SABCA. Management Report

Transcription

1 2011 Annual report

2 SABCA Management Report Profile of the Group 1 Statutory bodies 2 Chairman s message 3 Message of the Chief Executive Officer 4 1. Principal activities in Business environment and outlook Research and development Human resources Corporate Governance Financial aspects 36 Proposals for resolutions 40 (The detailed annual accounts are inserted hereafter) Annual report SABCA

3 SABCA Profile of the Group Over the last 15 years, the SABCA Group (Société Anonyme Belge de Constructions Aéronautiques and its subsidiary SABCA Limburg) has developed well, now achieving the right balance between its three market segments - aerospace, civil aviation and defence. SABCA is making good use of the synergy and complementarity between these three sectors, not only in its products but also in its engineering and production facilities. The SABCA Group conducts its business at three operating sites located in the three regions of Belgium. The company is involved in Belgian and international programmes either as project supervisor, partner or subcontractor. SABCA s exports represent almost 85% of its turnover. Working in the three main areas, the Group is involved in the study, design and manufacture of structural elements, fitted sub-assemblies and servo systems. As part of its defence support business, it handles the maintenance and modernisation of military aircraft, as well as the production of kits and replacement parts. The Group has always been able to contribute to the realization of special customised products that meet the needs of its customers. With a view to continually improving the aircraft and space launchers in the development of which it is involved, the Group is developing innovative technologies and more efficient manufacturing processes. It also develops facilities for testing and certifying its products and puts a lot of efforts in quality control. The Group also abides by the environmental standards and makes appropriate investments to ensure that this remains the case. Every department complies at all times with the national and international standards required both by civilian and military authorities. The high level of qualification demanded of staff is provided by training programmes organised by the human resources department. The Group is attuned to a globalised marketplace. It works with numerous partners and has gradually built up a network of international relations. Within Belgium, given the nature of its activities and the crucial role played by the authorities, the Group is devoted to operating as an industrial player at both the federal and regional levels. The Group is characterised by its operating flexibility and the efficiency created by working as a team with customers, starting from the design stage and going through to qualification, production, delivery and after-sales service. Controlling the development of costs is one of the Group s ongoing objectives. The Group conducts a policy of investing in and developing technologies in its various areas of excellence, while at the same time using the services of subcontractors in an appropriate manner, notably in response to the customers wishes. Annual report SABCA > 1

4 SABCA STATUTORY BODIES SABCA Board of directors (and the expire date of current term) Chairman Remo Pellichero (2013) Daniel Blondeel Charles Edelstenne Guy Piras Loïk Segalen Chief Executive Officer Daniel Blondeel (2016) Directors Charles Edelstenne, Chairman and Chief Executive Officer Dassault Aviation 1 (2016) Guy Piras, Executive Vice-President Industrial Operations, Procurement and Purchasing Dassault Aviation until December 31 th, Benoît Berger, Executive Vice-President Industrial Operations, Procurement and Purchasing Dassault Aviation from January 1 th, (2016) Loïk Segalen, Executive Vice-President, Economic and Social Affairs Dassault Aviation 1 (2014) Sjoerd Vollebregt, Chairman and Chief Executive Officer Fokker Technologies Holding B.V. 2 (2016) Henk Valk, Executive Vice President Fokker Aerostructures B.V. 2 (2016) S.A. Gefor represented by its CEO Jacques de Smet, independent director (2014) S.A. C.G.O. represented by its CEO Philippe Delaunois, independent director (2016) Auditor Mazars Bedrijfsrevisoren-Réviseurs d Entreprises SCRL, represented by Xavier Doyen, Company Auditor SABCA Limburg Sjoerd Vollebregt Jacques de Smet Henk Valk Philippe Delaunois Board of directors (and the expire date of current term) Chairman Remo Pellichero (2013) Chief Executive Officer Daniel Blondeel (2012) 1 Elected on the proposal of the Dassault Group 2 Elected on the proposal of the Stork Group Directors Loïk Segalen, Executive Vice-President, Economic and Social Affairs Dassault Aviation 1 (2015) Ruben J.H. Hutten, Director Finance Fokker Elmo B.V. 2, until March 3 d, 2011 Remco Smit, Chief Financial Officer Fokker Technologies Holding B.V. 2, from March 4 th, 2011 (2016) Commissaire Mazars Bedrijfsrevisoren-Réviseurs d Entreprises SCRL, represented by Lieven ACKE, Company Auditor > 2 Annual report SABCA

5 SABCA Chairman s Message In the course of the 2011 financial year, the company made progress in increasing its productivity to maintain a satisfactory result. The company s continuing high workload bodes well for future turnover. The Group achieved a net result of 9% of turnover, despite a very unsettled operating environment. Remo Pellichero In this context the company will be proposing to the Annual General Meeting to maintain the dividend at its 2010 level, distributing 2.11 million EUR (equivalent to EUR 0.88 per share gross or EUR 0.66 net). Cash flow improved and our backlog, now standing at 407 million EUR, represents more than 3 years of work. Aerospace business held up well in 2011 and orders placed with Arianespace bode well for high production levels in the future. However, the Ariane development programmes are coming to an end and new projects will need to be launched to face up to competition. The ongoing discussions within the European Space Agency and the Member States and the directions they take are crucial for the sector s long-term prospects. The February 2012 success of the Vega launcher has cemented the new niche of excellence developed by SABCA regarding the positioning of the nozzles of rocket engines. In the field of aircraft modernisation, ongoing programmes are keeping our engineering and production facilities very busy. Nevertheless, the budget restrictions affecting many countries throughout the world could have a significant impact on outlook. In the field of civil aviation, order books are now leading to major production increases from which SABCA is set to benefit. The dollar level which worried us in the past improved somewhat at the end of the financial year, though customer pressure on margins remains very strong. In line with new legislation, the remunerations committee was established in Similarly, the Corporate Governance Charter was also completed. Though the Group is coping successfully with the crisis, competition is continuing to grow in all its markets, meaning that SABCA needs to keep improving considerably to maintain the good performance guaranteeing its future. Remo PELLICHERO Annual report SABCA > 3

6 SABCA Message of the Chief Executive Officer SABCA faces new challenges Our company has three business fields: civil aviation, aerospace and defence. In civil aviation, the increases in the production rates of aircraft with more than 100 seats are expected to reach levels unimaginable several years ago. Looking for instance at the work on the Airbus A320, A330 or A380, we can expect major increases in growth rates in Our plants in Brussels and Lummen are well prepared for this, with strict yet voluntary management being applied to personnel, investments and our supply chain. Looking at business aircraft, we hope to see the market recovering in the second half of the year. Though benefiting from the positive impact on our workload in civil aviation, we need to point out that price levels remain very low, despite an unstable U.S. dollar and rising material and staff costs. Finally our engineering offices have also been hard at work on the new structural programmes for the Airbus A350 XWB, for which we are developing the FSS (Flap Support Structures) and the FSF (Flap Support Fairings), as well as on Dassault Aviation s new business plane, the SMS, for which we are responsible for designing and developing part of the rear fuselage. Following the installation of a very large autoclave in 2010, our subsidiary SABCA Limburg in 2011 invested in a new paint booth enabling it to treat even large dimension elements, and in an ultrasonic inspection Daniel Blondeel system, allowing it to strengthen its position in the production of composite horizontal stabilisers. In this context, SABCA Limburg won the contract for the horizontal stabiliser for the Dassault SMS, on top of the ones it already has for the Falcon and the Gulfstream 650. Turning to aerospace, February 2012 saw the successful test flight of the small Vega launcher, representing an important victory for the European space community and in particular for SABCA. The lower cylindrical structure supporting the whole weight of the rocket before lift-off, and the electromechanical guidance system of the nozzle of each engine of the launcher s four stages, operated exactly as designed during the test flight. Vega s SABCA-designed Thrust Vector Control (TVC) consists of the control and thrust electronics, the guidance software and the actuators. Vega opens up a new market for launching small satellites and we can expect to supply these TVCs for two launchers a year to start with. Furthermore, with 5 launches in 2011 Ariane 5 is set to return to an annual rate of 6-7 launches in the coming years. SABCA continues to assert its presence in the everchanging world of aerospace. > 4 Annual report SABCA

7 SABCA The Executive Committee (ComEx). From the left to the right : R. De Dobbeleer, P. De Graef, D. Blondeel, J.M. Lefèvre, M. Humblet However, challenges remain for the Ariane launchers: the adoption of the A5ME programme, discussions on Ariane 6, Arianespace consolidation, continuing productivity improvements against a background of new non-european players entering the market. Turning to defence, we are proud of the great success notched up with the signing of the F16 USAFE maintenance contract against extremely tough international competition. Nevertheless with budget restrictions in force in both Europe and the United States, workload is set to again drop. This remains a worry for the future of our defence operations at our Charleroi plant. We will continue fighting for new export contracts as we have been doing over the last few years. The political context, in particular in North Africa, is of course acting as a dampener on our short-term prospects. On the other hand, A400M production rates are increasing at a significant pace. In the current economic environment, the volatile dollar, inflation, raw material prices are all factors needing to be closely monitored. It is crucial for SABCA to remain within the leading group of companies supplying the prime contractors. To achieve this, there are a number of challenges needing to be met. The willingness of our staff to meet up to these challenges in a positive spirit bolsters our firm conviction that SABCA will continue to be successful in the future. Daniel BLONDEEL Annual report SABCA > 5

8 SABCA 1Principal activities in 2011 Ariane 5. Installation of the equipment in the front skirt (JAV) by SABCA Limburg AEROSPACE Ariane 5 There can be no doubt that 9 years of uninterrupted success make the Ariane 5 launcher the No. 1 launcher for heavy payloads - and SABCA is a significant contributor to this success. A total of 5 Ariane 5 rockets were launched in 2011, putting into orbit the ATV2 (Automated Transfer Vehicle) and 8 geo-stationary telecom satellites. Arianespace has already scheduled 7 lift-offs for In 2011, SABCA continued producing structural elements, including the Rear Skirt (JAR), the Front Skirt (JAV), the Front Cone of the Powder Acceleration Stages, as well as the acceleration rocket frames (ARF) for the ECA s Upper Cryogenic Stage. It also supplied the engine activation groups (GAM), the nozzle activation groups (GAT), the pneumatic snatch off connectors (PCP), and the hydraulic servomotor subsystems (GHSM) for 6 launchers. Installing this equipment in the skirts was carried out by SABCA Limburg, which was responsible for final customer shipment. > 6 Annual report SABCA

9 SABCA Vega Once certification of the test models was obtained, the TVCs (Thrust Vector Controls) for each of the four stages of the first flight prototype (Flight Model 1 - FM1) were upgraded and shipped to the customer in the first half of After having them checked through and tested, the customer shipped them to the launch site in Guyana in autumn With the Flight Readiness Review (FRR) held in October 2011, we entered the final stretch, capped by the successful maiden flight of the prototype of this small European launcher (Vega VV01) on 13 February Following the certification of the TVCs and of the 0/1 inter-stage skirt for the first launch, SABCA has started work on a second set of TVCs and structural elements with the same specifications. The signing of the framework contract for the production of 5 launchers as part of the VERTA (Vega Research and Technology Accompaniment) programme was followed later in the year by concrete orders for the components of these 5 launchers. Annual report SABCA > 7

10 SABCA CIVIL AVIATION 2011 was a record year for our main client Airbus, recording more than 1400 orders for new aircraft and delivering 534, almost 5% more than in the previous year. This increase in aircraft deliveries to airlines is already having an effect on SABCA and SABCA Limburg production and customer shipments. AIRBUS A380 Year-end 2011 saw the Airbus order book containing orders for 253 of these very large airliners from 19 airlines; 67 of the aircraft have already been delivered, including 26 in For its part, SABCA delivered 26 rear lower shells (commonly known as the T-shape) in 2011, 9 more than in 2010, a rise of 50%. October saw SABCA delivering the 100th T-shape for this programme. Shipments to the Airbus plant in Saint-Nazaire reached three a month at the end of the year. The number of modifications taking account of the specific needs of individual airlines (customizations) remains high, regularly necessitating work having to be done at Airbus plants. The development of the 800e ( enhanced ) and the manufacturing engineering work are now nearing completion, with the first plane of this version destined for British Airways. AIRBUS A /600 Given the new regulations favouring the use of twinengine planes, production of this four-engine plane is now stopped. The quantity of aircraft actually delivered represents only a third of the programme s initially forecast volume. As regards the manufacture of pressurised floors at the Brussels plant and of flap track fairings at the Lummen plant, both halted for the last two years, it is now planned to dismantle and store the production equipment. All work within this programme will now focus on after-sales service, with a particular focus on replacement parts. AIRBUS A330/A /300 The twin-engine A330 remains a very popular aircraft and production is expected to continue for many more years. Almost 100 planes of this family were ordered from Airbus in 2011 and the size of the order book promises further increases in workload over the next three years. Deliveries of the fully-equipped tail cones by SABCA s Brussels plant increased by more than 10% against We are now producing 9 cones a month and Airbus has announced an increase to 10 or even 11 cones a month. SABCA Limburg supplies the composite maintenance doors for the same aircraft. > 8 Annual report SABCA

11 SABCA Falcon jet of Dassault Aviation. Assembly of a karman A350 XWB : Cantilever rib for station 2 AIRBUS A318/A319/A320/A321 A new member of this single-aisle family, the A320neo with its alternative engine configuration got off to a great start, already clocking up 1250 firm orders. All in all, a total of 1470 aircraft were added to the already well-filled order book of this family in This has a favourable influence on work at the SABCA Limburg plant in Lummen, which supplies all the composite ribs of the aircraft s vertical stabilizer. For its part, SABCA s Brussels plant continues to supply direct drive valves (DDV) to Messier Bugatti, which in turn builds the equipment into the braking systems of these aircraft. AIRBUS A350 XWB In the face of numerous technical challenges and despite the slip in the programme s schedule, priority is being given to harmonising development, tooling and production work at SABCA, SABCA Limburg and at the subcontractors to meet customer requirements with regard to development and delivery schedules. The flap support beams, designed, manufactured and assembled at SABCA s Brussels plant and destined for the first flight prototype and other ground test prototypes, were shipped to Airbus at Filton and its subcontractor GKN in These will soon be followed by the support levers and other metal components. Production of flap support fairings is also on-going at SABCA Limburg, with first deliveries to the Airbus Bremen plant scheduled for the first half of Annual report SABCA > 9

12 SABCA 2011 saw the negotiation and signing of industrial cooperation contracts, and the progressive implementation of the supply chain. With regard to the A350 XWB-1000 version, we were involved in the initial engineering studies carried out by Airbus. However, the programme s original schedule has been moved back. DASSAULT Aviation In 2011 SABCA was awarded a major development and production contract by Dassault Aviation for its SMS business aircraft. The work won by SABCA consists of designing and producing a rear part of the fuselage, made up of machined, formed and assembled panels. A team from SABCA s engineering office was involved in the development of this assembly, working on-site at Dassault Aviation. For its part, SABCA Limburg has been assigned the work of constructing the horizontal stabiliser (HTP) with integrated stiffeners; the HTP spars are also included in the work. > 10 Annual report SABCA

13 SABCA A10. Maintenance activities in Charleroi Hydraulic testing in SABCA in Charleroi Alpha-Jet during modernisation SABCA continued manufacturing the panels of the F7X rear tank for Dassault Aviation plant in Seclin in These large-sized panels are machined in Brussels. The karman assembly work for the Argenteuil plant was also resumed. In addition, SABCA also delivered the mechanical, electrical, hydraulic and pneumatic equipment for these programmes. SABCA is also responsible for repair and maintenance work on the Alpha-Jet servo controls for French and export needs. An agreement was signed in February with Dassault Equipment. GULFSTREAM 650 On 18 November 2011, the Federal Aviation Administration (FAA) awarded a provisional certificate of airworthiness for this new business aircraft, with final certification expected in SABCA Limburg is responsible for building the composite structural elements of the horizontal stabiliser. By the end of 2011, elements for 30 aircraft had already been shipped to our customer Fokker Aerostructures, the company responsible for assembling the aircraft s tailplane. Annual report SABCA > 11

14 SABCA F16. Ready for flight tests DEFENCE SABCA in Charleroi The Charleroi plant continued its maintenance and modernisation work on aircraft, helicopters and accessories for both the Belgian and foreign armed forces. The work done for Belgium remained on the same level as The programme for modernising the Alpha-Jets continues, with the modification gaining the certification of the French authorities in the course of Deliveries of standard modification kits continued. Looking at the other Alpha-jet export programme, the modifications were installed in the prototype, with ground tests starting at the end of The volume of F16 export work remained very high, with the painting programme for the Netherlands Air Force being completed and a new Depot maintenance contract for the USAFE ( ) being obtained following an international tender by the U.S. administration. As regards A10 aircraft, the workload remained high. Nevertheless policy changes and budget restrictions are a concern, especially with the announcement that A10 aircraft based in Europe are to be pulled out. The production of 31 F16 MLU (Mid Life Update) kits for Lockheed continues, with 24 kits delivered by the end of An order for a further 10 kits was booked. These are to be supplied from late 2012 onwards. > 12 Annual report SABCA

15 SABCA Electrical wiring in Charleroi Work into the avionic rack of a F16 Various modifications were carried out on the Belgian A109 helicopter fleet. SABCA in Brussels and SABCA Limburg in Lummen In 2011, after all the difficulties experienced in 2010, Airbus Military S.L. finally completed the revision of the contract with OCCAR. 170 aircraft (plus 10 options) have been ordered by OCCAR, with a further four by Malaysia. The flight test programme is now nearing its end. Airworthiness certification is expected before the end of 2012, with the first aircraft set to be delivered to France in The final assembly of this plane has now started in Seville. In 2011 SABCA supplied Airbus with the flap deployment mechanisms for MSN 7 and 8, while SABCA Limburg delivered composite flap fairings for the same aircraft to the Airbus plant in Bremen. Annual report SABCA > 13

16 SABCA Workshop of top skins for horizontal tail planes in SABCA Limburg QUALITY With work having started in 2011, SABCA s Quality Management system is being upgraded to make it compliant with the new version of EN9100 which becomes mandatory as of mid The concepts of risk analysis and customer satisfaction have been completely revised, along with various process indicators. SABCA again successfully passed a PRI-NADCAP audit of its chemical surface treatments in 2011, meaning that it is now re-certified until July At the end of 2011, our SABCA Limburg subsidiary passed its transition audit, receiving its certification for the new version of EN9100 at the beginning of SABCA Limburg was also audited in 2011 by Belgian s aviation authority, and hopes to soon gain Production Organisation Approval (POA) under Regulation EASA PART 21/G. > 14 Annual report SABCA

17 SABCA ENVIRONMENT In 2011, SABCA took the first step towards gaining ISO certification, with the certification agency AFNOR Certification awarding it the first-step FDX certificate ( step-by-step Environmental Management System, level 1 of 3 ). For SABCA customers, this is a guarantee that the company is voluntarily committed to a process that should eventually lead to full ISO certification. INDUSTRIAL INVESTMENT PROJECTS At the Brussels plant, construction of the new building housing surface treatment and painting facilities is now finished, with the equipment installed in the fourth quarter of A 3-month test period with last adjustments to the facilities will be followed by a further 3-month period during which acceptance tests will be done on the various processes. A new painting booth for large-size objects has come into service at SABCA Limburg, allowing a primer coat of paint to be applied to even the largest items. This new equipment will also allow the final coat of paint to be applied to the A350 flap fairings. MOVEMENTS IN THE US DOLLAR EXCHANGE RATE Through its policy for managing exchange rate risks on its current contracts, the company continued to attenuate the effects of the persistent weakness in the US dollar in The company organises its purchases of goods and services in foreign currency in order to restrict any residual exchange risk. However, the level of the US dollar remains a determining factor for the future of the company. ORDERS SABCA orders reached 147 million EUR in 2011, taking the order book to 407 million EUR. This order book includes an amount of 164 million EUR that corresponds to SABCA s contractual participation in firm orders received by its customers and for which confirmation is only given shortly before delivery. Annual report SABCA > 15

18 SABCA 2Business Environment and Outlook AEROSPACE 2012 is set to be a pivotal year for the European launcher industry. Preliminary work on a new upper stage to the Ariane 5 carried out in 2010 and 2011 should enable the Council of Ministers of the countries belonging to the European Space Agency (ESA) to take the decision to go ahead with the development of this new stage. The ministerial conference is scheduled for November 2012, and SABCA, following a tender put out by Astrium-ST, hopes to soon start work on implementing the nozzle servo-controls for the third stage of the A5ME (Ariane 5 Midlife Evolution). The success of the first test flight of the small launcher, Vega, opens the door to its further development. Different avenues are envisaged. SABCA is counting on perfecting the new generation activation systems which it has successfully developed but for which cost reductions are to be studied. Discussions on the future (post-2025) launcher are on the agenda, with the preliminary requirement being to define market needs and design the launcher best responding to these needs. If on top of all this, we add Europe s wish to maintain independent access to space, and the necessity to keep operating costs under control, the ministerial conference at the end of 2012 is set to represent a major step for ESA and its industrial partners. > 16 Annual report SABCA

19 SABCA Beam A350 on the 3D measure bench in Brussels CIVIL AVIATION Given the excellent health of the Airbus programmes and the slight recovery of the market for business aircraft, production rates at both the Brussels and the Lummen plants are set to rise for the next few years. further prototype for mechanical tests in June The pre-series is due to start in September 2013, with series production starting in Talks are currently being conducted with Dassault Aviation aimed at increasing SABCA s scope of responsibility for this new aircraft. At both Brussels and Lummen, the development and production start of the A350 XWB programme is expected to take up a large share of resources in At the same time the sustained delivery rate for the A380 programme is being maintained. Following the development work on the Dassault SMS, pre-production work on the part of the fuselage is due to start in the course of will also see production starting for the first elements, with a first flight prototype ready for delivery in April 2013 and a Moreover, a new 5-year contract transferring activities has been signed with Dassault Equipement, relating to the assembly of various servo-controls for the F900, F2000 and F7X. Tooling is currently underway, with the testbeds and other equipment being manufactured and a dedicated workshop being fitted out. Certification is expected to be obtained in December, allowing the transfer to be finalised before the end of Annual report SABCA > 17

20 SABCA Gulfstream 650. Top skin horizontal tail plane At SABCA Limburg, the upcoming delivery of the first flap supports fairings for the A350 XWB to the Airbus plant in Bremen will quickly be followed by increased production rates. the basis of the unique experience and know-how gained through working with the Belgian armed forces and other users of the plane over the last thirty years, especially in the field of repairing wing surfaces. The current economic upturn and the accompanying increase in demand for certain business aircraft should also see us delivering more composite elements both for the Gulfstream 650 and for Dassault s Falcon jets. Over and above the F16, the modernisation programmes currently running are leveraged when looking for export opportunities. This strong reliance on commercial export success is of major concern for Charleroi, whose workload is expected to decline throughout DEFENCE SABCA in Charleroi The company s aim is to consolidate F16 business on SABCA in Brussels and SABCA Limburg in Lummen After gradually resuming production in 2011, the A400M programme is set to pick up speed in with five deliveries - and to reach a steady rate of up > 18 Annual report SABCA

21 SABCA Automatic tape-layer for composite materials at SABCA Limburg to three deliveries per month in the medium term. Thanks to its dual certification as both a civilian and military plane, the A400M can be expected to gain a good position on export markets, thereby consolidating the backlog for the Airbus Military S.L. QUALITY SABCA Limburg is expected to gain PRI-NADCAP certification in 2012 for the manufacture and inspection of elements made of composite materials. At all its plants, SABCA is looking to complete its analyse of causes of defects with a view to significantly reducing their occurrence. SABCA is set to pass its so-called transition audit in May 2012, giving it certification for the new 2009 version of EN9100. In the field of civil aviation, the Brussels plant should soon be seeing its Production Organisation Approval (POA) under EASA PART 21/G being extended to cover on the one hand the Airbus A350 XWB wing-flap mechanisms and fairings, and on the other hand the servo-controls under the Dassault Aviation contracts. The Charleroi plant will continue in 2012 to implement the prerequisites for gaining Part 145 maintenance organisation approval for civil aviation equipment in the medium term. ENVIRONMENT The second step of the process of introducing an Environmental Management System in line with ISO is now underway. This means that a number of management systems are currently being defined and introduced on the shop floor, such as waste sorting, environmental audits, the management of workplace environmental risks, environmental emergency plans, etc. This work should enable us to complete the second step of ISO certification in 2013, as the second of three steps proposed by the certification agency, AFNOR Certification. Annual report SABCA > 19

22 SABCA 3Research and Development AEROSPACE A5ME (Ariane 5 Midlife Evolution) Following the feasibility and risk reduction studies, SABCA has now started the preliminary design phase. Ariane 6 or the Future European Launcher (FEL) Whichever configuration is chosen, the new Ariane 5 upper stage is set to become one of the first building blocks of the new Ariane 6 launcher. Even so, new and totally innovative concepts are being studied or developed at SABCA, aimed at boosting overall performance while at the same time cutting overall costs. Here again, SABCA is leveraging its aerospace experience, making great use of various comparative studies already completed. IXV (Intermediate experimental Vehicle) In late 2011, SABCA was awarded the contract for Phase D (tooling, production and testing) of the Flap Control System (FpCS) by Thales Alenia Space Italy (TAS-I). The tight schedule is a challenge for SABCA, with the delivery of Prototype Flight Model (PFM) due in March 2013 and the FpCS test review in July The IXV, an experimental vehicle for collecting data on re-entry into the atmosphere, is expected to be put on a 415 km orbit by the Vega launcher in the course of The activation of the flaps by a SABCAdeveloped system will take place during a mission phase at an altitude between 120 km and 30 km. > 20 Annual report SABCA

23 SABCA Ariane 5. Measuring the damping device DIAS Expert Throughout 2011, SABCA provided technical support for the system tests of the experimental vehicle Expert, with the plasma wind tunnels Sirocco in Italy and Plasmatron in Belgium benefiting most from this support. The launch of Expert is scheduled for spring Expert is a space capsule similarly used for collecting data on re-entry into the atmosphere after a suborbital flight. Vega SABCA will be assisting ELV in evaluating the first test flight, proposing improvement for future launchers via the Vega Evolution programme. A few additional tests for the TVCs (Thrust Vector Control) are also envisaged. CIVIL AVIATION AIRBUS A380 Development of the Airbus A e is now coming to a close, with the first structure delivered to Airbus in January The certification files are to be consolidated and delivered in the first half of A350 XWB The degree of maturity reached in development enabled the production and delivery of the first parts fixed to the wing for flight and ground tests. The qualification tests for the manufacturing processes of the composite parts have now started. Research into ways of optimising the weight of the certification configuration is underway. At the same time, Airbus has started preliminary design on the A350 XWB-1000 version, again with SABCA contribution. AIRBUS A320 A new configuration for the direct drive valves (DDV) - part of the A320 family braking systems - is currently being developed. Certification of this equipment is expected to be completed in Annual report SABCA > 21

24 SABCA Ariane 5. Structural riveting of the rear skirt (JAR) DASSAULT SMS The development phase requiring our engineers to work on-site at the Dassault plant was completed at the end of Development work is now continuing at the SABCA plant in Brussels, with the critical design review (CDR) due to be passed before the end of After the delivery of the test components, our team will then devote all their attention to the certification files. clocked up 2700 flight hours by the end of The static tests have been successfully completed, while the fatigue tests begun in October 2010 have gone through a whole simulated life without showing any problems. These will continue in The certification files for the wing flap mechanisms for which SABCA is responsible - including the test flight results - are currently being validated by Airbus. Civil airworthiness certification is expected to be gained in DEFENCE SABCA in Brussels The A400M flight and ground tests are continuing at Airbus, with the test aircraft having already SABCA in Charleroi The engineering office is working on the modernisation of training aircraft. Development of the Alpha-Jet modernisation kit for export is now coming to a close. > 22 Annual report SABCA

25 SABCA Hydraulic tests in Charleroi Giam zzriuscidui blam, core eumsandre faccumm oloreet augait at. Oluptat erilisi. A10. Overhaul in Charleroi In its role as aircraft manufacturer, SABCA is building the prototype, conducting the ground and flight tests needed for certifying this new configuration. Projects for adapting other types of training aircraft are in a pre-technical-commercial study phase. Studies are also proceeding on various adaptations of the A109 helicopter (installation of new equipment, electrical modifications, etc.). Automatic Fibre Placement (AFP), a method allowing the production of sharply curved parts. This method could also prove to be interesting for manufacturing structures with numerous changes of thickness. The injection of resin into dry fibres has the advantage of extremely precise tolerances of the two surfaces through the use of a hot press. COMPOSITE MATERIALS With the technical and financial support of the Walloon Region and the Brussels-Capital Region, and in collaboration with the universities and various industrial partners, SABCA is continuing its research into alternative processes of manufacturing composite materials. Manufacturing processes constituting a potential alternative to the pre-preg process include: Demonstrators matching SABCA s strategic products will ultimately allow us to evaluate the production concepts and their technical and economic potential. At the same time, new inspection methods are being looked into. The growing complexity of structures indeed makes access to certain areas difficult or even impossible, given their closed or semi-closed form. Non-destructive methods are being researched and tested with a view to improving inspection speed and effectiveness. Annual report SABCA > 23

26 SABCA 4Human Resources Headcount development On 31 December 2011, SABCA employed 964 people. New engineers have been hired to boost structural engineering teams in the context of our development contracts for the Airbus A350 XWB and the Dassault Aviation SMS business aircraft. At the same time, production requirements at our Brussels plant are leading to us hiring skilled blue collar workers. Specific training courses were held for all staff in the context of changing our system. For the fourth year in a row, a technical training programme targeted job seekers in the Brussels-Capital Region, in collaboration with Actiris and Iristech+, a sector training organisation. Several participants of this on-site training programme were subsequently hired by SABCA. Training SABCA attaches particular importance to its staff undergoing continued training with a view to ensuring that existing competencies are permanently updated and new ones acquired. > 24 Annual report SABCA

27 SABCA A10. work into service room Maintaining skills Given the difficulties encountered in recruiting staff with the right competencies at the right time, SABCA has introduced a mentoring system aimed at ensuring that the competencies necessary to the company are maintained in the long-term. This project involves taking stock of existing competencies and identifying staff with such skills and capable of passing them on. Health and safety Training in ways of preventing accidents and in safety in general is regularly provided for both old-hands and new-hires. Evolution of the staff (SABCA Group) Annual report SABCA > 25

28 SABCA Corporate 5Governance Statement As a Belgian company listed on the NYSE Euronext market of Brussels, SABCA S.A. ( SABCA or the company ) complies in principle with corporate governance as defined and drawn up in the 2009 edition of the Belgian Corporate Governance Code (CGC). This code is available on the website > 26 Annual report SABCA

29 SABCA ARIANE 5. Milled part GAT (Nozzles Activation Group) As recommended by the CGC, a corporate governance charter has been established and has been approved by the board of directors of 13 September 2011 ; in accordance with legal requirements, the charter has been posted on the company s website www. sabca.com, in a section named Investor Corner, clearly split from the commercial information. The charter may be reviewed from time to time. The board of directors of SABCA recognize the importance of diversity in general and of gender diversity in particular. The board will pay a special attention to this aspect when identifying candidates for future nominations of directors. Taking into account the size and the situation of the company, as well as the specific structure of its shareholding, the board has considered that it is reasonable for the company not to fully comply with certain provisions of the Belgian Corporate Governance Code. These derogations concern the following provisions : Provision 2.3 : At least one half of the board should comprise non-executive directors and at least three of them should be independent [ ] Since 20 th January 2011 the board comprise nine directors who are all non-executive, excepted for the CEO. Two of the non-executive directors satisfy the independence criteria. Because of the specific structure of its shareholding the company considers that the appointment of a third independent director would presently not contribute to the managing or controlling role of the board. Provision 4.1 : There should be a rigorous and transparent procedure for an efficient appointment and re-appointment of directors. The board should draw up nomination procedures and selection criteria for board members, including specific rules for executive and non-executive directors where appropriate. Due to the structure of the shareholding of the company, comprising one majority shareholder and a second leading shareholder, the company has not yet established specific procedures related to the appointment of directors. The board itself, led by the chairman, decides the appointments and possible reappointments to be proposed to the general shareholders meeting. For the same reason, the company has not created a nomination committee (see provision 5.3 hereafter). This implies that the company derogates to all provisions of the CGC calling for a proposal or recommendation by the nomination committee when directors or the management are to be nominated or assessed. It is the case for the following provisions of the code : 4.2 : [ ] The nomination committee should recommend suitable candidates to the board. [ ] 4.6 : [ ] accompanied by a recommendation from the board, based on the advice of the nomination committee 5.3 : see hereafter 6.3 : The nomination committee should assist the board on the nomination and succession planning of the CEO and the other members of the executive management [ ] Appendix D : nomination committee. Annual report SABCA > 27

30 SABCA Provision 5.3 : [ ] The board should set up a nomination committee following the provisions set out in Appendix D. The reasons why the board has not created a nomination committee until now are given in the justification of provision 4.1 here-above. 1. Composition of the board of directors of SABCA 1.1. There are currently nine members of the board; the list of members, plus an indication of the main function they exercise outside SABCA and the shareholder at whose proposal they were elected, is shown on page 2. Excepted for the CEO, all members of the board are non-executive directors ; two of them are independent directors The board has not adopted any particular rules, either in relation to a possible age limit for its members, or with regard to exercising the position of director. 2. Functioning of the board of directors 2.1. Frequency of meetings The board of directors meet whenever the company s interest so requires. This frequency enables the board to examine amongst others the half-yearly accounts (in August and in September) and the annual accounts (in March), as well as any investments (in December). The board met on five occasions in Attendance of directors at board meetings M. Remo Pellichero 5 M. Daniel Blondeel 5 M. Charles Edelstenne 4 M. Guy Piras 4 M. Loïk Segalen 5 M. Sjoerd Vollebregt 5 M. Henk Valk 3 M. Jacques de Smet 1 5 M. Philippe Delaunois representing S.A. Gefor 2 representing S.A. C.G.O Competence In absence of any statutory restrictions, the board holds all of the powers assigned by law. The board determines the strategic and short-term objectives for the company; it approves and decides on the means to be implemented in order to achieve these objectives. At each meeting and in a general manner, the board reviews all operating issues that affect the company Control of the day-to-day management At each board meeting, the CEO, Mr Daniel Blondeel, reports on the progress of business, the search for new business and market prospects, as well as the order book, financial situation and opportunities for investing or disinvesting Invited participants Members of the executive committee (ComEx) are traditionally invited to attend board meetings. > 28 Annual report SABCA

31 SABCA 3. Committees created by the board of directors 3.1. Permanent committee The permanent committee has been in existence since The members are : the chairman, Mr Remo Pellichero, the CEO, Mr Daniel Blondeel, and two representatives chosen by the main shareholders. For 2011, these two representatives were Mr Loïk Segalen (Dassault Aviation) and Mr Remco Smit (Fokker Technologies Holding B.V.). Other members of the permanent committee are Mr Jacques de Smet, independent director representing S.A. Gefor, Mr. Philippe Delaunois, independent director representing S.A. C.G.O., the CFO, Mr Raymond De Dobbeleer, and any other adviser that the permanent committee deems appropriate. In general, the permanent committee meets before board meetings. It assists the board of directors in preparing its decisions. The permanent committee met three times in Attendance of directors at permanent committee meetings M. Remo Pellichero 3 M. Daniel Blondeel 3 M. Loïk Segalen 3 M. Jacques de Smet 1 3 M. Philippe Delaunois representing S.A. Gefor 2 representing S.A. C.G.O Audit committee The audit committee instituted pursuant to the law of 17 th December 2008 is chaired by Mr Jacques de Smet, independent director conversant with matters relating to accounting and auditing, and representing S.A. Gefor. The non-executive directors, Mr Loïk Segalen and Mr Sjoerd Vollebregt are the other members of the committee. From time to time the committee is assisted by the external auditor, the CEO, the CFO, the internal auditor also in charge of risks management, and any other adviser as deems adequate. An internal procedure for the audit committee has been established. The audit committee reports to the board on the exercise of its duties making recommendations as regards steps to be taken. In 2011 the audit committee met five times, in particular to examine the company s half-yearly and annual statutory and consolidated accounts ; it also examined the results of the audit programme that aimed at monitoring the effectiveness of the internal control and risk management systems. On recommendation of the audit committee to the board of directors, the responsibility of internal audit and risk management are now merged into one function reporting directly to the CEO. A staff member is appointed full-time to ensure this double responsibility. As a first assignment, this person established an audit charter and an audit programme to ensure the effectiveness of the systems of internal control and risk detection and management, in order to improve the performance level of the company. Attendance of directors at audit committee meetings M. Jacques de Smet 1 5 M. Loïk Segalen 3 M. Sjoerd Vollebregt 3 1 representing S.A. Gefor Annual report SABCA > 29

32 SABCA 4. Day-to-day management The board chooses the person responsible for day-today management from among its members or not (articles 11 and 20 of the articles of association). Day-to-day management of the company is executed by the CEO, Mr Daniel Blondeel. An executive committee (ComEx) and an operational committee (COp) chaired by the CEO, Mr Daniel Blondeel, meet once a month and contribute towards the day-to-day management of the company. Operational committee D. Blondeel* Chief Executive Officer M. Humblet* Marketing & Sales Direction P. De Graef* Brussels Site Direction J.M. Lefèvre* Charleroi Site Direction R. De Dobbeleer* Financial Direction A. Ghysens Human Resources Department A. Baus Information Systems Department J.M. Sonkes Quality Department M. Dubois Supply Chain Department * Member of Executive Committee (ComEx) The members of the ComEx for 2011 were : Messrs Daniel Blondeel, chief executive officer, Raymond De Dobbeleer, chief financial officer, Marc Humblet, marketing and sales manager, Jean-Marie Lefèvre, manager of the Charleroi site, Pierre De Graef, manager of the Brussels site. 5. Appropriation of retained earnings policy In its proposals to the general meeting of shareholders, the board of directors aims at reconciling the high level of investments required for the company s aerospace activities with a reasonable return on capital. The members of the COp for 2011 were : the members of the ComEx, plus Messrs Jean-Michel Sonkes, head of quality department, André Ghysens, head of human resources department, André Baus, head of information systems department and Marc Dubois, head of supply chain department. Mr Peter Reynaert is the general manager of the subsidiary SABCA Limburg. 6. Shareholders Dassault Belgique Aviation S.A., a virtually 100% subsidiary of the Marcel Dassault Industrial Group, holds 53.28% of the company s capital. The Dutch company, Stork B.V., holds 43.57% of the capital notably through its subsidiary, Fokker Aerostructures B.V. The balance of 3.15% is quoted on the NYSE Euronext market in Brussels. > 30 Annual report SABCA

33 SABCA 7. Related-party transactions Sales and purchases are made at market price. Balances outstanding at the year-end are not guaranteed and are made in cash. No guarantees were provided or received for related-party receivables. For the exercise 2011, the Group did not recognize any provisions for bad debts relating to amounts receivable from related-parties. This evaluation is done by examining the financial position of the related-parties and the market in which they operate. Identifying and values are listed in note 14 of the consolidated accounts. 8.1 Control environment The functioning of the various units is managed via Management Processes describing the principles and procedures with their input and output and how they interact together. In 2011 a Corporate Governance Charter was adopted. An Environmental Policy Statement and the internal audit code complement the Quality Policy Statement established in Risk management process SABCA has started formalising the process of analysing and assessing its business risks from These have now been categorised and prioritised in 7 areas on the basis of their probability and their impact level. The missions defined in the 2012 audit programme relate to risks considered as being high, with attention mainly focused on operational risks. 8. Internal control and risk management system SABCA has formalised its internal audit activities via the internal control system based on the COSO model. In doing so, it has defined its control environment, identifying and classifying risks in order to highlight the ones with the greatest consequences, and making sure that internal controls exist and are effectively executed. Communication and information together with monitoring and surveillance are part of this approach. The main objective is to increase process efficiency by reducing the level of risk, thereby improving overall performance and creating added value. As in any control system, the risk management system installed provides a reasonable expectation about the level of risk control. The financial side is the subject of particular attention, being focused on in the chapter on financial risk (see chapter 8.6 below). 8.3 Control activities Control activities consist of the measures taken by the company to make sure that the main risks identified are kept under adequate control. To accomplish this, the position of an internal auditor has been created, covering all processes within the SABCA Group. His main role is to manage all issues, including those involving the areas of finance and quality. The annual audit programme is submitted to the audit committee for approval. Annual report SABCA > 31

34 SABCA The control (i.e. audit) activities aim at making sure that standards and laws are complied with and procedures applied, with the focus placed mainly on the operational side. Audit activities benefit from performance indicators already used within processes, together with action emanating from the control plans. The activities for the internal control of financial processes are within the scope of the finance department, with process reviews supplementing this approach. 8.5 Management The management of internal audits including risk management is the responsibility of senior management which reports on this subject to the audit committee. 8.6 Principal risks and uncertainties Cash and liquidity risks The Group is not exposed to any significant market risk with regard to its financial debts. Cash resources enable the Group to meet its commitments without any liquidity risk. Quality audits are carried out by internal quality auditors using the appropriate existing procedures. They are also responsible for following up the actions and recommendations coming from internal or external audits. The external company auditor and his team are responsible for external audits, along with a number of both Belgian and foreign audit organisations. 8.4 Information and communication Each audit gives rise to a specific report. This method has now been extended to all processes, with a final report submitted for approval to the audit committee. The results of quality audits carried out internally or by external agencies are channelled through the quality department which also makes sure that any points are followed up. Credit risk The Group performs its cash and foreign exchange transactions with recognized financial institutions. The Group limits counterparty risk by performing most of its sales in cash and ensuring that the granted loans are secured by the Belgian Export Credit Insurer (DUCROIRE) or collateral. Considering the trade receivables impairment method applied for the drawing up of consolidated financial statements the percentage of outstanding receivables not impaired at the closing accounts is immaterial. Market risk Exchange risks The Group is exposed to an exchange risk on sales denominated in US Dollar, the major part of its expenses being expressed in Euros. Performance indicators are presented on a monthly basis to the various committees responsible for managing the company. The Group covers this risk using forward sales contracts and, if necessary, foreign exchange options. It hedges its net future cash flows only if they are considered highly probable and partially to ensure > 32 Annual report SABCA

35 SABCA that the first future cash flows will be sufficient to exercise the foreign exchange hedges in place. The amount of the hedge may be adjusted according to the variability in the timing of expected net cash flows. Operational risks Following the analysis done by the internal auditor responsible for risk management, several risks were identified and listed according to their acceptability. Other risks The risk of evolution of the raw material prices and labor costs; The permanent difficulty to find staff members with skills corresponding to company requirements; The age pyramid; non-obtaining or loss of license (political risk) the level of workload on the Charleroi site highly dependent on export contracts 9. Remuneration report 9.1 Remuneration committee Composition and activities The committee is made up of: Remo Pellichero, President, chairman of the board of directors. S.A. Gefor, represented by its CEO Jacques de Smet, independent director. S.A. C.G.O., represented by its CEO Philippe Delaunois, independent director. The following also took part in the meetings: Daniel Blondeel, CEO (except for the part concerning him). The secretary of the remuneration committee: André Ghysens, head of HR. In the course of 2011, the year the committee was set up, 12 meetings were held. For each member of the operational committee (COp) the committee looked at: the different remuneration components, with particular attention paid to the fixed and variable parts the group insurance policies remuneration policy comparisons with other companies The remuneration committee s rules of procedure are to be found in Appendix D of the SABCA Corporate Governance Charter. Annual report SABCA > 33

36 SABCA Attendance of directors at remuneration committee meetings: M. Remo Pellichero 12 M. Jacques de Smet 12 M. Philippe Delaunois Remuneration policy The aim of the company is to develop and maintain an attractive remuneration policy for its staff, balancing the interests of the company and those of its shareholders. The remuneration committee reviews the situation of COp members, including members of the executive committee (ComEx). The committee listens to the explanations of the CEO and, after discussion and exchange of views between its members, submits its final proposals to the board which then decides on the matter. Executives concerned: the members of the ComEx : Daniel Blondeel, CEO, Raymond De Dobbeleer, CFO, Pierre De Graef, manager of the Brussels site, Marc Humblet, marketing and sales manager, Jean-Marie Lefèvre, manager of the Charleroi site; other members of the COp: ment, Marc Dubois, head of the supply chain department, André Ghysens, head of the human resources department, Jean-Michel Sonkes, head of the quality department. André Baus, head of information systems depart- The remuneration consists of the fixed remuneration, the variable remuneration and the (supplementary) pension plan. The committee seeks to maintain the right balance between these three elements, the sum of which determines the company s ability to attract, motivate and retain highly skilled professionals, taking account of the scope of responsibilities and market standards. The fixed remuneration is based on the level of responsibility, with its evolution dependent on individual performance appraisals and market trends. The remuneration committee submits the remuneration modification proposals to the board. The variable remuneration for COp members is dependent on their individual performance, while for ComEx members overall company performance is also taken into account, based on the net Belgian Gaap result for the year. The variable remuneration for any one financial year is subject to Annual general meeting approval. A supplementary pension is established for each COp member. There is no significant change in the remuneration policy since the last financial statements. There is no provision made for allowances of break. Current laws on the subject are applicable. There was no leaving of the company in > 34 Annual report SABCA

37 SABCA 9.2 Remuneration of members of the board of directors and its committees* in EUR Non-executive directors S.A.C.G.O. represented by its CEO Philippe Delaunois, independent director 25,101 S.A. Gefor represented by its CEO Jacques de Smet, independent director 30,101 Charles Edelstenne, Chairman and CEO Dassault Aviation 17,601 Remo Pellichero, Chairman 15,000 Guy Piras, Executive Vice-President Industrial Operations, Procurement and Purchasing Dassault Aviation 17,601 Loïk Segalen, Executive Vice-President, Economic and Social Affairs Dassault Aviation 20,601 Henk Valk, Executive Vice President Fokker Aerostructures B.V. 17,601 Sjoerd Vollebregt, Chairman and Chief Executive Officer Fokker Technologies Holding B.V. 20,601 Executive director Daniel Blondeel, CEO 0 *Board of directors, audit committee, permanent committee and remuneration committee. There is no significant change in the remuneration policy of non-executive directors since the last financial statements. 9.3 Statutory auditor The fees of the statutory auditor for the financial year amount to EUR 85,016. However, and subject to approval by the general meeting, committee members receive an attendance allowance of EUR 500 (EUR 1000 for the chairman) for each meeting attended. The corresponding amounts are listed in the table above. 9.4 Remuneration of the CEO and other executives Following the proposal of the remuneration committee, the board set the following amounts as remuneration for the CEO and the other COp members in Via his company Gestime sprl, Mr Remo Pellichero has a service contract for an annual fee of EUR 75,000 except VAT. CEO Daniel Blondeel Salary Other COp members Modifications to the remuneration of the members of the board and committees are defined by the general meeting following the proposal of the remuneration committee. in EUR Fixed remuneration 243, ,390 Variable remuneration 112, ,648 Total 355,859 1,289,038 Supplementary pension 90, ,633 Other 3,261 37,468 Annual report SABCA > 35

38 SABCA 6Financial aspects Vega. First First op 13 February 2012 Copyright ESA > 36 Annual report SABCA

39 SABCA 1. SABCA GROUP Consolidated income statement pursuant to IFRS Key figures (in millions of EUR) Revenues Turnover Changes in work-in-progress Own construction capitalised Other operating income Operating expense Result from continuing operations Finance costs Finance income Result from continuing operations post finance result Income tax expense Net result for the period Attributable to owners of parent Minority interests Total Earnings per share (in EUR) (total number of shares: 2,400,000) *basic *diluted Headcount at 31 st December 990 1, SABCA Unconsolidated key results Statutory accounts (pursuant to Belgian accounting principles) (in millions of EUR) Turnover Net equity Investments Results - operational financial current extraordinary before taxes income taxes after taxes Total dividends Current profit per share (in EUR) Net profit per share (in EUR) Net dividend per share (in EUR) Annual report SABCA > 37

40 SABCA 1. SABCA GROUP (pursuant to IFRS) The SABCA Group achieved a turnover of EUR 138 million, up 2.4% against The result from continuing operations dropped by EUR 6.52 million to EUR million reflecting a EUR 1.48 million decrease in operating revenues and a EUR 5.04 million increase in operating expenses due to risk provisions for new programmes. The financial result totalled EUR 2.83 million, up EUR 0.71 million as a result of the year-end recovery of the U.S. dollar. The result from continuing operations including the financial result is therefore EUR million, down EUR 5.81 million against In 2011 the Group recorded a net profit of EUR million after current and deferred taxes, representing a decrease of EUR 4.04 million compared with SABCA Statutory accounts (pursuant to Belgian accounting principles) Turnover amounted to EUR 133 million, up 2.5% compared to The operating result totalled EUR 3.89 million, compared to EUR 8.89 million last year. Amortisation of development costs for new programmes and provisions for their inherent risks explain the drop in profit. The financial result totalled EUR 2.75 million, up EUR 0.42 million compared to 2010 as a result of the yearend recovery of the U.S. dollar and the rise in interest rates on term deposits. In the absence of any exceptional items, pre-tax result amounts to EUR 6.93 million. The refunding of taxes for prior years and withdrawals from taxed reserves explain the low level of the item taxes. Profit for the financial year 2011 totals EUR 6.33 million compared with EUR 6.18 in > 38 Annual report SABCA

41 SABCA Geographical distribution of turnover (%) Investments (MEUR) Europe % Belgium % Outside Europe 9.68 % ,77 0, Financial Intangible Tangible Turnover per field of activities (in %) Orders (MEUR) Defence Aerospace Civil aviation Order book Placement of orders Annual report SABCA > 39

42 SABCA PROPOSALS FOR RESOLUTIONS TO BE PRESENTED TO THE GENERAL MEETING OF SHAREHOLDERS STATUTORY APPOINTMENTS Mr Guy Piras handed back his director s mandate on 31 December The board of directors proposes to the general meeting to proceed with the final appointment of Mr Benoît Berger, Executive Vice-President Industrial Operations, Procurement and Purchasing Dassault Aviation, living 7, Rue de l Hôtel de Ville in Neuilly sur Seine, France, to the office of director for a period of four years expiring immediately after the ordinary general meeting of Making use of the powers conferred on it under article twenty nine of the articles of association and in accordance with the traditional policy aimed at ensuring a fair share between the return on capital and future self-financing and considering the short-term requirements of the company, the board proposes that the meeting of shareholders approve the following appropriation: 1. Profit to be carried forward 33,300, EUR 2. Return on capital 2,112, EUR i.e. for each of the 2,400,000 shares: a gross dividend of 0.88 EUR a withholding tax of 0.22 EUR a net dividend of 0.66 EUR Subject to the allocation being approved by the meeting of shareholders, a net dividend per share of 0.66 EUR will be paid from 7 June 2012 by transfer to shareholders entered in the register of registered company shares. For shares held in securities accounts, the bank or broker will automatically handle payment of the dividend. APPROPRIATION OF PROFITS The appropriation account included in the annual accounts presented to the meeting of shareholders is as follows: General meeting of shareholders 31 May 2012 Ex-date 04 June 2012 Record date 06 June 2012 Payment date 07 June Profit for the year for appropriation 2. Profit carried forward from previous year 6,238,555,82 EUR 29,173,610,06 EUR 3. Profit for appropriation 35,412,165,88 EUR > 40 Annual report SABCA

43 SABCA Registered office at 1130 Brussels, chaussée de Haecht 1470 Production sites in Brussels and Charleroi Site at 6041 Charleroi, rue des Fusillés 11 RPM Brussels V.A.T. BE Consolidation includes the subsidiary SABCA Limburg N.V. Registered office at 3560 Lummen, Dellestraat 32 RPR Hasselt V.A.T. BE SABCA expresses its gratitude to Mr Guillaume Dedeurwaerder for his artistic and photographic collaboration. Realisation and production:

44 SABCA SABCA S.A. Société Anonyme Belge de Constructions Aéronautiques Chaussée de Haecht 1470 B-1130 Brussels Belgium Tel: Fax:

45 2011 Annual accounts

46 SABCA Annual accounts Report of the board of directors Ordinary General Meeting of May 31, 2012 Annual accounts Consolidated accounts 2 Statutory auditor s report on the consolidated financial statements 25 Non consolidated accounts 26 Statutory auditor s report on the annual accounts 49 Rapport annuel SABCA

47 Annual accounts 2011 SABCA Declaration of the person responsible for the report I attest that, to my knowledge, the financial statements authorized for issue by the Board of Directors on March 28, 2012, have been prepared in accordance with the applicable accounting standards and give a fair view of the assets and liabilities, financial situation and income or loss of the company and the other company included in the scope of consolidation. And that the management report includes a fair review of the evolution of the business results and financial situation of the company and the other company included in the scope of consolidation together with a description of the principal risks and uncertainties that they face. Brussels, April 25, R. Pellichero Chairman Rapport annuel SABCA > 1

48 SABCA Annual accounts 2011 Consolidated accounts Consolidated statement of financial position Following the standards IFRS (International Financial Reporting Standards) (in thousand EUR) Assets Non-current assets 120, ,708 Intangible assets 47,774 44,593 Property, plant and equipment 72,534 69,635 Affiliated enterprises Financial assets and other non-current assets Current assets 230, ,225 Inventories 31,493 32,621 Work-in-progress 44,782 42,816 Trade and other receivables 43,332 31,766 Cash and cash equivalents 108,181 93,391 Other current assets 2,288 1,631 Total assets 350, ,933 Equity and liabilities Total equity 99,473 90,586 Total equity attributable to owners of the parent 99,472 90,585 Capital 12,400 12,400 Reserves and results carried forward 88,203 77,982 Revaluation reserves on property, plant and equipment Hedging instruments on cash flow -1, Minority interests 1 1 Non-current liabilities 163, ,017 Long-term borrowings 137, ,953 Hedging instruments 2, Non-current provisions 9,908 17,301 Deferred taxation 14,175 11,275 Current liabilities 87,856 84,330 Trade and other payables 43,630 43,102 Tax and social liabilities 12,179 11,018 Other current liabilities 16,212 16,452 Short-term borrowings Current provisions 15,238 13,342 Hedging instruments Total equity and liabilities 350, ,933 > 2 Rapport annuel SABCA

49 Annual accounts 2011 SABCA Consolidated income statement (in thousand EUR) Revenues 159, ,543 Turnover 138, ,978 Increase (+), decrease (-) in work in progress 1,966 12,502 Own construction capitalised 12,162 7,812 Other operating income 6,684 5,251 Operating expenses (-) -145, ,337 Raw materials and consumables used 27,447 28,736 whereof change in stocks ,167 Services and other goods 41,970 37,614 Wage and salaries, social security costs and pensions 61,732 57,515 Depreciation and amortisation of which write down of intangible and tangible assets 17,483 14,203 Depreciation in amounts written off stocks, contracts in progress and trade debtors Provisions for liabilities and charges -5, Other operating income and expenses 1,490 3,434 Result from continuing operations (+) 13,684 20,206 Finance costs (-) -3,746-8,182 Debt charges Other finance costs 3,200 7,713 Finance income 6,578 10,299 Income from financial fixed assets 43 Income from current assets 1,665 1,462 Other finance income 4,870 8,837 Result from continuing operations post finance result (+) 16,516 22,323 Income tax expense -4,183-5,949 Income taxes ,229 Deferred taxes -3,588-2,720 Net result for the period (+) 12,333 16,374 Attributable to owners of parent 12,333 16,374 Share of the minority interests PM PM Result per share (number of shares: 2,400,000) (in EUR) (in EUR) * Basic profit per share in euros * Diluted profit per share in euros Consolidated statement of comprehensive income (in thousand EUR) Net result for the period 12,333 16,374 Other elements of the comprehensive income Profit or loss on hedging instruments of cash flow -2,021-1,730 Income taxes on the result Total of the other elements of the comprehensive income -1,334-1,142 Total comprehensive income for the period after taxes 10,999 15,232 Attributable to owners of parent 10,999 15,232 Minority interests 0 0 Total comprehensive income result per share (number of shares: 2,400,000) (in EUR) (in EUR) * Basic * Diluted Rapport annuel SABCA > 3

50 SABCA Annual accounts 2011 Comments on the consolidated statement of financial position N.B.: The important differences between correspondig headings of compared periods are mentioned in italic. (in thousand EUR) Assets Non-current assets 120, ,708 Intangible assets (note 4) 47,774 44,593 This item includes the capitalization of the expenses of development relating to the programmes of civil aviation for which Group S.A.B.C.A. is a partner. Property, plant and equipment (notes 3 and 7) 72,534 69,635 Acquisition of new facilities by both the mother company and the subsidiary. Affiliated enterprises and financial assets and other non-current assets (note 5) Current assets 230, ,225 Inventories (note 8) 31,493 32,621 Slight reduction in paid advances. Work-in-progress (note 8) 44,782 42,816 Evolution in export programmes. Trade and other receivables (note 10) 43,332 31,766 Significant increase in trade receivables. Cash and cash equivalents 108,181 93,391 (see cash flow statement and note 9) Other current assests 2,288 1,631 > 4 Rapport annuel SABCA

51 Annual accounts 2011 SABCA (in thousand EUR) Equity and liabilities Total equity 99,473 90,586 Total equity attributable to owners of the parent (see statement of changes in equity) 99,472 90,585 Result of the period 12,333 16,374 Dividends relating to previous financial year -2,112-1,824 Total of the other elements of the comprehensive income -1,334-1,142 Movement during the period 8,887 13,408 Minority interests 1 1 Non-current liabilities 163, ,017 Long-term borrowings (notes 7 and 11) 137, ,953 Major increase in advances. Hedging instruments 2, Non-current provisions (notes 6 and 13) 9,908 17,301 Decrease of the provision for pensions and similar obligations. Deferred taxation (note 12) 14,175 11,275 Current liabilities 87,856 84,330 Trade and other payables (note 7) 43,630 43,102 Short-term borrowings (note 7) Current provisions (note 6) 15,238 13,342 New provision in favour of employees but decrease of the provision for future losses. Other current liabilities (note 7) 28,391 27,470 Hedging instruments Rapport annuel SABCA > 5

52 SABCA Annual accounts 2011 Consolidated Statement of changes in equity (in thousand EUR) Capital Revaluation reserves Reserves and Result carried forward Heging instruments on cash flow Total attributable to the owners of the mother company At 01/01/ , , , ,178 Result for the period 16,374 16, ,374 Other elements of the comprehensive income -1,142-1,142-1,142 Total of the other elements 16,374-1,142 15, ,232 of the comprehensive income Dividends -1,824-1, ,824 Balance at 31/12/ , , , ,586 Minority interests Total equity At 01/01/ , , , ,586 Result for the period 12,333 12, ,333 Other elements of the comprehensive income -1,334-1,334-1,334 Total of the other elements 12,333-1,334 10, ,999 of the comprehensive income Dividends -2,112-2, ,112 Balance at 31/12/ , ,203-1,656 99, ,473 Consolidated statement of cash flows (in thousand EUR) Net cash flow generated by operating activities 13,995 20,860 Net income 12,333 16,374 Income tax 4,182 5,950 Result on hedging instruments Depreciation and amortisation and fair value adjustments on assets 18,388 15,852 Change in working capital -16,580-15,841 Change in minority interests PM PM Change in provisions, deferred tax and reserves -1, Incomes taxes paid -3,005-3,073 Net cash flow used in investing activities -23,462-23,275 Purchase of intangible, tangible and financial non-current assets -23,611-23,175 Disposals of intangible, tangible and financial non-current assets Increase and decrease of receivables Net cash flow used in financing activities 24, Change in amounts receivable in short-term (except financial debts) - reimbursements -643 Change in amounts receivable in long-term (except financial debts) - increase 26,894 3,896 - reimbursements -11-3,573 Change in short-term financial liabilities - reimbursements -153 Change in long-term financial liabilities - reimbursements -921 Interests - earned 1,212 1,462 - paid Dividends paid to shareholders -2,112-1,824 Net increase (decrease) in net cash and cash equivalents 14,790-3,076 Net cash and cash equivalents, at the beginning of the period (*) 93,391 96,467 Net cash and cash equivalents, at the end of the period (*) 108,181 93,391 (*) consistent with the consolidated statement of financial position A classification was made in order to highlight the headings «Income tax» and «Earned and paid interests» during the reporting periods. > 6 Rapport annuel SABCA

53 Annual accounts 2011 SABCA Notes (Except contrary indication, all the data are in thousands of euros) The faire value adjustments were integrated in the gross amount and/or in the depreciations because they correspond to the differrence between Belgian Gaap and IFRS. 1. INFORMATION ABOUT CONSOLIDATION Subsidiary: SABCA Limburg Dellestraat, 32, LUMMEN Company number: % of ownership interest: Capital: 12,394, EUR FLABEL et SABCA (C.D.R.) have been left out of the scope of consolidation because not very significant. 2. EMPLOYMENT * FTE = full time equivalent Total in units FTE * Total in units FTE * Average number of employees Total employment at the end of the period PROPERTY, PLANT AND EQUIPMENT NOTE Land and buildings Plant, machinery and equipment Furniture and vehicles Leasehold improvements and similar rights 3 Assets under construction and advance payments TOTAL Beginning balance Gross amount 1 57, ,665 15,840 3,983 3, ,795 Depreciation -35,312-90,086-14,343-1, ,908 Adjustments - Third party assets 22,748 22,748 Beginning balance 22,029 39,327 1,497 2,898 3,884 69,635 Movements during the period Acquisitions 1,559 6, ,242 11,449 Disposals -25-4, ,965 Depreciation on disposals -1,809-5, ,502 Depreciation transfers 25 4, ,917 Ending balance Gross amount 2 58, ,825 16,388 3,983 6, ,279 Depreciation -37,096-90,673-14,758-1, ,493 Adjustments - Third party assets 22,748 22,748 Ending balance 21,779 40,900 1,630 2,674 5,551 72,534 1 Fully amortized ,300 90,612 12, Fully amortized ,542 87,796 12, Of which, at closing, 2,950 in building and 1,033 in plant, machinery and equipment Rapport annuel SABCA > 7

54 SABCA Annual accounts INTANGIBLE ASSETS NOTE Development expenses Beginning balance Gross amount 98,183 Amortisation -54,590 Beginning balance 43,593 Movements during the period Acquisitions 12,162 Amortisation expenses -8,981 Ending balance Gross amount 110,345 Depreciation Ending balance 46,774 Research costs non capitalized in the income statement as an incurred expense for the exercise and represent for this exercise 1,795 and for previous years 34,941. This strategy and axes of efforts of the Group in terms of research and development are described in the Management report. The proportion of development costs for a programme to be included in the trading figures over the course of the financial year is determined by the degree of progress of the particular programme, in accordance with the principle of prudence. Amortisation of development costs is determined in accordance with the recovery of expenditure, pro rata to contractual deliveries, to the residual risk upon charge of the company. No revaluation is applied to intangible assets. -63, FINANCIAL ASSETS NOTE Affiliated enterprises SABCA (C.D.R.) sprl FLABEL Corporation - shares held by S.A.B.C.A shares held by SABCA Limburg Other participations Arianespace Participation Acquisitions 2, Depreciation and amounts written down Others Amounts receivable and cash guarantees The losses in value of non-quoted shares are considered only if the loss is important and lasting. There is no financial asset which is past due and not impaired. > 8 Rapport annuel SABCA

55 Annual accounts 2011 SABCA 6. PROVISIONS NOTE Provisions for pension & equivalent Provision for implicit obligation Onerous contracts provisions Other provisions Provisions, beginning balance 17,300 9,650 3, ,643 TOTAL Increase ,715 4,525 Decrease -7,416-1,550-1, ,022 Provisions, ending balance (*) 9,908 8,100 3,153 3,985 25,146 (*) of which defined benefit plant obligations (note 13) : 6, BORROWINGS AND PAYABLES NOTE up to 1 year 1 to 5 years more than 5 years TOTAL up to 1 year 1 to 5 years more than 5 years I. Interest-bearing borrowings according to their maturity Leases , ,058 1,190 2,583 Bank overdrafts II. Other information Finance leases : - minimum lease payments payable, , ,058 1,190 2,583 present value - minimum lease payments payable, gross 433 1,157 1,027 2, ,319 1,305 3,056 - minimum lease payments payable, interest III. Trade and other payables according to their maturity Trade payables 12,824 12,824 11,270 11,270 Advances received 30,806 65,588 96,394 31,832 47,842 79,674 Tax and social liabilities 12,179 12,179 11,018 11,018 Other liabilities and borrowings 16, ,238 86,262 16,117 2,201 60,662 78,980 TOTAL LONG TERM BORROWINGS INCLUDED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 137, ,953 TOTAL 8. INVENTORIES NOTE Stocks merchandise and raw materials Work in progress Total stocks and work in progress Net value at the beginning 32,621 42,816 75,437 Movements during the period Change ,966 1,745 Depreciation - increase -2,379-2,379 Depreciation - decrease 1,472 1,472 Net value at the ending 31,493 44,782 76,275 Rapport annuel SABCA > 9

56 SABCA Annual accounts CASH AND CASH EQUIVALENTS NOTE Bank short-term deposits 104,916 91,172 Bank current accounts 3,241 2,198 Cash in hand and other ,181 93, AMOUNTS RECEIVABLE WITHIN ONE YEAR NOTE Trade receivables 39,082 29,706 Other receivables 4,250 2,060 43,332 31, GOVERNMENT GRANTS NOTE INVESTMENT GRANTS Carrying amount of capital grants recognised 4,923 4,351 Amount of income grants netted against reported expenses -3,962-3,599 DEFERRED TAX ASSETS AND LIABILITIES ON DITO ADVANCES TO BE REIMBURSED CONDITIONALLY 47,254 40,398 Relating to research activities 2, Relating to development activities 44,597 39,428 Split out : 47,254 40,398 - Reimbursement within one year 764 1,423 - Reimbursement after more than one year 46,490 38,975 47,254 40,398 - Federal Public Services 46,304 35,763 - Brussels Capital Region 950 4,635 The reimbursement of the advances to be reimbursed conditionally is linked to the success of the product. > 10 Rapport annuel SABCA

57 Annual accounts 2011 SABCA 12. RECOGNIZED DEFERRED TAX ASSESTS AND LIABILITIES TOTAL TAX CHARGE OF THE EXERCISE Reconciliation between the theoretical tax charge obtained by applying the nominal taxe rate to the earnings before taxes and the effective tax charge obtained by applying the Group s effective tax rate. Base Tax Profit before income tax 16,516 Theoritical income tax at the rate of % 5,614 Sources of disparities - Non-deductible expenses 1,200 - Impact of changes on non-taxed expenses and income Notional interests -1,503 - Investments deduction -1,100 Tax base of the Group 14,905 Income tax calculated at % 5,066 Deferred tax at the social level and adjustments 54 Previous years tax -937 Total income tax expense for the year 4,183 NOTE ON DEFERRED TAXES RECORDED IN THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION Consolidated Consolidated statement of financial position income statement & comprehensive income Sources of deferred tax Assets Intangible assets 28,382 28, ,859 Tangible assets 15,948 18,319-2,371 1,944 Work in progress 4,738-8,289 13,027 21,701 Total Assets 49,068 38,974 Liabilities Reserves -937 Provision for liabilities and charges -5,036-5, ,595 Short-term debts Total Liabilities -5,054-5,502 TOTAL OF SOURCES OF DEFERRED TAX 44,014 33,472 10,542 7,923 Deferred income tax Deferred tax on the fair value adjustments calculated at % 14,960 11,377 3,583 2,693 Adjustments for temporary differences and regularisations 28 Deferred tax on hedging instruments Deferred tax on government grants and on realized surplus TOTAL DEFERRED TAX 14,175 11,274 2,896 2,133 Defered tax assets related to provisions for pensions and similar obligations, for future losses and for implicit obligations are not taken into consideration, their reversal having to take place in a time significantly longer than the time during which the movements who have generated the deferred tax liabilities, are reversed. Rapport annuel SABCA > 11

58 SABCA Annual accounts DEFINED BENEFIT PLANS Components of defined benefit plan assets and liabilities Present value of wholly or partially funded obligations 21,007 19,709 14,404 13,829 13,998 Fair value of plan assets (-) -11,913-9,250-7,516-7,529-6,670 Present value of wholly unfunded obligations 9,091 10,459 6,888 6,300 7,328 Unrecognised actuarial gains (losses) -2,388-2,417 1,225 1, Defined benefit plan obligation (asset), total 6,703 8,043 8,113 7,973 7,805 Expense recognised in income statement for defined benefit plan 1,467 1,056 1,084 1,225 1,190 Current service cost 1, Interest cost Expected return on plan assets Contributions by personnel Recognised actuarial gains (losses) -23 Movements in defined benefit plan obligation (asset) Defined benefit plan obligation, beginning balance 8,042 8,113 7,973 7,805 7,370 Contributions paid -2,807-1, , Expense recognised 1,467 1,056 1,084 1,224 1,190 Defined benefit plan obligation, ending balance 6,703 8,043 8,113 7,973 7,805 Principal actuarial assumptions Discount rate used Expected return on plan assets Expected rates of salary increase 4.10 / / / / / 3.70 Future defined benefit increase Expected rate of return on reimbursement rights recognised as an asset N/A N/A N/A N/A N/A Expected rate of increase of medical costs N/A N/A N/A N/A N/A NB : All provisions for pensions and similar obligations amount to 9,908 in accordance with Collective Labor Agreements. A guarantee of 4.75% is paid by the insurer on premiums paid before 31/12/1998. An interest rate of 3.75% is applied to all increases in premiums between 01/01/1999 and 31/12/2005.Since 01/01/2006, the technical interest rate applicable on premium increases amounted to 2.75%. The proportions of the individual reserves to 31/12/2011 rates for each are as follows: 4.75%: 39% of reserves; 3.75%: 30% of reserves; 2.75%: 31% of reserves. The weighted average of 3.83% and the individual reserves representing the majority of assets a rate of 4% seems appropriate. > 12 Rapport annuel SABCA

59 Annual accounts 2011 SABCA 14. INFORMATION CONCERNING RELATED-PARTIES Key management compensation Short-term employee benefits 2,830 2,753 Post-employment benefits Other termination obligations 0 0 Considered headcount Related-party transactions The Group s related parties are : - Dassault Aviation - Fokker Aerospace - FLABEL Corporation - SABCA (C.D.R.) sprl Related-party sales 14,904 24,398 Related-party purchases Related-party receivables 8,938 8,114 Related-party payables 20 9 Terms and conditions related-party transactions Sales and purchases are made at market price. Balances outstanding at the year-end are not guaranteed and are made in cash. No guarantees were provided or received for related-party receivables. For the exercise 2011, the Group did not recognize any provisions for bad debts relating to amounts receivable from related parties. This evaluation is done by examining the financial position of the related-parties and the market in which they operate. 15. FINANCIAL COMMITMENTS Commitments given Guarantees and deposits 202 Registration of mortgages Mortgage mandates 2,275 2,275 Pledged accounts 3,143 3,121 - FLABEL Corporation 2,000 2,000 - Customs 1,143 1,121 Commitments received Export insurance guarantees Ducroire 24,184 26,919 Debts and receivables secured by bank guarantees 7,232 3,866 Rapport annuel SABCA > 13

60 SABCA Annual accounts APPROPRIATION OF PROFITS (in EUR) Return of capital 2,112, ,112, or for each of the 2,400,000 shares a gross dividend a withholding tax of 25 % a net dividend Total capital 12,400,000,00 12,400,000,00 Total shares conferring the right to vote 2,400,000 2,400,000 Total voting rights (denominator) 2,400,000 2,400, FOREIGN EXCHANGE RISKS The Group is exposed to a foreign exchange risk on the difference between its sales in US Dollars and its purchases in US Dollars. It partially covers this risk using forward sales contracts and foreign exchange options. The Group hedges its net future cash flows only if they are considered highly probable and partially to ensure that the first future cash flows will be sufficient to exercise the foreign exchange hedges in place. The Group has recorded related to the exchange differences 4,359 in income and 2,122 in charges. A sensitivity analysis was performed in order to determine the impact of a 10 centime increase or decrease in the US Dollar / EURO exchange rate : Net value US Dollars in balance sheet 19,061 20,647 Closing US Dollar exchange rate Change in closing US Dollar exchange rate Change in net value US Dollars in balance sheet -1,057 1,234-1,076 1,250 The portfolio of derivative financial instruments is as follows : US Dollars Euros US Dollars Euros Foreign exchange options 51,000 40,305 27,000 20,149 Forwards 20,000 14,867 26,000 19,330 TOTAL 71,000 55,172 53,000 39,479 The market value of the financial instruments rises to -2,712 for the exchange options and to -384 for forward sales. The change of fair value on the hedging instruments of cash flows of the year is booked on base of exchange rate dated December 31 and on «mark-to-market» calculated by financial institutions, managers of financial instruments Impact on financial income > 14 Rapport annuel SABCA

61 Annual accounts 2011 SABCA 18. MANAGEMENT OF RISKS AND UNCERTAINTIES The principal risks and uncertainties faced by the group are outlined below : Cash and liquidity risks The Group is not exposed to any significant market risk with regard to its financial debts. Cash resources enable the Group to meet its commitments without any liquidity risk. Credit risk The Group performs its cash and foreign exchange transactions with recognised financial institutions. The Group limits counterparty risk by performing most of its sales in cash and ensuring that the granted loans are secured by the Belgian Export Credit Agency (Ducroire) or collateral. Considering the trade receivables impairment method applied for the drawing up of consolidated financial statements the percentage of outstanding receivables not impaired at the closing accounts is immaterial. Market risk Exchange risk The Group is exposed to an exchange risk on sales denominated in US Dollars, the major part of its expenses being expressed in euros. The Group covers this risk using forward sales contracts and, if necessary, foreign exchange options. It hedges its net future cash flows only if they are considered highly probable and partially to ensure that the first future cash flows will be sufficient to exercise the foreign exchange hedges in place. The amount of the hedge may be adjusted according to the variability in the timing of expected net cash flows. Operational risks Following the analysis done by the internal auditor responsible for risk management, several risks were identified and listed according to their acceptability. Other risks - The risk of evolution of the raw material prices and labor costs; - Difficulty to find competent staff members; - non-obtaining or loss of license (political risk) - the level of workload on the Charleroi site highly dependent on export contracts Rapport annuel SABCA > 15

62 SABCA Annual accounts EVENTS AFTER THE BALANCE SHEET DATE No event has taken place after December 31, 2011 that may have a significant impact on the accounts 20. IDENTITY OF THE CONSOLIDATING MOTHER COMPANY DASSAULT BELGIQUE AVIATION Rue de Strasbourg Brussels - Belgium Company number Percentage of control % 21. AUDITOR S FEES Audit services - Auditor s fees S.A.B.C.A Auditor s fees SABCA Limburg Non-audit services - Fees for non-audit services S.A.B.C.A Fees for non-audit services SABCA Limburg 1 0 TOTAL SPLIT OF TURNOVER Delivery of goods 95,210 91,585 Services 37,341 43,393 TOTAL 132, , PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS Null. > 16 Rapport annuel SABCA

63 Annual accounts 2011 SABCA General consolidation principles Compliance with accounting standards The Group SABCA has prepared its consolidated financial statements in accordance with IFRS (International Financial Reporting Standards) applicable as of December 31, 2011 as adopted for us by the European Union. The Group has not early adopted the standards and interpretations published as of December 31, 2011 but whose application is only mandatory from accounting period beginning on or after January 1, For those which concern the Group and with respect of actual accounting policies the adoption of these new standards and interpretations should not significantly impact the group s earnings and financial position. Accounting choices and management estimates The preparation of the Group s consolidated financial statements requires management to make estimates and issue assumptions susceptible to have a financial impact on assets and liabilities. These estimates concern notably the results on contracts in progress and contingent liabilities. They are evaluated taking into accounts historical experience, elements known at the closing of the accounting year and various other assumptions that are believed to be reasonable. Subsequent results may differ from those estimates. Consolidation method The consolidation method by global integration has been chosen. SABCA s share in its subsidiary SABCA Limburg is 99.99% which confers it its exclusive control. This method consists in the incorporation in the company accounts of each assets and liabilities elements of the integrated subsidiary as a substitute for the inventory value of the participation. Similarly, costs and products of the subsidiary are cumulated with those of the parent company. Shares that are not held by the consolidated companies are included in assets and liabilities under «third person interests». They represent their part in equities and results. Reciprocal accounts and operations are eliminated. Reference period Consolidated companies close their social year on December 31 st. Consolidated subsidiary by global integration SABCA directly and exclusively controls its subsidiary SABCA Limburg N.V., Dellestraat 32 at 3560 Lummen BE Subsidiary excluded from the consolidation SABCA (C.D.R.) SPRL, Chaussée de Haecht, 1470 at 1130 Brussels BE Rapport annuel SABCA > 17

64 SABCA Annual accounts 2011 Application of IFRS standards (*) (IFRS: International Financial Reporting Standards) Like all listed European companies, SABCA is required to apply the new IFRS accounting standards to its consolidated accounts from the financial year 2005 onwards. Implementation of these new standards adheres to the principle of prudence applied by SABCA when drawing up its accounts. The group has chosen to make use of the exemption allowing it to substitute the fair value of certain capital assets for their cost on the IFRS transition date, for plots of land but not for other capital assets. The principal aspects of the IFRS standards applicable to SABCA are outlined below. A detailed and annotated review of the differences between Belgian standards (Belgian Gaap) and the IFRS frame of reference affecting the opening equity capital at January 1 st 2004 was published in the press release of September 30 th 2005 relating to the period ending on June 30th IAS 1 Presentation of financial statements Receivables and payables Receivables and payables are stated at the consolidated statement of financial position at their nominal value. The credits are the subject of reductions of value if their refunding at the limit, is in all or partly, dubious or compromise. The accounting of the reductions of value will be done on individualised basis. Cash and cash equivalents Cash includes cash in hand and deposits with banks. Cash equivalents are short-term, highly liquid investments that are readily convertible into known amounts of cash and are not subject to an important risk of change in value. Cash and cash equivalents are carried on the consolidated statement of financial position at nominal value. Dividends Dividends are recorded in the income statement in the year of their attribution. Dividends declared in respect of the period are no more accrued as short-term payables but included at the end of the financial year in a special heading of shareholders equity. Minority interests Minority interests consist in third party shareholder s interests in the equity of subsidiaries and the appropriate proportion of profits or losses. > 18 Rapport annuel SABCA

65 Annual accounts 2011 SABCA IAS 2 Inventory Inventories are stated at the lower of cost and net realisable value. Cost of inventories comprises the purchase, conversion and other costs incurred to bring the inventories to their present location and condition. Cost of inventories is determined by the first-in, first-out method (FIFO). Provisions for amounts written off on stocks are accrued in charges of the exercise: for parts related to production or maintenance programs, unusable or whose tolerances, norms, technical configuration, conception have changed; for parts not moved during the 24 previous months. Amounts written off will be decreased in case of later use of the non destructed parts. IAS 10 Subsequent events Post consolidated statement of financial position events that contribute to confirm changes in circumstances or position which existed at the consolidated statement of financial position date (adjusting events) are reflected in the financial statements. Post consolidated statement of financial position events that represent charges in circumstances or position appeared after the consolidated statement of financial position date (non-adjusting events) are disclosed in the notes when material. IAS 12 - Income taxes Current taxes Current taxes include expected tax charges based on the accounting profit of the current year and adjustments to tax charges of prior years. Deferred taxes Deferred taxes are calculated using the liability method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets are only recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. IFRS 8 - Segment reporting Business segment The Group SABCA is allocated into the business group, aeronautical construction for the segment information comply with the standards IFRS. All the activities of the Group SABCA are exercised in the sector of aeronautical construction and all the resources are affected to this one sector only. Further relevant information is given in the management report the percentage of net sales for each activity platform: civil aviation, defence and aerospace. Rapport annuel SABCA > 19

66 SABCA Annual accounts 2011 Geographical segment The total of activities of the group is located on the national territory. The sales geographical breakdown between Belgian, Europe and out of Europe is also given in percentage, upon further relevant information, in the management report. IAS 16 Tangible fixed assets Tangible fixed assets are recorded at historical cost, less accumulated depreciation and impairment losses. Cost includes all direct costs and appropriate allocation of indirect costs incurred to bring the asset to working condition for its intended use. There are non borrowing costs capitalised in the costs of the assets. Repair and maintenance costs are expensed in the period in which they are incurred, if they do not increase the future economic benefits of the asset. Otherwise, they are classified as separate components of items of tangible fixed assets. The plots of land were valued at their fair value, taking account of their use, geographic situation and any legal obligations attached to them. This value was determined within the framework of IFRS 1 and will be maintained for the whole useful life of these plots of land. Tangible assets received from third parties or acquired on behalf of third parties and held by the company for use in the production of goods are posted as tangible fixed assets, insofar as the company bears their risk and benefits from advantages relating to these assets. The cross-entry for these tangible fixed assets is posted as a long-term debt in liabilities: they are not amortised but valued every year at their fair value. Depreciation of tangible fixed assets is provided over assets estimated useful economic lives: the method of depreciation, chosen straight-line or decreasing is the method which reflects the best the pattern of economic benefits associated with the asset considered. Useful life is defined as follows per main type of tangible fixed assets: Land non-depreciable Buildings 30 years straight-line depreciation Roofs 10 years straight-line depreciation Heavy machines tools 10 years straight-line depreciation Plant, machinery and equipment 10 years decreasing depreciation Furniture and office equipment 10 years decreasing depreciation Vehicles 5 years straight-line depreciation Computer equipment 5 years decreasing depreciation Improvements to leased buildings are capitalised and depreciated over the remaining term of the lease or their expected useful life if shorter. Gains and losses on disposals are included in the operating result. > 20 Rapport annuel SABCA

67 Annual accounts 2011 SABCA IFRS 5 - Non-current assets held for the sale When at the closing date of the financial statements it is more than likely that non-current assets will be disposed of they are qualified as assets held for sale. Their disposal is considered highly probable when at the closing date a plan to sell them for a reasonable price in relation to their fair value has been initiated to find a buyer and to realize their disposal within a maximum of one year. A non-current asset held for sale is evaluated at the lowest between its carrying amount in accordance in the IAS 16 and its fair value reduced by the costs of the disposal. IAS 17 Financial leasing contracts Leases under which a substantial part of the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Payments under operating lease are considered as an expense in the income statement. Leases under which the group assumes a substantial part of the risks and rewards of ownership are classified as finance leases. Financial leasing contracts are recognised at the fair value of the minimum lease payments at the inception of the lease term and classified as leased tangible asset and are depreciated on their useful life, in line with the politic of depreciation applicable to the assets owned by the company. Lease payments are apportioned between the financial charges and the repayment of the lease liability so as to achieve a constant rate of interest on the remaining consolidated statement of financial position of the liability. The corresponding rental obligations, net of finance charges, are included in long-term payables. The reimbursements are allocated between finance charges and the liability of the leasing. It exists so a constant periodic rate of interest on the finance balance outstanding. IAS 18 - Revenue Work in progress (also IAS 11 Construction contracts and IAS 21 Effects of Changes in Foreign Exchange Rates) The cost of work in progress comprises direct and indirect costs of production; the indirect costs other than production are charged to the income statement over the period when incurred. The costs are distributed to production programs as follows: direct booking of raw materials, parts, consumer goods, direct costs and specific subcontract costs, depreciation of specific equipments and relocation, lay-out costs proper to a program; booking of indirect costs through hour rates based on the work of the production personnel. Revenue and charges are booked, in the statutory statements, following the completed contract method. Concerning all consolidated financial statements, revenue and charges of contracts in progress are recognised using the percentage of completion method in line with IAS 18. Rapport annuel SABCA > 21

68 SABCA Annual accounts 2011 At the closing date we fix the estimated total costs for the contract and the costs incurred for work performed to date. When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised by using the stage of completion method to measure the amount of these products and charges to be booked during the exercise and the expected losses are charged as expenses immediately. In connection with the nature of contracts and services the stage of completion method is measured: or comparing contract costs incurred for work performed to date and the estimated total costs for the contract; or by reference to the material progress of works estimated for the contract. When an outcome of a contract cannot be estimated reliably, contract revenue booked is limited to the amount of recoverable contract costs charged without profit. IAS 19 Employee benefits The company posts: a liability where a member of staff has rendered services in return for employee benefits, which will be paid to the latter at a future date, an expense where the company makes use of the economic benefit resulting from services rendered by a member of staff in return for employee benefits. The defined benefit obligation is calculated by independent qualified actuaries using the «Projected Unit Credit»-method and the obligations between the expected costs of any past service (Defined Benefit Obligation) and any plan assets are recognised in the balance sheet. Actuarial gains and losses which exceed more of 10 % the difference between the higher amount of the present value of the retirement benefit obligations and the fair value of the assets of the plan at consolidated statement of financial position closing date could be amortized on a period equal the expected average remaining working life of the working population. In accordance with IFRS 1, the group has opted to recognize all actuarial gains and losses and past service costs at the date of transition to IFRS as an adjustment to equity. IAS 20 Government Grants Government grants related to assets are, after transfer to deferred taxes, recognised as deferred income and transferred as income over the periods necessary to match them with the depreciation expense of the asset they relate to. A government grant is accounted for in the consolidated statement of financial position only when there is reasonable assurance that all the attached conditions can be met. The receipt of cash creates the factor which generates debt. Government grants constituted by advances which will be reimbursed conditionally are booked in long-term debts with the exception of the part paid during the year charged in short-term debts. If there exists a reasonable assurance that the non-reimbursement conditions of those advances are met the reversal of the debt is able to generate a profit result. > 22 Rapport annuel SABCA

69 Annual accounts 2011 SABCA IAS 21 Foreign currency transactions (cf. also IAS 39 financial instruments) Foreign currency transactions are recorded initially at the internal exchange rate prevailing at the transaction date. The internal exchange rate is based on the best estimation of mid-term forecasts and is injected during the year in case of strong variation or official revaluation / depreciation. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate at the consolidated statement of financial position date. Gains and losses resulting from the settlement of foreign currency transactions are recognised in the income statement as financial result. IAS 24 Information concerning related parties. Adoption of standards Under the information to take into consideration related to Key management compensation we find : the directors; the members of the Committee of Managers and of the Management Committee in charge of operations of the mother company mentioned in the annual report under the item Corporate Governance ; the executive members of the subsidiary. IAS 36 Impairment of assets The carrying amounts of tangible and intangible assets are reviewed at each consolidated statement of financial position date to determine if they may be subjected for impairment losses. An impairment loss is recognised in income whenever the carrying amount exceeds its recoverable amount which corresponds to the higher of an asset s net selling price and value in use such as defined in IAS 36. Reversal of impairment losses recognised in prior years is recorded in income when there is an indication that the impairment losses recognised for the asset no longer exist or have decreased. IAS 37 Provisions, contingencies Provisions Provisions are recognised in the consolidated statement of financial position when: there is a present obligation (legal or constructive) as a result of a past even; it is probable that an outflow of resources will be required to settle the obligation; a reliable estimate can be made on the amount of the obligation. The risks and uncertainties which affect unavoidable many events and circumstances are taking into account to provide at the consolidated statement of financial position date the best estimate of the expenditure required to settle the obligation. Rapport annuel SABCA > 23

70 SABCA Annual accounts 2011 Restructuring A provision for restructuring is only recognised when a detailed and formal restructuring plan has been approved and the restructuring has either commenced or has been announced publicly before the consolidated statement of financial position date. The restructuring provision only includes the direct expenditure arising from the restructuring which is necessarily entailed and is not associated with the ongoing activities of the enterprise. IAS 38 - Intangible assets Development Research costs are recognised in the income statement as an incurred expense. Development costs are capitalised if and only if all the conditions disclosed under IAS 38 are met. The valuation of development costs takes account not only of expenditure incurred but also insurance, guarantees, grants and finance obtained from public authorities as well as the certainty of sales to clients. The proportion of development costs for a programme to be included in the trading figures over the course of the financial year is determined by the degree of progress of the particular programme, in accordance with the principle of prudence. Amortisation of development costs is determined in accordance with the recovery of expenditure, pro rata to contractual deliveries, to the residual risk upon charge of the company. IAS 39 Financial instruments Financial instruments The group uses derivative financial instruments to hedge exposure arising from its industrial and commercial operations. These derivative financial instruments are treated, in accordance with IAS 39, either as «free-standing instruments held for trading or as qualified for hedge accounting. Derivative financial instruments are initially recorded in the consolidated statement of financial position at cost and are re-measured at their fair value at every closing date. Changes in the fair value of any such derivative instruments are recognised by their nature or in equity or in finance result. For financial instruments, SABCA has applied IAS 39 from the financial year 2005 Financial assets available for sale Financial assets available for sale are carried at fair value and changes in the fair value are recognised directly in the income statement. > 24 Rapport annuel SABCA

71 Annual accounts 2011 SABCA STATUTORY AUDITOR S REPORT TO THE GENERAL SHAREHOLDERS MEETING ON THE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY S.A.B.C.A. SA AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2011 As required by law and the company s articles of association, we report to you in the context of our appointment as statutory auditor. This report includes our opinion on the consolidated financial statements and the required additional disclosure. Unqualified opinion on the consolidated financial statements We have audited the consolidated financial statements of S.A.B.C.A. SA and its subsidiaries (the Group ) as of and for the year ended December 31, 2011, prepared in accordance with International Financial Reporting Standards, as adopted by the European Union, and with the legal and regulatory requirements applicable on quoted companies in Belgium. These consolidated financial statements comprise the consolidated statement of financial position as of December 31, 2011 and the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The total of the consolidated statement of financial position amounts to KEUR and the profit for the year (group share) amounts to KEUR The company s board of directors is responsible for the preparation of the consolidated financial statements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the legal requirements applicable in Belgium and with Belgian auditing standards, as issued by the «Institut des Réviseurs d Entreprises/Instituut van de Bedrijfsrevisoren». Those auditing standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. In accordance with the auditing standards referred to above, we have carried out procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The selection of these procedures is a matter for our judgment, as is the assessment of the risk that the consolidated financial statements contain material misstatements, whether due to fraud or error. In making those risk assessments, we have considered the Group s internal control relating to the preparation and fair presentation of the consolidated financial statements, in order to design audit procedures that were appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group s internal control. We have also evaluated the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by management, as well as the presentation of the consolidated financial statements taken as a whole. Finally, we have obtained from the board of directors and Group officials the explanations and information necessary for our audit. We believe that the audit evidence we have obtained provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements give a true and fair view of the Group s net worth and financial position as of December 31, 2011 and of its results and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union, and with the legal and regulatory requirements applicable on quoted companies in Belgium. Additional remark The company s board of directors is responsible for the preparation and content of the management report on the consolidated financial statements. Our responsibility is to include in our report the following additional remark, which does not have any effect on our opinion on the consolidated financial statements: the management report deals with the information required by the law and is consistent with the consolidated financial statements. However, we are not in a position to express an opinion on the description of the principal risks and uncertainties facing the companies included in the consolidation, the state of their affairs, their forecast development or the significant influence of certain events on their future development. Nevertheless, we can confirm that the information provided is not in obvious contradiction with the information we have acquired in the context of our appointment. Brussels, April 23, 2012 X. DOYEN Statutory Auditor Rapport annuel SABCA > 25

72 SABCA Annual accounts 2011 Non consolidated balance sheet after appropriation Statutory accounts according to the Belgian accounting policies (in thousand EUR) Codes Assets Fixed assets 20/28 46,810 40,300 Intangible assets 21 17,566 11,685 Tangible assets 22/27 23,533 22,865 Land and buildings 22 5,587 5,056 Plant, machinery and equipment 23 10,801 12,467 Furniture and vehicles 24 1,594 1,458 Assets under construction and advance payments 27 5,551 3,884 Financial assets 5,711 5,750 Affiliated enterprises 280/1 5,384 5,384 Participating interests 280 5,384 5,384 Other financial assets 284/ Shares Amounts receivable and cash guarantees 285/ Current assets 29/58 209, ,887 Amounts receivable after more than one year 29 6,037 4,282 Trade debtors 290 6,030 4,230 Other amounts receivable Stocks and contracts in progress 3 55,504 70,033 Stocks 30/36 29,727 30,921 Raw materials and consumables 30/31 7,518 8,095 Goods purchased for resale 34 20,653 20,571 Advance payments 36 1,556 2,255 Contracts in progress 37 25,777 39,112 Amounts receivable within one year 40/41 43,573 30,054 Trade debtors 37,791 27,419 Other amounts receivable 5,782 2,635 Investments 50/53 99,144 86,172 Other investments and deposits 51/53 99,144 86,172 Cash at bank and in hand 54/ Deferred charges and accrued 490/1 4,775 1,615 Total assets 20/58 256, ,187 > 26 Rapport annuel SABCA

73 Annual accounts 2011 SABCA (in thousand EUR) Codes Liabilities Capital and reserves 10/15 60,637 56,191 Capital 10 12,400 12,400 Issued capital ,400 12,400 Reserves 13 14,177 14,089 Legal reserve 130 1,240 1,240 Reserves not available for distribution Other Untaxed reserves Reserves available for distribution 11,760 11,760 Profit carried forward 14 33,300 29,174 Investment grants Provisions and deferred taxation 16 25,295 32,695 Provisions for liabilities and charges 160/5 25,240 32,656 Pensions and similar obligations 160 3,315 9,498 Major repairs and maintenance 162 1,770 1,803 Other liabilities and charges 163/5 20,155 21,355 Deferred taxation Creditors 17/49 170, ,301 Amounts payable after more than one year ,943 77,550 Advances received on contracts in progress 64,166 46,419 Other amounts payable 39,777 31,131 Amounts payable within one year 57,396 57,788 Current portion of amounts payable after more than one year Financial debts Credit institutions 430/ Trade debts 44 12,580 11,386 Suppliers 440/4 12,580 11,386 Advances received on contracts in progress 46 30,792 31,804 Taxes, remuneration and social security 45 10,818 10,593 Taxes 450/ Remuneration and social security 454/9 10,045 9,687 Other amounts payable 47/48 2,988 3,043 Accrued charges and deferred income 492/9 9,452 8,963 Total liabilities 10/49 256, ,187 Rapport annuel SABCA > 27

74 SABCA Annual accounts 2011 Non consolidated income statement Statutory accounts according to the Belgian accounting policies (in thousand EUR) Operating income 70/74 138, ,357 Turnover (notes 5.10) , ,337 Increase; decrease in stocks of finished goods, (+)/(-) 71-14,697-12,547 work and contracts in progress Own construction capitalised 72 13,721 8,187 Other operating income (notes 5.10) 74 6,462 10,380 Operating charges 60/64-134, ,469 Raw materials, consumables and goods for resale 60 24,812 27,094 Purchases 600/8 25,427 25,737 Increase, decrease in stocks (+)/(-) ,357 Services and other goods 61 44,110 35,848 Remuneration, social security costs and pensions (notes 5.10) 62 58,509 54,463 Depreciation of and other amounts written off formation expenses, ,447 9,769 intangible and tangible fixed assets Increase, decrease in amounts written off stocks, contracts in progress (+)/(-) 631/ and trade debtors (notes 5.10) Increase, decrease in provisions for liabilities and charges (notes 5.10) (+)/(-) 635/7-7,446-1,857 Other operating charges (notes 5.10) 640/8 1,277 1,270 Operating profit (+)/(-) ,893 8,888 Financial income 75 6,174 10,163 Income from financial fixed assets Income from current assets 751 1,595 1,456 Other financial income (notes 5.11) 752/9 4,536 8,704 Financial charges 65-3,422-7,828 Interest and other debt charges Other financial charges (notes 5.11) 652/9 3,038 7,576 Profit on ordinary activities before taxes (+)/(-) ,645 11,223 > 28 Rapport annuel SABCA

75 Annual accounts 2011 SABCA (in thousand EUR) Codes Extraordinary income Write-back of depreciation and of amounts written off intangible and tangible fixed assets Write-back of provisions for extraordinary liabilities and charges Gain on disposal of fixed assets Other extraordinary income (notes 5.11) 764/ Extraordinary charges ,072 Amounts written off financial fixed assets 661 2,035 Losses on disposal of fixed assets Other extraordinary charges (notes 5.11) 664/ Profit (Loss) for the period before taxes (+)/(-) ,937 9,407 Transfer from deferred taxation Transfer to deferred taxation Income taxes (+)/(-) 67/ ,229 Income taxes (note 5.12) 670/3 1,787 3,229 Adjustment to income taxes and write-back of tax provisions 77-1,192 Profit (Loss) for the period (+)/(-) ,326 6,184 Transfer from untaxed reserves Transfer to untaxed reserves Profit (Loss) for the period available for appropriation (+)/(-) ,239 6,145 Appropriation account Profit to be appropriated (+)/(-) ,413 31,286 Profit (Loss) for the period available for appropriation (+)/(-) (9905) 6,239 6,145 Profit brought forward (+)/(-) 14P 29,174 25,141 Profit to be carried forward (+)/(-) (14) -33,301-29,174 Distribution of profit 694/6-2,112-2,112 Dividends 694 2,112 2,112 Rapport annuel SABCA > 29

76 SABCA Annual accounts 2011 Notes (Except contrary indication, all the data are in thousands of euros) STATEMENT OF INTANGIBLE ASSETS (heading 21 of assets) Acquisition cost Codes Research and development expenses Concessions, patents licences a.o. At the end of the preceding period 805-P 102,076 3,024 Movements during the period: Acquisitions, including produced fixed assets ,721 At the end of the period ,797 3,024 Depreciation and amounts written down At the end of the preceding period 812-P 90,391 3,024 Movements during the period: Recorded 807 7,840 At the end of the period ,231 3,024 NET BOOK VALUE AT THE END OF THE PERIOD 17,566 STATEMENT OF TANGIBLE FIXED ASSETS (headings 22 to 27 of assets) Acquisition cost Codes Land and buildings (heading 22) Plant, machinery and equipment (heading 23) Furniture and vehicles (heading 24) Assets under construction and advance payments (heading 27) At the end of the preceding period 819-P 47,567 88,359 15,154 3,966 Movements during the period: Acquisitions, including produced fixed assets , ,467 Sales and disposals , Transfers from one heading to another (+)/(-) ,226 At the end of the period ,087 85,422 15,687 6,207 Depreciation and amounts written down At the end of the preceding period 832-P 42,511 75,893 13, Movements during the period: Recorded , Written down after sales and disposals , Transfers from one heading to another (+)/(-) At the end of the period ,500 74,621 14, NET BOOK VALUE AT THE END OF THE PERIOD 5,587 10,801 1,594 5,551 > 30 Rapport annuel SABCA

77 Annual accounts 2011 SABCA STATEMENT OF FINANCIAL FIXED ASSETS (heading 28 of assets) Participating, interests and shares Acquisition cost Codes Affiliated enterprises Other enterprises (heading 280) (heading 284) At the end of the preceding period 839-P 12,495 2,211 Movements during the period: Acquisitions, including produced fixed assets 836 Sales and disposals 837 At the end of the period ,495 2,211 Depreciation and amounts written down At the end of the preceding period 852-P 7,104 2,047 Movements during the period: Recorded 847 Cancelled owing to sales and disposals 850 At the end of the period 852 7,104 2,047 Uncalled amounts At the end of the preceding period 855-P 7 At the end of the period Net book value at the end of the period 5, Amounts receivable (heading 285/8) Net book value at the end of the preceding period 285-P 202 Movements during the period: Additions Reimbursements Net book value at the end of the period (285) 163 INFORMATION RELATING TO THE SHARE IN THE CAPITAL List of both enterprises in which the enterprise holds a participating interest (recorded in the heading 280 and 282 of the assets), and other enterprises in which the enterprise holds rights (recorded in the headings 28 and 50/53 of assets) in the amount of at least 10 % of the capital issued. Information from the most recent period Rights held by for which annual accounts are receivable NAME, full address of the REGISTERED OFFICE and for the enterprise governed by Belgian law, the COMPANY NUMBER SABCA Limburg N.V. Dellestraat 32 - B 3560 LUMMEN BE the enterprise (directly) Subsidiaries Annual accounts Monetary unit Capital and reserves Net result (+) or (-) in thousands of monetary units Number % % 499, EUR 10, SABCA (C.D.R.) SPRL Chaussée de Haecht Bruxelles BELGIUM BE EUR 11 0 FLABEL CORPORATION S.A. Boulevard Auguste Reyers Bruxelles 3 BELGIUM BE EUR Rapport annuel SABCA > 31

78 SABCA Annual accounts 2011 INVESTMENTS: OTHER INVESTMENTS AND DEPOSITS (heading 51/53 and 490/1 of assets) Other investments Codes Term deposits with credit institutions 53 99,144 86,172 falling due : less or equal to one month ,500 21,809 between one month and one year ,871 64,363 more than one year ,773 Deferred charges and accrued income 2011 Analysis of heading 490/1 of assets if the amount is significant. Goods in acceptance and litigations 1,154 Goods and services to provide 588 Accrued bank and loan interests 524 Valuation USD/MTM 2,509 STATEMENT OF CAPITAL AND STRUCTURE OF SHAREHOLDINGS Statement of capital Amounts in Codes thousand EUR Issued capital At the end of the preceding period 12,400 At the end of the period 12,400 Number of shares Structure of the capital Different categories of shares Without mention of nominal value 2,400,000 Registered shares ,245,807 Shares to bearer and/or dematerialized ,193 As from January 1 st, 2008 the shares of the company are only issued in registered or dematerialised according to the choice of the shareholder. Structure of shareholdings of the enterprise as at year-end closing date: Fokker Aerospace B.V. Amersfoortsestraatweg 7, NL-1412 KA Naarden (the Netherlands) : 1,045,662 shares equal % of the capital. Fokker Aerospace B.V. is under control of Stork B.V. Amersfoortsestraatweg 7, NL-1412 KA Naarden (the NETHERLANDS) (notification of November 5, 2002). DASSAULT BELGIQUE AVIATION S.A., rue de Strasbourg 13 B-1130 Bruxelles, 1,278,650 shares, equal % of the capital (information provided of June 9, 2010). The share stock of DASSAULT BELGIQUE AVIATION S.A. is held at % by the S.A. Groupe Industriel Marcel Dassault, 9 Rond-Point des Champs Elysées Marcel Dassault, F Paris (France) (situation of February 27, 2001). The annual accounts of S.A.B.C.A. are consolidated by global integration in the company accounts of the Group Dassault. > 32 Rapport annuel SABCA

79 Annual accounts 2011 SABCA PROVISIONS FOR OTHER LIABILITIES AND CHARGES 2011 Analysis of heading 163/5 of liabilities if the amount is material For global risk Ariane 5 and adaptation of the company to civil aviation programmes 9,200 Provision for futures losses on orders 6,358 Provision for seniority premium 3,715 Provision for futures losses 612 STATEMENT OF AMOUNTS PAYABLE, ACCRUED CHARGES AND DEFERRED INCOME Analysis by current portions of amounts initially payable after more than one year Amounts payable Codes not more than one year (heading 42) between one and five years (heading 17) over five years (heading 17) Advances received on contracts in progress ,166 Other amounts payable ,542 36,235 TOTAL ,708 36,235 Amounts payable for taxes, remuneration and social security Codes 2011 Taxes (heading 450/3 of the liabilities) Non expired taxes payable Estimated taxes payable Remuneration and social security (heading 454/9 of liabilities) Other amounts payable relating to remuneration and social security ,044 Accrued charges and deferred income 2011 Allocation of the heading 492/9 of liabilities if the amount is considerable Accrued charges 2,218 Suspense accounts : amounts not yet received on financial invoices 6,997 Suspense accounts : invoices redefined as advances not yet received 237 OPERATING RESULTS Operating income Net turnover (heading 70) 132,551 Breakdown by type of activity in percentage of turnover Airframe, civil and military, construction and overhaul 64.8 Space products 29.6 Servosystems 4.6 Miscellaneous Breakdown by geographical markets Domestic 14.9 Export Rapport annuel SABCA > 33

80 SABCA Annual accounts 2011 OPERATING RESULTS Operating income Other operating (heading 74) whereof: the total amount of compensatory amounts obtained from public authorities Codes Operating costs Codes Employees recorded in the personnel register Total number at the closing date Average number of employees in full-time equivalents Number of actual working hours ,284,227 1,328,552 Personnel charges (heading 62) Remuneration and direct social benefits ,521 29,954 Employer's contribution for social security ,102 13,523 Employer's premium for extra-statutory insurance 622 4,628 2,774 Other personnel charges 623 8,258 8,212 Provisions for pensions (comprises dans la rubrique 635/7) Additions (uses and write-back) (+)/(-) 635-6, Amounts written off (heading 631/4) Stocks and contracts in progress Recorded ,884 2,720 Write back ,449 2,838 Provisions for risks and charges (heading 635/7) Additions ,630 11,285 Uses and write-back ,076 13,142 Other operating charges (heading 640/8) Taxes related to operations 640 1,277 1,271 Temporary personnel and persons placed at the disposal of the enterprise Total number at the closing date Average number of employees in full-time equivalents Number of actual working hours ,707 70,814 Charges to the enterprise 617 6,127 3,661 > 34 Rapport annuel SABCA

81 Annual accounts 2011 SABCA FINANCIAL AND EXTRAORDINARY RESULTS Financial results Codes Other financial income (heading 752/9) Government grants recognised in the income statement Investment grants Allocation of other financial income Exchange differences 4,053 8,276 Interest in arrears 136 Other financial charges Allocation of other financial charges Exchange differences 2,388 6,263 Extraordinary results 2011 Allocation other extraordinary income Miscellaneous 10 Allocation other extraordinary charges Penalties 14 Miscellaneous 2 INCOME TAXES Income taxes Codes 2011 Income taxes on the result of the current period : ,531 Taxes and withholding taxes due or paid ,749 Excess of withholding taxes capitalised (-) ,218 Income taxes on previous periods : Additional charges for income taxes due or paid In so far as income taxes of the current period are materially affected by differences between the profit before taxes, as stated in the annual accounts and the estimated taxable profit, the main source for such differences with special mention of timing differences. Non-deductible expenses 1,200 Investments deduction 1,100 Notional interests 1,503 Other taxes and taxes borne by third parties Codes The total amount of value added tax, charged during the period: to the enterprise (deductible) ,685 16,046 by the enterprise ,770 12,098 Amounts retained on behalf of third parties for: Payroll withholding taxes ,519 10,206 Rapport annuel SABCA > 35

82 SABCA Annual accounts 2011 RIGHTS AND COMMITMENTS NOT ACCRUED IN THE BALANCE SHEET Goods and values not disclosed in the balance sheet, held by third parties in their own name but at risk to and for the benefit of the enterprise: Codes 2011 Raw materials in custody 962 Tooling in custody 226 Materials in custody 3,571 Amount of forward contracts: Currencies sold (to be delivered) ,867 Information relating to technical guarantees, in respect of sales or services. The general sales terms provide for a fonctional guarantee during a 6 month period. They are very few exceptions to the rule. For example, the warranty for space products covers 24 to 60 month stocking. If there is a supplementary retirement or survivors pensions plan in favour of the personnel or the executives of the enterprise, a brief description of such plan and of the measures taken by the enterprise to cover the resulting charges. The company contracted group insurance policies in favour of its employed personnel a guaranteed retirement or survivor s revenue, as a complement to legal pension and based on seniority as well as on remuneration at the end of the carreer; a death capital for the benefit of nominees in case of decease of the employee before retirement time. Premiums are paid by the employee and the company according to the insurance plan. Premiums are paid by the employee and the company according to the insurance plan. RELATIONSHIPS WITH AFFILIATED ENTERPRISES AND ENTERPRISES LINKED BY PARTICIPATING INTERESTS Affiliated enterprises Codes Financial fixed assets (281/1) 5,384 5,384 Investments (280) 5,384 5,384 Amounts receivable ,340 5,470 After one year ,037 4,282 Within one year ,303 1,188 Amounts payable , Within one year , Financial results Other financial income > 36 Rapport annuel SABCA

83 Annual accounts 2011 SABCA FINANCIAL RELATIONSHIPS WITH Directors and managers, individuals or bodies corporate who control the enterprise without being associated therewith or other enterprises controlled by these persons, other enterprises controlled by the sub B. mentioned persons without being associated therewith The amount of direct and indirect remuneration and pensions, included in the income statement, as long as this disclosure does not concern exclusively or mainly, the situation of a single identifiable person: Codes 2011 To directors and managers FINANCIAL RELATIONSHIPS WITH Auditors or people they are linked to Codes 2011 Auditor s fees Other missions within the framework of certificate of attestation Other attestation missions COMMITMENTS, RIGHTS AND SUSPENSE ACCOUNTS Guarantees given by third parties on behalf of the company 9,581 5,067 Guarantees received 3,533 4,262 Goods belonging to third parties 94, ,524 Miscellaneous, commitments, rights and suspense accounts including 4,759 4,452 2,245,807 registered shares S.A.B.C.A. handed by third parties PM PM Temporary partnership S.A.B.C.A. - SONACA Belgian Association for the Maritime Patrol Airplane (A.B.A.P.) 10,621 10,621 Forward contracts 14,867 19, , ,268 THIRD PARTY GOODS (analysis) Third party goods and values, held in deposit, consignment or for manufacturing Third party raw materials in the store room 5,610 5,633 Third party aeronautical parts and material, in the manufacturing or overhaul process 4,032 4,048 Third party tooling, in deposit 67,356 65,981 Equipment for repair-overhaul, in deposit 2,794 4,687 Office furniture 14,339 44,175 94, ,524 Rapport annuel SABCA > 37

84 SABCA Annual accounts 2011 Social report STATEMENT OF THE PERSONS EMPLOYED Employees recorded in the personnel register During the period and the previous period Codes Full-time Part-time Total (T) or total full-time equivalents (FTE) Total (T) or total full-time equivalents (FTE) Average number of employees (FTE) (FTE) Number of hours actually worked 101 1,066, ,826 1,284,227 (T) 1,328,552 (T) Personnel costs ,347 9,162 58,509 (T) 54,463 (T) Codes Full-time Part-time Total full-time equivalents At the closing date of period Number of employees recorded in the personnel register By nature of the employment contract Contract for an indefinite period Contract for a definite period According to the gender and by level of education Male primary education secondary education higher education (non university) university education Female primary education secondary education higher education (non university) university education By professional category Management staff Employees Workers HIRED TEMPORARY STAFF AND PERSONNEL PLACED AT THE ENTERPRISE S DISPOSAL During the period Persons placed Codes Temporary personnel at the disposal of the enterprise Average number of employees Number of hours actually worked , ,541 Charges of the enterprise ,474 > 38 Rapport annuel SABCA

85 Annual accounts 2011 SABCA TABLE OF PERSONNEL CHANGES DURING THE PERIOD Entries Number of employees recorded on the personnel register during the financial year Total full-time Codes Full-time Part-time equivalents By nature of the employment contract Contract for an indefinite period Contract for a definite period Departures Codes Full-time Part-time Total full-time equivalents Number of employees whose contract-termination date has been entered in the personnel register during the period By nature of the employment contract Contract for an indefinite period Contract for a definite period By reason of termination of contract Retirement Dismissal Other reason INFORMATION WITH REGARD TO TRAINING RECEIVED BY EMPLOYEES DURING THE PERIOD Total number of official advanced professional training projects received by employees at company expense Codes Male Codes Female Number of participating employees Number of training hours , ,676 Costs for the company , of which gross costs directly linked to the training , of which paid contributions and deposits in collective funds of which received subsidies (to be deducted) Total number of less official and unofficial advanced professional training projects received by employees at company expense Codes Male Codes Female Number of participating employees Number of training hours , Costs for the company Rapport annuel SABCA > 39

86 SABCA Annual accounts 2011 Summary of the rules of valuation (Art. 28, paragraph 1 of the Royal Decree of January 30, 2001) The rules of valuation were deposited on June 7, 1978 at the 6th Registration Office in Brussels Volume 131, folio 66 section 18. INTANGIBLE FIXED ASSETS These fixed assets are valued according to art. 60 of the Royal Decree of January 30, The board of directors decides, depending on the case, on the amount to be passed to the assets side as well as the depreciation rates to be applied. They can be the subject of accelerated or exceptional depreciation, in accordance with the fiscal prescriptions in this matter, if due to their alteration or modifications of the economic circumstances, the book value exceeds the usage value. The research and development costs are depreciated according to the straight-line method over a three year period, the software costs over a five year period. The intangible fixed assets purchased or produced since 2003 are subjected to a daily pro rata applicable to the first period of depreciation. TANGIBLE FIXED ASSETS The ACCOUNTING BOOK VALUE is defined in accordance with art. 36 to 39 of the Royal Decree of January 30, ADDITIONAL COSTS AND NON-RECOVERABLE TAXES. Additional ancillary costs are depreciated in the same time and in the same way as the amount in principal of the purchase price or the production cost of the equipment (art. 196, 2,2 CIR new).. The ancillary costs related to old tangible fixed assets continue to be written off, following the depreciation plan in the same way as in the past. DEPRECIATION (a) Method The straight-line method is applied for the former investments while the decreasing method is used for the investments that have been made since 1977, with the exception of any other fiscally authorized method within the context of investment stimulation. In that case, the board of directors examines the appropriateness of these depreciation methods case per case, as well as the additional depreciation rates related to economic and/or technological reasons (art. 64), and the extent to which they should be applied. Since 1977, the whole of the depreciation rules authorized by the various government measures, have been applied (100% and sometimes even 110% of the value). The depreciation rules were applied for the whole year and for the first time during the year when the purchase takes place until end In accordance with the fiscal law dated December 24, 2002 the new rules related to the daily pro rata depreciation are applied to the new tangible and intangible fixed assets purchased or produced since the fiscal year The assets purchased or produced before the financial period 2003 can be continued to be depreciated following the old procedure. The advance payments and assets under installation and construction benefit of a specific accounting and fiscal treatment. > 40 Rapport annuel SABCA

87 Annual accounts 2011 SABCA (b) Applied depreciation rates STOCKS AND SHARES VALUES: 5% or more is fiscally allowed, mainly for buildings erected on lands granted by third persons for a determined period and for the lay-out of the rented buildings. Installations, machines, tooling: 10% generally speaking; yet, a rate of 20 or 25% is applied for laboratory or electronic material, numeric control machines i.e. high precision equipment or machines in a sector undergoing a rapid technological evolution; as well as for equipment used in shift working. Tooling and equipment, templates and numeric control software proper to a program are depreciated at 100% or during the period of the contract in conformity with the allowed fiscal rules. Furniture, office and rolling stock: 10% except for vehicles and trailers, office machines, computers, cameras and copiers (20%). Depreciation recoveries can be applied up to the taxed surplus depreciation as well as for the tax exempted depreciations exceeding above mentioned rates; also in case of transfer, sale, catastrophe or compulsory purchase. With effect from the beginning of 2003 the daily pro rata was applied as well as to the straight-line method as to the decreasing or accelerating method of depreciation. FINANCIAL FIXED ASSETS STOCKS AND SHARES VALUES The acquisition, subscription costs are booked as exceptional financial charges. The losses in value of non-quoted shares are considered only if the loss is important and lasting. RECEIVABLES: (see below) STOCKS PURCHASE PRICE of materials, supplies and goods, suppliers invoices plus import, delivery, insurance and commission costs. VALUATION OF STOCKS AT THE END OF THE FINANCIAL YEAR as well as RAW MATERIALS CONSUMPTION: FIFO method (First In, First Out). AMOUNTS WRITTEN OFF ON STOCKS: Up to 100%. (a) for parts related to completed production or maintenance programs, unusable or whose tolerances, norms, technical configuration, conception have changed. (b) for parts that have not moved during the 24 previous months. In case of later use of the non destructed parts, amounts written of are decreased. CONTRACTS IN PROGRESS ELEMENTS CONSTITUTING THE COST PRICE Cost prices are determined taking into account all direct production costs on the one hand, as well as the whole of indirect costs on the other hand. For the latter, however, the board of directors reserves the right to book only part of these costs to cost price, individualized by a production program or not, the other part being booked directly to the result of the year or spread over several years. This right will only be used in case of exceptional disruptive and temporary circumstances (such as strikes, important and prolonged under-activity periods, restructuring and lay-outs) having such an impact on the cost price of works that they would considerably alter its image. Rapport annuel SABCA > 41

88 SABCA Annual accounts 2011 Method of distribution by individualized production programs (a) direct booking of raw materials, parts, consumer goods, direct costs and specific subcontract costs, depreciation of specific equipments and relocation, lay-out costs proper to a program. (b) booking of indirect costs through hour rates based on the work of the production personnel and/or certain machines. These hour rates include all direct and indirect remuneration and related charges as well as overheads and the financial industrial usage cost of the equipment. The latter can be spread over individualised production programs by derogating from the depreciation method and amount booked to the balance sheet on an economic and fiscal basis. VALUATION OF THE WORK IN PROCESS They include unfinished works regarding a same group of contracts, or for which the cost price elements are not complete, or for which definitive acceptance quality controls (possibly to be carried out by the customer) are not yet completed. These work in process are valuated at the cost price after deduction of the already invoiced works. AMOUNTS WRITTEN OFF (a) on works carried out: they are automatically and fully implemented up to the amount of the incurred costs exceeding the possible total contract invoicing. (b) on works left to be carried out: the estimated costs of these works are added to reductions described in (a) only if the progress of work is higher than 75% and if the estimation of these costs and of the invoicing to be made can be sufficiently accurate (usual works). In the other cases, provisions for risks on received orders should be made with the greatest care and on an individual basis. (c) on sales realized by our customers: in case of loss on program, a provision will be constituted to cover our implicit obligations. RECEIVABLES (a) Valuation of receivables (and payables) in foreign currencies at the internal standard exchange rate per currency, which is modified during the year only in case of important and lasting fluctuation of average rates or in case of official revaluation/devaluation. (b) Amounts written off in the following cases: - fluctuation of the exchange rate of a minimum of 5 % ( and 1,250 euros, was 50,000 BEF) in proportion to the internal standard rate; - bankruptcy, composition, nationalization (high political risks), subordination of receivables with risks; - important, lasting and in nature and amount determined litigation of which the recovery is very precarious, the negotiations being concluded; - very negative economical, financial or political information concerning exports. (c) Provision for risks and costs on litigation in negotiations (d) Decrease in amounts written off if the effective decrease can reasonably be envisaged during the first months of the following year or if the previous reductions were inappropriate or exaggerated. > 42 Rapport annuel SABCA

89 Annual accounts 2011 SABCA ACCRUED OR DEFERRED CHARGES OR INCOME (assets - liabilities) They are used only for amounts that can considerably influence the result of the year on the one hand and that are part of the usual activities of the company on the other hand. The board of directors individually analyzes the elements that are not part of the usual activity. PROVISIONS FOR LIABILITIES AND CHARGES They are systematically but very carefully established particularly when they can be fiscally harmful to the company or in case of loss superior to 50% of the capital. PROVISIONS SET UP FOR TAX PURPOSES They are determined according to fiscal rules, taking into account increases, advance payments, real and fictitious with-holding taxes on investment income, taxes credit, withholding taxes on real estate and chargeable foreign taxes. The exceeding part of the previous provisions will be considered only if three booking years have passed after their constitution without complementary enrolment, unless the board decides otherwise. MISCELLANEOUS RIGHTS AND COMMITMENTS NOT REFLECTED IN THE BALANCE SHEET They are valued at the maximum amount mentioned in the commitment documents. If there are no such documents, the reasonably estimated economic value of the goods they concern will be taken into account. This value will be considered as the net booking value for the goods belonging to the company. Adaptation to the valuation rules chosen by the companies (art. 30 of the Royal Decree) Tooling, small equipment and small tooling constituting full individual sets of less than 250 euros (was 10,000 BEF) are no longer included in assets but in the cost price or in overheads depending on the fact that they are specific or not to a contract. This modification of the 1978 rules is dealt with in the new fourth paragraph of section 04,5 of the rules of valuation (Financial year 1979). Modification of the first paragraph of section 14 of the rules of valuation. At the end of each social financial year, investments granted will be progressively reduced by booking to the profit and loss account, in deduction of: a. either the depreciation regarding fixed assets for the acquisition of which they were obtained; or; b. the loan costs (Financial year 1981). Starting from 1991, the deferred taxes have been deducted from investments granted and realized gains if necessary. They will be reduced at intervals by booking to the profit and loss account at the rate of the reduction of investments granted and, in the case of realized gains at the rate of the inclusion in the taxable result of the concerned gains. Rapport annuel SABCA > 43

90 SABCA Annual accounts 2011 Comments on the non consolidated balance sheet N.B.: the important differences between correspondig headings of compared periods are mentioned in italic. Assets Fixed Assets 46,810 Intangible assets 17,566 Research and development costs, know-how Movements during the period Acquisitions 13,721 Depreciation recorded -7,840 Net book value 5,881 The research and development activities focused on civil aviation programmes in which the company has been taking part with its industrial partners. Tangible assets 23,533 Land and buildings 5,587 Plant, machinery and equipment 10,801 Furniture and vehicles 1,594 Assets under construction and advance payments 5,551 Movements during the period Acquisitions 6,323 Sales and disposals -4,965 Depreciation recorded -5,607 Depreciation cancelled after sales & disposals 4,917 Net book value 668 The most significant industrial investment this year is the construction and development of the workshop for the surface treatment and painting automation of large-size pieces. Financial assets 5,711 Affiliated enterprises Participating 5,384 - SABCA Limburg N.V. 5,290 - SABCA (C.D.R.) sprl 11 - FLABEL CORPORATION S.A. 83 Other financial assets 327 Shares and other securities: B.S.C.A Sambrinvest 6 - Arianespace Participation Arianespace PM - Belairbus PM - SONACA PM - IGRETEC PM Intercommunale pour la Gestion et la Réalisation d Etudes Techniques et Economiques. - SABCA share in the participation of A.B.A.P. to the formation of S.E.C.B.A.T. PM Amounts receivable and cash guarantees Cash guarantees 163 The «other financial assets» item is in slight decrease due to refunds of guarantees by the customs admnistration. > 44 Rapport annuel SABCA

91 Annual accounts 2011 SABCA Current assets 209,913 Amounts receivable after more than one year 6,037 Trade debtors 6,030 Other amounts receivable 7 Trade debtors after more than one year related to advances paid to SABCA Limburg. Stocks and contracts in progress 55,504 Stocks 29,727 Raw materials and consumables 7,518 Goods purchased for resale 20,653 Raw materials and consumables in stock for other contracts partially paid by customer Advance payments 1,556 Contracts in progress 25,777 This item contains principally the following programmes: Airbus and Space applications. Amounts receivable within one year 43,573 Trade debtors - supply of goods & services 37,791 whereof affiliated enterprises 2,759 Trade receivables show a significant increase. They go from 27,419 to 37,791 due to the importance of billing at the end of the exercise. Other amounts receivable 5,782 V.A.T. Recoverable 1,982 Excess of income tax payments to be recovered 1,218 Loans and advances to the personnel 26 Amounts owed by insurers 464 Sundry amounts receivable 2,092 Investments 99,144 Other investments and deposits 99,144 Less or equal to one month 11,500 Between one month and one year 65,871 More than one year 21,773 Cash at bank and in hand 880 Bank & post office 862 Cash 18 Term deposits and cash equivalents amount to 100 million globally as compared to 87 in the previous financial year. This increase is due to advances received for the Ariane and Airbus A350 programmes. Deferred charges and accrued income 4,775 Valuation USD / MTM 2,509 Goods in acceptance and litigations 1,154 Expenses booked or prepaid 588 Accrued bank and loan interests 524 This heading goes up from 1,615 to 4,775. The increase is largely due to the recognition in market value (mark-to-market) of our long-term hedging instruments. Total assets 256,723 Rapport annuel SABCA > 45

92 SABCA Annual accounts 2011 Liabilities Shareholders equity 60,637 Capital 12,400 Issued capital 12,400 Represented by 2,400,000 shares without mention of nominal value Reserves 14,177 Legal reserve 1,240 Reserves not available for distribution 595 Extraordinary reserve 595 Untaxed reserves 582 Other untaxed gains: 521 Building and equipment 2 Realized tangible assets of more than five years 106 Collective transport of employee 413 Investment reserve: 61 Surplus after incorporation into the capital Reserves available for distribution 11,760 Reserve for replacement of tangible assets 2,866 Reserve for installations in favour of the personnel 938 Other available reserves 7,956 Profit carried forward - retained earnings 33,300 See page 40 for the appropriation of the result of the financial year Investment grants 760 Following the continuation in 2011 of new agreements signed with the «Région Bruxelles-Capitale» and the «Région Wallonne» in the scope of their political incentives and financial measures for industrial research a gross amount of 572 was booked and 340 were affected to other financial products. Provisions and deferred taxation 25,295 Provisions for liabilities and charges 25,240 Pensions and similar obligations 3,315 Major repairs and maintenance 1,770 Other liabilities and charges 20,155 For global risk Ariane 5 and adaptation of the company to civil aviation programmes 9,200 For future losses on orders 6,358 For future losses on orders in progress 612 For senority premium 3,715 For risks and charges on cases at issue 70 For social litigations 200 The provisions for liabilities and charges were reduced by 7.4 million, chiefly as a result of a decrease of 6.2 million in pensions and similar obligations and of 1.2 million in other liabilities and charges. The latter decrease is the result of the use of the supplementary provision for future losses in the amount of -3.2 million and of the provision for global risk on Ariane 5 and adaptation of the company to civil aviation programmes in the amount of -1.6 million offset by the setup of a new provision for seniority premium in favour of the personnel. Deferred taxation 55 Taxes relating to gains on disposals of fixed assets 815 Transfer from deferred taxation on dito -760 > 46 Rapport annuel SABCA

93 Annual accounts 2011 SABCA Creditors 170,791 Amounts payable after more than one year 103,943 Advances received on contracts in progress 64,166 Customer advances 64,166 Other amounts payable 39,777 Advances on prototypes, received by the State and to be reimbursed conditionally: 36,729 - Science Policy PPS - FPS Economy - N.R.C. - PLANCHER 3,654 - Science Policy PPS - FPS Economy - N.R.C. - A380 22,699 - Science Policy PPS - FPS Economy - N.R.C. - A350 10,376 Advances received from Brussels-Capital Region and to be reimbursed conditionally: Servoactuators No-back device for electromechanical actuators 49 - Zero lead differential roller bearing 250 Valuation USD MTM LT 2,121 The amounts payable after more than one year go from 78 to 104 million. This growth is due to a sharp increase in advances received from customers and to a lesser extent in the advances received for the extension programmes A350 from public authorities. In «Other debts» we find also the recognition of the valuation at market value (mark-to-market) of our long-term hedging instruments. Amounts payable within one year 57,396 Current portion of amounts payable after more than one year 208 Science Policy PPS - FPS Economy and Brussels-Capital Region 208 Financial debts 10 Other banks 10 Trade debts 12,580 Suppliers 12,580* - Invoices to be paid 11,515 - Invoices to be received 1,065 * whereof affiliated enterprises Advances received on contracts in progress 30,792 Financial invoices in progress 87,644 Amounts not yet received to deduct -6,997 Long term financial invoices -64,166 Invoices redefined as advances 14,548 Invoices redefined as advances not yet received -237 Taxes, remuneration and social security 10,818 Taxes Estimated taxes payable Taxes payable Taxes withheld 7 Remuneration and social security 10,045 - Social Security Office Remuneration due to the personnel Holiday pay 5,178 - Provisions for bonus and other personnel charges 4,581 - Insurance for the personnel Other social obligations 24 Other amounts payable 2,988 Amounts payable resulting from appropriation of profits 2,125 - Dividends relating to previous financial years 13 - Dividend relating to the financial year 2,112 Sundry amounts payable Royalties Contributions 17 - Customers payable 25 - Other 415 Accrued charges and deferred income 9,452 - Accrued charges 2,218 - Suspense accounts 7,234 Total liabilities 256,723 Rapport annuel SABCA > 47

94 SABCA Annual accounts 2011 Sources and applications of funds (in thousand EUR) 2011 I. Sources Profit for the period 6,326 Depreciation and amounts written down 13,447 Investment grants 232 Increase amounts payable after more than one year 26,393 46,398 II. Applications Increase amounts receivable after more than one year 1,755 Provisions and deferred taxation 7,400 Purchase of fixed assets 19,958 Distribution of profit 2,112 31,225 I. - II. Movement in working capital 15,173 III. Movement in stocks and contracts in progress -14,530 Movement in short-term accounts receivable 13,519 Movement in deferred charges and accrued income 3,160 2,149 IV. Movement in short-term non financial debts -388 Movement in accrued charges and deferred income III. - IV. Movement in short-term financing requirements 2,048 V. Movement in investments 12,972 Movement in cash at bank and in hand 150 VI. Movement in short-term financial debts 3 V. - VI. Movement in cash 13,125 > 48 Rapport annuel SABCA

95 Annual accounts 2011 SABCA STATUTORY AUDITOR S REPORT TO THE GENERAL SHAREHOLDERS MEETING ON THE ANNUAL ACCOUNTS OF THE COMPANY S.A.B.C.A. SA AS OF AND FOR THE YEAR ENDED DECEMBER 31, 2011 As required by law and the company s articles of association, we report to you in the context of our appointment as statutory auditor. This report includes our opinion on the annual accounts and the required additional disclosures and information. Unqualified opinion on the annual accounts We have audited the annual accounts of S.A.B.C.A. SA as of and for the year ended December 31, 2011, prepared in accordance with the financial reporting framework applicable in Belgium, and which show a balance sheet total of KEUR and a profit for the year of KEUR The company s board of directors is responsible for the preparation of the annual accounts. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of annual accounts that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Our responsibility is to express an opinion on these annual accounts based on our audit. We conducted our audit in accordance with the legal requirements applicable in Belgium and with Belgian auditing standards, as issued by the «Institut des Réviseurs d Entreprises/Instituut van de Bedrijfsrevisoren». Those auditing standards require that we plan and perform the audit to obtain reasonable assurance about whether the annual accounts are free of material misstatement. In accordance with the auditing standards referred to above, we have carried out procedures to obtain audit evidence about the amounts and disclosures in the annual accounts. The selection of these procedures is a matter for our judgment, as is the assessment of the risk that the annual accounts contain material misstatements, whether due to fraud or error. In making those risk assessments, we have considered the company s internal control relating to the preparation and fair presentation of the annual accounts, in order to design audit procedures that were appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company s internal control. We have also evaluated the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by management, as well as the presentation of the annual accounts taken as a whole. Finally, we have obtained from the board of directors and company officials the explanations and information necessary for our audit. We believe that the audit evidence we have obtained provides a reasonable basis for our opinion. In our opinion, the annual accounts give a true and fair view of the company s net worth and financial position as of December 31, 2011 and of its results for the year then ended in accordance with the financial reporting framework applicable in Belgium. Additional remarks The company s board of directors is responsible for the preparation and content of the management report, and for ensuring that the company complies with the Companies Code and the company s articles of association. Our responsibility is to include in our report the following additional remarks, which do not have any effect on our opinion on the annual accounts: the management report deals with the information required by the law and is consistent with the annual accounts. However, we are not in a position to express an opinion on the description of the principal risks and uncertainties facing the company, the state of its affairs, its foreseeable development or the significant influence of certain events on its future development. Nevertheless, we can confirm that the information provided is not in obvious contradiction with the information we have acquired in the context of our appointment ; without prejudice to certain formal aspects of minor importance, the accounting records are maintained in accordance with the legal and regulatory requirements applicable in Belgium ; there have been no transactions undertaken or decisions taken in breach of the company s statutes or the Companies Code such as we would be obliged to report to you. The appropriation of results proposed to the general meeting is in accordance with the relevant requirements of the law and the company s articles of association. Brussels, April 23, 2012 X. DOYEN Statutory Auditor Rapport annuel SABCA > 49

96 SABCA Annual accounts 2011 SABCA S.A. Société Anonyme Belge de Constructions Aéronautiques Chaussée de Haecht 1470 B-1130 Brussels Belgium Tel: Fax: [email protected]