiatives for female passengers on public transport in 2017.

5.4. Employing people with a disability

Article code


I-1-f-2

– measures implemented in favour of employing disabled people

1,470Keolis S.A.: 5=> expressed in number of employees

1,422.79Keolis S.A.: 5.08=> expressed in number of units

Total number of workers with a disability

Keolis ensures that all of its French and international operational subsidiaries fulfil their legal obligations in relation to disability as required by local legislation. Many subsidiaries, which play a major role in their communities, undertake proactive awareness-raising and social inclusion actions to fight against all forms of discrimination and exclusion.Keolis Rennes is the first public transport operator to have sig-ned an agreement with Agefiph, the French association whose remit includes helping to get disabled people into sustainable employment in private sector companies.

Keolis also works on supporting these disabled workers in adap-ting their workstation and including them within the collective working environment.

In 2017, through its partnership with Arnaud Assoumani, Keolis raised the awareness of its HR population to company spirit, disability and performance during a seminar dedicated to group human resources. This awareness was also deployed at the Keolis Caen subsidiary during its company seminar. In parallel, 302 employees received disability awareness training during courses organised in 2017.More of these awareness campaigns will be conducted and promoted through digital tools provided to our operational sub-sidiaries.

In 2018, Keolis wishes to launch an awareness initiative to

encourage disability declarations and support people who could be recognised as being disabled workers.

As a transport operator, Keolis also plays a major role in terms of mobility solutions for those with disabilities. The Keolis Group is the leading carrier of passengers with reduced mobility in France. Results for 2017 are presented in the previous chapter relating to commitment to passengers.

5.5. Combating discriminationThe Group is committed to promoting the employment of young people, seniors with experience or those changing career path, job-seekers, disabled workers and people of different nationali-ties and cultural backgrounds. For several years, Keolis has developed essential partnerships with organisations such as Cap Emploi, Pôle Emploi and local missions to help people who face difficulties when entering the workforce. With the aim of offering new opportunities to people over the age of 50 and to people in career transition, Keolis works with regional units spe-cialised in career transition services, the ministry of Defence or the French national police.

Keolis raises awareness among its managerial staff on their arrival in the Group through the induction course WelKome then throughout their career, about the Group’s commitments to equality and diversity and how this translates into action in their everyday work.


23

5.6. Other employment data

Article code


I-1-a-1

– Total workforce and breakdown of employees by gender, age and geographical location

61,012including 1,553 Keolis S.A.

56,740including 1,558 Keolis S.A.

Number of employees

registered as at 31 December

34,648incl. 1,553

6,2014,6424,3253,2141,5532,1671,978

879621658122

-4

FranceKeolis S.A.SwedenAustraliaUnited StatesBelgiumDenmarkNetherlandsUKCanadaGermanyIndiaNorwayChinaUnited Arab Emirates

33,390including 1,558

6,4314,1283,9082,5341,4921,7211,182

837441511127317

FranceKeolis S.A.SwedenUnited StatesBelgiumAustraliaDenmarkNetherlandsUKCanadaGermanyIndiaNorwayChinaUnited Arab Emirates

Total number of employees per

country

Group1,868 (3%)4,289 (7%)

5,856 (10%)6,694 (11%)7,825 (13%)8,779 (15%)9,651 (16%)8,653 (15%)4,059 (7%)1,780 (3%)

Keolis S.A.87 (6%)

214 (14%)252 (16%)243 (16%)241 (16%)208 (13%)161 (10%)109 (7%)34 (2%)4 (0%)

< or = 25 years 26 to 30 years31 to 35 years36 to 40 years 41 to 45 years46 to 50 years51 to 55 years56 to 60 years61 to 65 years Over 65 years

Group1,824 (3%)4,157 (7%)

5,537 (10%)6,150 (11%)7,629 (13%)8,440 (15%)9,404 (17%)8,229 (15%)3,737 (7%)1,633 (3%)

Keolis S.A.81 (5%)

229 (15%)248 (16%)239 (15%)207 (13%)248 (16%)148 (9%)125 (8%)28 (2%)5 (0%)

< or = 25 years 26 to 30 years31 to 35 years36 to 40 years 41 to 45 years46 to 50 years51 to 55 years56 to 60 years61 to 65 years Over 65 years

Number of employees per

age bracket

19.8%Keolis S.A.: 40.3%

19.9%Keolis S.A.: 39.7%

% of women in the total workforce

I-1-a-2 – new hires and dismissals

11,888of which 5,927 France

of which 261Keolis S.A.


of which 314 Keolis S.A.

Total number of new employees



5,768 exc. end of fixed term contracts

of which 3,187 Franceof which 175 Keolis S.A.

Total number of departures,

excluding expiring fixed-term contracts

1,503of which 820 France


1,240of which 769 France

of which 15 Keolis S.A..

Total number of dismissals

2,740Of which 1,005 FranceOf which 83 Keolis S.A.

- Total number of resignations

I-1-a-3 – remuneration and its variation

3,052.1 2,913.4 Payroll in € million

+4.76% + 3.29 % % of change in payroll

138.7 92.8 Change in payroll in € million

The perimeter used to express the number of departures was modified in 2017 to include departures due to the end of fixed term contracts. To compare with the published data from 2016, the number of departures in 2017 excluding the end of fixed term contracts is 6,617 for the group, including 3,415 in France and 223 for Keolis S.A.


24

5.7. Organisation of work

Article code


I-1-b-1 – organisation of working time

16.7%Keolis S.A. 2.5%

18.6%Keolis S.A. 2.7%

Percentage of part-time employees

67.9%Keolis S.A. 0%

67.6%Keolis S.A. 0% Percentage of driver employees

II-1-b-1 – rate of absence 6.03%Keolis S.A. 1.59%

5.88%Keolis S.A. 1.34% Rate of absence for sick leave

Absenteeism is an issue monitored locally by each Keolis Group subsidiary. In addition to local action plans, Keolis Group has defined, via its corporate programme, joint areas for progress in order to permanently control the rate of absence and ensure the well-being of employees. Time has been spent better defining the roles and responsibilities of local managers and developing their skills. The regular monitoring of absence has also become one of their tasks.

5.8. Organisation of social dialogueEach Group subsidiary has employee representative bodies in accordance with local legislation. However, the structure, prerogatives and obligations of these bodies vary greatly from one country to the next, depending on nationally applicable legislation.

In France, the management of each subsidiary chairs these representative bodies and can negotiate company-wide agreements with the subsidiary’s trade union delegates. All French subsidiaries with over 50 employees have a works council and committees for health, safety and working conditions (CHSCT). The Keolis Group ensures that all subsidiaries have the necessary tools for their representative bodies to operate in optimal condi-tions. It regularly contributes to subjects that may have an impact on the road and urban transport sector and provides updates on the legal environment through regular meetings and a two-monthly employee newsletter.

The Keolis Group has an agreement concerning the functioning of its European Works Council. This committee brings together staff representatives from all the European countries in which the Group operates (number of union representatives proportionate to the country workforce). The European Works Council meets twice a year and currently comprises 15 members of six different nationalities. On the basis of a jointly written agenda, debates mainly revolve around the groups economic and financial situation, its strategic orientations and other themes such as safety and social responsibility.Excluding training days (two days in 2017) and preparatory meetings, the operating costs of Keolis is European Works Council amounted to €152,000 in 2017.

In addition to its national and European bodies, Keolis wishes to conduct a group level survey on employee engagement, which will be deployed in 2018 in France and in 2019 abroad.

Article code


I-1-c-1

– Organisation of social dialogue, in particular staff information consultation and bargaining procedures

0.33 - Industrial action rate

5.9. Training The Keolis Group considers training as a tool to benefit its employees’ development at every stage of their career path. In 2017, 3.60% of payroll was invested in training, representing more than three times the French legal obligation.Keolis commits to developing the skills of each employee according to their area of expertise in order to foster their career deve-lopment, facilitate internal mobility and master key skills for the Group’s growth. Training has therefore been designed according to a logical career path and is aimed at all managerial and non-managerial staff. For example, in 2017, several new programmes were


25

deployed on the theme of safety, security and revenue protection (see previous section: “Safety and security of passengers and third parties”). The deployment of the training module on anti-corruption also continued in 2017 (see previous paragraph: “the Konformité programme”).

Keolis furthermore continued to develop its Incubator courses designed to recruit and train future young managers in different specialities (operations, marketing, passenger rail and maintenance) by creating a new incubator in security and revenue protection. These courses, lasting one year, include practical training on transport and time spent in the subsidiaries to give them the oppor-tunity to become familiar with the professions and activities covered by the company. In 2017, Keolis welcomed 30 new “seedlings”.

Keolis intends to accelerate the reinforcement of the company culture, the development of a common base of expertise in all Group countries and the support provided to the Group in setting up in new markets.Furthermore, to accompany the digital transformation strategy, the group launched a wide-ranging training programme in 2017 to help people become accustomed to digital technology, aimed at all group employees. This is a first time that this type of programme addressing all employees is deployed in a transport operator. The ambition for 2018 is that 20% of employees obtain their digital passport.

Article code


I-1-e-2 – total number of training hours

1,217,285of which Keolis S.A.:

38,778

1,021,132of which Keolis S.A.:

35,940Total number of hours of training

32,988of which Keolis S.A.:

950

34,118of which

Keolis S.A.: 998

Number of employees having received training

1,002 - Total number of managers having received training (France)

International 276 - Total number of managers having received training

3.60% - Percentage of payroll spent on training

The increase in the number of hours of training in 2017 is related to better reliability of feedback of data from international subsidia-ries (excluding Sweden). The number of hours of training in this perimeter has risen by 50% and represents 52% of hours of training followed by group employees.

Training is developed in partnership with the Keolis Training Institute. Various training modules have been added to the Keolis training catalogue to meet Group subsidiaries’ specific needs in terms of the environment. Environmental issues are also incorporated into the compulsory training course for Group drivers and in the WelKome induction course for all new Keolis S.A. managers.In 2017, Institut Keolis welcomed 1,645 people, delivering the equivalent of 13,046 hours on HSE subjects.A range of internal communication channels promote environmental approaches: newsletters, an intranet and its collaborative social platform and the KeoLife Week, an opportunity for subsidiaries to share their experiences and promote ground-level initiatives.


26

6 n COMMITMENT TO THE ENVIRONMENT: ENERGY, WASTE AND WATER

As a public transport operator, Keolis is fully conscious of its contribution to protecting the environment and has a duty to lead by example. As public transport is by definition a more environmentally friendly alternative to the use of private vehicles, controlling the environmental impact of its activities has been singled out as a major commitment in the Group’s social responsibility strategy.

The environment approach of the Group, chiefly based on the feedback from its subsidiaries, has been certified ISO14001 for the past three years. In 2017, this certification covered 17 Group subsidiaries. This grouped certification has instigated a genuine dynamic around the three commitments restated in the Group’s environment policy: improve its energy efficiency, increase its waste recovery rate and control its water consumption.

Article code


I-2-a-1

– organisation of the company to take environmental issues into account and, where applicable, assessment or certification programmes in terms of the environment

21,673 18,693 Number of employees covered by ISO14001 certification

35.52% 32.95%Percentage of employees

covered by ISO14001 certification

Keolis updates its mapping tool of risks relating to social responsibility. This provides an opportunity to requalify the notion of risk to the environment and thus assess its criticality in view of the group’s activities.

Food waste, noise disturbance and the protection of biodiversity are not significant environmental issues for the Group. Where relevant, these themes can be addressed locally, according to the situation encountered (applicable regulations, complaints by residents, establishment of a company canteen on site, protected species nearby, etc.). The Group’s service activity does not entail the substantial consumption of raw materials and does not have a significant impact on land use. These subjects are therefore not major environmental issues for the Group.

6.1. Energy efficiencyEnergy consumption is the main environmental impact of our activities. Improving our energy efficiency is one of the objectives of Keolis Group’s environment policy.

To support energy transition, Keolis works in three main areas:

n Improvement of behaviourEco-driving is a major contributor to reducing the fuel consumption of vehicles. Simulator training raises bus, coach and tram drivers’ awareness of the benefits of eco-driving. Smooth driving improves customer comfort and saves fuel, without having any impact on commercial speed. Keolis has also listed a range of products suitable for buses and coaches called “Konfort”, to view how driving affects consumption by mea-suring acceleration and braking. Today no fewer than 4,190 vehicles are equipped with an eco-driving assistant (Konfort or similar).

n Measuring and controlling the energy efficiency of entrusted assetsThe Group’s environmental approach includes as a minimum the monitoring and control of the energy consumption for buildings and commercial vehicle traction.


27

Article code


I-2-c-3

– energy consumption, measures taken to improve energy efficiency and use of renewable energies

294,251 283,389*Traction energy consumption for commercial vehicle fleets

(excluding rail) in TOE

54,470 51,936Traction energy consumption for commercial railway use in

TOE

23,398 22,089*Energy consumption of

company facilities in TOE

372,119 357,414*Total energy consumption in

TOE

The increase in the consumption of traction energy is proportional to the associated number of kilometres.

The 10% increase in the electricity consumption of facilities is the reason behind the variation in facilities’ energy consumption. This is caused by structural changes which four major group subsidiaries underwent in 2017 (new maintenance workshops, start-up of new contracts) and masks the positive effects of good practices implemented in the group’s other subsidiaries (better resource management, staff awareness, etc.).

In total, the group’s energy consumption represents 5 kWh/kilometre travelled.

Traction energy data for 2016 (excluding rail) has been significantly updated in relation to the previous publication. This is because new tools to control consistency have resulted in international data becoming more reliable. This particularly applies to data from Keolis Transit America (USA) being updated.

n Supporting Public Transport Authorities in their approaches to improve the environmental performance of their fleet and/or building renovations.

Keolis deploys its tailored PTA support approach in three stages, taking into consideration the changing legal environment and in alignment with its safety culture. Keolis analyses and designs the most suitable service in connection with the existing service offer and the limitations imposed by each contract, deploys its services whilst supporting the public transport authority and passengers, then capitalises on lessons learned so as to share its experience with other contracting authorities and improve service.For several years, Keolis has invested in a range of solutions to reduce the environmental impacts of its activities, often being a forerunner in the field. The solutions implemented are tailored to the local context and the fleet: alternative energies, particle filters, recovery systems or energy saving systems. Keolis is particularly active in this field, leveraging the entire range of alternative energies, such as bio-fuels, ethanol, products from the gas sector and electrical energy. In 2017, Keolis operated nearly 3,600 vehicles running on alternative fuels, breaking down by fuel type as follows: 827 Biodiesel, 143 Bioethanol, 517 Biogas, 216 Diester, 1,217 NGV (including at least 428 containing a fraction of biogas), 242 electric (including 130 trolleybuses in Lyon), 31 GPL and 363 hybrid.Keolis is continuing its actions in this field through active technological intelligence with manufacturers and equipment suppliers to identify and possibly develop solutions to optimise the environmental performance of the vehicle fleet.In Châlons-en-Champagne, the public transport authority chose to incorporate 30% of Diester into the diesel of its buses and its river shuttle. By choosing this biofuel, the city authority has halved its greenhouse gas emissions, while also supporting the local economy: producers of rapeseed have a new sales opportunity, and livestock farmers can feed their animals on the rape seed cake by-product. To go even further, Keolis is currently testing a hybrid bus on behalf of the PTA which combines Diester with an electric engine. Designed by Iveco and tested on the network’s line 1, this 12-metre hybrid bus charges its batteries when braking. Its electric drive enables the Urbanway bus to travel emission-free speeds of up to 19 km/h.Buildings consume far less energy than operated vehicles. Keolis nonetheless takes action to optimise energy consumption in a range of areas: heating, air-conditioning, hot water production, lighting and auxiliary equipment (ventilation, pumps), as well as machine tools and air compressors.


28

6.2. Reducing impact on the climate Greenhouse emissions produced by Group activities are proportional to the energy consumption of commercial vehicles, the Group’s leading source of emissions, and to energy use by buildings (heating, lighting). The emission factors used mainly come from the French carbon base and the International Energy Agency. Full details of these factors are available on request from [email protected].

The tasks of measuring and reducing GHG emissions are mainly carried out by subsidiaries either on a voluntary basis or in com-pliance with regulations. This is because reduction action plans must be defined and assessed locally, in particular due to the quantity and variety of contracts and types of network operated. Actions to reduce emissions are to be estimated and assessed by way of an indicator which includes the notion of trip or traveller (CO2 emissions per trip/per passenger.km). The Greenhouse Gas Emissions Statement for public transport must apply to a given geographical zone. Modal shift from private car to public transport can thus be measured. This helps to show that public transport is a solution to reduce global GHG emissions.

Article code


I-2-d-1 – greenhouse gas emissions;

929,547 888,056*GHG emissions from

commercial traction (excluding rail) in TCO2e

212,614 203,963GHG emissions from

commercial rail traction in TCO2e

74,946 66,128*GHG emissions of company

facilities in TCO2e

1,217,107 1,158,147* Total GHG emissions

The increase in greenhouse gas emissions relating to traction is proportional to the increase in kilometres.The increase in electricity consumption of international facilities is the main reason behind the change in GHG emissions of company facilities. The electrical mix of the countries concerned has a high carbon footprint.

In total, in 2017, the group’s GHG emissions represent 1,412 g CO2e/km travelled.

Adapting to climate change is not an immediate or major issue for the Keolis Group. As a public transport player, the Group may make recommendations for policy making, but is not a direct decision-maker in investments and other choices made by Public Transport Authorities.

However, Keolis is established in countries which are already facing the consequences of climate change. Keolis builds on its returns on experience, circulated to all Group subsidiaries, and implements contingency procedures for emergency situations.The major floods experienced in 2016 helped to formalise a return experience which was then shared among all group subsidiaries. In Australia, the three operational subsidiaries have set up very substantial rainwater collection and storage systems so as to be prepared for severe droughts.Similarly, Keolis Commuter Services in Boston has introduced a “snow plan” to anticipate occurrences of blizzards and snow storms according to their intensity.


29

6.3. Waste managementThe Group’s Environment policy has three specific goals, one of which is to increase its a waste recovery rateTo this end, the Health, Safety & Environment Department provides Group subsidiaries with specific tools, to help them better manage their waste.

Article code


I-2-b-2 – measures to prevent,

recycle and eliminate waste

5,713 4,464*Tonnes of hazardous waste

produced

2,950 2,070 Of which hydrocarbon sludge

7,684 7,927*

71% 70%*Percentage of hazardous waste

recovered

60% 52%*Percentage of non-hazardous

waste recovered

Waste recovery rates are improving thanks to initiatives implemented in several subsidiaries, in particular Nottingham Trams in the UK and Keolis Commuter Services in Boston. The latter has deployed a “zero sort recycling programme” in 16 entities which resul-ted in them increasing their local recovery rate by more than 100% for non-hazardous and hazardous waste.

6.4. Water consumptionControlling water consumption is one of the three specific objectives of our Environment policy.

Locally, Group subsidiaries use drinking water as well as recycled and/or rain water to wash vehicles. In 2017, 93 facilities were equipped with a vehicle washing water recycling system and 59 with a rainwater collection system.

Several Keolis Group subsidiaries are located in water-stressed countries, i.e. Australia and Belgium (according to the World Resources Institute).

Article code


I-2-c-1

– water consumption and water supply depending on local factors

1,083,282 719,684* Volume of water purchased in m3

13% 13% Share of water consumption in water-stressed areas

The increase in water consumption is due to the inclusion in the consolidation scope of consumption relating to track maintenance (in particular watering of tram track beds). This water consumption item represents 35% of total group consumption in 2017.

Excluding change in consolidation scope, water consumption decreased by 2% between 2016 and 2017, chiefly due to detection of leaks between 2016 and 2017 but also thanks to the introduction best practices (vehicle cleaning procedure reviewed by Autocars Planche, awareness initiatives introduced by Keolis Côte d’Azur, etc.).

Water consumption data for 2016 has been substantially modified in comparison with the previous publication. This is because control consistency tools have enabled the reporting scope to be updated, and in particular to remove the water consumption from rainwater harvesting in Gold Coast in Australia and consumption related to the upkeep of tram tracks in Keolis Angers.


30

7 n COMMITMENT TO REGIONS: SOLIDARITY, EDUCATION AND CULTURE.

Keolis has integrated an “Active involvement in the local community” project into its corporate programme.Its aim is to standardise practices by allowing each subsidiary to build its own binding and reasoned partnership strategy. The main guidelines of these strategies are shared by the Group and its subsidiaries: be consistent with the “Konformité” programme (see Prerequisite 1), allow each subsidiary to build its own approach and allow the Group to promote (internally and externally) the sub-sidiaries’ partnership actions.

Keolis started up a partnership in 2015 with Biom Work to enable subsidiaries to measure their contribution to sustainable deve-lopment in the region in the areas of employment, public services and environmental conservation. The result is expressed as a percentage of the turnover redistributed over the region. Seven Group subsidiaries took part in this assessment and the results often surpassed the 70% bar. This indicates that 70% of the turnover of these Keolis subsidiaries is acknowledged as being of public utility.

7.1. SolidaritySince 2010, Keolis has been presenting annual awards as part of “Actions for solidarity” (Coups de coeur solidaires). These awards created in 2016 under the aegis of the SNCF Foundation, enable Keolis to shine a light on to the commitment of its employees to associations acting in favour of vulnerable or underprivileged people. The relevance and eligibility of submissions are assessed according to the following criteria: the target audience, social and partnership dimensions, viability and originality, and the creation of social bonds. The Keolis judging panel comprising members of Group departments convened in June and decided to reward the voluntary actions of ten employees who had entered their project this year:

n Three charities supported by employees at Keolis Lille: Solid’Ailes, which supports vulnerable people in bringing their career plan to fruition, becoming independent or finding work; l’association de Gestion des Centres Sociaux Culturels Belencontre & Phalempins which uses digital technology to support inclusion, and Basket Club Loossois which aims to develop and promote sport for all.

n Two charities to promote the quality of life of children with illnesses and their families: Parentraide Cancer with the organisation of collective workshops aimed at parents affected by illness and the hospitalisation of their child in paediatric oncology, sup-ported by a Keolis Gironde employee; and l’Association de Zoothérapie de Côte d’or represented by an employee of Keolis Dijon Mobilité which organises therapeutic activities assisted by an animal.

n Two charities supported by Keolis Bordeaux Metropole employees: A l’asso citoyen, and the association Ombre et lumière 33, Patronage Sainte Jeanne de Lestonnac, which organise holidays for underprivileged children from 8 to 11 years of age; and the association Entr-Autres which offers work experience to young people with a disability.

n The charity CIP75, which uses photography as a means of entering employment in the agricultural and market gardening sector, represented by an employee from Keolis head office.

n The charity Rêve d’Enfants du Calaisis which enables children with intellectual disabilities and autistic tendencies to go on an outing on the theme of breadmaking, supported by an employee from the North East regional division.

These associations received grants from the SNCF Foundation to help to conduct their initiatives and projects aimed at vulnerable members of the population.

7.2. EducationKeolis raises awareness among its future passengers and the citizens of the future:

n by speaking in primary, secondary and high schools, n by organising class visits to depots, n by contributing to awareness initiatives or publications.

There are several aims to these actions: n improve knowledge about public transport, n increase awareness about fighting fare evasion and antisocial behaviour, n highlighting public transport as a way of reducing a region’s impact on the environment.


31

Article code


I-3-b-2

b) Relations with people or organisations with an interest in the company’s activities […]

– Sponsorship or charitable contributions;

59,122 64,155Number of pupils covered

by an awareness initiative at school

The decrease in the number of pupils covered by an awareness initiative can be explained by some programmes which take place every two years such as in the Gold Coast subsidiary in Australia.

8 n CONCLUSION AND OUTLOOK

Keolis is continuing to pursue its efforts in the deployment and application of this strategy, across the 16 countries in which it is established. This diversity, whether cultural, technical or contractual in nature, enables the Group to enhance its experience and to capitalise on and share its best practices in the field of Social Responsibility throughout the world, in a perspective of continuous improvement.

A survey was conducted among 55 French and international subsidiaries of the group (representing 78% of group turnover) in summer 2017. This survey provided a snapshot of the initiatives conducted locally by subsidiaries relating to social responsibility. These initiatives address themes such as sustainable and supportive purchasing, visits to schools, diversity and environmental actions. The findings of this survey will allow the sharing of best practices and improve support given to subsidiaries which have not yet started to take action.

In 2017, in accordance with new legal requirements1, the Keolis Group updated its mapping of risks relating to social responsibility.

The exercise was carried out jointly by several group departments to benefit from different perspectives and expertise and ensure that the results are properly incorporated into the risk management work currently underway. It is planned to ask for input from internal and external stakeholders at the beginning of 2018. According to the findings, Keolis will adjust its social responsibility strategy and associated action plans.

The new whistleblowing system entitled “Keolis Ethic Line” should incorporate themes addressed in the Act on the duty of vigilance.

1 Act no. 2017-399 of 27 March 2018 on the duty of vigilance of mother companies and order principles, and decree no. 2017-1265 of 9 August 2017 taken as appli-cation of the ordinance no. 2017-1180 of 19 July 2017 relating to the disclosure of non-financial information by certain large companies and certain large groups.


32


33

(Arts. 133, 135 and 148 of the Commercial Companies Decree)

2017 2016 2015 2014 2013

1 - Capital at end of period

a) Share capital 412,832,676 346,851,276 46,851,276 46,851,276 46,851,276

b) Number of ordinary shares outstanding 34,402,723 28,904,273 3,904,273 3,904,273 3,904,273

c) Number of future shares to be created

- by conversion of bonds

- through the exercise of subscription rights

2 - Transactions and earnings for the period

a) Share capital 206,126,031 200,348,991 196,787,773 186,836,372 175,946,238

b) Earnings before tax, profit sharing, depreciation and provisions 24,876,154 (8,566,084) 13,568,616 14,909,693 48,656,168

c) Tax (tax credit) on profits (18,017,119) (17,212,644) (15,388,189) (15,845,019) (10,378,714)

d) Employee profit sharing for the year - - - - -

e) Earnings after tax, profit sharing, depreciation and provisions (70,781,999) (4,172,555) 37,599,518 25,151,149 38,731,482

f) Distributed earnings - - - 19,130,938 19,130,938

3 - Earnings per share

a) Earnings after tax, but before allocations to depreciation and provisions 1.25 0.30 7.42 7.88 15.12

b) Earnings after tax and allocations to depreciation and provisions (2.06) (0.14) 9.63 6.44 9.92

c) Dividend paid on each share (Net dividend) - - - 4.90 4.90

4 - Staff

a) Average numbers employed 1,511 1,480 1,408 1,363 1,262

b) Payroll 105,422,972 98,964,303 92,565,343 90,570,432 83,312,146

c) Amounts paid in welfare benefits (Social Security, company benefits, etc.) 48,950,895 45,765,523 43,295,106 42,962,595 38,219,435

APPENDIX 3 TABLE OF EARNINGS FOR THE PAST FIVE FINANCIAL YEARSD

2. CONSOLIDATED FINANCIAL STATEMENTS

CONTENTSA KEY FIGURES FOR THE GROUP . . . . . . . . . . . . . . . . . . .35

B CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . .361 n INCOME STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 36

2 n STATEMENT OF COMPREHENSIVE INCOME . . . . 37

3 n STATEMENT OF FINANCIAL POSITION . . . . . . . . . 38

4 n STATEMENT OF CHANGES IN EQUITY . . . . . . . . . 39

5 n STATEMENT OF CASH FLOWS . . . . . . . . . . . . . . . . . 40

C NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . .41

1 n GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . 41

2 n SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES . . . . . . . . . . . . . . . . . . . . . . 41

2.1. Accounting guidelines . . . . . . . . . . . . . . . . . . . . . . . . 412.2. Changes in accounting principles . . . . . . . . . . . . . 412.3. Use of Management estimates

in the application of the Group’s accounting standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

2.4. Accounting principles . . . . . . . . . . . . . . . . . . . . . . . . . 44

3 n HIGHLIGHTS OF THE FINANCIAL YEAR . . . . . . . . 55

4 n NOTES TO THE CONSOLIDATED INCOME STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . 56

4.1. Staff costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564.2. Other operating income . . . . . . . . . . . . . . . . . . . . . . . 564.3. Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 564.4. EBITDA calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . 574.5. Share in net profit for the year from

investments under the equity method . . . . . . . . . . 574.6. Financial income / (expense) . . . . . . . . . . . . . . . . . . 574.7. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58

5 n NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . 60

5.1. Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605.2. Other intangible assets . . . . . . . . . . . . . . . . . . . . . . . 625.3. Immobilisations corporelles . . . . . . . . . . . . . . . . . . . 635.4. Investments under the equity method . . . . . . . . . . 645.5. Current and non-current financial assets . . . . . . . 655.6. Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655.7. Trade and other receivables . . . . . . . . . . . . . . . . . . . 665.8. Cash and cash equivalents . . . . . . . . . . . . . . . . . . . 665.9. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 665.10. Financial debt and long-term borrowings . . . . . . 675.11. Financial assets and liabilities by category . . . . 705.12. Risk management and financial derivatives . . . . 725.13. Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 775.14. Operating liabilities and other debt . . . . . . . . . . . . 82

6 n OTHER COMMITMENTS NOT RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION AND CONTRACTUAL COMMITMENTS . . . . . . . . . 83

7 n DISPUTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

8 n RELATED PARTY TRANSACTIONS . . . . . . . . . . . . . 848.1. Transactions with GROUPE KEOLIS S.A.S.

and Groupe EFFIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 848.2. Transactions with joint ventures and associates 848.3. Remuneration of the Group’s key managers . . . . 84

9 n POST BALANCE SHEET EVENTS . . . . . . . . . . . . . . . 84

10 n CONSOLIDATION SCOPE . . . . . . . . . . . . . . . . . . . . 8510.1. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8510.2. Joint ventures and associates . . . . . . . . . . . . . . . . 92

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS . . . . . .93

2. CONSOLIDATED FINANCIAL STATEMENTS | KEOLIS S.A. 2017

34

KEY FIGURES FOR THE GROUPA


35

(1) Cash surpluses are presented in brackets.(2) The retrospective application of IFRS 9 has no effect on the Group’s key figures in 2016

(€ million) Note 31/12/2017 31/12/2016 (2)

Revenue 5,138.6 4,866.0

n Revenue France 2,700.7 2,670.4

n Revenue International 2,437.8 2,195.6

Revenue net of sub-contracting 4,944.7 4,676.6

Recurring EBITDA 4.4 259.9 241.4

EBITDA 4.4 240.7 223.2

Recurring operating profit 4.3 94.5 67.5

Operating profit before investments under equity method 67.6 42.1

Operating profit after investments under equity method 93.2 67.5

Profit after tax from continuing operations 41.0 18.4

Profit attributable to equity shareholders 39.4 24.0

Total equity 615.5 515.4

of which attributable to equity shareholders 553.3 463 .7

Net cash flows from operating activities 147.5 239.8

Industrial investments 185.2 183.0

Net financial debt (cash surplus) (1) 246.5 276.3


36

1 n INCOME STATEMENT

(€ million) Note 31/12/2017 31/12/2016 (1) (2)

Revenue 5,138.6 4,866.0

Other income from operations 21.6 15.4

INCOME FROM CONTINUING OPERATIONS 5,160.2 4,881.4

Sub-contracting (193.9) (189.4)

Purchases consumed and external expenses (1,665.5) (1,532.2)

Taxes (15.4) (14.5)

Staff costs, incentive schemes, profit-sharing 4.1 (3,052.1) (2,913.4)

Other operating income 4.2 61.3 49.8

Other operating expense (32.8) (29.1)

Net provisions on current assets (2.0) 0.2

Net depreciation and other provisions charged (172.7) (191.9)

Profit/(loss) on recurring fixed asset disposals (0.1) (1.8)

Amortisation of grants received 7.5 8.4

RECURRING OPERATING PROFIT 94.5 67.5

Other non-recurring income 4.3 11.3 4.7

Other non-recurring expense 4.3 (29.6) (21.8)

Depreciation and provisions on contractual rights 4.3 (8.6) (8.2)

OPERATING PROFIT/LOSS BEFORE INVESTMENTS UNDER EQUITY METHOD 67.6 42.1

Profit/(loss) from associates 4.5 25.6 25.4

OPERATING PROFIT/(LOSS) AFTER INVESTMENTS UNDER EQUITY METHOD 93.2 67.5

Net cost of financial borrowing 4.6 (8.3) (10.7)

Other financial income 4.6 5.1 1.6

Other financial expense 4.6 (8.4) (12.4)

FINANCIAL INCOME (EXPENSE) (11.6) (21.4)

PROFIT BEFORE TAX 81.6 46.2

Taxation 4.7 (40.6) (27.8)

PROFIT FOR THE YEAR 41.0 18.4

CONSOLIDATED NET PROFIT 41.0 18.4

Profit attributable to non-controlling interests (1.7) 5.6

PROFIT ATTRIBUTABLE TO GROUP 39.4 24.0

(1) See note 2.24.28 on changes in presentation of reversals of provisions used(2) The retrospective application of IFRS 9 has no effect on the 2016 income statement

CONSOLIDATED FINANCIAL STATEMENTS B


37

(en millions d’euros) 31/12/2017 31/12/2016 (2)


Actuarial gains and losses on defined benefit pension schemes (6.7) (2.9)

Unrealised gains (losses) relating to the revaluation at fair value of non-consolidated investments (6.4) -

Tax on actuarial gains and losses on defined benefit pension schemes 0.9 (1.2)

ITEMS THAT WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS (12.2) (4.1)

Translation differences and others (1) (6.6) (1.6)

Unrealised gains and losses (0.2) 6.9

on financial hedging instruments (0.2) 8 .0

on available-for-sale assets (2) - (1.1)

Tax on items that may be reclassified to profit or loss 0.1 (2.7)

ITEMS THAT MAY BE RECLASSIFIED TO PROFIT OR LOSS (6.8) 2.6

TOTAL GAINS AND LOSSES RECOGNISED DIRECTLY IN EQUITY (19.0) (1.5)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR 22.0 16.8

of which attributable to:

- Equity shareholders 23.5 18.4- Non-controlling interests (1.6) (1.6)

(1) Mainly comprising the impact of depreciation of the Australian dollar amounting to -€4.9 million in 2017.(2) Following the application of the IFRS 9 standard retrospectively from 1 January 2017, unrealised gains and losses relating to the revaluation at fair value of strategic

investments have been transferred from “Items that may be reclassified to profit or loss” to “Items that will not be classified to profit or loss”.

2 n STATEMENT OF COMPREHENSIVE INCOME


38

ASSETS(€ million)

Note 31/12/2017 31/12/2016

Goodwill 5.1 287.4 289.0

Other intangible assets 5.2 211.7 208.2

Property, plant and equipment 5.3 770.6 752.6

Investments under the equity method 5.4 36.2 37.6

Non-current financial assets 5.5 285.2 214.4

Deferred tax asset 4.7 105.7 86.9

NON-CURRENT ASSETS 1,696.8 1,588.7

Inventories and work in progress 5.6 103.2 92.1

Trade receivables 5.7 441.3 372.9

Other receivables 5.7 514.2 466.2

Current financial assets 5.5 19.5 20.3

Cash and cash equivalents 5.8 276.5 301.6

CURRENT ASSETS 1,354.6 1,253.1

TOTAL ASSETS 3,051.5 2,841.8

LIABILITIES(€ million)

Note 31/12/2017 31/12/2016

Share capital 5.9 412.8 346.9

Reserves and premiums 5.9 101.0 92.8

Net profit/(loss) attributable to Group 5.9 39.4 24.0

EQUITY ATTRIBUTABLE TO GROUP 553.3 463.7

Reserves attributable to non-controlling interests 60.6 57.4

Profit for the year attributable to non-controlling interests 1.7 (5.6)

EQUITY 615.5 515.4Non-current provisions 5.13 190.2 194.5

Non-current financial debt 5.10 394.9 329.8

Deferred tax liability 4.7 102.2 77.3

NON-CURRENT LIABILITIES 687.3 601.6

Current provisions 5.13 45.9 51.7

Current financial debt 5.10 74.4 130.7

Bank borrowings 5.8 166.9 157.8

Trade payables and other liabilities 5.14 1,461.4 1,384.6

CURRENT LIABILITIES 1,748.6 1,724.8

TOTAL LIABILITIES 3,051.5 2,841.8

3 n STATEMENT OF FINANCIAL POSITION


39

(€ million)

Sha

re c

apita

l

Res

erve

s

Tran

slat

ion

di

ffere

nces

Oth

er u

n-

reco

gnis

ed g

ains

/ (

loss

es),

net

Oth

er u

nrea

lised

gai

ns /

(loss

es),

net,

not r

e-

clas

sifia

ble

to p

rofit

or l

oss

Sub

-tot

al

Tota

l equ

ity

AT 31 DECEMBER 2015 46.9 174.7 (3.8) (4.8) (10.7) 155.5 202.3Attributable to Keolis S.A. shareholders 46.9 124.4 (5.1) (4.8) (10.7) 103.9 150.8Attributable to minority shareholders in subsidiaries - 50.3 1.3 - - 51.5 51.5Dividends paid to Keolis S.A. shareholders - - - - - - -Capital increase by creation of receivable 300.0 - - - - - 300.0Other changes - (5.4) - - - (5.4) (5.4)OPERATIONS ATTRIBUTABLE TO KEOLIS S.A. SHAREHOLDERS (A) 300.0 (5.4) - - - (5.4) 294.6

Dividends paid to minority shareholders in subsidiaries - (2.5) - - - (2.5) (2.5)Change in shareholdings in subsidiaries without gaining/losing control - 4.3 - - - 4.3 4.3

OPERATIONS ATTRIBUTABLE TO MINORITY SHAREHOLDERS IN SUBSIDIARIES (B) - 1.8 - - - 1.8 1.8

Net profit for the year restated (1) - 18.4 - - - 18.4 18.4Gains / (losses) recognised directly in equity - - (1.6) 4.1 (4.1) (1.6) (1.6)COMPREHENSIVE INCOME (C) - 18.4 (1.6) 4.1 (4.1) 16.8 16.8CHANGE IN THE YEAR (A+B+C) 300.0 14.8 (1.6) 4.1 (4.1) 13.2 313.2Attributable to Keolis S.A. shareholders 300.0 18.6 (5.7) 4.2 (4.1) 13.0 313.0Attributable to minority shareholders in subsidiaries - (3.8) 4.1 (0.1) - 0.2 0.2AT 31 DECEMBER 2016 (1) 346.9 189.5 (5.4) (0.7) (14.8) 168.6 515.4Attributable to Keolis S.A. shareholders 346.9 143.0 (10.8) (0.6) (14.8) 116.8 463.7Attributable to minority shareholders in subsidiaries - 46.5 5.4 (0.1) - 51.8 51.8Dividends paid to Keolis S.A. shareholders - - - - - - -Share capital increase through creation of receivable 66.0 - - - - - 66.0Other changes - 0.1 - - - 0.1 0.1OPERATIONS ATTRIBUTABLE TO KEOLIS S.A. SHAREHOLDERS (A) 66.0 0.1 - - - 0.1 66.1

Dividends paid to minority shareholders in subsidiaries - (1.6) - - - (1.6) (1.6)Capital increase subscribed to by minority shareholders - 13.5 13.5 13.5Change in shareholdings in subsidiaries leading to gain/loss of control - 0.9 - - - 0.9 0.9

Change in shareholdings in subsidiaries without gaining/losing control - (0.6) - - - (0.6) (0.6)

OPERATIONS ATTRIBUTABLE TO MINORITY SHAREHOLDERS IN SUBSIDIARIES (B) - 12.1 - - - 12.1 12.1

Profit for the year - 41.0 - - - 41.0 41.0Gains / (losses) recognised directly in equity - - (6.6) 1.0 (13.5) (19.1) (19.1)COMPREHENSIVE INCOME (C) - 41.0 (6.6) 1.0 (13.5) 21.9 21.9CHANGE IN THE YEAR (A+B+C) 66.0 53.2 (6.6) 1.0 (13.5) 34.2 100.1Attributable to Keolis S.A. shareholders 66.0 39.5 (3.5) 0.9 (13.3) 23.7 89.6Attributable to minority shareholders in subsidiaries - 13.7 (3.1) - (0.2) 10.5 10.5AT 31 DECEMBER 2017 412.8 242.7 (12.0) 0.3 (28.3) 202.7 615.5Attributable to Keolis S.A. shareholders 412.8 182.5 (14.3) 0.4 (28.1) 140.4 553.3Attributable to minority shareholders in subsidiaries - 60.2 2.3 (0.1) (0.2) 62.2 62.2

4 n STATEMENT OF CHANGES IN EQUITY

RESERVES AND OTHER

Items that may be reclassified to profit

or loss

(1) Following the application of the IFRS 9 standard retrospectively from 1 January 2017, unrealised gains and losses relating to the revaluation at fair value of strategic investments have been transferred from “Items that may be reclassified to profit or loss” to “Items that will not be classified to profit or loss”.


40

(€ million) Note 31/12/2017 31/12/2016

Operating profit before investments under equity method 4.3 67.6 42.1

Non-cash items 4.4 173.1 181.1

EBITDA 4.4 240.7 223.2

Elimination of provisions on current assets 2.0 (0.2)

Changes in working capital (89.9) 41.1

Tax paid (5.3) (24.3)

A) NET CASH FROM OPERATING ACTIVITIES 147.5 239.8

Capital expenditure (185.2) (183.0)

Proceeds from the sale of tangible and intangible assets 14.8 21.9

Investment grants received 11.7 10.1

Change in financial assets for concessions (IFRIC 12) (0.4) (11.5)

Financial investments (99.9) (56.8)

Proceeds from disposal of financial assets 13.9 1.0

Cash flows on changes in reporting scope 2.0 3.5

B) FLUX NET DE TRÉSORERIE LIÉS AUX OPÉRATIONS D’INVESTISSEMENT (242.9) (214.7)

FREE CASH FLOW (A +B) (95.4) 25.1

Net dividends paid (1.7) (2.5)

Net dividends received 26.8 24.6

Change in equity (other transactions with shareholders) 79.5 6.5

New borrowings 173.6 132.9

Borrowings repaid (196.7) (64.8)

Interest received 1.1 1.2

Interest paid (9.6) (12.6)

Change in other financial debts - 0.2

Other (4.4) (7.8)

C) NET CASH FROM FINANCING ACTIVITIES 68.6 77.6

D) FOREIGN EXCHANGE TRANSLATION DIFFERENCES (7.4) (3.2)

CHANGE IN CASH AND CASH EQUIVALENTS (A+B+C+D) (34.2) 99.5

Cash and cash equivalents at beginning of period 5.8 143.8 44.2

Cash and cash equivalents at end of period 5.8 109.6 143.8

CHANGE IN CASH AND CASH EQUIVALENTS (34.2) 99.6

5 n STATEMENT OF CASH FLOWS


41

1 n GENERAL INFORMATION

The company Keolis S.A. and its subsidiaries (“the Group”) develop transport service solutions tailored to local conditions: auto-matic metros, trams, trains, buses, coaches, river and sea ferries, self-hire bikes, etc. Keolis exports its multi-modal expertise to 16 countries around the world.

The company Keolis S.A., the Group’s holding company, is a société anonyme (public limited company) registered and domiciled in France, with its registered office located at 20/22, rue Le Peletier, 75320 Paris Cedex 09.

The consolidated financial statements of the Group for the financial year ended 31 December 2017 were approved by the Board of Directors on 1 March 2018.

The financial statements of the Group are fully consolidated into those of GROUPE KEOLIS S.A.S. which SNCF fully consolidates.The Group has chosen not to manage rounding discrepancies; consequently, some small differences may appear

2 n SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1. Accounting guidelinesThe Group’s consolidated financial statements as at 31 December 2017 have been prepared in accordance with IFRS (standards and interpretations) published by IASB as adopted by the European Union and rendered mandatory from 1st January 2017. They are available at this site: http://ec.europa.eu/internal_market/accounting/ias/index_fr.htm

In the absence of borrowing or equity instruments traded on a regulated market, the Group chose not to publish information on earnings per share (IAS 33), or information about operating segments (IFRS 8).

2.2. Changes in accounting principles

Application of standards, amended standards and interpretations that are mandatory as of 1st January 2017

Standard or interpretation

Summary descriptionDate of application (annual period starting on or after)

IAS 7 amendments Initiatives on disclosures. IASB: 29/01/2016 EU: 09/11/2017Group: 01/01/2017

IAS 12 amendments Recognition of deferred tax assets for unrealised losses IASB: 19/01/2016EU: 09/11/2017Group: 01/01/2017

There is no material impact arising from the application of these standards.

Standards, amendments to standards and interpretations applied earlyThe Keolis S.A. Group decided to apply stages 1 and 2 of the standard “IFRS 9 – financial instruments” in advance at 1 January 2017.The Group has chosen not to present comparatives, as the standard (IFRS 9.7) authorises, insofar as this retroactive application has no impact whatever on the income statement, the statement of financial position or the statement of cash flows as presented in the Keolis S.A. financial report as at 31 December 2016.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSC


42

“IFRS 9 – Financial instruments” amends the principles for the measurement and recognition of financial instruments in three stages: n Classification and measurement of financial assets, n Impairment of financial assets, n And on hedge accounting.

The provisions in IAS 39 concerning financial liabilities are in the main basically unchanged in IFRS 9: they will therefore continue to be measured at amortised cost.Application of this standard is mandatory for statements relating to financial years starting on or after 1 January 2018. However, the Group has chosen to apply stages 1 and 2 in advance as of financial year 2017:

n Application of the stage 1: Using the principles of IFRS 9, Keolis carried out an analysis of financial assets so as to break them down according to the valuation categories described in the standard:

● Either at amortised cost ● Or at fair value, the change of which affects the profit or loss, or the equity (Other items of comprehensive income)

The two criteria used to determine how financial assets should be classified and measured are the management method applied for these assets, and the characteristics of their contractual cash flows. The change in the classification of financial assets is presented in the following table showing the balance sheet transition from 31 December 2016 to 1 January 2017.

(€ million)

31/12/2016 01/01/2017

Loa

ns a

nd re

ceiv

able

s

Sec

uriti

es a

vaila

ble

for s

ale

Dep

osits

and

gua

rant

ees

Der

ivat

ive

asse

ts

Con

cess

ion

finan

cial

ass

ets

Tota

l

Equi

ty

inst

rum

ents

Deb

t in

stru

men

ts m

easu

red

at

amor

tised

cos

t by

P&

L

Der

ivat

ive

asse

ts

Con

cess

ion

finan

cial

ass

ets

Tota

l

FV in

P&

L

FV

OC

I non

re

cycl

able

s

Total non-consolidated assets > 1 year 33.6 33.6 3.0 30.6 33.6

Total Loans and Receivables 6.6 30.0 36.7 36.7 36.7

Derivative Assets 2.3 2.3 2.3 2.3Concession financial assets <1 year 162.2 162.2 162.2 162.2

CURRENT AND NON-CURRENT FINANCIAL ASSETS

6.6 33.6 30.0 2.3 162.2 234.8 3.0 30.6 36.7 2.3 162.2 234.7

Loans and receivables < 1 year - - 18.2 2.1 - 20.3 - - 18.2 2.1 - 20.3

Loans and receivables > 1 year 6.6 33.6 11.8 0.2 162.2 214.4 3.0 30.6 18.4 0.2 162.2 214.4

n Application of stage 2: the new standard requires that entities recognise expected losses of credit as soon as they are recorded in the statement of financial position. The majority of the Group’s customer receivables comprises receivables from public authorities, with a high collection rate. Keolis has not identified any significant impact resulting from this second stage of the IFRS 9 standard.

n Application of stage 3 is currently under consideration: The Keolis Group continues to apply IAS 39 in the field of hedge accounting, as the standard permits. Assessments conducted to date have not revealed any significant impact on the 2017 financial year. Keolis has not yet determined the date at which it will apply this stage of the standard.


43

Standards, amendments to standards and interpretations not subject to early application

The Group has not applied the following standards to its 2017 consolidated accounts:

Standard or interpretation

Summary descriptionExpected impact

Date of application (annual period starting on or after)

Annual Improvements (2014-2016 cycle) to IFRS

IFRS 12 “Disclosure of Interests in Other Entities” – Clarification of the scope of the disclosure requirements.IFRS 1: “First-time Adoption of IFRS” – removal of short-term exemptions for first-time adopters.IAS 28: “Investments in Associates and Joint Ventures” - measuring investments at fair value through profit or loss on an investment-by-investment basis.

The Group does not anticipate any significant impact

IASB: 01/01/2018EU: Not adoptedGroup: pending adoption

IFRS 15: "Revenue from Contracts with Customers"

This new standard aims to provide a single model for recognising turnover for all types of contracts irrespective of the sector of activity. Organised around five key steps, the model is based on the transfer of control which can be continuous or immediate. The notion of transfer of risks and benefits is no longer determinant. The income is recognised at the time of supply of the promised goods or services in an amount that reflects the consideration expected in return.

Currently being measured

IASB: 01/01/2018EU: 09/11/2017Group: pending adoption

IFRS 16 "Leases" This new standard concerns the recognition of lease agreements and will replace the current IAS 17 standard.It consists of recognition by lessees of all lease agreements of longer than 1 year as finance leases by recording a fixed asset (right-of-use) offset by a debt under liabilities. Recognition by the lessor remains similar to IAS 17.

Currently being measured

IASB: 01/01/2019 EU: 31/10/2017Group: 01/01/2019

The impacts of application of these new standards are currently being assessed.

2.3. Use of Management estimates in the application of the Group’s accounting standards

In order to draw up the Group’s accounts in accordance with IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, management must make estimates and assump-tions, notably based on ongoing action plans on certain opera-tions, affecting the amounts stated in the financial statements. Management has to revise such estimates in the light of changes in the circumstances on which they are based or further to new information. Management also has to exercise judgement in how accounting methods are applied. As a result, future estimates may be different from those adopted as of 31 December 2017.

The estimates and assumptions primarily concern the lengths of contractual relations, asset impairment tests, deferred tax assets and financial instruments, as well as provisions, in particular provisions for pensions, litigation and losses on contracts and recognition of amounts to be received and penalties to be paid arising from contractual relationships.

Finally, in the absence of standards or interpretations applicable to a specific transaction, Group management must use its best judgement to define and implement accounting methods that provide the most relevant and reliable information, to ensure that the financial statements:

n present a true and fair view of the Group’s financial position and cash flows;

n reflect the economic reality of the transactions.


44

2.4. Accounting principles2.4.1. General measurement methodThe assets and liabilities in the Group’s consolidated financial statements are measured and recognised according to various measurement bases authorised by IFRS, primarily the historical cost basis of accounting, with the exception of derivative finan-cial instruments and financial assets held for trading purposes or classified as AFS (available for sale), which are measured at fair value.

2.4.2. Methods of consolidationSubsidiaries are recognised in the consolidated statements from the date on which control thereof reverted to the Group. They are derecognised from the date on which the Group ceased to control them. The income and expenses of the companies are included in the Group’s income statement from the date that control was taken, and up to the date on which the Group lost control.

Fully consolidated subsidiariesAll the Group’s subsidiaries are companies it exclusively controls directly or indirectly. The Group’s consolidated financial state-ments include the assets, liabilities, income and expenses of these companies. Exclusive control exists when Keolis S.A. has power over the entity, is exposed or has rights to variable returns, and has the ability to affect those returns. In ascertaining whether there is control, account is taken of the established rules of governance and the rights held by the other shareholders in order to ensure that they are merely protective in nature. Potential voting rights, whether immediately exercisable or convertible, including those held by another entity, are also analysed to determine those conferring substantive rights in the assessment of power, in accordance with IFRS 10 “Consolidated Financial Statements”.

Associates and joint ventures consolidated under the equity methodEntities in which the Group exerts significant influence without exercising control are associates. Significant influence is presu-med when the Group holds upwards of 20% of the voting rights.Under the equity method, investments in associates or joint ventures are capitalised in the consolidated balance sheet at their cost of acquisition. The Group’s share of income (loss) of associates or joint ventures is recognised in profit or loss, whe-reas its share of post-acquisition movements in reserves is reco-gnised in reserves. Post-acquisition movements are posted in adjustment to the value of the investment. The Group’s share of an associate’s or a joint venture’s losses is recognised up to the limit of the carrying amount of the investment as well as any possible long-term share. Additional losses are not booked as provisions, unless the Group is legally or implicitly required to support the said associate or joint venture.

Non-controlling investmentsA non-controlling investment is the share of interest in a subsi-diary which is not directly attributable to the parent company. Non-controlling investments are recognised at fair value on the takeover date.

Year-end closing timing differencesFor companies whose financial year does not end on 31st December, interim financial statements as at 31st December are established.

Transactions eliminated in the consolidated financial sta-tementsTransactions between consolidated companies which have an impact on their balance sheet or income statement are elimina-ted. Losses on transactions between consolidated companies that are indicative of value impairment are not eliminated. IAS 12 “Income Taxes” applies to temporary differences resulting from the elimination of profits and losses on intra-group transactions.

2.4.3. Translation of transactions and financial state-ments of foreign companies

Translation of the financial statements of foreign compa-niesThe financial statements of consolidated foreign subsidiaries, whose functional currency is different from the euro which is the reporting currency, are translated on the following bases:

n assets and liabilities are translated at the official exchange rates prevailing at the year-end date;

n income and expenses are translated at the average rate for the period, unless exchange rates fluctuate significantly;

n goodwill and fair value adjustments recognised on the acquisition of companies whose functional currency is not the euro are considered to be the assets and liabilities of such companies: they are thus stated in the functional cur-rency of the said companies and converted at the closing rate of each period;

n the resulting foreign exchange translation differences are recognised in consolidated equity under the item “foreign exchange translation reserves”.

Translation of foreign currency transactionsThe functional currency of Group companies is their local cur-rency. Transactions denominated in foreign currency are trans-lated by the subsidiaries into their functional currency at the rate of exchange prevailing at the transaction date.Monetary assets and liabilities denominated in foreign currency are translated into euros at the last official year-end exchange rate. The corresponding exchange differences are recorded in financial income (expense).

2.4.4. Business combinationsThe Group has applied IFRS 3 (Revised) since 1st January 2010.

A business combination is understood to involve the obtaining of control. Upon acquisition of a controlling interest, the acquirer recognises the fair value of the acquired assets and liabilities of the acquired entity and also assesses the goodwill or profit from them.

Non-controlling interests are recognised according to the fol-lowing options for each combination:

n either based on their share in the fair value of the assets and


45

liabilities acquired (the so-called partial goodwill method); n or at fair value of the shareholding (the so-called complete goodwill method).

Acquisition costs are expensed in the year.

For a takeover in several stages, the investment held prior to the establishment of control is revalued at its fair value on the date of takeover and any profit or loss arising therefrom is recognised in the operational profit or loss after gains or losses from dispo-sals.

Commitments linked to earn-out clauses are measured at their fair value on the acquisition date.

Adjustments to the cash consideration during the twelve months after the date of acquisition must be analysed in order to deter-mine:

n if the adjustment is linked to new factors occurring since the acquisition of control: counterpart in profit for the year;

n if the adjustment is the result of new information collected enabling fine-tuning of the valuation on the takeover date: counterparty in goodwill.

A subsequent change of debt corresponding to additional consi-deration beyond the twelve month period is booked in profit for the year.

After the acquisition of control, purchases/disposals without loss of control are treated as transactions between shareholders and therefore directly through equity.

2.4.5. GoodwillGoodwill on acquisition represents the excess of the cost of an acquisition over the share acquired by the Group of the fair value of the acquired assets and liabilities of the acquired entity on the date of acquisition.

The goodwill recognised for an associate is included in the value of the investment in it under “Investments under the equity method”, in the statement of financial position.

Corrections or adjustments may be made to the fair value of assets, liabilities and contingent liabilities acquired in the twelve months following the acquisition, when new information arises affecting facts and circumstances which were in evidence at this date of acquisition. Goodwill is then corrected with retroactive effect. Beyond that date, any change in assets acquired and liabilities assumed is recognised in the income statement. If the information is a result of events occurring after the date of acqui-sition, the changes are recognised in profit for the year.As goodwill cannot be amortized, it undergoes impairment tests every year or at more frequent intervals when events or changes in circumstances indicate possible loss in value (see 2.4.10).

Goodwill is allocated to cash generating units or groups thereof which are likely to benefit from synergies resulting from aggre-gation as described in note 2.4.10.

Negative goodwill is recognised in the income statement on the date of acquisition.

2.4.6. Commitments to repurchase the non-controlling interests in a subsidiary The Group has given promises to non-controlling shareholders of certain fully consolidated subsidiaries to repurchase their shares.

These purchase commitments (firm or conditional) of non-controlling interests do not transfer risks and benefits. They are recognised in financial debts against a reduction of those ear-nings attributable to non-controlling interests. Where the value of the commitment exceeds the amount of earnings attributable to non-controlling interests the balance is recognised in equity attributable to Group shareholders.

The fair value of non-controlling interest buyout commitments is reviewed at each financial accounting period end. A change in the corresponding financial liability is booked against equity. This provision applies to commitments to purchase non-control-ling interests issued after the application date of revised IFRS 3, i.e. 1st January 2010. For those issued before that date, the change in valuation will be booked against the associated goodwill.

2.4.7. Service concession arrangements

Presentation of the IFRIC 12 interpretationAn arrangement is included in the scope of interpretation of IFRIC 12, where the assets used to carry out the public service are controlled by the grantor. Control is presumed when the two conditions below are met:

n the grantor controls or regulates the public service, i.e. it controls or regulates the services that must be rendered, through the infrastructure covered by the concession and determines to whom and at what price the service shall be rendered; and

n the grantor controls the infrastructure on termination of the contract, i.e. the right to regain possession of the infrastruc-ture at the end of the contract.

In its public transport activities, the Group is notably the holder of outsourced public service contracts.

In France, the Group operates outsourced public service contracts, mainly in the form of operate and maintain (O&M) contracts whereby the operator is responsible for operating and maintaining facilities owned and funded by local and regional authorities – public transport authorities (PTAs).

Pursuant to the interpretation of IFRIC 12, in this case, the ope-rator cannot include the infrastructure controlled by the grantor in its balance sheet as tangible assets, but either as an intangible asset (“intangible asset model”) and/ or as a financial asset (“financial asset model”):

n the “intangible asset model” applies where the operator receives a right to charge users for the public service and


46

thus bears a financial risk; n the “financial asset model” applies where the operator obtains an unconditional right to receive cash or other finan-cial asset, either directly or indirectly through guarantees given by the grantor on the amount of cash payments from the public service. The remuneration is independent of the extent to which the public uses the infrastructure.

Where the service is provided using infrastructure rented from a third party and controlled by the grantor, the Group has reco-gnised payments of fixed and variable fees in the IFRIC 12 asset valuation.

Financial asset modelIn service concessions, the operator receives an unconditional right if the grantor gives it a contractual guarantee to pay:

n amounts specified or determined in the contract; or n the shortfall, if any – between the amount received from users of the public service and specified or determinable amounts in the contract.

Financial assets stemming from the application of the IFRIC 12 interpretation are recorded in the statement of financial position under “Non-current financial assets” detailed in Note 5.5. They are recognised at amortised cost and repaid.

The financial income, calculated on the basis of the effective rate of interest, the equivalent of the project’s internal rate of return, is recognised as revenue.

Intangible asset modelThe intangible asset model applies where the operator is paid by users or does not receive any contractual guarantee from the grantor on the amount to be collected. The intangible asset corresponds to the right granted by the grantor to the operator to charge users for the public service.Intangible assets resulting from the application of the IFRIC 12 interpretation are booked in the statement of financial position under the heading “Other intangible fixed assets” detailed in Note 5.2. These assets are amortised straight-line over the term of the contract.Within the framework of the intangible asset model, revenues include:

n Turnover as and when assets or infrastructures under construction are completed;

n Remuneration relating to the provision of services.

Mixed or bifurcation model Application of the financial asset model or the intangible asset model is based on the existence of guarantees of payment given by the grantor.

However, certain contracts may include a payment commitment from the grantor which partially covers the investment, with the balance covered through fees charged to users.

In this case, the amount guaranteed by the grantor is recognised as a financial asset and the balance as an intangible asset.

2.4.8. Intangible assets excluding goodwillIntangible assets are shown in the statement of financial position at their acquisition cost less the accumulated amortisation and impairments.

Intangible assets mainly consist of patents, licences, trademarks, rights under contracts, pension plan assets, software and ser-vice concession intangible assets as defined by IFRIC 12.

In the event of a successful bid, the Group capitalises mobilisa-tion costs, which meet capitalisation criteria, from the point at which it is almost certain that the contract will be awarded. The corresponding contract asset is amortised over the life of the contract.

When the Group completes an acquisition, the contractual rela-tionship between the acquired company and its client (the public transport authority) is assessed at fair value and recognised separately from the goodwill as a contractual right satisfying the qualifying criteria of IAS 38 and IFRS 3 revised.

Where their useful life is defined, intangible assets are amortised on a straight-line basis over periods corresponding to their expected useful life. The amortisation method and useful lives are revised at least each financial year or when necessary. The estimated useful lives are as follows:

n Trademarks: between five and fifteen years; n contractual rights: two to twenty years, corresponding to their estimated useful life, allowing for a contract renewal rate when the Group has a high renewal rate in the Cash Generating Unit (CGU) concerned;

n software: one to five years; n service concession assets: amortised over the term of the contract (see 2.4.7);

n contract assets, amortised over the life of the contract. n Where their useful life is indefinite, intangible assets are not amortised.

2.4.9. Property, plant and equipmentExpenditure on property, plant and equipment by the Group is recognised as an asset at its acquisition cost where it satisfies the following criteria:

n it is likely that the future economic benefits relating to the asset will fall to the Group;

n the cost of the asset can be reliably measured.

Property, plant and equipment are shown in the statement of financial position at their acquisition cost less the accumulated depreciation and impairments. The cost includes the asset’s purchase or production cost and all the costs directly incurred in making it usable.

Items of property, plant and equipment cease to be recognised as assets when they are derecognised (through disposal or retirement), or when no future economic benefit is expected from their use or disposal. Any gain or loss arising from the dereco-gnition of an asset from the statement of financial position (the difference between the net income from disposal and the asset’s


47

carrying amount) is recognised in the income statement in the period of its retirement.

Given the nature of the Group’s business, the activities of the different subsidiaries do not include holding investment property assets.

Subsequent expenditureSubsequent expenditure incurred in replacing property, plant or equipment is recognised under PPE only if it satisfies the fore-going general criteria and qualify as components.Otherwise, this expenditure is recognised in the income state-ment as incurred.

Through its public passenger transport activity, the Group incurs multiyear expenditure on heavy maintenance and major servicing operations on its light rail (underground railway, tramway) and passenger rail rolling stock. These are capitalised as assets as a component overhaul, which is subsequently depreciated. Furthermore, expenditure which relates to refurbishments or leads to an increase in productive capacity and modifications bringing new functionality or that extend lifespans are contribu-tions that can be qualified as operator assets.

DepreciationThe residual values and useful lives of the assets are reviewed and, where applicable, adjusted, annually or whenever lasting changes arise in operating conditions. To date, the residual values at the end of the useful life are regarded as immaterial.

Land is not depreciated. Other property, plant and equipment items are depreciated using the straight line method. The esti-mated useful lives are as follows:

Buildings 15 - 20 years

Equipment and tooling 5 - 10 years

Office equipment and furniture 5 - 10 years

Vehicles:

Cars 5 years

Coaches and buses 10 - 15 years

Rolling stock 15 - 30 years

Lease agreementsAs part of its various operations, the Group uses assets made available through lease agreements. These lease agreements are the subject of an analysis based on the situations described and indicators provided in IAS 17 to determine whether they are operating lease agreements or finance leases.Finance leases are agreements that transfer almost all of the risks and benefits of the relevant asset to the lessee. All the lease agreements that do not comply with the definition of a finance lease are classified as operating lease agreements.The main indicators examined by the Group to assess whether a lease agreement transfers almost all of the risks and benefits

are as follows: the existence of an automatic ownership transfer clause or a transfer option; the conditions under which this clause may be exercised; a comparison between the length of the lease and the estimated life of the asset; the uniqueness of the asset used, and a comparison of the present value of the minimum payments under the agreement with the fair value of the asset.

Recognition of finance leasesAt the point of initial recognition the assets treated as finance leases are posted as tangible assets, with a corresponding finan-cial debt. The asset is recognized at the fair value of the asset at the start of the lease or, if it is lower, the present value of the minimum payments under the lease.

Recognition of operating leases Payments made under operating lease agreements are reco-gnised as expenses in the income statement.

Government investment grantsGovernment grants wholly or partly covering the cost of investing in an asset are recognised as “Trade payables and other liabili-ties” and systematically written down in the income statement over the useful lives of the assets concerned.

2.4.10. Impairment of capitalised assets and non-finan-cial assetsThe Group performs systematic impairment tests annually (or more frequently where value impairment is indicated) of goodwill and other intangible assets that have indefinite useful lives, and therefore cannot be depreciated.

For property, plant and equipment, and intangible assets with finite useful lives, which are therefore depreciated or amortised, an impairment test is only conducted where impairment is indi-cated.Cash Generating Units (CGUs) are the smallest group of assets generating cash flows largely independently of other asset groups. Such units or groups of units correspond to activities in France, and internationally are mainly classed by country.

For testing purposes, the assets are aggregated within CGUs in accordance with IAS 36 “Impairment of Assets”.

These tests compare the net carrying amount of assets with their recoverable amount, which is the higher of the fair value less the potential sales costs or the value in use of the asset. In the absence of any fair value observable on an organised market, the recoverable value of the CGUs is determined on the basis of their value in use.

The carrying amount of each asset group tested is compared with its value in use defined as the sum of the net cash flows arising from the latest forecasts for each of the CGUs, drawn up using the main assumptions and procedures set out below:

n medium-term plan and budgets over a 5-year timeframe, drawn up by Management on the basis of growth and pro-fitability assumptions taking account of past performance,


48

foreseeable developments in the economic environment and the expected development of markets;

n extrapolation of the net cash flow of the last year or the average of cash flows over the five previous years by applying the growth assumptions stated in note 5.1;

n discounted future value of the cash flows arising from these plans at a rate determined using the weighted average cost of capital (WACC) of the Group.

Value impairment is recognised in the income statement, under other non-recurring expense, if the carrying amount of a cash-generating unit or group of such units is greater than its recove-rable amount. The value impairment is allocated first to the goodwill apportioned to the CGU or CGU group tested, then to the other assets of the CGU or CGU group in proportion to their carrying amount.

This allocation must not result in the carrying amount of an indi-vidual asset being lower than its fair value, value in use or zero.

Impairment losses allocated to acquisition goodwill cannot be reversed, unlike the impairment losses of other property, plant and equipment and intangible assets.

In the event of an impairment loss being reversed, the asset’s carrying amount is capped at the carrying amount, net of any depreciation or amortisation without taking into account any value impairment recognised in prior periods. When an impair-ment loss or a reversal of an impairment loss has been reco-gnised, the depreciation charge is adjusted for future periods so that the adjusted carrying amount of the asset, less its residual value, if any, is spread systematically over the remaining useful life.

2.4.11. Financial assetsPurchases and sales of financial assets are accounted for at their transaction date, the date on which the Group is committed to the purchase or sale of the asset. On initial recognition, financial assets are recognised in the statement of financial position at fair value plus the transaction costs directly attributable to the acqui-sition or issue of the asset (except for the category of financial assets measured at fair value, for which transaction costs are recognised directly in the income statement).

Financial assets are derecognised from the statement of financial position to the extent that entitlements to future cash flows have expired or have been transferred to a third party, and the Group has transferred virtually all the risks and benefits or the control of such assets. Financial assets, the maturity (or intended holding period) of which exceeds one year, are recognised under “Non-current financial assets”.

In applying the standard IFRS 9, the Group determines the clas-sification of financial assets, on the date of initial recognition, into one of the accounting categories provided for, according to the management model applied for these assets and the characte-ristics of the contractual cash flows (“basic loan” criteria).

Equity instruments An equity instrument under the terms of IAS 32 offers its holder a residual right to the assets of an entity after deduction of the liabilities, without the issuer of the instrument being obliged:

n to give them cash or any other financial asset, n or to exchange financial instruments under terms which would be potentially unfavourable to them.

Equity instruments within the Keolis Group relate to non-conso-lidated investments. The Keolis Group has irrevocably selected the classification of its equity assets, either in the category of securities whose fair value varies in equity in “Items which will not be recycled in profit/loss - FVOCI” with no option to recycle in profit/loss (this is the case for strategic investments in entities created under public/private partnerships, and historic invest-ments on the date of the first application), or in the category of securities whose corresponding variations in fair value pass in the income statement.

Debt instrumentsDebt instruments are defined by standard IAS 32 as being finan-cial instruments that do not come within the definition of equity instruments mentioned above.The Group analyses the cash flows generated by the instrument and Management’s intentions with regard to these investments, in order to determine the classification of the financial instru-ments according to the following three categories:

n Debt instrument valued at amortised cost “hold to collect”: this means debt instruments whose cash flows represent interest or repayment of capital on specific dates (com-pliance with “basic loan” criteria), and that the Management intends to retain to maturity.

n Debt instruments valued at the Fair Value by Equity (“Other Items in Comprehensive Income”) recycled in profit/loss at the time of the sale “hold to collect and sell”: these are debt instruments whose cash flows represent interest or repay-ment of capital on specific dates (compliance with “basic loan” criteria), and that the Management intends sell in the medium term.

n Debt instruments valued at Fair Value in profit/loss “hold to sell”: these are

● either debt instruments whose cash flows represent interest or repayment of capital on specific dates (com-pliance with “basic loan” criteria), and that the Management intends to sell in the short term.

● or debt instruments where it cannot be contractually asserted that the cash flows represent interest or repayment of capital on specific dates.

In the case of instruments with a debt component and an equity component, IFRS 9 no longer authorises their separation: an analysis of the instrument will lead to its being classified in one of the two categories. For example, loans convertible into shares are classified in the category of debt instruments whose varia-tions in fair value pass in the income statement.


49

Impairment of financial assetsWhen financial assets are first recognised, the Group considers the expected credit losses not only on the basis of an objective indication but also with regard to statistics arising from its past experience. Accordingly, the initial value of a financial asset depends on the level of credit risk at its initial recognition.Subsequently, a loss of value is recognised on an asset or a group of financial assets not measured at fair value, in the case of a significant credit risk or where there is an objective indication of impairment arising from one or more events that have occur-red since the initial recognition of the asset, and where such an impairing event has an impact on the estimated future cash flows from the financial asset or group of financial assets, and if its carrying value is higher than its estimated recoverable value.The measurement of trade receivables is described in note 2.4.13.

2.4.12. InventoriesInventories consist mainly of consumables and miscellaneous goods or supplies used for the maintenance and upkeep of vehicles or intended for resale. These inventories are valued at purchase cost. Impairment is recognised to reduce the purchase cost (determined using the weighted average cost (WAC) method or the First-in, First-out (FIFO) method) to the net realisable value if lower. Pursuant to IAS 2, the net realisable value is the estimated sale price in the normal course of business, less the estimated cost for comple-tion and realisation of the sale.

2.4.13. Trade receivables and other debtorsTrade receivables and receivables from other debtors are initially recognised at their fair value which, in most cases is their nomi-nal value, given the generally short payment times. The carrying amount is subsequently measured where required at an amor-tised cost using the effective interest rate method, less any impairment losses.When the trade debt is first accounted for, the Group considers the potential expected credit losses not only on the basis of an objective indication but also with regard to statistics arising from its past experience.In view of the low credit risk borne by its customers (mainly public authorities), the Keolis Group applies the simplified method for trade receivables and states that the expected credit loss on recognition of the receivable is negligible. (See paragraph 2.2).

If there is subsequently an objective indication of impairment or a risk that the Group may be unable to collect all the contractual amounts (principal plus interest) on the date set in the contractual payment schedule, an impairment loss is recognised in the income statement. This allowance is equal to the difference between the carrying amount and the estimated recoverable future cash flows, discounted at the original effective rate of interest.

2.4.14. Cash and cash equivalentsThis item includes cash, sight deposits and other short-term deposits as well as other easily convertible liquid instruments

with negligible risk of a change in value, maturing less than three months from the date of acquisition.

2.4.15. Corporate income tax Keolis S.A. and its French subsidiaries are part of the tax peri-meter of its parent company GROUPE KEOLIS S.A.S. Other tax consolidation regimes also exist abroad. The effect of these regimes is recognised in the income statement. The income tax expense or income includes the current tax expense or income and the deferred tax expense or income. Tax is recognised in profit for the year unless it relates to items that are directly recognised under equity, in which case, the tax is recognised under equity.

Current tax is the estimated amount of tax due on the taxable profit for the period. It also includes adjustments to the amount of tax payable in respect of previous periods. Deferred tax is calculated for each individual entity using the balance sheet approach, on the temporary differences between the carrying amount of the assets and liabilities and their taxation base, including assets of which the Group has possession under finance lease agreements.

Measurement of deferred tax assets and liabilities depends on whether the Group expects to recover or to pay the carrying amount of the assets and liabilities, under the variable-carry-forward method, using the rates of taxation that were adopted or virtually adopted at the reporting date. A deferred tax asset is only recognised or maintained as an asset to the extent that the Group is likely to benefit from future taxable profits to which the related deductible temporary difference may be imputed.

Deferred tax assets and liabilities are not discounted.

Deferred tax assets and liabilities are offset in each taxable entity when it recovers the asset and settles the liability on the same due date, subject to the following conditions being met:

n legally enforceable right to offset, n intention to settle, n schedule of payments.

Deferred tax liabilities are recognised for all taxable temporary differences, with the exception of certain differences between the values of the Group’s proportionate interests in the net assets of subsidiaries, joint ventures and associates and their tax values. This exception applies espacially to the income of subsidiaries yet to be distributed, should distribution thereof to shareholders generate taxation; if the Group has decided not to distribute profits retained by the subsidiary in the foreseeable future, no deferred tax liabilities are recognised.

2.4.16. Borrowings and financial debtAll borrowings are initially recognised at fair value, less the related borrowing costs. Thereafter, they are recognised at amortised cost, using the effective interest rate method, with the difference between the cost and the redemption value recognised in the income statement over the term of the borrowings.


50

The effective interest rate is the rate used to obtain the original carrying amount of a loan by discounting the future cash inflows or outflows over the loan’s term. The original carrying amount of the loan includes the transaction costs of the operation and any issuance premiums.

When a debt is reimbursed early, any non-amortised costs are recognised as expenses.

In the event that a loan is renegotiated, standard IFRS 9 stage 1 lays down that the original interest rate is maintained, and an immediate impact is recognised in the income statement amounting to the difference between the expected contractual flows prior to amendment, and the expected contractual flows after amendment. The Keolis Group did not suffer any impact from this stage of the standard at 31 December 2017.

2.4.17. Derivative financial instrumentsThe Group uses derivative financial instruments to manage exposure to financial market risks resulting from its operational, financial and investment activities:


The derivative financial instruments are measured and reco-gnised at fair value in the statement of financial position on the date they are established, then on each financial year end date.

Fair value is measured by using standard valuation methods and is based on the mid-market conditions commonly used in the markets. The market data used is Level 2 data, as described in IFRS 13.

The treatment of the gains and losses under the fair value reva-luation depends on whether or not the derivative instrument is considered a hedging instrument and the nature of the hedged item.

The changes in fair value of derivative financial instruments that are not eligible for hedge accounting are recognised under finan-cial income/(expense).

Certain derivative financial instruments are eligible for one of the three hedge accounting categories defined in IAS 39:

n Fair value hedge; n Cash flow hedge; n Net investment hedge.

They are recognised in accordance with hedge accounting rules.

The criteria to apply hedge accounting are mainly: n general hedging documentation that describes the Group’s exposure to the various financial risks and its hedging stra-tegy,

n a hedging relationship clearly established on the date on which each derivative financial instrument is established,

n the use of effectiveness testing to demonstrate the effecti-

veness of the hedging relationship prospective to the date of establishment, and retrospective to each financial close. This effectiveness must be reliably measured and fall within 80% and 125%.

Interest rate, foreign exchange and commodity derivative finan-cial instruments are entered into with first-class bank counter-parties in accordance with the Group’s counterparty risk management policy. Consequently, the counterparty risk can be regarded as negligible.

Interest rate risks relating to the variable rate portion of its financial debtThe Group’s interest rate risk exposure results from its financial debt. The Group covers this risk by using derivative financial instruments.

The objective of the risk management is to protect the Group’s financial income/(expense) from an increase in interest rates, while taking advantage of a decrease in rates to the greatest extent possible. The interest rate hedging policy implemented consists in favou-ring fixed rate derivative financial instruments. The management horizon adopted is usually a rolling five years, but this can be greater dependent upon the hedging requirement.

The derivative financial instruments which the Group uses are standard, liquid and available on the market, namely:

n swaps; n cap calls; n sales of caps to unwind an existing cap or to realise a cap spread;

n floor puts if tied with cap calls to create a symmetrical or asymmetrical collar;

n floor calls, in particular to buy back floors that constitute asymmetrical collars;

n swaption calls; n swaption puts if tied with calls to constitute swaption collars.

Derivative financial instruments eligible for hedge accounting are recognised under cash flow hedges. The derivative financial instruments that are not eligible are recognised under trading.

Changes in the intrinsic value of derivative financial instruments recognised under cash flow hedges are entirely recognised within equity (OCI - other comprehensive income). The other items are recognised as financial income/(expense):

n changes in fair value of derivative financial instruments not eligible for hedge accounting (for example, the asymmetrical portion of collars);

n changes in the time value of all derivative financial instru-ments;

n option premiums.

Foreign exchange riskThe Group has put in place intra-group loans denominated in foreign currency and recognised in current accounts. In order to cover the resulting foreign exchange risk, the Group uses deri-


51

vative financial instruments which allow it to fix the exchange rate of these intra-group loans.

The Group also makes net investments in the capital of its foreign subsidiaries in local currency. To cover the foreign exchange risks engendered by these investments, the Group uses derivative financial instruments in controlled amounts. Management’s objective is to protect the balance sheet values of these invest-ments in local currency. The foreign exchange hedging policy implemented to achieve this objective consists of maintaining a reference exchange rate defined for the year.

The derivative financial instruments used by the Group are stan-dard, liquid and market-available:

n forward and futures sales and purchases; n foreign exchange swaps; n call options; n put options in combination with call options to provide sym-metric or asymmetric collars.

Some derivative financial instruments held by the Group are eligible for net investment hedge accounting as described in IAS 39. The derivative financial instruments that are not eligible are recognised under trading.

Changes in the intrinsic value of derivative financial instruments recognised under net investment hedges are entirely recognised within equity (OCI). The other items are recognised as financial income/(expense):



n option premiums.

Commodities price risksDue to their transportation activities as operators of light vehicle fleets (coaches and buses), the Group’s subsidiaries must make substantial and regular purchases of diesel. The Group is consequently exposed to a risk in the fluctuation of the price of diesel, a risk which is partially hedged in the concession contracts signed with public transport authorities. For the remaining expo-sure, the Group implements a hedging policy using derivative financial instruments whose objective is to minimise the volatility of Group profits.

For this purpose, the Group uses standard, liquid and market-available derivative financial instruments, namely:

n swaps; n cap calls; n cap puts to unwind an existing cap or to realise a cap spread;

n floor puts if tied with cap calls to create symmetrical or asymmetrical collars;

n floor calls, in particular to buy back floors that constitute asymmetrical collars.

Derivative financial instruments eligible for hedge accounting are recognised under cash flow hedges. The derivative financial instruments that are not eligible are recognised under trading.

Changes in the intrinsic value of derivative financial instruments recognised under cash flow hedges are entirely recognised within equity (OCI). The other items are recognised as financial income/(expense):



n the contango/backwardation component, corresponding to the price difference between the forward price for swaps (or exercise price for options) and the spot price;

n option premiums.

2.4.18. Provisions

Provisions for pension and post-employment commit-ments (IAS19 revised)The Group offers its employees various fringe benefits while they are in employment or after employment. These benefits arise under the legislation applicable in certain countries and under contractual arrangements concluded by the Group with its employees, and are either defined contribution plans or defined benefit plans.

(a) Defined contribution plansDefined contribution plans are characterised by payments to organisations that discharge the employer from any subsequent obligation, with the organisations taking responsibility for paying employees their entitlements. Hence, once the contributions are paid, no liability is reported in the Group’s financial statements.

(b) Defined benefit plansDefined benefit plans refer to plans providing post-employment benefits other than defined contribution plans. The Group has a duty to accrue provisions for the benefits to be paid to serving members of its staff, and to pay the benefits of former members of its staff. In substance, the actuarial and investment risks lie with the Group.These plans mainly concern the following:

n pension commitments: pension annuity plans, retirement gratuities, other retirement commitments and additional pension benefits;

n other long term benefits: long service awards.

Description of commitments under defined benefit plansApart from ordinary, statutory schemes, the Group provides, according to country and local legislation, retirement gratuity schemes (France), defined benefit pension schemes (United Kingdom and Canada) and pensioners’ health benefit schemes (Canada and USA).

In France, retirement gratuities paid to the employee on leaving employment are determined according to the national collective


52

labour agreement or the company agreement applying in the business. The following are the two main collective labour agree-ments applied within the Group:

n “Convention collective des transports publics urbains” (CCN_3099) – the national collective labour agreement for urban public transport;

n “Convention collective des transports routiers” (CCN_3085) – the national road-haulage collective labour agreement.

n These schemes are partly financed by insurance policies. Their value is measured over the average term of the policies (20 years) except in the case of Keolis S.A., which is mea-sured on a perpetuity basis.

Annual actuarial evaluations of the commitments of the defined benefit schemes are carried out each year end primarily by inde-pendent actuaries.

Commitments for pensions, additional pension benefits and retirement gratuities are measured using a method that takes account of the projected final end-of-career salaries (termed the Projected Unit Credit Method) on an individual basis, which is based on assumptions of discount rates and expected long-term yields from the funds invested for each country, and on assumptions regarding life expectancy, staff turnover, trends in pay, annuity revaluations and the discounted value of payable sums. The specific assumptions for each plan take local econo-mic and demographic factors into account.

The value entered in the statement of financial position under provisions “pensions and other employment benefits” is the difference between the discounted value of the future obligations and the fair value of the pension plan assets intended to cover them. Where the result of this calculation is a net commitment, an obligation is recognised as a liability in the statement of finan-cial position.When bids are won in France or abroad, the asset representing pension rights and all other employee benefits recognised at the start of the franchise is determined on the basis of the amount of pension liabilities and other employee benefits over the esti-mated life of the contract.

Actuarial gains/losses relating to post-employment benefits resulting from experience and changes in actuarial assumptions are recognised directly in equity in the year in which they are incurred and are off set against the increase or decrease of the obligation. They are set out in the statement of comprehensive income.

In the income statement, the cost of service earned during the financial year is included in the operating profit.

The interest cost in respect of the discounting of pensions and similar obligations, and the income relating to the expected yields from the pension plan assets, are recognised under financial income and expense.

The actuarial calculations for pension and similar commitments are mainly performed by independent actuaries.

In France, long service medals are valued on the same basis as pension commitments, with the exception of the recognition of actuarial gains and losses. Actuarial gains and losses are reco-gnised in the income statement.

Other types of provisions Provisions are accrued where at the end of the reporting period:

n there is a present legal or implicit obligation towards third parties arising from a past event;

n there is a probability that an outflow of resources embodying economic benefits will be required to settle this obligation;

n a reliable estimate can be made of the amount.

In the context of its activity, the Group is generally subject to a contractual obligation to carry out multiyear heavy maintenance and major servicing operations on facilities managed under a public service agreement. The resulting maintenance and repair costs are analysed in accordance with IAS 37 on provisions and, where applicable, provisions are accrued for heavy maintenance and major servicing and also for lossmaking contracts where the unavoidable costs incurred to meet the contractual obligation are greater than the economic benefits of the contract.

In cases of restructuring, an obligation is accrued in so far as the restructuring has been announced and is the object of a detailed formalised plan or has been started prior to the reporting date.Provisions due in more than one year are discounted whenever the impact is material.

2.4.19. Payments in shares and similar paymentsThe Group has no share option plans or share purchase war-rants for the benefit of its members of staff.

2.4.20. Trade payables and other accounts payable Trade payables and other accounts payable are measured at their fair value at initial recognition, which in most cases is their nominal value, and otherwise at the amortised cost. Short-term payables are recognised at their nominal amount unless dis-counting at the market rate would have a material impact. In the event of long payment delays, the suppliers’ debt is dis-counted.

Other payables include deferred revenues, corresponding to income received for services not yet provided, and investment grants not yet credited in the income statement.

2.4.21. Revenue and other business income Revenue and other business-related income are measured at the fair value of the consideration received or accrued.

They are measured net of discounts and commercial benefits given, where the service has been provided. No income is reco-gnised where there exists significant uncertainty as to the reco-verability of the consideration receivable or the costs incurred or to be incurred in relation to the service, and where the Group remains involved in managing the income. The revenue from urban passenger transport companies is


53

recognised according to the terms of the contract signed with the public transport authority, taking account of all additional clauses and any vested rights (indexation clauses, etc).

The same applies for revenue from intercity passenger transport companies, and other activities not under contract, recognised according to the services provided.

Revenues include fees from value added services arising from the Group’s knowhow. These activities (excluding transportation) mainly relate to the management of airports and bike rental.

Other business-related income covers fees for services consis-ting mainly of revenues classified by the Group as incidental, as well as the remuneration of concession financial assets.

2.4.22. Other operating expensesSince they are a recurrent feature of the activity, losses or gains on sales of transport equipment are recognised on a separate line, and included in profit from continuing operations.

2.4.23. Other operating incomeOther operating income mainly comprises the CICE (tax credit for competitiveness and employment), which was created to help companies finance their competitiveness, in particular through investment, research, innovation, recruitment, prospec-tion of new markets, environmental transition and replenishment of their working capital. It applies to remuneration not exceeding two and a half times the minimum wage that the companies pay their employees in the course of the calendar year. In 2017, the tax credit rate remained unchanged at 6%.

The CICE is deducted from corporate income tax due for the year during which the remuneration used for the calculation of the tax credit was paid. Any non-deducted credit is treated as a receivable from the State and can be used to pay tax due in the three years following that in which the credit was earned. At the end of this period, any remaining non-deducted amount is reim-bursed to the company.

The Group holds the view that the CICE is a type of public sub-sidy within the application of IAS 20, insofar as it is used for financing working capital related expenditure. The CICE is reco-gnised under operating subsidies in the line “Other operating income” of the consolidated income statement.

2.4.24. Recurring operating profitRecurring operating profit corresponds to the whole of the expenses and income arising from the Group’s recurring opera-ting activity before financing activities, the earnings of associates, activities discontinued or being sold and taxation.

2.4.25. Operating profit or loss Operating profit includes recurring operating profit and all tran-sactions not directly related to the normal conduct of business, but that cannot be directly attached to any other item in the income statement.

Income and expenses, charges to depreciation and provisions on non-recurring items include all non-recurring operations where costs are significant: this applies in particular to offensive bids, restructuring costs, disposal gains or losses on assets other than transport equipment, the amortisation of contractual rights and startup costs in a new country or zone, and to other items that are by their nature non-recurring.

Effects of changes in scope recognised directly in income include:

n direct acquisition costs in the case of a takeover; n effects of revaluations, at fair value on the acquisition date, of non-controlling interests previously acquired in the case of an acquisition in stages;

n subsequent earn-outs; n profit or loss from divestments of holdings which lead to a change in the method of consolidation as well as, where applicable, the revaluation effects of retained non-controlling interests.

2.4.26. EBITDA calculationEBITDA is calculated based on operating profit/(loss), plus or minus the profit or loss on asset disposals, the amounts repre-senting depreciation and amortisation, increases and reversals of provisions and the share of grant income released. Recurring EBITDA corresponds to EBITDA less material non-recurring items.

2.4.27. Financial income / (expense)Financial expenses include interest on borrowings and financial debt calculated using the effective interest rate method, the cost of early loan repayments or of cancelling credit lines, the financial interest not directly attributable to the operating margin and the financial cost of discounting non-current liabilities.

Financial income includes income from deposits of cash or cash equivalents and dividends received from non-consolidated com-panies.

Other financial income and expense include net foreign exchange gains and losses, bank commissions on credit transactions booked as an expense and their rebilling as income, changes in the fair value of derivative financial instruments when they are to be recognised in the income statement and are recognised respectively as financial income or expenses on transactions, with the exception of changes in the fair value of hedging deri-vatives which are recorded on the same line as the transaction hedged within operating profit. Therefore, any change in the fair value of derivatives, when they are not eligible for hedge accoun-ting, and the change in value of the ineffective portion for cash flow hedging are recognised in the financial result.

All interest on borrowings is recognised as a financial expense as and when incurred.


54

2.4.28. Change in the presentation of the reversals of provisions usedAs from financial year 2017, reversals of provisions used are henceforth presented in the income statement on the line ”Net depre-ciation and other provisions charged“. In 2016, the reversals were presented in each of the corresponding expense lines.This changed presentation has no effect on the aggregates of the 2016 income statement.

(€ million) 31/12/2016

Impact of change in presentation of reversals of

provisions used

31/12/2016 pro forma

Revenue 4,866.0 - 4,866.0

Other income from operations 15.4 - 15.4

Income from continuing operations 4,881.4 - 4,881.4

Sub-contracting (189.4) - (189.4)

Purchases consumed and external expenses (1,532.2) (5.2) (1,537.4)

Taxes (14.5) - (14.5)

Staff costs, incentive schemes, profit-sharing (2,913.4) (3.2) (2,916.6)

Other operating income 53.2 - 53.2

Other operating expense (25.9) (2.9) (28.8)

Net provisions on current assets 0.2 - 0.2

Net depreciation and other provisions charged (191.9) 11.3 (180.6)

Profit/(loss) on recurring fixed asset disposals (1.8) - (1.8)

Amortisation of grants received 8.4 - 8.4

Recurring operating profit 74.1 - 74.1

Operating profit/loss 28.5 - 28.5

Profit/(loss) from associates 25.4 - 25.4

Operating profit/(loss) after investments under equity method 53.9 - 53.8

Financial income (expense) (34.4) - (34.4)

Profit before tax 19.4 - 19.4

Profit for the year (8.4) - (8.4)

PROFIT ATTRIBUTABLE TO GROUP (2.8) - (2.8)


55

3 n HIGHLIGHTS OF THE FINANCIAL YEAR

Keolis and Île-de-France Mobilités signed 20 bus operation contracts in the Île-de-France region. Each of these contracts will run for four years covering the 2017-2020 period, generating cumulative turnover of approximately 750 million euros. These contracts further reinforce Keolis’s status as a major mobility operator in France’s leading economic region.

Elsewhere in France, Keolis was awarded the transport concession contract for the Côte Basque-Adour joint municipal region, for a term of six years and nine months. The Group also won an offensive bid for the Greater Besançon metropolitan area. Furthermore, Keolis had its contracts renewed in Lille, Rennes, Caen, Amiens and Quimper.

Outside France, Keolis reinforced is position in Belgium though the acquisition of the Compagnie des Autocars Liégeois.

Also outside France, the year was prolific in terms of commercial activity with a lot of offensive and defensive bid wins and the start-up of new networks: the takeover of operations in Manchester (tram, United Kingdom), Aarhus (tram, Denmark), Teutoburger-Wald-Network (passenger rail, Germany), Zwenzwoka and Almere (passenger rail and buses, Netherlands), the win of Foothill (buses, United States), the launch of Newcastle (multimodal, Australia), the renewal of Melbourne (tram, Australia), the Gold Coast network extension (tram, Australia), the start-up of Hyderabad (automatic metro, India), and the wins of contracts in Doha (metro, Qatar) and Pudong (automatic metro, China).


56

4 n NOTES TO THE CONSOLIDATED INCOME STATEMENT

4.1. Staff costs

Staff costs

(€ million) 31/12/2017 31/12/2016

Wages and social charges (2,781.2) (2,450.3)

Taxes on remuneration (67.0) (66.1)

Other staff expenses (1) (203.9) (397.0)

TOTAL (3,052.1) (2,913.4)

(1) Other staff expenses include incentive schemes and profit sharing.

Average number of employees

Employee numbers are now presented in terms of number of people whereas they were expressed as full-time equivalents in 2016. In 2016, the number of people working for Keolis was 55,318.

4.2. Other operating incomeUnder the CICE, the Group received €57.7 million in 2017 compared to €49.7 million in 2016.

4.3. Operating profit

(€ million) 31/12/2017 31/12/2016


Non-recurring costs of offensive bids (6.1) (4.6)

Amortisation of contractual rights and trademarks (8.6) (8.2)

Other non-recurring items (12.2) (12.6)

n Net reorganisation expenses (10 .7) (13 .0)

n Change in provisions for contract losses 2 .6 3 .0

n Other (4 .1) (2 .6)

TOTAL NON-RECURRING ITEMS (26.9) (25.4)

OPERATING PROFIT BEFORE INVESTMENTS UNDER EQUITY METHOD 67.6 42.1

(number of people)

31/12/2017(eq. full time)

31/12/2016

Managers 2,588 2,102

Supervisory and technical staff 8,354 5,981

Clerical and manual employees, drivers 46,849 45,817

TOTAL 57,791 53,899


57

4.4. EBITDA calculation

(€ million) 31/12/2017 31/12/2016

OPERATING PROFIT 67.6 42.1

Net depreciation and other provisions charged 172.7 191.9

Depreciation and provisions on non-recurring items 7.8 8.1

Amortisation of grants received (7.5) (8.4)

Reversals of operating provisions utilised on recurring items (1) - (11.1)

Reversals of provisions utilised on non-recurring items (1) - (1.3)

Profit/(loss) on fixed asset disposals 0.1 1.8

EBITDA 240.7 223.2

Non-recurring income and expense (2) 19.1 18.2

RECURRING EBITDA 259.9 241.4

(1) Reversals of utilised provisions are now presented within net depreciation and other provisions charged (2) Non-recurring income and expense include significant offensive bid costs, major restructuring expenses and other significant exceptional items.

4.5. Share in net profit for the year from investments under the equity method

(€ million) 31/12/2017 31/12/2016

Govia (UK) 25.4 19.7

First / Keolis Transpennine (UK) 0.7 5.4

Other associates (France) 0.2 0.2

Other associates (international, excluding UK) (0.7) -

TOTAL JOINT VENTURES AND ASSOCIATES 25.6 25.4

4.6. Financial income / (expense)

(€ million) 31/12/2017 31/12/2016

Net cost of financial debt (8.3) (10.7)

n of which Cost of gross financial debt (9 .7) (11 .8)

n of which Income from cash and cash equivalents 1 .4 1 .1

Other financial income and charges 5.1 1.6

n of which revaluation of securities 0 .5 -

Other financial charges (8.4) (12.4)

n of which foreign exchange impact (0 .1) (4 .3)

FINANCIAL INCOME / (EXPENSE) (11.6) (21.4)


58

4.7. Taxation

The 2017 tax charge breaks down as follows.

(€ million) 31/12/2017 31/12/2016

CURRENT TAX EXPENSE (35.8) (38.4)

Tax payable for the period (35.9) (38.5)

Adjustments in respect of prior years 0.1 0.1

DEFERRED TAX INCOME (4.8) 10.6

Deferred tax for the period (3.0) 11.1

Impairment loss on deferred tax asset (1.7) (0.6)

TAX EXPENSE FOR THE YEAR (40.6) (27.8)

In 2016 and 2017, the Group opted to present a reconciliation of its effective rate at 34.43%.

The reconciliation between the legal rate of taxation in France and the effective rate is as follows:

31/12/2017 31/12/2016

In % In € million In % In € million


Neutralisation of Profit/(loss) from associates (25.6) (25.4)

Neutralisation of Taxation 40.6 27.8

PROFIT BEFORE TAX AND BEFORE PROFIT/(LOSS) FROM ASSOCIATES 56.0 20.8

Theoretical tax using the legal rate of French taxation 34.43% (19.3) 34.43% (7.2)

French / foreign taxation rate differentials 4.52% (2.5) -7.10% 1.5

Rate change in France and the USA (1) 8.63% (4.8) 24.14% (5.0)

Recognition of deferred taxes on intangible assets -2.64% 1.5 -19.07% 4.0

Effect of reduced rates and changes in tax rates 0.18% (0.1) 0.00% -

Adjustment in respect of tax for prior years -0.18% 0.1 -0.48% 0.1

Other permanent differences 11.47% (6.4) 12.39% (2.6)

Crédit d’Impôt Compétitivité Emploi -35.47% 19.9 -82.37% 17.1

Effect of direct taxation (CVAE) 11.48% (6.4) 38.12% (7.9)

Unrecognised deferred tax assets 40.05% (22.4) 133.72% (27.8)

EFFECTIVE RATE OF TAXATION 72.46% (40.6) 133.78% (27.8)

(1) The changes in the corporate income tax rates in France (25.83% from 2022) provided for in the new French Finance Act and in the USA generated net decreases of 0.7 million euros and 4.2 million euros respectively in the deferred tax asset balance at end of 2017.

Unrecognised deferred tax assets in 2017 mainly relate to France, North America, Germany and the Netherlands.

Deferred tax included within non-current assets and liabilities breaks down as follows:

(€ million) 31/12/2017 31/12/2016

DEFERRED TAX ASSETS 105.7 86.9

Less than one year 11.2 10.6

More than one year 94.5 76.3

DEFERRED TAX LIABILITIES (102.2) (77.3)

Less than one year (12.5) (12.7)

More than one year (89.6) (64.6)


59

Unused losses amounted to €601.9 million at 31 December 2017 of which €461.9 million were not recognised, taking into account assumptions on the usability of these losses within available time limits, which would represent a deferred tax asset of €159 million.

At each financial year end, the Group assesses for each tax entity the probability of its having taxable profits against which to offset its deferred tax assets or to use available unrecognised tax credits. In making this assessment, the Group takes account of, among other factors, past and present taxable profit, and the companies’ prospects for making future taxable profits.

The change in the net deferred taxes recorded in the statement of financial position breaks down as follows:

(€ million) Net position

OPENING BALANCE ON 1 JANUARY 2017 9.6Recognised in equity 0.5

Recognised in profit for the year (4.6)

Effect of consolidation scope changes (2.9)

Foreign exchange translation difference and other movements 0.6

CLOSING BALANCE ON 31 DECEMBER 2017 3.5

(€ million) Net position

OPENING BALANCE ON 1 JANUARY 2016 7.2Recognised in equity (3.9)

Recognised in profit for the year 10.6

Effect of consolidation scope changes (4.8)

Foreign exchange translation difference and other movements 0.6

CLOSING BALANCE ON 31 DECEMBER 2016 9.6

Net deferred taxes by type are as follows:

(€ million) 31/12/2017 31/12/2016

Purchase accounting asset revaluations (49.3) (49.7)

Staff benefits 36.8 40.4

Tax losses 32.2 44.0

Other (16.2) (25.1)

CLOSING BALANCE ON 31 DECEMBER 2017 3.5 9.6


60

5 n NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

5.1. Goodwill

Changes in carrying amount

(€ million) France Continental Europe Australia North

America Total

At 1 January 2017 112.8 104.6 34.8 36.7 289.0

Acquisitions (1) 2.5 0.5 1.0 (0.4) 3.6

Disposals - - - - -

Impairment loss for the period - - - - -

Foreign exchange translation differences and others 0.5 (0.3) (1.8) (3.6) (5.2)

At 31 December 2017 115.7 104.9 34.1 32.7 287.4

Of which gross value 116 .2 104 .9 34 .3 42 .6 297.9

Of which accumulated amortisation and impairment charges (0 .4) - (0 .2) (9 .8) (10.5)

(1) The variation in acquisitions in France mainly relates to the acquisition of Les Coccinelles on 31 March 2017.

(€ million) France Continental Europe Australia North

America Total

At 1 January 2016 92.9 104.2 36.9 33.3 267.3

Acquisitions (1) 18.8 0.8 (2.8) 1.8 18.6

Disposals - - - - -

Impairment loss for the period - - - - -

Foreign exchange translation differences and others 1.1 (0.3) 0.7 1.6 3.0

At 31 December 2016 112.8 104.6 34.8 36.7 289.0

Of which gross value 113 .2 104 .6 35 .1 47 .6 300.6

Of which accumulated amortisation and impairment charges (0 .4) - (0 .2) (10 .9) (11.6)

(1) The additional goodwill recorded in 2016 arises principally from the acquisition of Transports Meyer on 11 January 2016.


61

Impairment testingLes principales hypothèses retenues pour les tests de perte de valeur sont les suivantes :

Discount rateThe discount rate used is based on the average cost of capital reflecting current market assessments of the time value of money and the risks specific to the tested asset.

The average weighted cost of capital has been determined by a combination of two methods: the “Capital Asset Pricing Model” (CAPM) method and the weighted average cost of capital method for comparable listed companies. Taking into account these factors, the costs of capital used to discount future cash flows were as follows:

WACC

31/12/2017 31/12/2016KEOLIS 4.49% 4.70%

United Kingdom 4.96% 4.70%

Sweden 4.73% 4.70%

Canada 4.96% 4.70%

Denmark 4.49% 4.70%

Netherlands 4.25% 4.70%

Belgium 4.49% 4.70%

Australia 5.20% 4.70%

Norway 4.25% 4.70%

United States 4.96% 4.70%

Germany 4.49% 4.70%

France 4.49% 4.70%

These discount rates are rates after tax applied to cash flows after tax. Use thereof results in recoverable amounts identical to those obtained by using pre-tax rates applied to non-taxable cash flows, in accordance with IAS 36.

Long-term growth ratesThe growth rates applied to the main cash-generating units or groups thereof were as follows:

Infinite growth rates

31/12/2017 31/12/2016KEOLIS 2.00% 2.00%

United Kingdom 2.21% 2.00%

Sweden 2.11% 2.00%

Canada 2.21% 2.00%

Denmark 2.00% 2.00%

Netherlands 1.89% 2.00%

Belgium 2.00% 2.00%

Australia 2.32% 2.00%

Norway 1.89% 2.00%

United States 2.21% 2.00%

Germany 2.00% 2.00%

France 2.00% 2.00%

Sensitivity of recoverable amountsSensitivity tests on groups of cash-generating units were carried out by varying the long-term growth rates or the WACC (weighted average cost of capital).A 0.5% decrease in the indefinite growth rate leaves a positive margin between the value in use and the carrying amount of cash-generating units.A 0.5% increase in the discount rate leaves a positive margin between the value in use and the carrying amount of cash-generating units.


62

5.2. Other intangible assets

(€ million)

Aut

horis

atio

ns,

Pat

ents

and

S

oftw

are

Trad

emar

ks

Con

tract

ual

right

s

Con

cess

ion

asse

ts

Con

trac

t as

sets

(1)

Oth

er

Tota

l

At 1 January 2017 28.8 4.0 101.0 3.3 11.9 59.2 208.2

Acquisitions 15.7 - - 1.0 12.1 10.4 39.2

Assets disposed of and scrapped - - - - - (0.1) (0.1)

Amortisation (16.6) (0.4) (8.0) (18.0) (1.7) (5.4) (50.0)

Changes in reporting scope 0.4 - 4.8 - - 1.7 6.9Foreign exchange translation differences and other movements 5.1 (0.5) (3.1) 13.7 - (7.6) 7.7

At 31 December 2017 33.4 3.1 94.7 - 22.3 58.3 211.8

Of which gross value 131 .7 5 .3 137 .9 98 .3 52 .9 67 .4 493.6Of which cumulative depreciation and impairment losses (98 .4) (2 .2) (43 .1) (98 .3) (30 .6) (9 .2) (281.9)

(€ million)

Aut

horis

atio

ns,

Pat

ents

and

S

oftw

are

Trad

emar

ks

Con

tract

ual

right

s

Con

cess

ion

asse

ts

Con

trac

t as

sets

(1)

Oth

er

Tota

l

At 1 January 2016 32.7 4.3 96.1 16.0 5.4 49.4 203.9

Acquisitions 12.0 - 0.3 2.0 7.2 20.2 41.7

Assets disposed of and scrapped - - - - - (0.3) (0.3)

Amortisation (17.8) (0.4) (7.8) (14.6) (0.6) (6.4) (47.7)

Changes in reporting scope - - 11.0 - - (1.5) 9.6Foreign exchange translation differences and other movements2

1.9 0.1 1.3 - - (2.2) 1.1

At 31 December 2016 28.8 4.0 101.0 3.3 11.9 59.2 208.2

Of which gross value 120 .4 6 .1 137 .2 87 .5 40 .8 60 .5 452.5Of which cumulative depreciation and impairment losses (91 .6) (2 .1) (36 .2) (84 .2) (28 .9) (1 .3) (244.3)

(1) See note 2.4.8 for definition of contract assets


63

5.3. Property, plant and equipment

(€ million)

Land

&

Dev

elop

men

ts

Bui

ldin

gs

Equi

pmen

t and

to

olin

g

Tran

spor

t eq

uipm

ent

PP

E un

der

cons

truc

tion

Oth

er

Tota

l

At 1 January 2017 37.2 79.3 32.6 509.9 27.2 66.3 752.6

Acquisitions 1.9 9.2 10.8 115.9 33.8 26.0 197.6

Assets disposed of and scrapped (0.4) (2.2) (0.2) (10.9) - (0.6) (14.4)

Depreciation (1.3) (9.9) (8.2) (110.2) - (18.7) (148.3)

Changes in reporting scope 1.1 - - 4.3 - 0.1 5.4Foreign exchange translation differences and other movements (0.6) 1.5 1.2 (0.2) (21.2) (3.0) (22.3)

At 31 December 2017 37.8 77.9 36.3 508.8 39.8 70.1 770.6

Of which gross value 46 .4 171 .9 110 .7 1 247 .2 39 .8 193 .8 1,809.7Of which cumulative depreciation and impairment losses (8 .6) (93 .9) (74 .5) (738 .4) - (123 .7) (1,039.1)

(€ million)

Land

&

Dev

elop

men

ts

Bui

ldin

gs

Equi

pmen

t and

to

olin

g

Tran

spor

t eq

uipm

ent

PP

E un

der

cons

truc

tion

Oth

er

Tota

l

At 1 January 2016 37.8 78.1 34.1 489.2 15.5 56.7 711.4

Acquisitions 2.1 6.7 7.3 127.1 23.5 26.6 193.3

Assets disposed of and scrapped (0.7) (0.4) (0.1) (19.9) - (0.4) (21.4)

Depreciation (2.3) (11.0) (9.5) (102.7) - (18.1) (143.8)

Changes in reporting scope - 0.8 1.2 7.3 - 0.5 9.8Foreign exchange translation differences and other movements 0.3 5.1 (0.3) 9.0 (11.8) 1.0 3.4

At 31 December 2016 37.2 79.3 32.6 509.9 27.2 66.3 752.6

Of which gross value 47 .0 164 .9 106 .0 1,193 .0 27 .2 180 .3 1,718.4Of which cumulative depreciation and impairment losses (9 .7) (85 .6) (73 .4) (683 .1) - (114 .0) (965.8)

Finance leases At 31 December 2017, finance leased assets included within assets in the statement of financial position comprised:

(€ million)Transport

equipment Land and Buildings Total

Net book value of finance leased fixed assets 132.3 10.7 143.1

Schedule of minimum finance lease payments

(€ million) 1 year 1 to 5 years > 5 years Total

Principal 40.8 88.3 13.6 142.7

Interest - 4.7 0.4 5.1

FINANCE LEASE PAYMENTS 40.8 93.0 14.0 147.8


64

5.4. Investments under the equity methodThe Group holds several investments in joint ventures and associates, notably in the United Kingdom, consolidated under the equity method.The changes in the value of these investments during the financial year can be explained by the items below:

(€ million) 31/12/2017 31/12/2016

AT 1 JANUARY 37.6 39.4

Net profit attributable to Group 25.6 25.4

Profit/(loss) from investments under equity method 25.6 25.4

Change in fair value affecting equity - -

Foreign exchange translation differences 0.5 (2.6)

Dividends paid (26.6) (24.6)

Changes in consolidation scope & other (0.9) -

AT 31 DECEMBER 36.2 37.6

The financial elements relating to significant joint ventures are presented below at 100% of their values:

31/12/2017 31/12/2016

(€ million)

Gov

ia &

sub

sid’

s

Firs

t / K

eolis

Tr

ansp

enni

ne

Oth

ers

Tota

l as

soci

ates

Gov

ia &

sub

sid’

s

Firs

t / K

eolis

Tr

ansp

enni

ne

Oth

ers

Tota

l as

soci

ates

Non-current assets 62.3 - NA NA 52.6 0.3 NA NA

Net WCR 31.2 5.3 NA NA 41.9 3.7 NA NA

Equity 90.3 5.4 NA NA 91.9 4.1 NA NA

Inc. Net profit 72.6 1.5 NA NA 56.9 12.1 NA NA

Non-current liabilities 3.2 - NA NA 2.6 (0.1) NA NA

Net assets 90.3 5.4 NA NA 91.9 4.1 NA NA

Reconciliation of financial data with value of investments under equity method

Group share of net assets 31.6 2.4 2.2 36.2 32.2 1.8 3.6 37.6

Net book value of investments 31.6 2.4 2.2 36.2 32.2 1.8 3.6 37.6

With regard to Govia’s activities of in the UK, operating companies are required under contract to retain a level of liquidity such that the public service can be guaranteed in the event of the operator’s insolvency. This requires the operator to maintain a Liquidity Maintenance Ratio. The required amount is equal to a certain number of weeks of direct costs relating to the activity and must be maintained until the end of the franchise. This requirement means that the majority of the cash held by Govia under operational companies cannot be qualified as transferable to the Go-Ahead group, the majority shareholder in Govia. As such, the net cash position at year end is presented in net working capital.However, the net assets held by the Keolis Group in the UK in Govia, amounting to €28.5 million at 31 December 2017, are fully available.


65

5.5. Current and non-current financial assets

(€ million)

Equity instruments measured at

Debt instruments measured at

“Fai

r val

ue”

by

Pro

fit/lo

ss

“Fai

r val

ue b

y” O

CI

not r

ecyc

labl

e in

P

&L

Am

ortis

ed c

ost b

y pr

ofit/

loss

“Fai

r Val

ue”

by

Pro

fit/L

oss

Der

ivat

ive

asse

ts

Con

cess

ion

finan

cial

as

sets

Tota

l

At 31 December 2017

Gross value 3.5 25.7 111.2 - 1.6 162.6 304.7

Impairment - - - - - - -

Net value 3.5 25.7 111.2 - 1.6 162.6 304.7

n Of which less than 1 year - - 17.9 - 1.6 - 19.5

n Of which more than 1 year 3.5 25.7 93.4 - - 162.6 285.2

(€ million)

Equity instruments measured at

Debt instruments measured at

“Fai

r val

ue”

by

Pro

fit/lo

ss

“Fai

r val

ue b

y” O

CI

not r

ecyc

labl

e in

P

&L

Am

ortis

ed c

ost b

y pr

ofit/

loss

“Fai

r Val

ue”

by

Pro

fit/L

oss

Der

ivat

ive

asse

ts

Con

cess

ion

finan

cial

as

sets

Tota

l

At 31 December 2017

Gross value 3.0 30.6 36.7 - 2.1 162.2 234.5

Impairment - - - - - - -

Net value 3.0 30.6 36.7 - 2.1 162.2 234.5

n Of which less than 1 year - - 18.2 - 2.1 - 20.3

n Of which more than 1 year 3.0 30.6 18.4 - - 162.2 214.2

The increase in debt instruments comprises new credit facilities granted to EFFIA Holding for €31.2 million and KEOMOTION for €49.6 million.

5.6. Inventories

(€ million) 31/12/2017 31/12/2016

Gross inventories 108.5 96.5

Provisions (5.2) (4.4)

NET INVENTORIES 103.3 92.1


66

5.7. Trade and other receivables

(€ million) 31/12/2017 31/12/2016

Trade receivables 442.7 374.5

Advances and down payments on orders 10.0 8.8

Amortisation of accounts receivable (11.4) (10.5)

TRADE RECEIVABLES 441.3 372.9

Receivables from staff and welfare agencies 3.6 4.4

Central government and local authorities 309.6 271.8

Prepayments 21.4 21.5

Other(1) 180.7 169.7

Depreciation of other debtors (1.2) (1.1)

OTHER RECEIVABLES 514.2 466.2

(1) Other receivables for 2017 include €67 million representing the Australian Department for Transport’s guarantee on extra holiday rights; these rights appear under liabilities as payables to staff.

5.8. Cash and cash equivalents

Analysis by type

(€ million) 31/12/2016 31/12/2016

Cash 271.3 293.7

Short term investments 5.1 7.9

TOTAL RECOGNISED AS ASSETS 276.5 301.6

Bank overdrafts (166.8) (157.8)

NET CASH AND CASH EQUIVALENTS 109.6 143.8

Cash equivalents include highly liquid short term investments that are easily convertible into a known amount of cash and present no significant risk of loss of value.

The Group takes the view that its UCITS classified by the AMF (French financial markets authority) as “euro money-market” meet the criteria necessary to classify them as cash equivalents.

In 2017, the Group carried out several transactions to monetise trade receivables. The amount of receivables thus monetised was €28.1 million at 31 December 2017 versus €44.4 million at 31 December 2016.

In 2017, as in previous years, the receivable arising from the CICE implemented by the French government and recognised by French consolidated tax groups was subject to a “Dailly” sale made by GROUPE KEOLIS S.A.S.

5.9. Equity

Share capital and share premium At 31 December 2017, the share capital was €412.8 million, comprising 34,402,273 ordinary shares with a nominal value of 12 euros each. No diluting instrument was issued during the financial year ended 31 December 2017.

The Group’s borrowing contracts do not include any mandatory gearing ratio clauses.

Treasury shares At 31 December 2017, Keolis S.A. held no treasury shares and was not a party to any purchase or sale option relating to Keolis S.A. shares.


67

Distributable reserves and earningsAt 31 December 2017, Keolis S.A. held distributable reserves and earnings of €132.0 million. The Group recorded a loss for the year amounting to €70.8 million.

Non-controlling interestsThe main investments not giving control are Keolis Downer, KDR Victoria Pty Ltd, Keolis Commuter Services LLC and Australian Transit Enterprises.

Foreign exchange translation reserve The following were the main exchange rates against the euro used for the 2017 and 2016 financial years:

2017 2016

Average rate Closing rate Average rate Closing rate

Pound Sterling 0.876834 0.887200 0.819483 0.856200

Australian Dollar 1.472852 1.534600 1.488282 1.459600

Danish Crown 7.438615 7.444900 7.445189 7.434400

Swedish Crown 9.633786 9.843800 9.468901 9.552500

Norwegian Crown 9.326170 9.840300 9.290600 9.086300

US Dollar 1.129877 1.199300 1.106903 1.054100

Canadian Dollar 1.464183 1.503900 1.465879 1.418800

Indian Rupee 73.556827 76.605500 74.371692 71.593500

5.10. Financial debt and long-term borrowingsIn 2017 two credit lines were was arranged by Keolis S.A.:

n a loan of €20 million to finance rolling stock, arranged and drawn down on 7 December 2017, repayable in instalments over 8 years. This loan is fully hedged by a derivative financial instrument;

n a loan of €7 million, arranged and drawn down in December 2017, repayable in instalments over 3 years.

Financial debt breakdown by type

At 31 December 2017

(€ million)Amounts in the

statement of financial position

Term Rates

Finance leasing 1.8 2018 Variable rates

Finance leasing 39.0 2018 Fixed ratesOwed to non-controlling shareholders (put option) - 2018 -

Derivatives 0.9 2018 -

Loans 17.5 2018 Fixed rates

Loans 15.3 2018 Variable rates

SUBTOTAL LESS THAN 1 YEAR 74.4

Finance leasing 4.9 2019-2029 Variable rates

Finance leasing 97.0 2019-2029 Fixed rates

Employee profit-sharing 0.4 2019-2021 Fixed rates

Derivatives - - -

Loans 93.9 2019-2029 Fixed rates

Loans 198.7 2019-2029 Variable rates

SUBTOTAL MORE THAN 1 YEAR 394.9

TOTAL 469.3


68

At 31 December 2016

(€ million)Amounts in the

statement of financial position

Term Rates

Finance leasing 1.5 2017 Variable rates

Finance leasing 32.0 2017 Fixed ratesOwed to non-controlling shareholders (put option) 1.0 2017 -

Derivatives 0.8 2017 -

Loans 27.7 2017 Fixed rates

Loans 67.7 2017 Variable rates

SUBTOTAL LESS THAN 1 YEAR 130.7

Finance leasing 3.0 2018-2028 Variable rates

Finance leasing 95.2 2018-2028 Fixed rates

Employee profit-sharing 0.5 2018-2020 Fixed rates

Derivatives 0.2 -

Loans 54.6 2018-2028 Fixed rates

Loans 176.3 2018-2028 Variable rates

SUBTOTAL MORE THAN 1 YEAR 329.8

TOTAL 460.5

Financial debt breakdown by maturity

(€ million)

Maturity

2018 2019 2020 2021 2022 2023 - 2028

After 2028 Total

Finance leasing 40.8 39.5 30.0 10.2 8.7 13.6 - 142.7

Other liabilities 33.6 82.3 44.0 13.7 128.4 13.6 11.1 326.7

TOTAL 74.4 121.8 74.0 23.9 137.0 27.2 11.1 469.3


69

Statement of changes in financial debt

(€ million)

31/1

2/20

16

Res

tate

d

Incr

ease

Dec

reas

e

Cha

nges

in

repo

rtin

g sc

ope

Impa

ct o

f exc

hang

e ra

te

Oth

er

31/1

2/20

17

Finance leasing 33.5 12.1 (7.0) (0.8) (0.5) 3.5 40.8Owed to non-controlling shareholders (put option) 1.0 - - (1.0) - - -

Derivatives 0.8 - - - - 0.1 0.9

Loans 95.4 1.9 (88.8) 0.9 (1.7) 25.0 32.7

SUBTOTAL, LESS THAN 1 YEAR 130.7 14.0 (95.7) (0.9) (2.2) 28.6 74.4Owed to non-controlling shareholders (put option) - - - - - - -

Finance leasing 98.2 39.6 (31.8) (1.2) (2.0) (0.9) 101.9

Employee profit-sharing 0.5 - - - - - 0.4

Derivatives 0.2 - - - - (0.2) -

Loans 230.8 172.0 (69.4) 2.0 (15.1) (27.7) 292.6

SUBTOTAL, MORE THAN 1 YEAR 329.8 211.6 (101.2) 0.7 (17.1) (28.9) 394.9

TOTAL 460.5 225.6 (197.0) (0.2) (19.3) (0.3) 469.3

Mandatory financial ratiosContracts held by Keolis S.A. do not require compliance with any specific financial ratios.

The Group’s contracts, and those of its subsidiaries, include cross acceleration clauses. If the Group or, under certain conditions, its largest subsidiaries do not comply with their commitments, lending institutions may claim default and early reimbursement of a major portion of the Group’s debt.

Taking account of the spread of this financing among various subsidiaries and the quality of the Group’s liquidity resources, the existence of these clauses does not create a material risk to the Group’s financial situation.

In 2014 the Group introduced monitoring of the financial ratios relating to the financing of the Group and its subsidiaries in order to anticipate any adverse changes to these ratios.


70

5.11. Financial assets and liabilities by category

31/12/2017 Total Financial instruments Fair value

Balance sheet item and instrument class € million

Non

-cur

rent

Cur

rent

Net

boo

k va

lue

of

clas

s in

sta

tem

ent o

f fin

anci

al p

ositi

on

At f

air v

alue

thro

ugh

equi

ty

Loan

s, re

ceiv

able

s,

debt

at a

mor

tised

co

st

At f

air v

alue

thro

ugh

profi

t and

loss

Qua

lified

as

hedg

ing

Fair

valu

e of

the

clas

s

Leve

l 1

Leve

l 2

Leve

l 3

Net

fina

ncia

l deb

t

Other loans and receivables 93.4 17.9 111.2 - 111.2 - - 111.2 - 111.2 - 111.2

Financial assets for concessions 162.6 - 162.6 - 162.6 - - 162.6 - 162.6 -

SUB-TOTAL OF LOANS AND RECEIVABLES 255.9 17.9 273.8 - 273.8 - - 273.8 - 273.7 - 111.2

Pension assets - - - - - - - - - - - -

Available for sale (AFS) assets 29.1 - 29.1 29.1 - - - 29.1 - 10.3 18.8 -

Assets at fair value, recognised in profit and loss - - - - - - - - - - - -

Positive fair value of hedging instruments - 0.1 0.1 - - - 0.1 0.1 - 0.1 - 0.1

Positive fair value of trading derivatives - 1.7 1.7 - - 1.7 - 1.7 - 1.7 - 1.7

Cash and cash equivalents - 276.4 276.4 - - 276.4 - 276.4 5.1 271.4 - 276.4

TOTAL CURRENT AND NON-CURRENT FINANCIAL ASSETS 285.0 296.0 581.0 29.1 273.8 278.1 0.1 581.0 5.1 557.1 18.8 389.4

Bank borrowings 292.5 32.3 324.8 - 324.8 - - 324.8 - 324.8 - 324.8

Finance leasing 101.9 40.8 142.7 - 142.7 - - 142.7 - 142.7 - 142.7

SUB-TOTAL OF BORROWINGS 394.3 73.2 467.5 - 467.5 - - 467.5 - 467.5 - 467.5

of which:

- measured at amortised cost 394 .3 73 .2 467 .5 - 467 .5 - - 467 .5 - 467 .5 - 467 .5

- subject to fair value hedge accounting - - - - - - - - - - - -

- measured according to the "fair value" option - - - - - - - - - - - -

Negative fair value of hedging instruments - 0.4 0.4 - - - 0.4 0.4 - 0.4 - 0.4

Negative fair value of trading derivatives - 0.5 0.5 - - 0.5 - 0.5 - 0.5 - 0.5

BORROWINGS AND FINANCIAL DEBT 394.3 74.0 468.4 - 467.5 0.4 0.4 468.3 - 468.4 - 468.4

Bank loans and overdrafts - 167.4 167.4 - 167.4 - - 167.4 - 167.4 - 167.4

Debts relating to commitments to purchase non-controlling interests - - - - - - - - - - - -

TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES

394.3 241.4 635.8 - 634.9 0.4 0.4 635.6 - 635.7 - 635.8

GROUP NET FINANCIAL DEBT 301.0 (54.6) 246.4 - 523.6 (277.7) 0.4 246.4 (5.1) 251.5 - 246.4


71

31/12/2016 Financial instruments Total Fair value

Balance sheet item and instrument class € million

Non

-cur

rent

Cur

rent

Net

fina

ncia

l deb

t

At f

air v

alue

thro

ugh

equi

ty

Loan

s, re

ceiv

able

s,

debt

at a

mor

tised

co

st

At f

air v

alue

thro

ugh

profi

t and

loss

Qua

lified

as

hedg

ing

Net

boo

k va

lue

of

clas

s in

sta

tem

ent o

f fin

anci

al p

ositi

on

Fair

valu

e of

the

clas

s

Leve

l 1

Leve

l 2

Leve

l 3

Other loans and receivables 18.4 18.2 36.7 - 36.7 - - 36.7 36.7 - 36.7 -

Financial assets for concessions 162.2 - - - 162.2 - - 162.2 162.2 - 162.2 -

SUB-TOTAL OF LOANS AND RECEIVABLES 180.6 18.2 36.7 - 198.9 - - 198.9 198.9 - 198.9 -

Available for sale (AFS) assets 33.4 - - 33.4 - - - 33.4 33.4 - - 33.4

Assets at fair value, recognised in profit and loss - - - - - - - - - - - -

Positive fair value of hedging instruments 0.2 - 0.2 - - - 0.2 0.2 0.2 - 0.2 -

Positive fair value of trading derivatives - 2.1 2.1 - - 2.1 - 2.1 2.1 - 2.1 -

Cash and cash equivalents - 301.6 301.6 - - 301.6 - 301.6 301.6 7.9 293.7 -

TOTAL CURRENT AND NON-CURRENT FINANCIAL ASSETS 214.3 321.9 340.5 33.4 198.9 303.6 0.2 536.2 536.2 7.9 495.0 33.4

Bank borrowings 230.8 94.9 325.7 - 325.7 - - 325.7 325.7 - 325.7 -

Finance leasing 98.2 33.5 131.7 - 131.7 - - 131.7 131.7 - 131.7 -

SUB-TOTAL OF BORROWINGS 329.1 128.4 457.5 - 457.5 - - 457.5 457.5 - 457.5 -

of which:

- measured at amortised cost 329 .0 128 .5 457 .5 - 457 .5 - - 457 .5 457 .5 - 457.5 -

- subject to fair value hedge accounting - - - - - - - - - - - -

- measured according to the "fair value" option - - - - - - - - - - - -

Negative fair value of hedging instruments 0.2 0.8 1.0 - - - 1.0 1.0 1.0 - 1.0 -

Negative fair value of trading derivatives - - - - - - - - - - - -

BORROWINGS AND FINANCIAL DEBT 329.3 129.2 458.5 - 457.5 - 1.0 458.5 458.5 - 458.5 -

Bank loans and overdrafts - 158.3 158.3 - 158.3 - - 158.3 158.3 - 158.3 -

Debts relating to commitments to purchase non-controlling interests - 1.0 - 1.0 - - - 1.0 1.0 - - 1.0

TOTAL CURRENT AND NON-CURRENT FINANCIAL LIABILITIES

329.3 288.5 616.8 1.0 615.8 - 1.0 617.8 617.8 - 616.8 1.0

GROUP NET FINANCIAL DEBT 310.6 (34.4) 276.3 - 579.1 (303.7) 0.8 276.3 276.3 (7.9) 284.1 -


72

5.12. Risk management and financial derivatives The Group uses derivative financial instruments to manage exposure to financial market risks resulting from its operational, financial and investment activities:


As at 31 December 2017, the Group held derivative instruments:

n eligible for hedge accounting and recognised as cash flow hedges (CFH); n or non-eligible for hedge accounting and recognised in trading.

Fair values are calculated by using standard valuation methods and on a basis of mid-market conditions commonly used in the financial markets. The market data used is level 2 under the terms of IFRS 13.

The impacts on performance and the financial position of derivatives are presented in the table below:

(€ million)Other comprehensive income account (OCI) (reclassifiable as

income)

Latent financial income/

(expense)

Underlying asset Hedge accountingFair value at 31/12/2016 Change (1) Reclassified (2) Change (3)

Fair value at 31/12/2017

Interest rates CFH (0.7) (0.1) 0.5 - (0.4)

Interest rates Trading - - - - - TOTAL INTEREST RATES (0.7) (0.1) 0.5 - (0.4)

Currency Net investment hedge - - - - -

Currency Trading 1.9 - - (0.8) 1.1

TOTAL CURRENCY 1.9 - - (0.8) 1.1

Commodities CFH 2.4 0.2 (0.7) - 2.0

Commodities Trading (0.2) - - 0.1 (0.1)TOTAL COMMODITIES 2.2 0.2 (0.7) 0.1 1.8

TOTAL 3.5 0.1 (0.2) (0.7) 2.7

(1) Changes in market values, which have impacted the other comprehensive income account (reclassifiable reserves) for the financial year.(2) Reclassifications from equity have had a negative impact of €1.0 million on EBITDA and a positive impact of €0.5 million on financial income / (expense).(3) Changes in market values that have impacted financial income/ expense for the financial year.

Derivative instruments are recognised in the statement of financial position at their fair value for the following amounts:

(€ million)

31/12/2017 31/12/2016

Non-current Current Total Non-

current Current Total

Derivative assets

Cash flow hedges - 1.9 1.9 0.2 2.9 3.1

Fair value hedges - - - - - -

Transaction hedges - 1.6 1.6 - 2.0 2.0

Net foreign investment hedges - - - - - -

TOTAL DERIVATIVE INSTRUMENTS - ASSETS - 3.5 3.5 0.2 4.9 5.1

Derivative liabilities

Cash flow hedges - 0.4 0.4 0.2 1.4 1.6

Fair value hedges - - - - - -

Transaction hedges - 0.5 0.5 - 0.1 0.1

Net foreign investment hedges - - - - - -TOTAL DERIVATIVE INSTRUMENTS - LIABILITIES - 0.9 0.9 0.2 1.5 1.7


73

Management of interest rate risk The exposure of the Group to interest rate risk stems from its net financial debt. The Group covers this risk by using derivative financial instruments.

Derivative financial instruments eligible for hedge accounting are recognised under cash flow hedges. The derivative financial ins-truments that are not eligible are recognised under trading.

The breakdown of the Group’s net debt is as follows:

(€ million) At 31 December 2017 At 31 December 2016

Financial debt and long term borrowings 469.3 459.5

Cash and cash equivalents (109.6) (143.8)

Accrued interest receivable (0.3) -

Loans and receivables (81.9) (6.6)

Deposits and guarantees (29.0) (30.0)

Derivative assets (1.6) (2.3)

Profit sharing (0.4) (0.5)

NET FINANCIAL DEBT 246.4 276.3

The Group is exposed to interest rate variability on the variable rate portion of its net financial debt.

The interest rate breakdown of financial debt and borrowings before and after derivative instruments (hedging and transaction) is as follows:

(€ million)

Initial debt structure Structure after IFRS hedging

31/12/2017 31/12/2016 restated 31/12/2017 31/12/2016

restated

Fixed rate 247.8 210.0 337.7 281.4

Variable rate 221.6 249.5 131.7 178.1

TOTAL BORROWINGS AND DEBT 469.3 459.5 469.3 459.5

Analysis of sensitivity

At 31 December 2017, on the basis of a constant net debt, a variation of 50 basis points in market interest rates would have chan-ged the annual borrowing cost as follows.

(€ million)+50 bp

Income+50 bp

Reclassified-50 bp

Income-50 bp

Reclassified

Variable rate financial derivatives (after effect of fair value hedges) (1.5) - 1.2 -

Liabilities at fair value by option - - - -

Derivatives not qualifying as hedges - - - -

Derivatives qualifying as cash flow hedges - 1.1 - (1.2)

ANALYSIS OF SENSITIVITY (1.5) 1.1 1.2 (1.2)


74

Derivative financial instruments on interest rates are recorded in the statement of financial position at their fair value for the following amounts:

Fair value in the balance sheet as at 31/12/2017


(€ million)

Cas

h flo

w h

edge

Fair

valu

e he

dge

Trad

ing

Hed

ge o

f a n

et

inve

stm

ent i

n a

fore

ign

oper

atio

n

TOTA

L

Cas

h flo

w h

edge

Fair

valu

e he

dge

Trad

ing

Hed

ge o

f a n

et

inve

stm

ent i

n a

fore

ign

oper

atio

n

TOTA

L

Fixed-rate receiver swaps 0.1 - - - 0.1 0.3 - - - 0.3DERIVATIVE INSTRUMENTS ASSETS 0.1 - - - 0.1 0.3 - - - 0.3

Fixed-rate receiver swaps - - - - - 0.3 - - - 0.3Fixed-rate payer swaps 0.4 - - - 0.4 0.7 - - - 0.7DERIVATIVE INSTRUMENTS LIABILITIES 0.4 - - - 0.4 1.0 - - - 1.0

INTEREST RATE NET POSITION (0.4) - - - (0.4) (0.7) - - - (0.7)

The nominal amounts of derivative financial instruments are detailed below:

(€ million)

31/12/2017 31/12/2016

Net long term debt

Net short term debt

Net long term debt

Net short term debt

Fixed-rate receiver swaps - - - -

Fixed-rate payer swaps 78.4 11.5 61.0 10.0

Index swaps - - - -

Interest rate options - - - -

All of the interest rate hedging instruments held at 31 December 2017 mature between 2018 and 2025.

Foreign exchange risk managementThe Group has put in place intra-group loans denominated in foreign currency and recognised in current accounts. In order to cover the resulting foreign exchange risk, the Group uses derivative financial instruments which allow it to fix the exchange rate of these intra-group loans.

The derivative financial instruments held by the Group are considered trading instruments under IAS 39.


75

Derivative financial instruments are recognised in the statement of financial position at their fair value at the following amounts:



(€ million)

Cas

h flo

w h

edge

Fair

valu

e he

dge

Trad

ing

Hed

ge o

f a n

et

inve

stm

ent i

n a

fore

ign

oper

atio

n

TOTA

L

Cas

h flo

w h

edge

Fair

valu

e he

dge

Trad

ing

Hed

ge o

f a n

et

inve

stm

ent i

n a

fore

ign

oper

atio

n

TOTA

L

Currency swaps - - 1.6 - 1.6 - - 2.0 - 2.0

DERIVATIVE ASSETS - - 1.6 - 1.6 - - 2.0 - 2.0Currency swaps - - 0.5 - 0.5 - - 0.1 - 0.1DERIVATIVE LIABILITIES - - 0.5 - 0.5 - - 0.1 - 0.1NET POSITION / FOREIGN EXCHANGE - - 1.1 - 1.1 - - 1.9 - 1.9

The derivative financial instruments hedge mainly transactions in the following currencies: AED, AUD, CAD, DKK, GBP, NOK, SEK, and USD.

All of the foreign exchange hedging derivatives held at 31 December 2017 mature in 2018.

Management of risk of fluctuations in commodities prices Within the scope of its activities, the Group is exposed to a risk of fluctuation in the price of certain commodities, in particular diesel. The Group covers this risk by using derivative financial instruments. In 2017 Keolis hedged 80% of exposed diesel volumes;

Derivative financial instruments eligible for hedge accounting are recognised under cash flow hedges as described by IAS 39. The derivative financial instruments that are not eligible are recognised under trading.

The derivative instruments are recognised in the statement of financial position at their fair value at the following amounts:



(€ million)

Cas

h flo

w h

edge

Fair

valu

e he

dge

Trad

ing

TOTA

L

Cas

h flo

w h

edge

Fair

valu

e he

dge

Trad

ing

TOTA

L

Swaps on petroleum products 1.7 - - 1.7 2.8 - - 2.8

Foreign exchange futures - assets 0.2 - - 0.2 - - - -

DERIVATIVES ON COMMODITIES - ASSETS 1.9 - - 1.9 2.8 - - 2.8

Swaps on petroleum products - - - - 0.6 - - 0.6

Diesel options - liabilities - - - - - - 0.1 0.1

DERIVATIVES ON COMMODITIES - LIABILITIES - - - - 0.6 - 0.1 0.7

NET POSITION ON COMMODITIES 1.9 - - 1.9 2.2 - (0.1) 2.1


76

At 31 December 2017 the commodity price derivatives represent a volume of 37,331 tonnes:

Volumes in tonnesMaturing in less

than a yearMaturing in 1 to 5

years

Swaps and tunnels on diesel reference 31,878 5,453

Counterparty riskThe transactions generating a potential counterparty risk for the Group are as follows:

n cash deposits; n derivative financial instruments; n trade receivables.

In 2013, the Group established and implemented a counterparty risk procedure for bank counterparties relating to its investments and derivative financial instruments. This procedure is based on the principles set out below:

n Definition of three categories within which the Group’s bank counterparties are divided: ● Authorised Banks; ● Banks under supervision; ● Non-Authorised Banks.

n These categories are defined based on criteria specific to banks (rating) or Keolis (Group financing). n Cash investments and derivative financial instruments are only undertaken with counterparties that belong to the “Authorised Banks” category;

n The portfolio of cash investments complies with weighting restrictions; n The “fair value at risk” (fair value in favour of the Group) of the portfolio of derivative financial instruments is monitored regularly so as to spread the risk over various counterparties;

n The banks and categories are monitored regularly.If a bank that is a Group counterparty is removed from the “Authorised Bank” category, the portfolio of derivative financial instruments is restructured so as to comply once again with the category criteria.

At 31 December 2017: n All the investments made and all the derivative financial instruments held by the Group were established with bank counter-parties in the “Authorised Bank” category;

n The analysis of fair values at risk indicates that there is no major counterparty risk to report.

Finally, the credit and debit valuation adjustment calculations for the counterparty risk, as required by IFRS 13, indicate that the counterparty risk related to the valuation of the Group’s portfolios of derivative financial instruments is negligible.

Liquidity riskOn 28 April 2017, after securing the approval of all of the banks, Keolis extended the maturity date of its €900 million syndicated loan by a year to 11 June 2022. The €900 million syndicated loan is available to GROUPE KEOLIS S.A.S. and Keolis S.A. At 31 December 2017, the available, confirmed and undrawn syndicated credit facility is €300 million.

In December 2017, a credit line was arranged by Keolis S.A. to finance the acquisition of rolling stock: a loan of €20 million, arran-ged and drawn down on 7 December 2017, repayable in instalments over 8 years. This loan is fully hedged by a derivative financial instrument.

In December 2017, a loan of €7 million was arranged by Keolis S.A. repayable in instalments over 3 years, replacing a previous loan of the same type and for the same amount. This loan is not hedged: it is incorporated into the calculation of total debt contracted by GROUPE KEOLIS S.A.S.


77

The following table shows the reimbursement schedule Keolis S.A.’s credit lines (excluding the syndicated loan) and the profile of the corresponding forecasted interest charges after taking into account interest rate hedging.

(€ million) < =1 year 2 years From 3 to 5 years > 5 years

Financial debt 10.3 8.0 112.2 10.9

Debt expense (1.2) (1.1) (2.5) (0.2)

n of which interest rate hedges (0.2) (0.2) (0.3) (0.1)

The forecasted interest charges on the debt are calculated on the gross debt on the basis of the interest rate on 31 December 2017, to which is added the Group’s interest margin.

The Group ensures that it has sufficient resources to meet its financial obligations.To do so, each year the Group prepares a table of projected cash flows several years into the future to identify financing requirements and their seasonality.

5.13. Provisions

Analysis by type

(€ million)

At 31 December 2017 At 31 December 2016

More than a

year

Less than a

yearTotal

More than a

year

Less than a

yearTotal

Pensions 139.1 7.0 146.2 133.6 7.1 140.7

Other employee benefits 26.8 0.8 27.6 30.4 0.9 31.4

Employment and tax risks 9.8 22.6 32.5 12.2 18.7 30.9Losses on contract termination and loss-making contracts - - - 2.6 - 2.6

Contract fines - - - - 2.3 2.3

Major repairs and maintenance 6.4 13.8 20.2 7.6 21.2 28.8

Other 8.1 1.7 9.8 8.1 1.6 9.6

TOTAL 190.2 45.9 236.3 194.5 51.7 246.3


78

Movements during the financial year

(€ million)At 1 January

2017 Charges ReversalsChanges in reporting

scopeOther

movementsAt 31

December 2017

Pensions 140.7 11.4 (14.3) 0.1 8.3 146.2

Other employee benefits 31.4 2.4 (2.0) - (4.3) 27.6Employment and tax risks 30.9 13.0 (12.3) 0.6 0.3 32.5

Losses on contract termination and loss-making contracts

2.6 - (2.6) - - -

Contract fines 2.3 - (2.3) - - -Major repairs and maintenance 28.8 2.8 (11.7) - 0.3 20.2

Other 9.7 2.8 (2.7) 0.6 (0.6) 9.8

TOTAL 246.3 32.4 (47.9) 1.3 4.0 236.3

(€ million)At 1 January

2016 Charges ReversalsChanges in reporting

scopeOther

movementsAt 31

December 2016

Pensions 134.1 10.4 (7.8) 1.0 3.0 140.7

Other employee benefits 31.8 2.8 (0.9) - (2.3) 31.4Employment and tax risks 28.0 13.8 (11.3) 0.2 0.2 30.9

Losses on contract termination and loss-making contracts

5.0 0.6 (3.0) - - 2.6

Contract fines 2.9 2.3 (2.9) - - 2.3Major repairs and maintenance 33.5 3.5 (8.2) - - 28.8

Other 9.4 2.8 (2.6) - - 9.7

TOTAL 244.7 36.2 (36.7) 1.2 0.9 246.3

Pensions and similar benefitsThe amount of commitments recognised in the statement of financial position breaks down as follows:


Commitments recorded in the statement of financial position:

Pensions and other post-employment benefits 146.3 140.7

Other employee benefits 27.6 31.4

TOTAL 173.9 172.1

n Non-current 166.1 164.1

n Current 7.8 8.0


79

Pensions and other post-employment benefits

Actuarial assumptions

The following are the main actuarial assumptions adopted in evaluating pension commitments under the defined benefit schemes:

At 31 December 2017 At 31 December 2016

(per cent) France Canada France Canada

Discount rate 0.88 3.25 1.21 3.45

Rate of increase in salaries 2.40-7.00 N/A 2.00-7.00 N/A

Expected rate of return on assets 0.88 3.45 1.21 3.30

The plan assets break down as follows:

(€ million)At 31 December 2017 At 31 December 2016

France Canada France Canada

Equities 0.1 1.2 0.1 5.3

Bonds 0.4 5.5 0.3 -

Real estate - - - 1.9

Other 0.1 0.1 0.1 -

The sensitivity to discount rates, in relation to the assumptions adopted is as follows:

(€ million)Commitment at

31/12/2017 Service cost 2018 Financial cost 2018

discount rate less 0.25% 152.2 10.2 1.1

discount rate (base assumption) 146.3 9.8 1.5

discount rate plus 0.25% 143.5 9.4 1.8

Commitments recorded in the statement of financial position

The commitments recognised in the statement of financial position break down as follows:


Present value of non-financed liabilities 142.8 138.8

Present value of financed liabilities 10.6 9.7

PRESENT VALUE OF TOTAL LIABILITIES 153.4 148.4

Fair value of pension scheme assets (7.2) (7.7)

Asset plan ceiling (Canada) 0.2 -PRESENT VALUE OF NET LIABILITIES RECOGNISED 146.3 140.7


80

Analysis of changes in liabilities and assets

The net present value of the liabilities comprises:

(€ million) 31/12/2017 31/12/2016

NET PRESENT VALUE OF LIABILITIES AT 1 JANUARY 148.4 141.3

Service cost 9.0 8.2

Financial cost (including Franchise Adjustment) 1.9 2.2

Benefits paid (10.5) (7.8)

Employee contributions - -

Changes in pension schemes 0.6 -

Actuarial gains/(losses) 7.1 2.7

Foreign exchange translation difference (0.4) 0.8

Effect of changes in consolidation scope (2.8) 1.1

Effect of reductions and pension scheme settlements - -

NET PRESENT VALUE OF LIABILITIES AT 31 DECEMBER 153.4 148.4

The fair value of the assets comprises:

(€ million) 31/12/2017 31/12/2016

FAIR VALUE OF PENSION PLAN ASSETS AT 1 JANUARY 7.7 7.2Expected return on assets 0.2 0.2

Actuarial gains/(losses) on pension fund returns 0.3 0.4

Employer contributions 0.1 0.2

Employee contributions - -

Benefits paid (0.6) (0.7)

Foreign exchange translation differences (0.4) 0.4

Effect of changes in consolidation scope - -

Effect of reductions and pension scheme settlements (0.2) -

FAIR VALUE OF PENSION PLAN ASSETS AT 31 DECEMBER 7.0 7.7

The following are the actuarial gains and losses both in the light of experience and due to changes in actuarial assumptions:

(€ million) 31/12/2017 31/12/2016

Impact of changes in assumptions 6.0 3.0

Losses/(gains) in the light of experience 0.8 (0.7)

ACTUARIAL LOSSES/(GAINS) FOR THE YEAR 6.9 2.3

The following is the geographical breakdown of the liabilities and assets:

(€ million)At 31 December 2017

France Canada Total

Present value of the liabilities 146.8 6.6 153.4

Fair value of pension scheme assets (0.5) (6.7) (7.2)

Franchise Adjustment / Assets ceiling (Canada) - 0.2 0.2

NET PRESENT VALUE OF NET OBLIGATIONS 146.3 - 146.3


81

Benefit cost for the financial year

The cost of benefits recognised in the income statement breaks down as follows:

(€ million) 31/12/2017 31/12/2016

Service cost 9.0 8.2Interest cost 1.9 2.2

Expected return on assets (0.2) (0.2)

Effect of changes in consolidation scope 0.6 -

Effect of reductions and pension scheme settlements 0.2 -

TOTAL EXPENSE RECOGNISED IN THE INCOME STATEMENT 11.4 10.2

The service cost is recognised within staff expenses.The interest cost on liabilities and the expected return on the pension scheme assets are recognised as financial expense and financial income respectively.

Change in the net commitment recorded as a liability in the statement of financial position

(€ million) 31/12/2017 31/12/2016

OPENING PROVISION AT 1 JANUARY 140.7 134.1Change in consolidation scope (2.9) 1.1

Benefit cost for the financial year 11.4 10.2

Used benefits / (Contributions paid) (10.0) (7.3)

Provision charged to/(reversed from) equity 6.9 2.3

Foreign exchange translation differences 0.1 0.4

CLOSING PROVISION AT 31 DECEMBER 146.3 140.7

The cumulative movements in charges/(reversals) recognised directly in equity are as follows:

(€ million) 31/12/2017 31/12/2016

CUMULATIVE OPENING BALANCE OF CHARGES/(REVERSALS) 38.8 38.8Actuarial (gains) / losses for the year 6.9 2.3

Foreign exchange translation differences and other changes - 0.2CUMULATIVE CLOSING BALANCE OF CHARGES/(REVERSALS) 51.5 41.3

Variations for the current financial year and for the three previous ones:

(€ million) 31/12/2017 31/12/2016 31/12/2015 31/12/2014

Present value of liabilities 153.3 148.4 141.3 127.5

Fair value of pension scheme assets (7.2) (7.7) (7.2) (8.1)

Franchise adjustment / Asset ceiling (Canada) 0.2 - - -

Surplus (deficit) of the pension scheme 146.3 140.8 134.1 119.4

Adjustments related to experience 0.8 (0.7) 2.2 2.2


82

Other employee benefits

Description of commitments and actuarial assumptions Other employee benefits mainly consist of long-service awards to employees working in France and healthcare expenses of employees in the USA who have taken early retirement. These schemes are not funded by external assets (e.g. insurance policies). The obligations arising from these defined benefit schemes are measured using the same methods and assumptions as for the pension schemes.

The actuarial gains and losses arising from both experience and due to changes in actuarial assumptions are immediately recognised in the income statement for the financial year.

Analysis of movements in obligations

(€ million) 01/01/2017 Charge Reversals Change in scope

Foreign exch transl. diff & other 31/12/2017

France – long service awards 16.9 1.9 (1.0) (0.8) (0.3) 16.7

USA – healthcare expenses of early-retired employees

14.5 0.7 - - (4.3) 10.8

TOTAL 31.4 2.5 (1.0) (0.8) (4.6) 27.6

The change in the USA related to the provision for healthcare expenses recorded as part of the Boston tender award, counterba-lanced by the recording of an intangible asset depreciated over the contract’s duration.

5.14. Operating liabilities and other debt


Trade receivables: advances and deposits received 35.6 68.5Trade payables 599.8 552.6

Payables to PPE suppliers 43.6 40.8

Payables to staff 491.1 468.5

Central government and local authorities 79.3 72.7

Deferred income 97.1 98.0

Other 114.9 83.6

TOTAL 1,461.4 1,384.7


83

6 n OTHER COMMITMENTS NOT RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION AND CONTRACTUAL COMMITMENTS


Unutilised credit lines 22.8 11.2Guarantees given to secure debt 15.7 50.2

Guarantees given for operating commitments 827.9 696.7TOTAL COMMITMENTS MADE AND GUARANTEES GIVEN, EXCLUDING OPERATING LEASES 843.6 746.9

The amount of railway path access entitlements within the “Guarantees given for operating commitments” is €99.6 million at 31 December 2017 compared to €69.2 million at 31 December 2016.

The future minimum payments on operating lease contracts break down as follows:


Less than one year 192.5 188.6One to five years 679.3 591.0

More than five years 373.0 314.0

TOTAL 1,244.9 1,093.5

Future commitments linked to leases primarily relate to the rental of transport equipment and buildings. They comprise €909.4 million internationally and €335.5 million in France. IT equipment rental contracts are in place for immaterial values.

France

Rental contracts Contracts entered into on vehicles (buses and coaches) relate to average durations of:

n 7 to 8 years for buses and coaches, n 3 or 4 years for minibuses.

The manufacturer’s buyback undertaking corresponds to the estimated market value of the vehicle at the end of the rental period.Most of these contracts are entered into directly by the subsidiaries, with a guarantee signed by Keolis S.A. in favour of the financing bodies. This guarantee takes the form of an undertaking to continue the rental and binds Keolis S.A. only in terms of the payment of the rental amounts that remain due under the contract if the subsidiary defaults. In return, the financing body undertakes to keep the related vehicles available to the Group.

Outside FranceWe distinguish between railway contracts and bus contracts.

Railway contractsRailway rental contracts are entered into for the term of the franchise.

Rentals under leases due in less than one year amount to €19.4 million.

Rentals under leases due in more than one year depend on the end date of each of the railway or similar franchises. They amount to €504.4 million

Bus and coach contractsRental instalments outstanding on these contracts amount to €211.9 million. As in France, Keolis S.A. is required to provide guarantees of rental payments on behalf of its foreign subsidiaries.


84

7 n DISPUTES

The estimates and underlying assumptions relating to current disputes are continuously re-examined. In particular, current disputes and litigation, especially with tax administrations or relating to appeals on tenders or on warranty claims, have been examined by the management with its advisers and lawyers for the purpose of assessing the risk they entail to the measurement of assets or liabilities.

The impact of changes in accounting estimates is recognised during the period of the change where they only affect that period, or during the period of the change and subsequent periods where the latter are also affected by the change.Risks are measured at fair value and where appropriate a provi-sion is made in the accounts (see note 5.13).

8 n RELATED PARTY TRANSACTIONS

Keolis S.A. is wholly owned by GROUPE KEOLIS S.A.S. 69.69% of GROUPE KEOLIS S.A.S. is owned by SNCF Participations and 30.00% by Caisse de Dépôt et Placement du Québec.

SNCF is a public company with an industrial and commercial activity whose capital is entirely owned by the French State.

8.1. Transactions with GROUPE KEOLIS S.A.S. and Groupe EFFIA

Transactions with GROUPE KEOLIS S.A.S. mainly correspond to general management services.Transactions with Groupe EFFIA correspond to sub-contracting services.

8.2. Transactions with joint ventures and associates Transactions with joint ventures and associates are performed according to normal market conditions.

8.3. Remuneration of the Group’s key managers The key managers in the Group are defined as being the com-pany officers and directors of Keolis S.A. and the members of the Executive Committee. Remuneration and other short-term benefits paid to these directors amounted to €4.8 million for 9 people in 2017 compared to €4.1 million for 9 people in 2016.

No directors’ fees were allotted to members of the Group’s management or executive committees.

There are no outstanding advances or credit facilities extended to members of the Group’s management or executive commit-tees.

9 n POST BALANCE SHEET EVENTS

Nil.


85

10 n CONSOLIDATION SCOPE

At 31 December 2017, the consolidation scope included:

10.1. Subsidiaries

Name Country Method of consolidation % of shareholding

Aerobag France Fully consolidated (FC) 100.00%

Aerolignes* France Fully consolidated (FC) 100.00%

Aerolis France Fully consolidated (FC) 100.00%

Aéroport Angers Marcé France Fully consolidated (FC) 100.00%

Aéroport de Troyes Barberey France Fully consolidated (FC) 100.00%

Aerosat France Fully consolidated (FC) 85.00%

Airelle France Fully consolidated (FC) 100.00%

Autocars Delion SAS France Fully consolidated (FC) 100.00%

Autocars Eschenlauer France Fully consolidated (FC) 100.00%

Autocars Planche France Fully consolidated (FC) 100.00%

Autocars Striebig France Fully consolidated (FC) 100.00%

Caennaise de Services* France Fully consolidated (FC) 100.00%

Cariane Littoral France Fully consolidated (FC) 100.00%

Cars de Bordeaux France Fully consolidated (FC) 100.00%

Cars Planche France Fully consolidated (FC) 100.00%

Cie Tpts Méditerranéens* France Fully consolidated (FC) 100.00%

Compagnie du Blanc Argent France Fully consolidated (FC) 99.43%

Entreprise Charles Caron France Fully consolidated (FC) 100.00%

Gep Vidal France Fully consolidated (FC) 100.00%

Holding Striebig France Fully consolidated (FC) 100.00%

Institut Keolis France Fully consolidated (FC) 100.00%

Interhone France Fully consolidated (FC) 100.00%

Keolis France Fully consolidated (FC) 100.00%

Keolis Abbeville France Fully consolidated (FC) 99.02%

Keolis Agen France Fully consolidated (FC) 100.00%

Keolis Aix-Les-Bains France Fully consolidated (FC) 100.00%

Keolis Alençon France Fully consolidated (FC) 100.00%

Keolis Alès France Fully consolidated (FC) 100.00%

Keolis Alpes Maritimes France Fully consolidated (FC) 100.00%

Keolis Amiens France Fully consolidated (FC) 100.00%

Keolis Angers France Fully consolidated (FC) 100.00%

Keolis Arles* France Fully consolidated (FC) 100.00%

Keolis Armor France Fully consolidated (FC) 100.00%

Keolis Arras France Fully consolidated (FC) 100.00%

Keolis Artois France Fully consolidated (FC) 100.00%

Keolis Atlantique France Fully consolidated (FC) 100.00%

Keolis Auch France Fully consolidated (FC) 100.00%

Keolis Aude France Fully consolidated (FC) 100.00%

Keolis Baie des Anges France Fully consolidated (FC) 100.00%

Keolis Bassin de Pompey France Fully consolidated (FC) 100.00%


86


Keolis Beaune France Fully consolidated (FC) 100.00%

Keolis Besançon Mobilités France Fully consolidated (FC) 100.00%

Keolis Besançon* France Fully consolidated (FC) 99.96%

Keolis Blois France Fully consolidated (FC) 100.00%

Keolis Bordeaux France Fully consolidated (FC) 99.99%

Keolis Bordeaux Métropole France Fully consolidated (FC) 100.00%

Keolis Boulogne sur Mer France Fully consolidated (FC) 100.00%

Keolis Bourgogne France Fully consolidated (FC) 99.50%

Keolis Brest France Fully consolidated (FC) 100.00%

Keolis Bus Verts France Fully consolidated (FC) 100.00%

Keolis Caen France Fully consolidated (FC) 100.00%

Keolis Caen Mobilités France Fully consolidated (FC) 100.00%

Keolis Calvados France Fully consolidated (FC) 100.00%

Keolis Camargue France Fully consolidated (FC) 100.00%

Keolis Centre France Fully consolidated (FC) 100.00%

Keolis Châlons-en-Champagne France Fully consolidated (FC) 99.24%

Keolis Charente Maritime France Fully consolidated (FC) 99.98%

Keolis Château Thierry France Fully consolidated (FC) 100.00%

Keolis Châteauroux France Fully consolidated (FC) 100.00%

Keolis Châtellerault France Fully consolidated (FC) 100.00%

Keolis Chaumont France Fully consolidated (FC) 100.00%

Keolis Chauny - Tergnier France Fully consolidated (FC) 100.00%

Keolis Chauny-Tergnier-La Fère Scolaire France Fully consolidated (FC) 100.00%

Keolis Cherbourg France Fully consolidated (FC) 100.00%

Keolis CIF France Fully consolidated (FC) 99.99%

Keolis Conseil et Projets France Fully consolidated (FC) 100.00%

Keolis Côte Basque - Adour France Fully consolidated (FC) 100.00%

Keolis Côte d’Azur France Fully consolidated (FC) 100.00%

Keolis Creil France Fully consolidated (FC) 100.00%

Keolis Dijon France Fully consolidated (FC) 100.00%

Keolis Dijon Mobilités France Fully consolidated (FC) 70.00%

Keolis Drôme Ardèche France Fully consolidated (FC) 100.00%

Keolis Drouais France Fully consolidated (FC) 100.00%

Keolis en Cévennes France Fully consolidated (FC) 99.19%

Keolis Epinal France Fully consolidated (FC) 100.00%

Keolis Eure et Loir France Fully consolidated (FC) 100.00%

Keolis Garonne France Fully consolidated (FC) 100.00%

Keolis Gascogne France Fully consolidated (FC) 100.00%

Keolis Gironde (ex SNCOA) France Fully consolidated (FC) 100.00%

Keolis Grand Tarbes France Fully consolidated (FC) 100.00%

Keolis Ille et Vilaine France Fully consolidated (FC) 100.00%

Keolis Languedoc France Fully consolidated (FC) 100.00%

Keolis Laval France Fully consolidated (FC) 100.00%

Keolis Laval Mobilités France Fully consolidated (FC) 100.00%

Keolis Lille France Fully consolidated (FC) 100.00%


87


Keolis Littoral France Fully consolidated (FC) 100.00%

Keolis Lorient France Fully consolidated (FC) 100.00%

Keolis Lyon France Fully consolidated (FC) 100.00%

Keolis Manche France Fully consolidated (FC) 100.00%

Keolis Maritime France Fully consolidated (FC) 99.00%

Keolis Maritime Brest France Fully consolidated (FC) 100.00%

Keolis Marmande France Fully consolidated (FC) 100.00%

Keolis Mobilité Hauts-de-Seine France Fully consolidated (FC) 100.00%

Keolis Mobilité Paris France Fully consolidated (FC) 100.00%

Keolis Mobilité Roissy France Fully consolidated (FC) 100.00%

Keolis Mobilité Val-de-Marne France Fully consolidated (FC) 100.00%

Keolis Montargis France Fully consolidated (FC) 100.00%

Keolis Montélimar France Fully consolidated (FC) 100.00%

Keolis Montluçon France Fully consolidated (FC) 100.00%

Keolis Morlaix France Fully consolidated (FC) 100.00%

Keolis Narbonne France Fully consolidated (FC) 100.00%

Keolis Narbonne Mobilités France Fully consolidated (FC) 100.00%

Keolis Nevers France Fully consolidated (FC) 100.00%

Keolis Nîmes France Fully consolidated (FC) 100.00%

Keolis Nord Allier* France Fully consolidated (FC) 100.00%

Keolis Normandie Seine France Fully consolidated (FC) 100.00%

Keolis Obernai France Fully consolidated (FC) 100.00%

Keolis Oise France Fully consolidated (FC) 100.00%

Keolis Orléans France Fully consolidated (FC) 100.00%

Keolis Orly Airport France Fully consolidated (FC) 100.00%

Keolis Orly Rungis France Fully consolidated (FC) 100.00%

Keolis Oyonnax France Fully consolidated (FC) 100.00%

Keolis Pays d’Aix France Fully consolidated (FC) 100.00%

Keolis Pays de Montbéliard France Fully consolidated (FC) 100.00%

Keolis Pays des Volcans France Fully consolidated (FC) 100.00%

Keolis Pays Nancéien France Fully consolidated (FC) 100.00%

Keolis Pays Normands France Fully consolidated (FC) 100.00%

Keolis PMR Rhône France Fully consolidated (FC) 100.00%

Keolis Porte de l'Isère France Fully consolidated (FC) 100.00%

Keolis Pyrénées France Fully consolidated (FC) 95.16%

Keolis Quimper France Fully consolidated (FC) 100.00%

Keolis Rennes France Fully consolidated (FC) 100.00%

Keolis Réseau Départemental Sud Oise France Fully consolidated (FC) 100.00%

Keolis Roissy Airport France Fully consolidated (FC) 100.00%

Keolis Roissy Services Aéroportuaires France Fully consolidated (FC) 100.00%

Keolis Saint-Malo France Fully consolidated (FC) 100.00%

Keolis Saintes France Fully consolidated (FC) 100.00%

Keolis Seine Essonne France Fully consolidated (FC) 100.00%

Keolis Seine Maritime France Fully consolidated (FC) 100.00%

Keolis Seine Sénart France Fully consolidated (FC) 100.00%


88


Keolis Seine Val de Marne France Fully consolidated (FC) 100.00%

Keolis Somme France Fully consolidated (FC) 100.00%

Keolis Sud Allier France Fully consolidated (FC) 100.00%

Keolis Sud Lorraine France Fully consolidated (FC) 100.00%

Keolis Touraine France Fully consolidated (FC) 100.00%

Keolis Tours France Fully consolidated (FC) 100.00%

Keolis Travel Services France Fully consolidated (FC) 100.00%

Keolis Trois Frontières France Fully consolidated (FC) 100.00%

Keolis Urbest France Fully consolidated (FC) 100.00%

Keolis Val d' Oise France Fully consolidated (FC) 100.00%

Keolis Val de Maine France Fully consolidated (FC) 100.00%

Keolis Val de Saone France Fully consolidated (FC) 100.00%

Keolis Val Hainaut France Fully consolidated (FC) 96.32%

Keolis Velizy France Fully consolidated (FC) 100.00%

Keolis Versailles France Fully consolidated (FC) 100.00%

Keolis Vesoul France Fully consolidated (FC) 100.00%

Keolis Vichy France Fully consolidated (FC) 100.00%

Keolis Voyages France Fully consolidated (FC) 100.00%

Keolis Yvelines France Fully consolidated (FC) 100.00%

Les Autobus d'Arcachon France Fully consolidated (FC) 100.00%

Les Cars du Bassin de Thau France Fully consolidated (FC) 100.00%

Les cars Roannais France Fully consolidated (FC) 100.00%

Les Coccinelles France Fully consolidated (FC) 100.00%

Les Courriers Catalans France Fully consolidated (FC) 100.00%

Les Courriers Du Midi France Fully consolidated (FC) 100.00%

Les Kangourous 2 France Fully consolidated (FC) 100.00%

Les Transports Dunois France Fully consolidated (FC) 100.00%

Loisirs et Voyages France Fully consolidated (FC) 100.00%

Millau Cars France Fully consolidated (FC) 100.00%

Monnet Tourisme* France Fully consolidated (FC) 100.00%

Monts Jura Autocars France Fully consolidated (FC) 100.00%

Ormont Transport France Fully consolidated (FC) 100.00%

Pacific Car France Fully consolidated (FC) 100.00%

Prioris France Fully consolidated (FC) 100.00%

Réseau en Vosges France Fully consolidated (FC) 70.00%

S.T.2.L. Westeel France Fully consolidated (FC) 100.00%

S.T.E.F.I.M. France Fully consolidated (FC) 100.00%

SAP Cariane Provence France Fully consolidated (FC) 100.00%

SCAC France Fully consolidated (FC) 100.00%

SCAC Bagnis France Fully consolidated (FC) 100.00%

SEA Albert-Picardie France Fully consolidated (FC) 50.96%

Setver* France Fully consolidated (FC) 100.00%

SFD France Fully consolidated (FC) 100.00%

Société d'Exploitation de l'Aéroport Dole Jura France Fully consolidated (FC) 51.00%

Sodetrav France Fully consolidated (FC) 95.08%


89


STCAR* France Fully consolidated (FC) 100.00%

Sté Rennaise Transports et Services France Fully consolidated (FC) 100.00%

Sté Transports Robert France Fully consolidated (FC) 100.00%

Sté Transports Services Aéroportuaires France Fully consolidated (FC) 100.00%

TPR France Fully consolidated (FC) 100.00%

Transports de la Brière France Fully consolidated (FC) 60.10%

Transports Evrard France Fully consolidated (FC) 100.00%

Train Bleu St Marcellin France Fully consolidated (FC) 100.00%

Trans Val de Lys France Fully consolidated (FC) 99.99%

Transévry France Fully consolidated (FC) 55.62%

Transkeo France Fully consolidated (FC) 51.00%

Transpole France Fully consolidated (FC) 100.00%

Transports Daniel Meyer France Fully consolidated (FC) 100.00%

Var Tour France Fully consolidated (FC) 94.97%

Voyages Autocars Services France Fully consolidated (FC) 100.00%

Voyages Chargelègue France Fully consolidated (FC) 100.00%

Voyages Dourlens France Fully consolidated (FC) 100.00%

Voyages Fouache SAS France Fully consolidated (FC) 100.00%

Voyages MONNET France Fully consolidated (FC) 100.00%

Voyages Striebig* France Fully consolidated (FC) 100.00%

VTS Roissy* France Fully consolidated (FC) 100.00%

Keolis Deutschland COKG Germany Fully consolidated (FC) 100.00%

Keolis Deutschland Verwaltung Germany Fully consolidated (FC) 100.00%

Schloemer Verkehrsbetrieb Gmbh Germany Fully consolidated (FC) 100.00%

Striebig Deutschland Germany Fully consolidated (FC) 100.00%

Striebig Gmbh Germany Fully consolidated (FC) 100.00%

Australian Transit Enterprises Pty Ltd Australie Fully consolidated (FC) 51.00%

Hornibrook Bus Lines Pty Ltd Australie Fully consolidated (FC) 51.00%

Hornibrook Transit Management Pty Ltd Australie Fully consolidated (FC) 51.00%

KD Hunter Pty Ltd Australie Fully consolidated (FC) 51.00%

KDR Gold Coast Pty Lta Australia Fully consolidated (FC) 51.00%

KDR Victoria Pty Ltd Australia Fully consolidated (FC) 51.00%

Keolis Australia Pty Australia Fully consolidated (FC) 100.00%

Keolis Downer Australia Fully consolidated (FC) 51.00%

Keolis Downer Bus and Coachlines Property Pty Ltd Australia Fully consolidated (FC) 51.00%

Keolis Downer Bus and Coachlines Pty Ltd Australia Fully consolidated (FC) 51.00%

Link SA Pty Ltd Australia Fully consolidated (FC) 51.00%

Path Transit Pty Ltd Australia Fully consolidated (FC) 51.00%

South West Transit Pty Ltd Australia Fully consolidated (FC) 51.00%

Southlink Pty Ltd Australia Fully consolidated (FC) 51.00%

Autobus de Genval Belgium Fully consolidated (FC) 100.00%

Autobus Dony Belgium Fully consolidated (FC) 100.00%

Autobus Dujardin Belgium Fully consolidated (FC) 100.00%

Autobus Lienard Belgium Fully consolidated (FC) 100.00%

Cardona-Deltenre Belgium Fully consolidated (FC) 100.00%


90


Cars Gembloutois Belgium Fully consolidated (FC) 100.00%

CINTRA Belgium Fully consolidated (FC) 100.00%

CINTRAL Belgium Fully consolidated (FC) 100.00%

Compagnie des Autobus Liégeois Belgium Fully consolidated (FC) 100.00%

De Turck BVBA Belgium Fully consolidated (FC) 100.00%

Eltebe Belgium Fully consolidated (FC) 100.00%

Eurobus Holding Belgium Fully consolidated (FC) 100.00%

Eurobussing Brussels Belgium Fully consolidated (FC) 100.00%

Eurobussing Wallonie Belgium Fully consolidated (FC) 100.00%

Flanders Bus Belgium Fully consolidated (FC) 100.00%

Garage du Perron Belgium Fully consolidated (FC) 100.00%

Gino Tours Belgium Fully consolidated (FC) 100.00%

Heyerick Belgium Fully consolidated (FC) 100.00%

Joye Belgium Fully consolidated (FC) 100.00%

Keolis Vlaanderen Belgium Fully consolidated (FC) 100.00%

Kibel Belgium Fully consolidated (FC) 100.00%

L.I.M. Collard-Lambert Belgium Fully consolidated (FC) 100.00%

Le Cinacien Belgium Fully consolidated (FC) 100.00%

N.V. Autobusbedrijf Bronckaers Belgium Fully consolidated (FC) 100.00%

N.V. Autobussen De Reys Belgium Fully consolidated (FC) 100.00%

NV Aotocars De Boeck Belgium Fully consolidated (FC) 100.00%

Picavet Belgium Fully consolidated (FC) 100.00%

Pirnay Belgium Fully consolidated (FC) 100.00%

Ramoudt Tours Belgium Fully consolidated (FC) 100.00%

Reniers & C° Belgium Fully consolidated (FC) 100.00%

S.A.D.A.R. Belgium Fully consolidated (FC) 100.00%

Satracom Belgium Fully consolidated (FC) 100.00%

Sophibus Belgium Fully consolidated (FC) 100.00%

SPRL Bertrand Belgium Fully consolidated (FC) 100.00%

SPRL Taxis Melkior Belgium Fully consolidated (FC) 100.00%

SPRL Truck Bus Repair* Belgium Fully consolidated (FC) 100.00%

SPRL Voyages F. Lenoir Belgium Fully consolidated (FC) 100.00%

STACA (KBO) Belgium Fully consolidated (FC) 100.00%

T.C.M. Cars Belgium Fully consolidated (FC) 100.00%

Transports Penning Belgium Fully consolidated (FC) 100.00%

Trimi Belgium Fully consolidated (FC) 100.00%

Van Rompaye NV Belgium Fully consolidated (FC) 100.00%

Voyages Doppagne Belgium Fully consolidated (FC) 100.00%

Voyages Nicolay Belgium Fully consolidated (FC) 100.00%

West Belgium Coach Company* Belgium Fully consolidated (FC) 100.00%

Développement GOE Canada Fully consolidated (FC) 100.00%

Keolis Canada Inc Canada Fully consolidated (FC) 100.00%

Keolis Grand River L.P Canada Fully consolidated (FC) 100.00%

Keolis China China Fully consolidated (FC) 100.00%

Keolis Wuhan China Fully consolidated (FC) 100.00%


91


Keolis Danmark Denmark Fully consolidated (FC) 100.00%

Etablissement Abu Dhabi United Arab Emirates Fully consolidated (FC) 100.00%

Keolis España Spain Fully consolidated (FC) 100.00%

Keolis America Inc. USA Fully consolidated (FC) 100.00%

Keolis Commuter Services LLC USA Fully consolidated (FC) 60.00%

Keolis Rail Service America USA Fully consolidated (FC) 100.00%

Keolis Rail Service Virginia USA Fully consolidated (FC) 100.00%

Keolis Transit America USA Fully consolidated (FC) 100.00%

Keolis Hyderabad Mass Rapid Transit System Private Limited India Fully consolidated (FC) 100.00%

Kilux Luxembourg Fully consolidated (FC) 100.00%

Keolis Norge AS Norway Fully consolidated (FC) 100.00%

Keolis Nederland Holding Netherlands Fully consolidated (FC) 100.00%

Syntus Netherlands Fully consolidated (FC) 100.00%

Keolis UK United Kingdom Fully consolidated (FC) 100.00%

Keolis-Amey Docklands Ltd United Kingdom Fully consolidated (FC) 70.00%

KeolisAmey Metrolink United Kingdom Fully consolidated (FC) 60.00%

Nottingham Trams Ltd United Kingdom Fully consolidated (FC) 80.00%

CSG Commuter Security Sweden Fully consolidated (FC) 100.00%

Keolis Nordic Sweden Fully consolidated (FC) 100.00%

Keolis Spår AB Sweden Fully consolidated (FC) 100.00%

Keolis Sverige Sweden Fully consolidated (FC) 100.00%

* Companies removed from the consolidation scope on 31 December 2017


92

10.2. Joint ventures and associates


Albatrans France Equity method (EM) 36.20%

CTCOP France Equity method (EM) 50.00%

Orgebus France Equity method (EM) 50.00%

RDK France France Equity method (EM) 50.00%

STA Chauny* France Equity method (EM) 50.00%

Scodec France Equity method (EM) 35.00%

TICE France Equity method (EM) 19.00%

Trans Pistes France Equity method (EM) 40.00%

Transports de l'agglomération de Metz Métropole France Equity method (EM) 25.00%

Netlog Germany Equity method (EM) 33.00%

Shanghai Keolis Public Transport Operation Management Co. China Equity method (EM) 49.00%

Wuhan Tianhe Airport Transport Center Operation and Management co. LTD China Equity method (EM) 40.00%

Prometro Portugal Equity method (EM) 20.00%

RDK LLC (Qatar) Qatar Equity method (EM) 50.00%

First / Keolis Holdings Limited United Kingdom Equity method (EM) 45.00%

First / Keolis Transpennine United Kingdom Equity method (EM) 45.00%

First / Keolis Transpennine Holding Ltd United Kingdom Equity method (EM) 45.00%

Govia United Kingdom Equity method (EM) 35.00%

Govia Thameslink Railway Limited United Kingdom Equity method (EM) 35.00%

London Midland United Kingdom Equity method (EM) 35.00%

London&South Eastern Railway - LSER United Kingdom Equity method (EM) 35.00%

New Southern Railway United Kingdom Equity method (EM) 35.00%

Southern Railway Ltd United Kingdom Equity method (EM) 35.00%

Thameslink Rail Limited United Kingdom Equity method (EM) 35.00%

* Companies removed from the consolidation scope on 31 December 2017


93

STATUTORY AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS (FOR THE YEAR ENDED 31 DECEMBER 2017)

To the Shareholders Keolis 20-22 rue le Peletier75009 Paris

Opinion

In compliance with the engagement entrusted to us by your annual general meeting, we have audited the accompanying consolidated financial statements of Keolis SA for the year ended December 31, 2017.

In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the Group as at 31 December 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.

Basis for Opinion

Audit FrameworkWe conducted our audit in accordance with professional stan-dards applicable in France. We believe that the audit evidence we have obtained is sufficient 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.

IndépendanceWe conducted our audit engagement in compliance with inde-pendence rules applicable to us, for the period from January 1st 2017 to the date of our report and specifically 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.

Justification of Assessments

In accordance with the requirements of Articles L.823-9 and L.823-7 of the French Commercial Code (code de commerce) relating to the justification of our assessments, we bring to your attention the following.

Change in accounting methodAs part of our assessment of the accounting rules and methods followed by your company, we ensured of the correct application by anticipation on January 1st 2017 of part 1 and part 2 of IFRS 9 as described in the note 2.2 to the consolidated financial sta-tements.

Accounting estimates n Keolis carries out impairment tests out impairment tests on goodwill and indefinite life assets and also assesses whe-ther there is any indication of impairment on non-current assets, as described in notes 2.4.10 and 5.1 to the conso-lidated financial statements. We have examined the methods used to carry out this impairment test as well as the corresponding cash flow forecasts and assumptions,

This is a translation into English of the statutory auditors’ report on the consolidated financial 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 verification 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 .

PricewaterhouseCoopers Audit63 rue de Villiers92208 Neuilly-sur-Seine Cedex672 006 483 R.C.S. Nanterre

Commissaire aux ComptesMembre de la compagnie régionale de Versailles

Ernst & Young AuditTour First - TSA 1444492037 Paris-La Défense CedexS.A.S. à capital variable344 366 315 R.C.S. Nanterre



94

and have verified that the notes to the consolidated financial statements provide appropriate disclosures.

n Note 2.4.18 specifies the valuation methods for provisions for pensions and other employee benefits. An evaluation of these provisions was carried out by independent actuaries. Our work consisted in examining the data and assumptions used and verifying that note 5.13 to the consolidated finan-cial statements provides appropriate disclosures.

n Notes 2.3 and 2.4.18 specify the methods used to take into account the risks relating to ongoing litigation and contracts. Our work consisted in examining the procedures used by the Company to identify and assess these risks and the accounting treatment applied and in assessing the resulting estimates.

These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on specific items of the consolidated financial statements.

Verification of the Information Pertaining to the Group Presented in the Management Report

As required by law we have also verified in accordance with professional standards applicable in France the information pertaining to the Group presented in the management report of the Board of Directors.

We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presen-tation of the consolidated financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and for such internal control as manage-ment determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial 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 ope-rations.

The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and risks management systems and where applicable, its internal audit, regarding the accounting and financial reporting proce-dures.The consolidated financial statements were approved by the Board of Directors.

Statutory Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Objectives and audit approach

Our role is to issue a report on the consolidated financial state-ments. Our objective is to obtain reasonable assurance about whether the consolidated financial 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 conduc-ted 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 influence the economic decisions of users taken on the basis of these consolidated financial statements.

As specified in Article L.823-10-1 of the French Commercial Code (code de commerce), our statutory audit does not include assurance on the viability of the Company or the quality of mana-gement of the affairs of the Company.

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:

n Identifies and assesses the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, designs and performs audit procedures res-ponsive to those risks, and obtains audit evidence conside-red to be sufficient and appropriate to provide a basis for his opinion. The risk of not detecting a material misstate-ment 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.

n Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appro-priate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.

n Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and rela-ted disclosures made by management in the consolidated financial statements.

n 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 significant 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 requi-


95

Neuilly-sur-Seine and Paris-La-Défense, March 12, 2018

PricewaterhouseCoopers Audit

Françoise Garnier-Bel

Ernst & Young Audit

Jérôme Guirauden

rement to draw attention in the audit report to the related disclosures in the consolidated financial statements or, if such disclosures are not provided or inadequate, to modify the opinion expressed therein.

n Evaluates the overall presentation of the consolidated finan-cial statements and assesses whether these statements represent the underlying transactions and events in a man-ner that achieves fair presentation.

n Obtains sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. The statutory auditor is responsible for the direction, supervision and performance of the audit of the consolidated financial statements and for the opinion expressed on these consolidated financial statements.

3. UNAUDITED FINANCIAL STATEMENTS | KEOLIS S.A. 2017

96

3. UNAUDITED FINANCIAL STATEMENTS

CONTENTS1 n KEY FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

2 n INCOME STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

3 n STATEMENT OF FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

4 n STATEMENT OF CASH FLOWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100

The Group considers that the following financial statements, prepared without applying IFRS 10 and 11, are accurate indicators of the operational and financial performances of the Group. They should be considered as an additional source of information and are in no way a substitute for other strictly accounting-related forms of the measurement of operational and financial performance as presented in the consolidated financial statements and the notes thereto, or referred to in the financial report.

The management accounts as at 31 December 2017 have not been audited.


97

UNAUDITED FINANCIAL STATEMENTSA1 n KEY FIGURES

(€ million) 31/12/2017 31/12/2016

Revenue 6,242.7 5,990.5

n Revenue France 2,706.1 2,675.3

n Revenue International 3,536.6 3,315.2

Revenue net of sub-contracting 6,045.6 5,797.9

Recurring EBITDA 295.9 277.5

EBITDA 281.7 257.5

Recurring operating profit 131.2 101.3

Profit after tax from continuing operations 41.0 18.5

Profit attributable to equity shareholders 39.5 24.2

Total equity 615.6 515.4

of which attributable to equity shareholders 552.9 463 .7

Net cash flows from operating activities 156.5 232.1

Industrial investments 198.7 193.8

Net financial debt (cash surplus) 41.7 35.8


98

2 n INCOME STATEMENT

(€ million) 31/12/2017 31/12/2016

Revenue 6,242.7 5,990.5

Other income from operations 21.6 16.2

INCOME FROM CONTINUING OPERATIONS 6,264.2 6,006.7

Sub-contracting (197.1) (192.6)

Purchases consumed and external expenses (2,420.3) (2,288.5)

Taxes (16.0) (15.0)

Staff costs, incentive schemes, profit-sharing (3,358.1) (3,226.7)

Other operating income 61.3 49.8

Other operating expense (28.6) (44.3)

Net provisions on current assets (1.4) (0.5)

Net depreciation and other provisions charged (182.2) (195.8)

Profit/(loss) on recurring fixed asset disposals 1.7 (1.1)

Amortisation of grants received 7.7 9.3


Other non-recurring income 11.3 4.7

Other non-recurring expense (32.7) (23.6)

Depreciation and provisions on contractual rights (8.6) (8.2)

OPERATING PROFIT/LOSS BEFORE INVESTMENTS UNDER EQUITY METHOD 101.2 74.1

Profit/(loss) from associates (0.7) 0.0

OPERATING PROFIT/(LOSS) AFTER INVESTMENTS UNDER EQUITY METHOD 100.5 74.1

Net cost of financial borrowing (8.3) (10.4)

Other financial income 8.4 5.2

Other financial expense (11.8) (15.9)

FINANCIAL INCOME (EXPENSE) (11.7) (21.1)

PROFIT BEFORE TAX 88.9 53.0

Taxation (47.8) (34.5)


CONSOLIDATED NET PROFIT 41.0 18.5

Profit attributable to non-controlling interests (1.5) 5.6

PROFIT ATTRIBUTABLE TO GROUP 39.5 24.2


99

ASSETS(€ million)

31/12/2017 31/12/2016

Goodwill 290.3 292.5

Other intangible assets 212.6 208.9

Property, plant and equipment 790.5 769.5

Investments under the equity method 1.8 2.2

Non-current financial assets 285.2 214.5

Deferred tax asset 77.8 59.1

NON-CURRENT ASSETS 1,658.2 1,546.6

Inventories and work in progress 107.7 97.6

Trade receivables 479.4 411.2

Other receivables 597.0 556.9

Current financial assets 14.2 15.0

Cash and cash equivalents 499.1 560.8

CURRENT ASSETS 1,697.4 1,641.5

TOTAL ASSETS 3,355.6 3,188.1

LIABILITIES(€ million)

31/12/2017 31/12/2016

Share capital 412.8 346.9

Reserves and premiums 100.5 92.6

Net profit/(loss) attributable to Group 39.5 24.2

Equity attributable to Group 552.9 463.7

Reserves attributable to non-controlling interests 61.2 57.4

Profit for the year attributable to non-controlling interests 1.5 (5.6)

EQUITY 615.6 515.4Non-current provisions 190.2 194.6

Non-current financial debt 396.1 331.0

Deferred tax liability 75.6 50.4

NON-CURRENT LIABILITIES 661.9 576.0

Current provisions 45.9 51.7

Current financial debt 85.9 143.0

Bank borrowings 166.9 157.8

Trade payables and other liabilities 1,779.4 1,744.2

CURRENT LIABILITIES 2,078.1 2,096.7

TOTAL LIABILITIES 3,355.6 3,188.1

3 n STATEMENT OF FINANCIAL POSITION


100

(€ million) 31/12/2017 31/12/2016

Operating profit before investments under equity method 101.2 74.1

Non-cash items 180.5 183.4

EBITDA 281.7 257.5

Elimination of provisions on current assets 1.4 0.5

Changes in working capital (119.1) 8.7

Tax paid (7.5) (34.6)

A ) NET CASH FROM OPERATING ACTIVITIES 156.5 232.1

Capital expenditure (198.7) (193.8)

Proceeds from the sale of tangible and intangible assets 16.7 22.6

Investment grants received 12.1 10.3

Change in financial assets for concessions (IFRIC 12) (0.4) (11.5)

Financial investments (99.9) (55.7)

Cash flows on changes in reporting scope 1.7 3.5

Proceeds from disposal of financial assets 13.9 1.0

B) NET CASH FROM INVESTING ACTIVITIES (254.6) (223.7)

FREE CASH FLOW (98.0) 8.3

Net dividends paid (1.7) (2.5)

Net dividends received 0.2 0.1

Change in equity (other transactions with shareholders) 79.5 6.5

New borrowings 173.6 135.0

Borrowings repaid (197.1) (64.5)

Interest received 1.8 2.7

Interest paid (10.3) (13.8)

Change in other financial debts - 0.2

C) NET CASH FROM FINANCING ACTIVITIES 41.5 55.8

D) FOREIGN EXCHANGE TRANSLATION DIFFERENCES (14.3) (47.4)

CHANGE IN CASH AND CASH EQUIVALENTS (A+B+C+D) (70.8) 16.7

Cash and cash equivalents at beginning of period 403.0 386.3

Cash and cash equivalents at end of period 332.2 403.0

CHANGE IN CASH AND CASH EQUIVALENTS (70.8) 16.7

4 n STATEMENT OF CASH FLOWS

4. ANNUAL FINANCIAL STATEMENTS | KEOLIS S.A. 2017

101

4. ANNUAL FINANCIAL STATEMENTS

CONTENTSA ANNUAL FINANCIAL STATEMENTS

AT 31 DECEMBER 2017 . . . . . . . . . . . . . . . . . . . . . . . 1021 n BALANCE SHEET AT 31/12/2017 . . . . . . . . . . . . . .102

2 n INCOME STATEMENT AT 31/12/2017 . . . . . . . . . .104

B NOTES TO ANNUAL FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106

1 n SIGNIFICANT EVENTS OF THE FINANCIAL YEAR . . . . . . . . . . . . . . . . . . . .106

2 n ACCOUNTING PRINCIPLES, RULES AND METHODS . . . . . . . . . . . . . . . . . . . . . .106

2.1. Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .1062.2. Tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1062.3. Financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1072.4. Receivables and payables . . . . . . . . . . . . . . . . . . . .1072.5. Marketable securities . . . . . . . . . . . . . . . . . . . . . . . .1072.6. Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1072.7. Provisions for contingencies and charges . . . . .1072.8. Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . .1072.9. Profit from joint ventures . . . . . . . . . . . . . . . . . . . . .1072.10. Tax status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1072.11. Crédit d’Impôt pour la Compétitivité

et l’Emploi (CICE) . . . . . . . . . . . . . . . . . . . . . . . . . . .108

3 n USE OF ASSESSMENTS IN THE PREPARATION OF FINANCIAL STATEMENTS . . . . . . . . . . . . . . . .108

4 n FINANCIAL INSTRUMENTS . . . . . . . . . . . . . . . . . . .1084.1. Interest rate risk relating to the variable rate

portion of its financial debt . . . . . . . . . . . . . . . . . . .1084.2. Currency risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1084.3. Commodity price risks . . . . . . . . . . . . . . . . . . . . . . .109

5 n NOTES ON THE BALANCE SHEET . . . . . . . . . . . . .1105.1. Fixed assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1105.2. Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1115.3. Details of prepayments and deferred income . . .1125.4. Exchange differences on receivables

and payables in foreign currencies . . . . . . . . . . . .1125.5. Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1125.6. Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1135.7. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114

6 n NOTES ON THE INCOME STATEMENT . . . . . . . . .1156.1. Analysis of turnover . . . . . . . . . . . . . . . . . . . . . . . . .1156.2. Details of other income and expenses . . . . . . . . .1156.3. Transfers of expenses . . . . . . . . . . . . . . . . . . . . . . .1156.4. Financial income and expense . . . . . . . . . . . . . . . .1156.5. Exceptional income and expense . . . . . . . . . . . . .1166.6. Corporate income tax . . . . . . . . . . . . . . . . . . . . . . . .116

7 n OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . .1177.1. Financial commitments . . . . . . . . . . . . . . . . . . . . . .1177.2. Pension and long service award commitments .1177.3. Leasing commitments . . . . . . . . . . . . . . . . . . . . . . .1177.4. Contractual obligations . . . . . . . . . . . . . . . . . . . . . .1187.5. Number of employees . . . . . . . . . . . . . . . . . . . . . . .1187.6. Remuneration of directors . . . . . . . . . . . . . . . . . . .1187.7. Post balance sheet events . . . . . . . . . . . . . . . . . . .1187.8. Identity of the consolidating company . . . . . . . . .118

STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . 133


102

1 n BALANCE SHEET AT 31/12/2017

ANNUAL FINANCIAL STATEMENTS AT 31 DECEMBER 2017A

Gross Depreciation & amortisation 31/12/2017 31/12/2016

(In euros)

ASSETS Uncalled subscribed capital - - - -

INTANGIBLE ASSETS

Preliminary expenses 35,273 35,273 - -Development costs - - - -Concessions, patents and related rights 88,850,132 65,628,470 23,221,662 19,688,296Goodwill - - - -Other intangible assets 25,951,348 - 25,951,348 25,063,279Advances, down payments for intangible assets - - - -PROPERTY, PLANT AND EQUIPMENT

Land 9,358,087 1,553,583 7,804,504 7,805,678Buildings 40,845,607 10,900,904 29,944,704 21,905,045Technical facilities, equipment, machinery 1,727,978 975,356 752,622 146,599Other property, plant and equipment 16,555,152 ,13,683,536 2,871,616 3,754,197PPE under construction 2,086,836 - 2,086,836 9,006,828Advances and down payments 35,000 - 35,000 606,800NON-CURRENT FINANCIAL ASSETS

Shareholdings under the equity method - - - -Other shareholdings 1,053,365,571 189,919,759 863,445,812 882,528,543Receivables from shareholdings 385,246,193 8,855,327 376,390,866 318,919,410Other long-term investments 188,361 7,622 180,738 180,738Loans 570,978 - 570,978 657,690Other non-current financial assets 1,720,488 - 1,720,488 1,692,811

TOTAL FIXED ASSETS (I) 1,626,537,006 291,559,832 1,334,977,174 1,291,955,914INVENTORIES AND WORK IN PROGRESSRaw materials, supplies - - - -Production in progress (goods) - - - -Production in progress (services) - - - -Semi-finished and finished goods - - - -Goods - - - -Advances and down payments on orders 123,775 - 123,775 162,819TRADE RECEIVABLES

Trade receivables and accounts receivable 49,038,408 433,070 48,605,338 49,951,376Other receivables 224,645,797 38,089,232 186,556,565 192,595,734Subscribed called non paid-up capital - - - -MISCELLANEOUS

Marketable securities held for trading 235,051 235,051 235,055Cash 6,120,637 6,120,637 63,121,383ACCRUALS

Prepaid expenses 1,081,480 1,081,480 1,211,679TOTAL CURRENT ASSETS (II) 281,245,148 38,522,302 242,722,846 307,278,046

Unrealised losses on foreign exchange transactions (III) 4,806,041 - 4,806,041 3,583,026

TOTAL ASSETS (I+II+III) 1,912,588,194 330,082,133 1,582,506,061 1,602,816,986


103

FY 2017 FY 2016

(In euros)

LIABILITIESShare capital or individual capital 412,832,676 346,851,276Additional paid-in capital - -Revaluation reserves (1) 1,901,431 1,845,363Legal Reserve 4,685,128 4,685,128Statutory or contractual reserves - -Regulated reserves - -Other reserves 132,038,364 131,601,875Retained earnings brought forward (4,172,555)NET PROFIT/(LOSS) FOR THE YEAR (70,781,999) (4,172,555)Investment grants 742,445 742,445Regulated provisions 1,652,546 1,536,257

TOTAL EQUITY (I) 478,898,036 483,089,789Provisions for contingencies 5,519,642 4,345,007Provisions for charges 3,322,435 1,922,477

TOTAL PROVISIONS (II) 8,842,077 6,267,484DEBTS

Convertible bond issues - -Other bond issues - -Bank borrowings (2) 139,423,989 145,094,107Loans and other financial debts 250,095,290 213,692,103Customer advances and down payments 39,067 39,067OPERATING LIABIITIES

Trade payables and related accounts 33,102,233 44,681,646Tax and social security liabilities 53,269,967 50,010,795MISCELLANEOUS LIABLITIES

Liabilities on assets and related receivables 7,876,862 10,493,755Other liabilities 608,435,326 637,382,289ACCRUALS

Deferred income - -LIABILITIES AND ACCRUALS (III) 1,090,242,734 1,101,393,762

Unrealised gains on foreign exchange transactions (IV) 2,523,214 12,065,951TOTAL LIABIITIES (I TO IV) 1,582,506,061 1,602,816,986 (1) Revaluation reserves incorporated in equity 1,901,431 1,845,363

(2) Including bank overdrafts and bank credit balances 139,423,989 145,094,107

Amounts payable after one year 52,921,196 35,431,281

Amounts due within one year 86,502,793 109,662,826


104

2 n INCOME STATEMENT AT 31/12/2017

(In euros) 31/12/2017 31/12/2016

OPERATING REVENUE

Sales of goods - -Sales of services 206,126,031 200,348,991NET REVENUE 206,126,031 200,348,991

Production held as inventory - -

Capitalized production 4,350,682 6,069,987

Operating grants - 8,190

Reversal of depreciation, provision and expense transfers 4,758,314 5,753,631

Other income 8,307,697 7,780,135

TOTAL OPERATING INCOME (I) 223,542,724 219,960,933

Stock purchases (including customs duties) 808 22

Change in inventory of goods - -

Purchase raw materials, other supplies (including customs duties) 226,341 -

Change in inventory purchases (raw materials and supplies) - -

Other purchases and operating expenses 75,043,145 79,619,887

Taxes and similar payments 9,627,412 9,403,449

Wages and salaries 105,422,972 98,964,303

Welfare contributions 49,636,655 46,628,806

OPERATING ALLOWANCES

On capital/fixed assets: depreciation expense 14,253,824 11,888,349

On current assets:charges to provisions 184,122 373,161

Other charges 513,807 5,664,150

TOTAL OPERATING EXPENSES (II) 254,909,085 252,542,126,

OPERATING PROFIT / LOSS (I - II) (31,366,361) (32,581,193)

JOINT VENTURES

Attributed profit or transferred loss (III) 15,991,665 17,048,599

Loss borne or transferred profit (IV) 4,636,372 4,169,954

FINANCIAL INCOME

Financial income from shareholdings 13,138,743 12,644,729

Other marketable and receivables from capitalized assets - -

Other interest and similar income 6,278,143 3,669,338

Reversal of provisions charged and expense transfers 22,841,506 34,267,852

Foreign exchange gains 28,545,239 14,534,732

Net gains on sales of marketable securities 671

TOTAL FINANCIAL INCOME (V) 70,803,631 65,117,322

FINANCIAL EXPENSES

Changes to depreciation and provisions 120,794,455 37,592,678

Interest and similar expenses 5,671,877 6,362,117

Foreign exchange losses 17,862,750 20,187,504

Net expenses on sales of marketable securities - -

TOTAL FINANCIAL EXPENSES (VI) 144,329,082 64,142,299

FINANCIAL INCOME / (EXPENSE) (V-VI) (73,525,452) 975,023

RECURRING PROFIT BEFORE TAX AND EXCEPTIONAL ITEMS (I-II+III-IV+V-VI) (93,536,520) (18,727,525)


105

(In euros) 31/12/2017 31/12/2016

EXCEPTIONAL GAINS

Exceptional gains on operations 5,574,115 982,000

Exceptional gains on equity transactions 8,191,359 11,092,114

Reversal of provisions charged and expense transfers 3,050,967 1,958,640

TOTAL EXCEPTIONAL GAINS (VII) 16,816,441 14,032,754

EXCEPTIONAL LOSSES

Exceptional losses on operations 5,134,848 4,255,277

Exceptional losses on equity transactions 2,374,445 10,188,123

Exceptional charges to depreciation and provisions 4,569,747 2,247,029

TOTAL EXCEPTIONAL LOSSES (VIII) 12,079,040 16,690,429

EXCEPTIONAL INCOME / (LOSS) (VII-VIII) (V - VI) 4,737,402 (2,657,674)

Employee profit-sharing (IX) - -

Corporate income tax (X) (18,017,119) (17,212,644)

TOTAL INCOME (I+III+V+VII) 327,154,460 316,159,608

TOTAL CHARGES (II+IV+VI+VIII+IX+X) 397,936,459 320,332,162

NET PROFIT / (LOSS) (70,781,999) (4,172,555)


106

1 n SIGNIFICANT EVENTS OF THE FINANCIAL YEAR

Capital IncreaseKeolis S.A. issued 5,498,450 new shares of €12 nominal value. GROUPE KEOLIS S.A.S. subscribed to the totality of this increase in share capital amounting to €65,981,400.

Subscription to the capital increases of subsidiariesPursuant to regulations on the trade’s practices relating to the financial capacity of public passenger transportation businesses, Keolis S.A. subscribed to capital increases in its subsidiaries in 2017 for a total amount of €31,330,102,58.

“Better fortunes” obtainedFollowing subsidies granted by Keolis S.A. to its subsidiaries in prior financial years containing “return to better fortune” clauses, an entitlement amounting to €1,466,696 was recognised under exceptional income / loss at 31/12/2017.

(In euros)

Subsidiary name Better fortunes obtained

Keolis Touraine 900,000

Keolis Côte d’Azur 200,000

Keolis Evrard 182,907

Keolis Brest 110,000

Keolis Montluçon 29,650

Keolis Mobilité Roissy 24,139

Keolis Saint Malo 20,000TOTAL 1,466,696

2 n ACCOUNTING PRINCIPLES, RULES AND METHODS

The financial statements are prepared in accordance with rules laid down by the general chart of accounts in accordance with regulation ANC N° 2014-03 dated 5 June 2014 amended by the regulation ANC 2016-06, of the French Accounting Standards Authority (Autorité des Normes Comptables) and principles generally accepted in the profession.

General conventions were applied in compliance with the pru-dence principle, in accordance with the basic assumptions of:

n continuity of operations; n consistency of accounting methods from one year to ano-ther;

n independence of financial years.

The basic method used to value the items in the accounts is the historical costs method.In preparing the financial statements, the adjustments to the general accounting plan PGC (articles 111-1 and 831-1/1) were not used.

The main accounting policies used are described below.

2.1. Intangible assetsIntangible assets are valued either at cost of acquisition, or when produced, at their production cost or revalued amount, accor-ding to legal requirements.This item mainly concerns the cost of systems’ software acqui-red which is amortized over 5 years for IT projects and 3 years for desktop software.Intangible assets in progress correspond to expenditure in connection with the implementation of IT projects, and therefore include all expenses that can be directly attributed to projects and which are necessary in creating, producing and preparing the asset in order to be able to function with the use intended by management.

2.2. Tangible assetsTangible assets are valued at their acquisition cost (purchase price and incidental expenses) or their production cost.

NOTES TO ANNUAL FINANCIAL STATEMENTSB


107

Methods and depreciation periods are:

Duration Method

Buildings 15 to 20 years Linear

Equipment and tooling 5 to 10 years Linear

Office equipment and furniture 5 to 10 years Linear

Automotive equipment

n New Vehicles

• Commercial vehicles (GVM under 3.5 t.)

5 years Linear

• Coaches and buses 10 to 15 years Linear

n Used Vehicles 2 to 14 years Linear

2.3. Financial assets

Equity and other investmentsEquity investments are recorded at acquisition cost. If the acqui-sition value is greater than the inventory or utility value, an impair-ment is recognised for the difference. For each of the holdings, the utility value is determined on the basis of a range of valuation methods (discounted cash flow, revalued net position).

Technical losses from mergersFollowing adoption of regulation ANC 2015-06, technical losses from mergers and the transfer of all assets and liabilities concer-ning financial assets are allocated in the balance sheet to a “mer-ger losses on financial assets” account. They correspond to the negative difference between the net assets and liabilities received and the net carrying amount of the investment in the absorbed company. For each of the investments, the inventory value is determined by taking into account the future cash flows that the activity may generate. An impairment is recorded, where neces-sary, which may not be reversed.Other financial assets are stated at their acquisition cost. Where applicable, an impairment is recorded if their utility value falls below their acquisition cost.

Receivables related to equity and current accountsReceivables related to equity and current accounts are recorded at nominal value.When equities are fully depreciated and the net assets of the subsidiary is negative, an impairment of all receivables related to equity and current accounts is recorded due to the risk of loss of these receivables following the transfer or cessation of the activities of the subsidiary.

2.4. Receivables and payablesReceivables are recorded at their nominal value.Where applicable, a depreciation is recognised whenever there is a risk of non-recovery.Receivables and payables in foreign currencies are converted at the year-end exchange rate of the functional currency. Foreign exchange differences resulting from this adjustment with the transaction date exchange rate appear under “foreign exchange translation differences”. Unrealised foreign exchange losses are

subject to a provision for liabilities, unrealised foreign exchange gains are not recorded in the income statement.

2.5. Marketable securitiesThese are recorded at their acquisition cost. Where applicable, an impairment is recorded for each line of securities of a similar nature, in order to bring their value to their average closing price, or their probable trading value for unlisted securities.

2.6. CashCash balances in foreign currencies are converted at the closing exchange rate of the financial period. Foreign exchange diffe-rences resulting from this adjustment with the transaction date exchange rate appear under “foreign exchange translation dif-ferences”.

2.7. Provisions for contingencies and chargesA provision for contingencies and charges is recorded when the company has a legal or implicit obligation to a third party arising from a past event, whose amount can be reliably estimated and where it is probable that its settlement will cause an uncompen-sated outflow of resources.

2.8. Employee benefits Employee benefits include payments due on retirement and long service awards.Evaluations of these obligations are carried out annually using the projected unit credit method.

The main actuarial assumptions used for the assessment of employee benefits are as follows:

n Discount rate 0.88% n Long-term expected inflation rate 1.75% n Rate of salary increases 6.1% n Mobility rate 6.3% n Type of retirement At the initiative of the employee n Mortality table INSEE TD/TV 2012-2014

These commitments appear under off-balance sheet commit-ments.

2.9. Profit from joint venturesThe profit or loss from joint ventures in which Keolis S.A. holds an interest are recorded under “Attributed profit or transferred loss” and “Loss borne or transferred profit”.

2.10. Tax statusThe results of the company are integrated within the framework of a tax group. The Group’s tax parent company is the Company GROUPE KEOLIS S.A.S. Procedures provide that tax is calcu-lated as if the company were taxed separately.

Any savings achieved by the parent company from the tax losses and long-term capital losses of the subsidiary are taken by the former in its income statement. However, these are reallocated to the subsidiary as and when it generates future profits.


108

2.11. Crédit d’Impôt pour la Compétitivité et l’Emploi (CICE)The CICE, which is a tax credit, is recognised as a deduction from corporate income tax.

3 n USE OF ASSESSMENTS IN THE PREPARATION OF FINANCIAL STATEMENTS

For the preparation of annual accounts, Keolis S.A. management may be required to make estimates and assumptions that affect the book value of assets and liabilities, revenues and expenses as well as information on assets and liabilities. Actual results could differ substantially from these estimates.

The estimates and underlying assumptions are made from past experience and other factors considered reasonable in the cir-cumstances. They serve as the basis for the exercise of judg-ment required in determining the carrying amounts of assets and liabilities that cannot be obtained directly from other sources. Actual values may differ from these estimates.The estimates and underlying assumptions are reviewed on an ongoing basis. In particular, disputes and litigation in progress or with employees, that have been subject to review by the mana-gement with their advisers or lawyers in order to reflect the risk on the valuation of assets or liabilities.

The impact of changes in accounting estimates is recorded during the period of change if it affects only that period or during the period of change and future periods if they are also affected by the change.

4 n FINANCIAL INSTRUMENTS

The application on 1 January 2017 of Regulation no. 2015-05 relating to financial futures and hedging operations, did not have a significant impact on the financial statements of Keolis S.A.

Keolis S.A. uses derivative financial instruments to manage its exposure to financial risks resulting from its operation, financial and investing activities:

n interest rate risk; n foreign exchange risk; n commodities risk.

At the year end, unrealized gains are not recognised. Unrealised losses are booked except when they relate to instruments qua-lified as hedges entered into in one of the following two cases:

n to hedge underlying items in the balance sheet which have not been revalued;

n to hedge future cash flows expected in a future year, under the principle of matching the accounting impact in the same financial year.

The gains and losses realised are reported in the same income statement as the income and expenses on the hedged item.

Interest rate, foreign exchange and commodities derivative finan-cial instruments are traded with first-class bank counterparties in accordance with the Group’s counterparty risk management policy. Consequently, the counterparty risk can be regarded as negligible.

4.1. Interest rate risk relating to the variable rate portion of its financial debt

A credit line was arranged by Keolis S.A. in 2017 to finance rolling stock: a loan of €20 million, drawn down on 7 December 2017, repayable in instalments over 8 years. This loan is fully hedged by a derivative financial instrument.


At 31 December 2017, the available, confirmed and undrawn syndicated credit facility is €300 million. This credit line is avai-lable to GROUPE KEOLIS S.A.S. and Keolis S.A.

The distribution of debt between fixed and variable rates, exclu-ding and including the derivatives portfolio is respectively:

Split excluding derivatives (in € million) 31/12/2017 31/12/2016

Variable rates 48.4 29.2

Fixed rates - -

Split including derivatives (in € million) 31/12/2017 31/12/2016

Variable rates 9.3 7

Fixed rates 39.1 22.2

4.2. Currency riskThe Group has put in place intra-group loans denominated in foreign currency and recognised in current accounts. In order to cover the resulting foreign exchange risk, the Group uses deri-vative financial instruments which allow it to fix the exchange rates of these intra-group loans.

The derivative financial instruments used by Keolis S.A. are stan-dard, liquid and market-available:

n forward and futures sales and purchases; n foreign exchange swaps.

Loans and borrowings are revalued on the closing date to the closing price. The revaluation differences, positive or negative, are recorded as financial income. In the same way for consis-tency, the variation in value of these derivative financial instru-ments subscribed to cover these intra-group loans is also recorded in financial income.


109

Loan hedges that were still open at 31 December 2017 are as follows:

Hedging instruments Nominal Maturity

Forward sell AUD / EUR swaps

AUD 0.3M 2018

Forward sell CAD / EUR swaps

CAD 40.1 M 2018

Forward sell DKK / EUR swaps

DKK 344.6 M 2018

Forward sell GBP / EUR swaps

GBP 5.5 M 2018

Forward purchase SEK / EUR swaps

SEK 489.5 2018

Forward sell USD / EUR swaps

USD 115.3 M 2018

4.3. Commodity price risksDue to their transportation activities as operators of light vehicle fleets (coaches and buses), the Group’s subsidiaries must make substantial and regular purchases of diesel. The Group is consequently exposed to a risk in the fluctuation of the price of diesel, a risk which is partially hedged in the concession contracts signed with public transport authorities. For the remaining expo-sure, the Group implements a hedging policy using derivative financial instruments whose objective is to minimise the volatility of Group profits.

For this purpose, the Group uses standard, liquid and market-available derivative financial instruments, namely:

n swaps; n cap calls; n cap puts to unwind an existing cap or to realise a cap spread;

n floor puts if tied with cap calls to create symmetrical or asymmetrical collars;

n floor calls, in particular to buy back floors that constitute asymmetrical collars.

At 31 December 2017 the commodity price derivatives represent a volume of 27,320 tonnes.

Volumes in tonnes

Maturing in less than a

year

Maturing in 1 to 5 years

Swaps and tunnels on diesel reference 22,520 4,800


110

5 n NOTES ON THE BALANCE SHEET

5.1. Fixed assets

Gross values

* dont 2 478 K€ d’écart de conversion des créances rattachées à des titres de participation** dont 6 208 K€ de cessions de titres liées aux transmissions universelles de patrimoine

(in € thousand)Gross value at

start of year Increase DecreaseTransfers between

items

Gross value at end of year

INTANGIBLE ASSETS

Concessions, patents, licences 75,206 9,181 - 4,498 88,885

Other intangible assets 25,063 5,386 - (4,498) 25,951

TANGIBLE ASSETS

Land and development 9,359 - (1) - 9,358

Buildings

- on own land 27,339 - (7) 9,678 37,010

- on other land 1,808 - - 1,808

- general facilities 1,861 - - 167 2,028

Plant, equipment, tooling 835 693 (407) 607 1,728Office and computer equipment and furniture 15,470 1,085 - - 16,555

Assets under construction 9,007 2,925 - (9,845) 2,087Prepayments and downpayments on assets 607 35 - (607) 35

FINANCIAL ASSETS

Holdings 1,316,501 169,038 (46,927) - 1,438,612

Other fixed investments 188 - - - 188

Loans and other financial assets 2,351 - (60) - 2,292

GRAND TOTAL 1,485,595 188,343 (47,401) - 1,626,537

Assets under constructionIntangible assets in progress relate mainly to the design, development and deployment of new operations, payroll and maintenance software solutions. Implementation is carried out by internal and external teams.Tangible assets under construction mainly relate to real estate.

ParticipationsLes principales acquisitions de l’exercice sont:

n Groupe Omnibus : €3,942 thousand n Aérolis: €1,000 thousand n Keolis Nord Allier: €150 thousand

The main subscriptions by Keolis S.A. to the capital of its subsidiaries are: n Keolis America: €20,002 thousand n Keolis Lille: €7,490 thousand n Keolis Alpes Maritimes: €6,219 thousand n Aérolis: €4,500 thousand n Keolis Pays d’Aix: €3,600 thousand n Keolis Lyon: €2,400 thousand n GrandLink: €1,875 thousand n GoldLink: €1,462 thousand n Keolis Brest: €1,100 thousand n Keolis Caen Mobilité: €1,090 thousand


111

The major decreases in the year come from disposals and liquidations. They are as follows: n One Park: €1,750 thousand n Forcity SAS: €249 thousand n Travel Mania: €3 thousand

Receivables related to investments The major increases in the year are:

n KeoMotion: €49,593 thousand n EFFIA Holding: €31,183 thousand n Aérolis: €7,581 thousand n Keolis America: €7,280 thousand n Keolis Dijon Mobilité: €7,000 thousand n Keolis Bordeaux Métropole: €1,522 thousand

The main decreases in the year: n Keolis Spar: €15,755 thousand n Keolis Lille: €5,800 thousand n EFFIA St Etienne: €5,395 thousand

Depreciation and amortisation

(€ thousand)Amortissements début d’exercice

Augmentations DiminutionsAmortissements

fin d’exercice

INTANGIBLE ASSETS

Tangible assets 55,518 10,146 - 65,664

LAND AND DEVELOPMENT

Terrains et agencements sur terrains 1,500 - - 1,500

Buildings

- on own land 6,107 1,688 (7) 7,788

- on other land 1,135 100 - 1,235- general facilities 1,860 17 - 1,877

Plant, equipment and tooling 689 324 (37) 975

Other tangible assets 11,716 1,968 - 13,684

TOTAL 78,525 14,241 (44) 92,723

5.2. Receivables

(in € thousand) Gross amount Due in less than one year

Due in more than one year

FIXED ASSETS

Receivables related to investments 385,246 3,374 381,872

Loans 759 - 759

Other financial assets 1,720 - 1,720

CURRENT ASSETS

Prepayments and deposits made 124 124 -

Trade receivables and related accounts 49,038 49,038 -

Other receivables (1) 224,646 224,646 -

Deferred charges 1,081 1,081 -

TOTAL 662,614 278,263 384,351

(1) Other receivables: these include in particular €125,491 thousand of current accounts and €15,858 thousand of share of profits from joint ventures.


112

Details of accrued income at 31 December 2017(in € thousand) Accrued interest on advances and current accounts 3,448Customer invoices outstanding 22,576Supplier credit notes outstanding 34Accrued income from bank 214Tax and social security receivables 299“Better Fortunes” obtained 1,467Othe accrued income 4,112TOTAL 32,150

5.3. Details of prepayments and deferred income

Details of prepaid expenditure at 31 December 2017(in € thousand)Rent and charges 1,081TOTAL 1,081

5.4. Exchange differences on receivables and payables in foreign currenciesKeolis S.A. has intra-group loans or borrowings denominated in foreign currencies. These loans and borrowings are converted at the closing exchange rate of each currency on 31 December. At 31 December 2017, Keolis recognised:

n €4,806 thousand of unrealised losses n €2,523 thousand of unrealised gains.

5.5. Equity

(in € thousand)Amount at

31/12/2016Allocation

2017Profit

31/12/2017Capital

increaseOther

movementsAmount at

31/12/2017

Capital 346,851 - - 65,982 - 412,833

Revaluation difference 1,845 - - - 56 1,901

Legal reserve 4,685 - - - - 4,685

Retained earnings - (4,173) - - - (4,173)

Other reserves 131,602 - - - 436 132,038

Profit for the year (4,173) 4,173 (70,782) - - (70,782)

Regulated provisions 1,536 - - - 116 1,653

Investment grants 742 - - - - 742

TOTAL 483,089 - (70,782) 65,982 608 478,898

The General Meeting of 18 April 2017 allocated the loss of the 2016 financial year, amounting to (€4,172,554,76), as follows:

(€ thousand)

Profit/(loss) for the year (4,173)

Retained earnings brought forward -DISTRIBUTABLE PROFIT (4,173)

Other reserves -

TOTAL (4,173)

Dividends paid -

Retained earnings (4,173)

Other reserves -


113

Share capitalAt 31 December 2017, capital is fixed at the sum of 412,832,676 euros divided into 34,402,723 shares of nominal value of €12.

Regulated provisions Regulated provisions notably include €1,255 thousand for depreciation, including €116 thousand charged in the year.

5.6. Provisions

(in € thousand)At start of

year Increase DecreaseTransfers between

itemsOther At year

end

REGULATED PROVISIONS 1,536 117 - - - 1,653PROVISIONS FOR CONTINGENCIES AND LOSSES

Provisions for disputes 762 154 (202) - - 714

Provisions for foreign exchange losses 3,583 4,806 (3,583) - - 4,806

Provisions for charges 896 4,453 (3,096) - - 2,253

Provisions for long service awards 1,027 69 (26) - - 1,070

ASSET DEPRECIATION

Goodwill - - - - - -

Land 54 - - - - 54

Depreciation of investments 114,865 92,059 (15,026) - (1,978)(2) 189,920

Depreciation of other financial assets 196 8,673 (6) - - 8,863

Depreciation of client accounts 439 - (6) - - 433

Other depreciation (1) 27,058 15,256 (4,225) - - 38,089

TOTAL 150,416 125,587 (26,170) - (1,978) 247,855

(1) composed primarily of write-downs of Group current accounts.(2) The decrease in depreciation concerns the transfer of all assets and liabilities from SETVER and TRANSEVRY to Keolis S.A.

Reversals of provisions used amount to €721 thousand, including €37 thousand related to provisions for disputes.

Depreciation of investmentsThe major increases in the year are:

n Keolis Lille €65,981 thousand n STA €5,705 thousand n Aérolis €5,500 thousand n Voyages Autocars Services €4,370 thousand n Keolis Roissy Airport €3,419 thousand n SEM VFD €1,737 thousand

The major decreases in the year are: n Keolis Pays d’Aix €5,010 thousand n Kisio Solution €2,879 thousand n GEP Vidal €2,086 thousand n Keolis Baie des Anges €1,152 thousand


114

5.7. Liabilities

(in € thousand) Gross amount Up to 1 year Between 1 and 5 years

Bank borrowings (1) 139,424 86,503 52,921

Loans and other financial debts 250,095 820 249,275

Trade payables and related accounts 33,141 33,141 -

Tax and social security debts 53,270 53,270 -

Debts on assets and related accounts 7,877 7,877 -

Other liabilities (2) 608,435 608,435 -

TOTAL 1,092,242 790,046 302,196

1) Includes €86,464 thousand of creditor bank balances.(2) Other liabilities: include short-term current account deposits and cash pooling from subsidiaries of €599,801 thousand.

Details of accrued liabilities at 31/12/2017

(in € thousand)Accrued interest on advances and current accounts 534Supplier invoices not received 30,905Tax and social security liabilities 38,332Discounts and rebates 1,860TOTAL 71,631

Details of borrowing

Other bond issues and borrowingBorrowings can be broken down as follows:

(in € thousand)Loans from credit institutions 52,921Creditor bank balances 86,464 Interest accrued on loans and financial liabilities 38 TOTAL 139,424

Loans and other financial debtsSont regroupés dans ce poste :

(in € thousand)Current account advances to subsidiaries 249,275 Guarantee deposits received on rented property 283 Other financial liabilities 537 TOTAL 250,095


115

6 n NOTES ON THE INCOME STATEMENT

6.1. Analysis of turnoverThe Company generates the vast majority of its revenue in France. Revenue generated abroad amounts to 15,505,930 euros.

6.2. Details of other income and expenses(in € thousand)

Other operating income Gains on diesel hedging 1,288Supplier discounts 7,019Other 0TOTAL 8,307

Other operating expenses Losses on diesel hedging (474)Royalties 717Other 197TOTAL 440

6.3. Transfers of expenses(in € thousand)

Government vocational training agency refunds 328Insurance 4,116Other 1TOTAL 4,445

6.4. Financial income and expense

(in € thousand) Income Expense Balance

Income from investments 239 - 239,

Depreciation and provisions, net of reversals 22,842 (120,794) (97,953)

Interest on current accounts 12,900 (1,910) 10,990

Interest on loans - (694) (694)

Foreign exchange gains / (losses) 28,545 (17,863) 10,682

Income from sale of marketable securities - - -

Technical gains/(losses) on mergers 1,947 - 1,947

Other financial income and expense 4,331 (3,067) 1,264

TOTAL 70,804 (144,329) (73,525)


116

6.5. Exceptional income and expense

(in € thousand) Income Expense Balance

Staff related expenditure - (5,135) (5,135)

Income / (loss) from intangible asset disposals - - -

Income / (loss) from tangible asset disposals 798 (372) 426

Income / (loss) from financial asset disposals 7,394 (2,002) 5,391

Other exceptional income (inc. better fortunes on 2011 subsidies (1)) - - -

Depreciation and provisions, net of reversals 3,051 (4,570) (1,519)

Other exceptional items 5,574 - 5,574

TOTAL 16,816 (12,079) 4,737

(1) See details of return to better fortunes, page p106

6.6. Corporate income taxThe corporate income tax for the year consists of:

(in € thousand) Profit before tax Tax due Net profit

Current (93,537) - (93,537)

Exceptional 4,737 - 4,737

CICE - (17,620) 17,620

Other tax credits - (397) 397

TOTAL (88,799) (18,017) (70,782)

Increase and reduction in future tax liabilitiesThe deferred tax bases are as follows:

(€ thousand)Deferred tax base at

1 January 2017 Increase DecreaseDeferred tax

base at 31 December 2017

PROVISIONS AND DEFERRED CHARGES

Provisions for foreign exchange losses 3,583 4,806 (3,583) 4,806

Other provisions 613 - (447) 166

Other temporary differences

Contribution Sociale de Solidarité 614 647 (613) 647

Translation difference - liability 12,066 2,523 (12,066) 2,523

Translation difference - asset (3,583) 3,583 (4,806) (4,806)

Income subject to deferred taxation - - - -

Other 51 - - 51

TOTAL 13,343 11,559 (21,515) 3,387


117

7 n OTHER INFORMATION

7.1. Financial commitments

Other financial commitmentsA credit line was arranged by Keolis S.A. in 2017 to finance rolling stock: a loan of €20 million, drawn down on 7 December 2017, repayable in instalments over 8 years. This loan is fully hedged by a derivative financial instrument.


At 31 December 2017, the available, confirmed and undrawn syndicated credit facility is €300 million. This credit line is available to GROUPE KEOLIS S.A.S. and Keolis S.A.

At 31 December 2017, the portfolio of guarantees and securities given by Keolis S.A. breaks down as follows.

Bank guarantees (guarantees and endorsements): €415.2 millionParent company guarantee: €1,256.5 million

7.2. Pension and long service award commitments

Retirement paymentsThe amount of pension liabilities at 31 December 2017 stood at €34,103 thousand. This sum is not provided for in the annual financial statements and appears under financial commitments.

Long service awardsThe amount provisioned in the annual financial statements at 31 December 2017 relating to long service awards stands at €1,065 thousand.

7.3. Leasing commitments

The booking as capital assets and depreciation of goods financed by leasing would have resulted in the following values at 31 December 2017:

ASSETS UNDER LEASE Depreciation charges

(€ thousand) Initial cost In year Accumulated Net value

Land 278 - - 278

Buildings 1,813 4 1,521 292

Transport equipment 912 27 882 30

TOTAUX 3,003 31 2,403 600

Commitment at 31 December 2017 are as follows:

LEASING COMMITMENTS Rentals paid Rentals yet to be paid

(in € thousand) In year AccumulatedUp to 1

year

Between 1 year and 5

years+ 5 years

Total to be paid

Residual purchasing

price

Terrains- constructions - 1,239 13 51 83 147 149

Matériel de transport - 2,574 - - - - -

TOTAUX - 3,813 13 51 83 147 149


118

7.4. Contractual obligationsThe operating leases taken out mainly by Keolis S.A. subsidiaries on vehicles (coaches and buses) are signed with financial institutions for periods not exceeding eight years; the residual value is equal to the projected market value at the end of the rental period. Rentals excluding VAT still outstanding at 31 December 2017 amounted to €229.2 million.

Keolis S.A. provides an undertaking to continue the rental in terms of the payment of the rental amounts that remain due under the contract if the subsidiary defaults. In return, the financing body undertakes to keep the related vehicles available to the Group.

7.5. Number of employeesThe average headcount can be broken down as follows:

31/12/2017 31/12/2016

Executives 1,320 1,285

Supervisors and technicians 164 167

Employees 27 28

TOTAL 1,511 1,480

7.6. Remuneration of directorsNo directors’ fees are allotted to members of the Group’s management or executive committees.

Remuneration of members of management bodiesNo remuneration was paid to members of the Group’s management bodies during 2017.

7.7. Post balance sheet eventsThere are no significant post-balance sheet events to report.

7.8. Identity of the consolidating company The Company belongs to a Group whose consolidating company is GROUPE KEOLIS S.A.S., incorporated and domiciled in France, under SIRET number 49432127600037, headquartered at 20/22 Rue Le Peletier, 75009 Paris.

The consolidated accounts of GROUPE KEOLIS S.A.S. are established in accordance with articles L 233-16 to L 233-28 of the French Commercial Code.


119

Information on subsidiaries and non-consolidated investments (position at 31 December 2017)

DETAILED INFORMATION ON SHAREHOLDINGS WHOSE CARRYING AMOUNTS EXCEED 1% OF THE CAPITAL OF THE COMPANY REQUIRED TO PUBLISH ITS FINANCIAL STATEMENTS

A - SUBSIDIARIES (AT LEAST 50% OF CAPITAL HELD BY THE COMPANY)

(€ thousand)Equity at

31 December 2016Pe

rcen

tage

of

cap

ital h

eld

at

31 D

ecem

ber 2

017

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty

Companies or groups of companies

1) French subsidiaries

Keolis Chalons en Champagne 148 1,026 99.24 861 861 -3,277 7,037 385 0

Chemin des Grèves - BP 68 - 51000 Chalons-en-Champagne

Keolis Oyonnax 90 16 99.98 90 90 -140 1,993 13 0

Rue de la Tuilerie - 01100 Arbent

Keolis Château-Thierry 25 23 100.00 25 25 -3 2,078 2 0

5 rue Vallée - 02400 Château-Thierry

Keolis Chauny-Tergnier 45 56 100.00 45 45 -704 1,650 32 0

150 avenue Jean Jaurès - 02300 Chauny

Keolis Montluçon 197 192 100.00 197 197 -980 5,271 39 0

Rue des Canaris - 03100 Montluçon

Keolis Sud Allier 325 1,953 100.00 6,374 6,374 976 6,396 117 0

14 boulevard Alsace Lorraine - 03300 Cusset

Keolis Vichy 300 599 100.00 660 660 -534 3,459 38 0

Boulevard Alsace Lorraine - 03300 Cusset

Keolis Alpes Maritimes 220 587 99.79 8,201 8,201 6,573 2,168 153 0

840 Avenue Emile Hugues - 06140 Vence

Keolis Garonne 98 596 100.00 1,968 1,968 234 6,964 -174 0

ZI de Bonzom - 09270 Mazères

Société de gestion de l'Aéroport de Troyes en Champagne 10 -34 100.00 10 10 34 0 -1 0

20-22 rue Le Peletier - 75009 Paris

Keolis Aude 1,783 -448 100.00 2,857 2,857 2,944 10,032 277 0

Pech Loubat - 11000 Narbonne

Keolis Narbonne Mobilité 870 -825 100.00 870 40 -374 5,906 -93 0

Avenue de Pech Loubat - 11000 Narbonne Cedex

Keolis Aveyron 126 193 100.00 624 200 -290 1,515 37 0

ZA Saint Martin - 8 Impasse de l'Aigoutal - 12100 Creissels

Keolis Cote d'Azur 290 525 100.00 289 289 -948 3,373 89 0

59, rue de la Buffa - 06000 Nice


120


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Keolis Baie des Anges 7,305 -7,281 100.00 11,230 3,607 -333 12,456 -397 0

742 route de Grenoble - 06200 Nice

Keolis Camargue 58 151 99.97 2,889 208 -142 0 132 0

20, rue de la Villette - 69328 Lyon

Société Transports Robert 38 3,366 99.96 821 821 -2,450 8,885 485 0

31 avenue José Nobre - BP 57 - 13500 Martigues

Société Autocars de Provence 46 1,442 99.97 840 0 3,855 11,266 357 0

289 rue des Roseaux - 13320 Bouc Bel Air

Keolis Pays d'Aix 5,010 -6,186 100.00 8,610 8,610 -2,650 36,211 -2,454 0

Rue des roseaux - Quartier du verger - 13320 Bouc Bel Air

SCAC 4,168 -4,056 100.00 5,447 0 364 3,280 -566 0

398 Avenue du Mistral - ZI ATHELIA - 13600 - La Ciotat

Keolis Calvados 1,100 4,120 100.00 1,152 1,152 -5,776 5,410 792 0

19, chemin de Courcelle - BP 127 - 14128 Mondeville

Keolis Bus Verts 1,100 2,658 100.00 1,100 1,100 -7,497 28,385 1,492 0

19 chemin de Courcelles – 14120 Mondeville

Keolis Pays Normands 276 477 100.00 1,268 1,268 -173 3,186 132 0

ZI la Madeleine, rue de l'Ile du Marais Carentan - 50500 Carentan

Keolis Caen 1,065 4,260 100.00 2,251 2,251 -7,125 53,962 523 0

15 rue de la Geôle - 14000 Caen

Keolis Littoral 4,259 -2,784 100.00 4,258 4,258 -1,836 14,575 657 0

2 avenue du Pont Neuf - 17300 Rochefort

Keolis Saintes 140 98 100.00 139 139 -601 2,767 30 0

Rue des Perches - ZI Charriers - 17100 Saintes

Compagnie du Blanc Argent 279 1,593 99.41 4,139 4,139 -1,677 5,709 548 0

Gare de Romorantin - 41200 Romorantin

Keolis Centre 5,541 -4,770 100.00 5,643 0 237 3,719 -531 0

86 rue du village d'En Haut - 18230 Saint Doulchard

Keolis Bourgogne 153 4,320 99.50 1,917 1,917 -5,964 12,774 1,116 0

17, rue du Bailly - ZI Dijon Saint Apollinaire - 21000 Dijon

Keolis Beaune 60 0 100.00 60 60 228 1,274

17, rue du Bailly - ZI Dijon Saint Apollinaire - 21000 Dijon

Keolis Dijon 1,206 1,471 100.00 1,414 1,414 -5,248 66,247 549 0

49, rue des ateliers - 21000 Dijon


121


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Keolis Dijon Mobilité 1,200 0 70.00 830 830 -13,311 0

49, rue des ateliers - 21000 Dijon

Monts Jura Autocars 2,329 -26 100.00 10,196 10,196 1,263 23,783 137 0

4, rue Berthelot - 25000 Besançon

Keolis Pays Montbéliard 546 403 100.00 542 542 -1,580 17,147 109 0

CD 126 La Chamotte - 25420 Voujeaucourt

Keolis Urbest 640 495 100.00 801 801 -1,206 1,100 154 0

4 rue Berthelot - 25000 Besançon

Keolis Drôme Ardèche 573 2,772 100.00 3,507 3,507 -4,541 11,422 602 0

26, rue Laurent de Lavoisier - 26800 Portes-lès-Valence

Keolis Montélimar 47 11 100.00 47 47 -133 143 -101 0

8 avenue de la Feuillade - ZA du Meyrol - 26200 Montélimar

Keolis Eure 467 3,961 100.00 1,555 1,555 -1,506 14,948 834 0

2 rue Lakanal - ZI n° 2 - 27031 Evreux

Keolis Eure et Loir 538 2,750 100.00 2,363 2,363 -3,253 12,779 614 0

Les Fenots - 28100 Dreux

Keolis Drouais 82 145 100.00 82 82 348 4,412 53 0

Les Fenots - 28100 Dreux

Keolis Quimper 259 214 100.00 257 257 -3,186 12,318 49 0

1 Rond Point de Quistinidal - 29000 Quimper

Keolis Brest 6,626 -6,622 100.00 7,718 7,718 -3,745 39,594 -1,185 0

7 rue Ferdinand de Lesseps - 29806 Brest

Keolis Morlaix 59 92 96.00 57 57 -1,125 2,587 76 63

ZI de Kérivin - 29600 St Martin des Champs

Keolis Maritime Brest 8 -397 100.00 8 0 1,125 8,932 389 0

1 rue Eperon - Port de Commerce - BP 80713 - 29200 Brest

Keolis en Cévennes 97 48 99.19 95 0 -100 82 2 0

389 chemin du Viguet - 30100 Alès

Keolis Alès 120 59 100.00 120 120 -1,494 9,442 88

389 chemin du Viguet - 30100 Alès

Sté des Transports en Commun Nimois 750 1,731 100.00 1,090 1,090 -9,238 46,054 246 0

388 rue Robert Bompard - 30000 Nîmes

Keolis Auch 168 -96 100.00 221 221 152 1,683 -144 0

7 Place de la Libération - 32000 Auch


122


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Les Cars de Bordeaux 264 989 49.97 379 379 248 9,190 269 0

8, rue d'Artagnan - 33000 Bordeaux

Keolis Gironde 684 9,184 90.65 6,658 6,658 -8,616 16,848 920 0

ZA les Artigons Issac - 33160 Saint Médard en Jalles

Autobus d'Arcachon 217 2,490 100.00 2,931 2,931 -2,151 3,301 310 0

1431 bd de l'Industrie - 33260 La Teste de Buch

Keolis Bordeaux Métropole 5,000 9,837 100.00 5,000 5,000 -35,981 211,874 5,927 0

12 boulevard Antoine Gautier – 33000 Bordeaux

Keolis Bordeaux 18,058 -7,851 100.00 18,058 10,000 -9,118 0 101 0

12 Boulevard Antoine Gautier - 33000 Bordeaux

Keolis Narbonne 200 18 100.00 200 200 561 3,888

Avenue de Pech Loubat - 11100 Narbonne

Les Courriers du Midi 2,039 1,918 100.00 5,117 5,116 -1,895 19,716 248 0

9, rue de l'Abrivado - BP 85121 - 34073 Montpellier Cedex 3

Keolis Languedoc 90 1,945 99.98 899 899 -2,128 6,340 589 0

927, avenue Joliot Curie - 30000 Nîmes

Cars du Bassin de Thau 278 630 100.00 278 278 -1,071 4,260 231 0

21 av de la Méditerranée - Lieu dit Etang d'Ingril - 34110 Frontignan-La Peyrade

Keolis Armor 1,505 10,184 78.21 12,755 12,755 -5,889 43,565 1,489 0

26, rue du Bignon - CS 27403 - 35135 Chantepie

Société Rennaise de Transports & Services Handistar 43 107 100.00 44 44 -1,117 3,446 32 0

26 rue Bignon - 35135 Chantepie

Keolis Saint Malo 461 117 100.00 461 461 -1,694 9,015 5 0

rue des Rougeries BP 70548 - 35405 Saint Malo Cedex

Keolis Rennes 3,738 -3,105 100.00 4,536 4,536 -10,445 114,712 -1,014 0

Rue Jean Marie Huchet - CS94001 - 35040 Rennes

Keolis Châteauroux 170 115 100.00 169 169 263 5,204 23 0

6 allée de la Garenne - ZI - 36000 Châteauroux

Keolis Touraine 6,087 -3,258 100.00 7,472 7,472 -1,811 14,864 -20 0

Impasse de Florence - 37700 St Pierre des Corps

Keolis Tours 1,910 803 100.00 1,906 1,906 -12,005 59,279 340 0

Avenue de Florence - 37700 Saint Pierre des Corps


123


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Train Bleu St Marcellin 274 -8 99.97 594 594 -29 1,547 -33 0

3 impasse Claude Charon - 38160 St Marcellin

Voyages Monnet 537 -1,451 100.00 2,505 0 1,019 -19 -107 0

Route de Grenoble - 38590 St Etienne de St Geoirs

Keolis Porte d'Isère 300 314 100.00 300 300 -1,976 9,379 314

Avenue du Lemand - 38090 Villefontaine

Sté d'exploitat de l'aéroport Dole Jura 50 91 51.00 26 0 250 2,420 48 0

33 place de la Comédie - 39000 Lons Le Saunier

Keolis Gascogne 135 394 52.89 594 594 715 5,939 -185 0

215 Route de Benquet - ZA de la Téoulière - 40280 Saint Pierre du Mont

Keolis Blois 878 -645 100.00 1,117 1,117 -1,579 10,020 -328 0

9 rue Alexandre Vezin - 41000 Blois

Les Cars Roannais 156 2,408 100.00 374 374 -3,114 3,654 257 0

ZI les Guérins - 42120 Le Coteau

Cars Planche 94 712 100.00 874 0 -428 3,655 -294 0

10 boulevard Duguet - 42600 Savigneux

Keolis Atlantique 2,076 5,880 100.00 9,926 9,926 -1,786 34,111 805 0

3, rue de la Garde - ZI Bois Briand - 44300 Nantes

Transports de la Brière 92 611 59.80 1,221 1,221 -96 3,095 -284 0

7, rue Pierre Vergniaud - Penhoet - 44600 Saint - Nazaire

Keolis Voyages 8 67 100.00 7 7 -20 3,026 9 0

3, rue de la Garde-Zone de Bois Briand - 44300 Nantes

Keolis Montargis 163 125 100.00 163 163 -693 4,240 40 0

16 rue de la Baraudière - 45700 Villemandeur

Keolis Orléans Val de Loire 802 1,508 100.00 802 802 2,645 68,034 471 0

64 rue Pierre Louget- 45800 Saint Jean de Braye

Keolis Agen 224 102 100.00 224 224 -1,363 7,125 65 0

Rue Georges Clemenceau - 47240 Bon Encontre

Keolis Marmande 135 119 100.00 135 135 -313 1,996 59 0

Impasse Doumayne - ZA de Girauflat - 47200 Marmande

Keolis Val de Maine 35 7 100.00 35 35 -96 1,164 6 0

Rue du Bois Rinier - ZI Saint Barthélémy - 49124 Saint Barthélémy d'Anjou


124


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Société de Gestion de l'Aéroport d'Angers Marcé 8 -293 100.00 8 0 1,109 1,262 -101 0

Aéroport d'Angers-Marcé - 49140 Marcé

Keolis Angers 922 2,424 100.00 921 921 -9,955 56,971 449 0

Rue du Bois Rinier - 49124 Saint Barthélémy d'Anjou

Keolis Manche 497 1,643 100.00 3,102 3,102 -2,668 5,256 522 0

La Fosse Yvon - 50440 Beaumont Hague

Keolis Cherbourg 299 132 100.00 382 382 -1,575 9,421 83 0

491 rue de la Chasse aux Loups - 50110 Tourlaville

Keolis Chaumont 149 131 100.00 149 149 -670 3,174 31 0

Rue du Vieux Moulin - 52000 Chaumont

Keolis Laval Mobilité 369 184 100.00 368 368 -504 8,629 88 0

Centre JM Moron - rue Henri Batard - BP 0909 - 53009 Laval Cedex

Keolis Laval 100.00 369 369 -2,586 4,078

Centre JM Moron - rue Henri Batard - BP 0909 - 53009 Laval Cedex

Keolis Sud Lorraine 2,575 1,689 100.00 2,576 2,576 -4,358 25,285 1,420 0

1 rue de la Sablière - 54136 Bouxières Aux Dames

Keolis Bassin de Pompey 95 42 100.00 95 95 -472 1,763 4 0

3 rue de la Sablière - 54136 Bouxières Aux Dames

Keolis Lorient 489 84 100.00 563 0 -5,898 31,017 -34 0

Boulevard Yves Demaine - 56323 Lorient Cedex

Keolis Maritime Lorient 10 854 99.00 10 10 -1,057 2,199 138 0

1 rue Yves Montand - 56260 Larmor-Plage

Keolis 3 Frontières 1,976 5,011 100.00 5,869 5,869 -7,238 32,529 1,450 0

5 rue de l'Abbé Grégoire - 57050 Metz

Keolis Nevers 324 23 100.00 324 324 -1,835 6,570 -35 0

120 route de Marzy - 58000 Nevers

Trans Val-de-Lys 1,101 4,602 100.00 2,027 2,027 -8,947 23,276 1,301 0

ZA de la nouvelle énergie - Rue de l'énergie prolongée - 59560 Comines

Keolis Val Hainaut 165 3,225 96.32 3,222 3,222 -4,627 6,186 660 0

36, rue Ernest Macarez - 59300 Valenciennes

Keolis Lille 57,994 -63,309 100.00 65,981 0 42,968 315,462 -17,074 0

Château Rouge - 276 avenue de la Marne - 59700 Marcq en Baroeuil


125


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Transports Evrard 1,320 827 100.00 8,450 0 3,374 10,364 165 0

304 avenue du Tremblay- ZI de Vaux - 60100 Creil

Keolis Oise 183 9,879 100.00 4,027 4,027 3,676 21,612 75 0

21, avenue Felix Louat - 60300 Senlis

Keolis Alençon 38 -62 100.00 38 0 -40 2,724 1 0

20 rue Ampère - 61000 Alençon

Keolis Arras 581 102 100.00 669 669 -3,546 11,424 94 0

Rue Mongolfier ZI Est - 62000 Arras

Keolis Artois Gohelle 908 1,461 99.99 677 0 -4,073 55,864 466 0

59 avenue Van Pelt - 62300 Lens

Caron Voyages 2,160 -1,623 100.00 2,465 103 -100 3,199 -33 0

Resurgat 1 - 64 Boulevard industriel - 62230 Outreau

Voyages Dourlens 531 -366 100.00 1,171 0 -984 2,650 -204 0

ZAL n°3 - rue de Belle Vue - 62700 Bruay La Buissiere

Voyages Fouache 400 1,273 100.00 4,301 4,301 281 4,724 -187 0

1321 route Nationale - 62117 Brebières

Keolis Boulogne sur Mer 359 230 100.00 559 559 -617 18 0

46/48 Rue des Canonniers - 59000 Lille

Westeel Voyages 3,325 1,786 100.00 5,520 5,520 -3,536 20,824 1,099 0

2, rue F. Jiolat - 62430 Sallaumines

Loisirs et Voyages 914 3,319 100.00 4,254 4,254 -3,540 11,508 892 0

ZI de l'Industrie - 63600 Ambert

TPR 521 -78 100.00 2,250 2,250 119 4,012 15 0

Chemin de la Saligue - 64140 Lons

Keolis Pyrénées 1,367 1,211 95.16 2,626 2,626 -89 12,733 456 0

Quartier Lasbats - Route de Pau - 65420 Ibos

Keolis Grand Tarbes 179 99 100.00 747 747 -969 4,905 32 0

Centre Kennedy - Rue Jean Loup Chretien - 65000 Tarbes

Les Courriers Catalans 2,160 -1,560 100.00 3,401 600 -475 -18 0

7 rue Jean Perrin - 66000 Perpignan

Transports GEP Vidal 1,074 -686 100.00 2,327 2,327 844 3,766 -42 0

7, rue Jean Perrin - 66000 Perpignan

Compagnie des Transports de Perpignan 100.00 78 78 -80


Holding Striebig 2,540 -2,489 100.00 11,495 11,495 160 6 -2,820 0

198 avenue de Strasbourg – 67170 Brumath


126


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Keolis Obernai 31 15 100.00 31 31 -153 656 3 0

7 rue de la Gare - 67210 Obernay Cedex

Autocars Striebig 1,200 58 100.00 2,100 2,100 1,352 18,824 241

198 avenue de Strasbourg – 67170 Brumath

Autocars Eschenlauer 300 540 90.97 1,600 1,600 -744 6,325 173 0

Route de Dresenheim - 67620 Soufflenheim

Autocars Planche 5,000 15,837 100.00 6,567 6,567 -14,707 29,950 2,089 0

69 rue du Champ du Garet - 69400 Arnas

Keolis PMR Rhône 1,639 -713 100.00 1,639 1,639 -719 3,774 -68 0

ZI La Bandonnière - 4, rue Maurice Audibert - 69800 Saint-Priest

Interhône Alpes 40 2,287 100.00 38 38 -2,257 963 163 0

69, rue du Champ du Garet - BP 80157 - Arnas - 69655 Villefranche sur Saône

Keolis Lyon 53,946 -50,673 100.00 56,398 56,398 -54,913 374,102 -2,932 0

19, boulevard Vivier Merle - 69212 Lyon Cedex 03

Keolis Val de Saône 953 1,150 99.27 1,006 1,006 -1,646 10,907 358 0

30, rue de Guerlande - Zone Verte - 71880 Chatenay le Royal

Keolis Aix Les Bains 540 -299 100.00 540 0 -342 -5 0

1700 boulevard Lepic - 73100 Aix Les Bains

Keolis Mobilité Paris 162 1,357 100.00 162 162 -213 14,054 320 0

58 averue des Terroirs de France - 75012 Paris

Institut Keolis 37 4,062 100.00 37 37 -4,589 10,089 1,584 0


Keolis Seine Maritime 185 6,169 100.00 5,631 5,631 -6,804 16,942 1,204 0

55/57, le Nid de Verdier - 76400 Fécamp

Les Courriers de l'Ile-de-France 344 35,062 99.99 560 560 12,344 104,378 2,739 0

34, rue de Guivry - 77980 Le Mesnil-Amelot

Airelle 6,108 -11,311 100.00 6,104 0 4,421 -42 0

1 à 9 avenue Francois Mitterand - Immeuble Le Jade - 93200 Saint Denis

Keolis Roissy Airpot 3,419 -2,896 100.00 3,419 0 1,200 9,615 -199 0

Rue de Paris Lieu-dit La Maladrerie - 77990 Mesnil Amelot

Aerosat 50 1,792 85.00 43 43 -1,806 0 160 0

Rue des Acacias - 77990 Le Mesnil Amelot


127


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Keolis Mobilité Roissy 324 -155 100.00 424 0 -4,137 8,790 13 0

34 rue de Guivry - 77990 Le Mesnil Amelot

Keolis Roissy Services Aeroportuaires 180 -26 100.00 210 0 -945 7,920 0

Rue de Paris - Lieu-dit La Maladrerie - 77990 Le Mesnil Amelot

Cie des Transports Collectifs de l'Ouest Parisien 40 2,019 50.00 20 20 -165 10,326 -87 135

18, rue de la Senette - 78755 Carrières sous Poissy

Keolis Versailles 680 11,679 99.90 2,960 2,960 -6,335 31,303 1,667 0

12 avenue du Général de Gaulle - Les Manèges - 78000 Versailles

Keolis Yvelines 358 244 99.68 959 959 1,392 6,222 165 0

12 avenue du Général de Gaulle - Les Manèges - 78000 Versailles

Keolis Somme 219 76 99.99 219 219 -71 2,014 -5 0

ZI du Frier - 80290 Poix de Picardie

Société d'Exploitation de l'Aéroport Albert Picardie 50 -163 50.96 26 0 207 10 0

Rue Henri Potez - 80300 Meaulte

Keolis Abbeville 162 172 99.02 186 186 -552 93 75 0

Place de la Gare - 80100 Abbeville

Keolis Littoral 2,822 -2,443 100.00 2,824 2,824 -125 4,266 -84 0

Place de la Gare - 59820 Gravelines

Société Départementale des Transports du Var 1,344 2,478 95.08 5,303 5,303 -31 15,567 65 0

175 Chemin du Palyvestre - 83400 Hyères

Keolis Châtellerault 113 78 100.00 111 111 -767 3,639 24 0

6 rue Le Prince Ringuet - 86100 Châtellerault

Keolis Epinal 141 822 100.00 141 141 -1,052 5,004 301 0

ZAC de la Magdeleine - 88000 Epinal

Keolis Seine Senart 47 8,120 100.00 5,783 5,783 -3,884 12,028 818 0

19, rue Charles Mory - 91210 Draveil

Transports Daniel Meyer 240 25,498 100.00 39,039 39,039 -3,750 32,845 2,053

123 rue Paul Fort - 91310 Montlhery

Keolis Seine Val de Marne 230 7,382 100.00 5,594 5,594 4,078 32,110 884 0

172 avenue François Mitterrand - 91200 Athis Mons

Keolis Seine Essonne 3,004 -1,868 100.00 5,705 0 4,294 9,301 -201 0

110, route Nationale 191 - La belle Etoile - 91540 Mennecy

Keolis Orly Airport 282 944 100.00 759 759 -329 12,688 -152 0

1 à 3 avenue François. Mitterand - 93200 Saint Denis


128


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Société & Exp. Francilienne Inter Modalité (STEFIM) 40 -861 100.00 40 0 1,860 960 -248 0

1 à 3 avenue Francois Mitterand - Immeuble Le Jade - 93200 Saint Denis

Autocars Delion 482 759 100.00 2,557 2,557 147 6,921 278 0

12 rue Jean Perrin - 92000 Nanterre

Keolis Mobilité Hauts de Seine 10 -1,409 100.00 10 0 1,396 -13 0

1-3 av Francois Mitterrand - Batiment le Jade - 93200 La Plaine St Denis

S.F.D 40 526 100.00 1,184 566 -571 0 0


Keolis Travel Services 1,057 -869 100.00 1,057 0 1,849 6,156 179 0

12 rue Jean Perrin - 92000 Nanterre

Voyages Autocars Services 2,064 -1,824 100.00 4,370 0 4,616 9,545 -410 0

52 rue Jean Lemoine - 93230 Romainville

Pacific Cars 1,300 -3,010 100.00 4,581 0 2,111 21 -6 0

20 rue du Bailly - 93210 La Plaine Saint-Denis

Prioris 38 -24 100.00 38 38 -32 -10 0

1 à 3 avenue François Mitterand - 93200 La Plaine Saint Denis

Société des Transports et de Serv. Aéroportuaires 150 -102 100.00 98 98 -3 -80 0

1 à 3 avenue Francois Mitterand - Bâtiment Le Jade - 93200 Saint Denis

Keolis Val d'Oise 128 2,284 99.99 130 130 2,240 5,462 255 0

1,chemin Pavé - 95340 Bernes sur Oise

Aérobag 8 -2,847 100.00 8 0 3,823 5,405 39 0

Rue de Paris - lieu-dit La Maladrerie - Mesnil Amelot 77990

Aerolis 3,759 -6,041 100.00 9,777 0 2,809 25,563 -4,863 0

Lieu-dit La Maladrerie – Rue de Paris au Mesnil Amelot (77990)

Keolis Conseil & Projets 8 280 100.00 8 8 -2,067 2,637 80 0

20 rue de la Villette - Immeuble le Bonnel - 69003 Lyon

Kisio Solution 7,235 -4,175 100.00 7,235 7,235 2,807 -3,832 0


SCI Héron Verdier 100.00 228 228 0

55/57 Le Nid de Verdier - 76400 Fécamp

REV (Réseau en Vosges) 10 14 70.00 7 0 -500 2,423 4 0

3 place Gambetta - 88300 Neufchâteau


129


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


Keolis Amiens 654 693 100.00 654 654 -7,556 31,403 220 0

45 rue Dejean - 80000 Amiens

Les Transports Dunois 629 -458 100.00 651 171 -162 6 0

Route de la souterraine - Dun le Palestel 23800

Keolis Creil 250 747 83.97 210 210 -1,511 7,200 246 0

ZI du Marais sec - rue du pont de la brèche sud - Villers Saint-Paul 60780

Voyages Chargélègue 1,291 -1,725 100.00 1,772 0 162 90 0 0

20 rue Grand rue Vasles - 79340 Menigoute

TRANSKEO 1,500 49 51.00 765 765 -7,189 3,618 49 0

266 avenue du Président Wilson - Immeuble Le Stadium - 93200 Saint Denis

Les Coccinelles 100.00 3,942 3,942 0

33 rue Ernest Renan - 94200 Ivry sur Seine

Keolis Val de Marne 10 100.00 50 0 1,061

41 rue Le Corbusier - 94000 Créteil

Keolis Côte Basque Adour 10 100.00 600 600 -2,042

Chemin de Marouette - 64100 Bayonne

Keolis Chauny-Tergnier - La Fère Scolaire 10 100.00 10 10 90

150 avenue Jean Jaurès - 02300 Chauny

Transpole 10 100.00 37 37 0

276 avenue de la Marne - 59700 Marcq en Baroeul

Keolis Caen Mobilité 10 100.00 1,100 1,100 -1,100

15 rue de Geôle - 14000 Caen

Keolis Besançon Mobilités 10 100.00 800 800 -800

5 rue Edouard Branly - 25000 Besançon

KLP19 10 100.00 10 10 0


KLP20 10 100.00 10 10 0


KLP21 10 100.00 10 10 0


KLP22 10 100.00 10 10 0


KLP23 10 100.00 10 10 0


KLP24 10 100.00 10 10 0



130


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


2) Foreign subsidiaries

Keolis Nordic * 100 448,494 100.00 46,034 46,034 0 0 160,750 0

c/o Advokatfirman Vinge KB - Box 1703 - 111 87 Stockholm - Sweden SEK SEK SEK SEK

Keolis Espagne 4,508 -510 100.00 20,445 3,997 -3,925

Via Augusta, 291 - 08017 Barcelona - SpainKeolis Canada inc * 29,569 -32,243 100.00 20,892 20,892 26,629 84,848 -4,481

1 place Ville Marie - H3B 4M7 Montréal - Canada CAD CAD CAD CAD

Keolis UK * 2,000 25,841 100.00 3,059 3,059 -6,218 0 5,852 0

Evergreen Buiding North - 160 Euston Road - NW1 2DX Londres - United Kiingdom

GBP GBP GBP GBP

Keolis Bus Danmark 1,800 169,336 100.00 21,680 21,680 46,288 878,870 13,546 0

2/4, Thorvald Borgs Gade - 2300 Copenhagen - Denmark DKK DKK DKK DKK

Keolis Deutschalnd Gmbh & Co. KG 51 -50,127 100.00 736 0 -25,000 132,975 -10,049

Rheinstrasse 4E - 55116 Mainz - GermanyKeolis Deutschland Verwaltungsgesellschaft Gmbh 26 -17 100.00 26 0 0 0 -1 0

KG Postfach-103255 - 40023 Düsseldorf - GermanyKeolis Vlaanderen 7,349 13,431 100.00 22,708 22,708 0 0 2,958 0

Oosterring 17 - 3600 Genk - BelgiumKeolis America * 78,605 -32,817 100.00 84,155 84,155 95,390 0 -8,595 0

c/o National Corporate Research, 615 South Dupont Highway USD USD USD USD

Dover, Kent County 19901 Delaware - USAKeolis Australie * 32,020 22,201 100.00 22,616 22,616 0 0 6,070 0

140 William Street - VIC 3000 Melbourne - Australia AUD AUD AUD

Keolis Tramway d'Alger * 100.00 198 0 0

2 impasse Bossuet - Alger - Algeria DZD DZD

Eurobus Holding SA 25,000 36,741 100.00 131,453 131,453 0 0 152 0

62 av. de Navagne - 4600 Visé - BelgiumKeolis Hyderabad Mass Rapid Transit System Private Limited 3,500 11,964 100.00 50 50 0 427,353 -5,800 0

Cyber Tower - Q3 L4 - 500081 Hyderabad - India INR INR INR INR

Kilux 13 95 100.00 20 20 827 45 0

Weiswampach - Grand Duché - LuxembourgStriebig Deutschland GmbH 52 583 100.00 1,000 1,000 0 2,732 60 0

Lundelbrunnstrasse 6 - 76887 Bad Bergzabern - Germany KIBEL 37,671 32,535 100.00 81,708 81,708 -171,618 298 682 0

62 av. de Navagne - 4600 Visé - BelgiumSYNTUS 272 2,835 100.00 22,248 22,248 -29 126,931 -7,652 0

5 Visbystraat - 7418 Be Deventer - NetherlandsKeolis Nederland 18 -320 100.00 588 520 7,215 0 2 0

5 Visbystraat - 7418 Be Deventer - NetherlandsRDK 50.00 30 30 396

54 quai de la rapée - 75012 Paris


131

B - NON CONSOLIDATED INVESTMENTS (BETWEEN 10% AND 50% HELD BY COMPANY)


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


1) French subsidiaries

T.I.C.E 182 1,153 19.00 35 35 0 0 0 0

352 rue des Champs Elysées - 91026 Evry 0

Scodec Voyages SCOP 338 617 35.00 111 111 92 0 0 0

La Tuilerie du Vignault - 79140 Cerisay

Kisio Digital 867 2,401 34.02 1,687 1,687 11,509 10,601 -1,413 0

20 bd Poniatowski - 75012 Paris

Trans Pistes 80 -79 40.00 32 0 0 1,017 -13 0

37-39 rue d'Athènes - 13127 Vitrolles

Transports de l'Agglomération de Metz Metropole 2,000 -64 25.00 500 500 0 44,838 19 0

10 rue des intendants Joseph et Ernest Joba - 57000 Metz

Keolis Velizy 359 6,570 40.36 310 310 739 16,971 983 0

12 avenue du Général De Gaulle - 78000 Versailles

Keolis Pays des Volcans 904 581 45.97 416 416 -407 5,371 295 0

14, avenue de la Gare - 63260 Aigueperse

Transbusevry 415 1,398 31.08 138 0 0 1 445 0

266 avenue du Président Wilson - 93200 Saint Denis


132


31 December 2016

Perc

enta

ge

of c

apita

l hel

d at

31

Dec

embe

r 201

7

Gro

ss v

alue

of

secu

ritie

s he

ld a

t 31

Dec

embe

r 201

7

Net

car

ryin

g va

lue

of

sec

uriti

es h

eld

at

31 D

ecem

ber 2

017

Loan

s an

d ad

vanc

es

gran

ted

by th

e C

ompa

ny

and

not r

efun

ded

in

cre

dit a

t 31

Dec

embe

r 201

7

Amou

nt o

f dep

osits

and

gu

arar

ante

es s

uppl

ied

by

the

Com

pany

at

31 D

ecem

ber 2

017

Rev

enue

exc

l. VA

T fo

r fin

anci

al y

ear e

nded

31

/12/

2016

Net

pro

fit o

r los

s (-)

fo

r fina

ncia

l yea

r end

ed

31/1

2/20

16

Div

iden

ds c

olle

cted

by

the

Com

pany

dur

ing

th

e 20

17 fi

nanc

ial y

ear

Shar

e

capi

tal

Oth

er

equi

ty


2) Foreign subsidiaries

Prometro 500 1,906 20.00 100 100 0 31,299 1,140 0

Rua de Campo Alegre 17, 2 - 4150-177 Porto - Portugal

Goldlinq Holdings Pty Ltd (création 2013)

5,749 5,749 0

Level 2,7 Bay Street -Southport Qld 4215 - Australia

Wuhan Tianhe Airport Transport Center Operation and Management Co., Ltd *

1,739 0 40.00 85 85 0 0 0 0

47 Huang Xia He Road - District of Jaang An - Wuhan - China

CNY CNY

Shanghai KEOLIS Public Transport Operation Management Co.*

10,000 -7,366 49.00 724 724 0 6,779 -4,545 0

5F Building No.1 - 909 Gullin Road - 201 103 Shangai - China

CNY CNY CNY CNY

STAR* 1,000 25.00 1,000 1,000 0

Abidjan plateau - Avenue Nogue Immeuble Brodway - 011450 Abidjan - Ivory Coast

CFA BEAC

CFA BEAC

CFA BEAC

*Subsidiaries presented in local currency for Equity, Revenue and Net profit.


133

STATUTORY AUDITORS’ REPORT ON THE FINANCIAL STATEMENTS (FOR THE YEAR ENDED 31 DECEMBER 2017)

To the Shareholders,Keolis 20-22 rue le Peletier75009 Paris

Opinion

In compliance with the engagement entrusted to us by your Annual General Meeting, we have audited the accompanying financial statements of Keolis SA (“the Company”) for the year ended December 31, 2017.

In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as at December 31, 2017 and of the results of its operations for the year then ended in accordance with French accounting principles.

Basis for Opinion

Audit FrameworkWe conducted our audit in accordance with professional stan-dards applicable in France. We believe that the audit evidence we have obtained is sufficient 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 inde-pendence rules applicable to us, for the period from January 1st, 2017 to the date of our report and specifically we did not provide any prohibited non-audit services referred to in the French Code of ethics (code de déontologie) for statutory auditors.

Emphasis of Matter

We draw attention to the following matter described in Note 4 to the financial statements relating to change in the accounting method due to the first application of the settlement ANC 2015-05 of July 2, 2015 related to the hedging instruments. Our opi-nion is not modified in respect of this matter.

Justification of Assessments

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 justification of our assessments, we inform you of the following assessments that, in our professional judgement, were of most significance in our audit of the financial statements of the current period.

These assessments were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on specific items of the financial statements.

This is a translation into English of the statutory auditors’ report on the financial 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 verification 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 .

PricewaterhouseCoopers Audit63 rue de Villiers92208 Neuilly-sur-Seine Cedex672 006 483 R.C.S. Nanterre


Ernst & Young AuditTour First - TSA 1444492037 Paris-La Défense CedexS.A.S. à capital variable344 366 315 R.C.S. Nanterre



134

Accounting estimatesAs part of our assessment, we inform you that our assessments made by us focused on the appropriateness of the accounting principles used and the reasonableness of the significant esti-mates made by the management relating particularly to the fol-lowing matters:

n Measure the recoverable amount of goodwill resulting from technical losses on mergers (note 2.3),

n Measure the value is use of the financial investments and the recoverable value of current accounts and receivables from investments (note 2.3),

n Risks related to current litigations (note 2.7).

Verification of the management report and of the other documents provided to Shareholders

We have also performed, in accordance with professional stan-dards applicable in France, the specific verifications required by French law.

Information given in the management report and in the other documents provided to Shareholders with respect to the financial position and the financial statementsWe have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the management report of the Board of Directors and in the other documents provided to Shareholders with respect to the financial position and the financial statements.

Information related to the Corporate GovernanceWe attest the existence, in the report of the Board of Directors, on the Corporate Governance, of the information required by Articles L.225-37-3 and L.225-37-4 of the French Commercial Code (code de commerce).

Concerning the information given in accordance with the requi-rements of Article L. 225-37-03 of the French Commercial Code (code de commerce) relating to remunerations and benefits received by the directors and any other commitments made in their favour, we have verified its consistency with the financial statements, or with the underlying information used to prepare these financial statements and, where applicable, with the infor-mation obtained by your company from controlling and control-led companies. Based on this work, we attest the accuracy and fair presentation of this information.

Other informationIn accordance with French law, we have verified that the required information concerning the purchase of investments and control-ling interests and the identity of the shareholders and holders of the voting rights has been properly disclosed in the management report.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presen-tation of the financial statements in accordance with French

accounting principles and for such internal control as manage-ment determines is necessary to enable the preparation of finan-cial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is res-ponsible 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 ope-rations.

The financial statements were approved by the Board of Directors.

Statutory Auditors’ Responsibilities for the Audit of the Financial Statements

Our role is to issue a report on the financial statements. Our objective is to obtain reasonable assurance about whether the financial statements as a whole are free from material misstate-ment. 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 influence the economic deci-sions of users taken on the basis of these financial statements.

As specified in Article L.823-10-1 of the French Commercial Code (code de commerce), our statutory audit does not include assurance on the viability of the Company or the quality of mana-gement of the affairs of the Company.

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:

n Identifies and assesses the risks of material misstatement of the financial statements, whether due to fraud or error, designs and performs audit procedures responsive to those risks, and obtains audit evidence considered to be sufficient 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, misrepre-sentations, or the override of internal control.

n Obtains an understanding of internal control relevant to the audit in order to design audit procedures that are appro-priate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.

n Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and rela-ted disclosures made by management in the financial sta-tements.


135

n 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 signi-ficant 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 financial statements or, if such disclosures are not provided or inadequate, to modify the opinion expressed therein.

n Evaluates the overall presentation of the financial state-ments and assesses whether these statements represent the underlying transactions and events in a manner that achieves fair presentation.

PricewaterhouseCoopers Audit

Françoise Garnier-Bel

Ernst & Young Audit

Jérôme Guirauden

Neuilly-sur-Seine and Paris-La-Défense, March 12, 2018

Date post:	23-May-2020
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

KEOLIS S.A. FINANCIAL REPORT 2017 · n HIGHLIGHTS OF THE FINANCIAL YEAR Keolis S.A. carried out a...

Documents