Document de référence - Altran

Registration Document 2007

Persons Responsible 5

Statutory Auditors 7

Selected fi nancial information 9

Risk factors 11

Information about Altran 13

Information about the company’s businesses 15

Organizational chart 19

Property, plant, and equipment 21

Operating and fi nancial review 23

Capital resources 61

Research and development 63

Trend information 65

Forecasts 67

Administrative, management, and supervisory bodies 69

Remuneration and benefi ts 71

Management Board and Supervisory Board practices 73

Employees 75

Major Shareholders 77

Related-party transactions 83

Financial information concerning the company’s assets and liabilities, fi nancial position and profi ts & losses 85

Additional information 161

Material contracts 167

Third-party information, expert statements, and declarations of interest 169

Documents available to the public 171

Information on holdings 173

APPENDIX

Appendix 1Internal controls 175

Appendix 22007 environmentaland labour report 183

Appendix 3Statutory Auditor’s reports 185

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A2

A3

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32007 Registration document


Pursuant to article 28 of European Commission Regulation (EC) no. 809/2004, the following information is referenced in this document:

a business report, the consolidated and individual company fi nancial statements and Statutory Auditors’ reports on these fi nancial statements,

and the Statutory Auditors’ report on regulated agreements covered by article L.226-10 of the French Commercial Code and entered into by

Altran Technologies S.A. in 2005; these reports are given on pages 60 to 150 of the registration document fi led with the AMF on 29 May 2006

under number D.06-0488; and

a business report, the consolidated and individual company fi nancial statements and Statutory Auditors’ reports on these fi nancial statements,

and the Statutory Auditors’ report on regulated agreements covered by article L.226-10 of the French Commercial Code and entered into by

Altran Technologies S.A. in 2004; these reports are given on pages 36 to 150 (inclusive) of the registration document fi led with the AMF on

14 June 2005 under number R.05-091.

These documents are available on the AMF website (www.amf-france.org) and on the issuer’s website (www.altran.com).

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This 2007 registration document was fi led with the French fi nancial markets authority (AMF) on 23 April 2008 in accordance with

article 212-13 of the AMF General Regulations. This registration document may be used to support a fi nancial transaction if accompanied

by a prospectus approved by the AMF.

This is a non-binding free translation into English of the original French text and is provided solely for the convenience of English

speaking users.

4 2007 Registration document


Statement by the person responsible for the 2007 registration document

I declare, after taking all reasonable measures for this purpose and

to the best of my knowledge, that the information contained in this

registration document is in accordance with the facts and makes no

omission likely to affect its impact.

I declare that to the best of my knowledge, the fi nancial statements

were prepared according to generally accepted accounting principles

and give a true and fair view of the assets and liabilities, earnings,

and fi nancial position of the company and all entities in its scope of

consolidation, and that the management report in chapter 9 gives a

faithful summary of the businesses, earnings, fi nancial position, and

main risks and uncertainties of the company and all entities in its scope

of consolidation.

I have obtained a completion letter from the Statutory Auditors in

which they state that they have audited the information relating to

the fi nancial position and the fi nancial statements presented in this

registration document and in the document as a whole.

The Statutory Auditors’ reports on the consolidated and individual

company fi nancial statements for the fi scal year ended 31 December

2007 are given in appendix 3 of this registration document and contain

no qualifi cations or observations.

Without qualifying their opinion on these fi nancial statements, the

Statutory Auditors, in their report on the fi nancial statements for

the fi scal year ended 31 December 2006, which is included in this

document for reference and in the 2006 Registration document fi led

with the AMF on 7 June 2007 under number D.07-0561, draw attention

on:

note 6 to the fi nancial statements, “Major litigation and contingent

liabilities”; and

measures taken to strengthen the company’s internal controls and

accounting information system as discussed in the Supervisory

Board Chairman’s report prepared in accordance with the last

paragraph of article L.225-68 of the French Commercial Code.


Statutory Auditors, in their report on the fi nancial statements for the

fi scal year ended 31 December 2006, which is included in this document

for reference and in the 2006 Registration document fi led with the

AMF on 7 June 2007 under number D.07-0561, draw attention to:

note 5 to the fi nancial statements, “Information on major ongoing

litigation”;

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note 4.8 to the fi nancial statements on the accounting impact of

mergers completed during the fi scal year; and









AMF on 29 May 2006 under number D.06-0488, draw attention to:

note 6 to the fi nancial statements, “Monitoring of signifi cant legal

disputes and possible liabilities”; and




paragraph of article L.225-68 of the French Commercial Code; and

note 4.11 to the fi nancial statements, “Net fi nancial indebtedness”,

which discusses the effects of the company’s adoption on 1 January

2005 of IAS 32 on the balance sheet presentation and net fi nancial

income.





AMF on 29 May 2006 under number D.06-0488, draw attention to:

note 2.12 to the fi nancial statements, “Provisions for contingencies

and charges”;

note 2.16 to the fi nancial statements, “Signifi cant outstanding legal

disputes”;

note 2.1 to the fi nancial statements which discusses the change

in accounting method effective 1 January 2005 on provisions for

retirement obligations recognised using the preferential method

set forth in Recommendation 2003-R01 of the French National

Accounting Board (CNC); and





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1Persons Responsible


Persons Responsible1Persons responsible for financial information


Statutory Auditors, in their report on the fi nancial statements for

the fi scal year ended 31 December 2004, which is included in this

document for reference and in the 2004 Registration document fi led

with the AMF on 14 June 2005 under number R.05-091, draw attention

to the following items in Notes 3.2, 4.12, 5.4, 5.5.1., and 5.5.2. to the

fi nancial statements:

changes in the internal controls environment (note 3.2);

segment information (note 4.12);

ongoing legal and regulatory proceedings (notes 5.4 and 5.5.1); and

the company’s corporate governance system (note 5.5.2).

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AMF on 14 June 2005 under number R.05-091, draw attention to the

following items in notes 2.13, 2.15, and 2.16 to the fi nancial statements:

changes in the internal controls environment (note 2.13);

ongoing legal and regulatory proceedings (note 2.15); and

the company’s corporate governance system (note 2.16).

Yves de Chaisemartin – Chairman of the Management Board

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Persons responsible for fi nancial information

Éric Albrand

Member of the Management Board

+33 (0)1 46 17 49 69

comfi @altran.com

Laurent Dubois

Head of Investor Relations

+33 (0)1 46 17 49 69

comfi @altran.com


Permanent external auditors

The permanent external auditors are members of the Versailles

Regional Statutory Auditors Commission (Compagnie Régionale de

Versailles).

Mazars & Guérard

Represented by Guy Isimat-Mirin and Jean-Luc Barlet

Tour Exaltis – 61 Rue Henri-Regnault

92075 La Défense Cedex

France

Initial appointment date: 29 June 2005

Mandate expiration date: Annual General Meeting held in 2008

to approve the fi nancial statements for the fi scal year ended

31 December 2007

A proposal will be made at the next Annual General Meeting to renew

Mazars & Guérard’s term for another six fi scal years, until the close of

the Annual General Meeting held to approve the fi nancial statements

for the fi scal year ending 31 December 2013.

Deloitte & Associés

Represented by Henri Lejetté

185 Avenue Charles-De-Gaulle

92524 Neuilly-sur-Seine Cedex

France



to approve the fi nancial statements for the fi scal year ending

31 December 2009

2 Statutory Auditors

Substitute external auditors

The substitute external auditors are members of the Versailles Regional

Statutory Auditors Commission (Compagnie Régionale de Versailles).

Jean-Louis Lebrun

Tour Exaltis – 61 Rue Henri-Regnault

92075 La Défense Cedex

France


Mandat e expiration date: Annual General Meeting held in 2008

to approve the fi nancial statements for the fi scal year ended

31 December 2007

A proposal will be made at the next Annual General Meeting to renew

Jean-Louis Lebrun’s term for another six fi scal years, until the close of

the Annual General Meeting held to approve the fi nancial statements

for the fi scal year ending 31 December 2013.

BEAS

7-9 Villa Houssay

92524 Neuilly-sur-Seine Cedex

France



to approve the fi nancial statements for the fi scal year ending

31 December 2009


2007 sales rose 6.4% to €1,591.4 million compared with €1,495.4 million in 2006.

(in million euros) 31/12/2006 H1 2007 H2 2007 31/12/2007

Sales 1,495.4 789.5 801.9 1,591.4

Current operating income 76.0 38.7 60.7 99.4

As % of sales 5.1% 4.9% 7.6% 6.2%

Non-recurring operating income (14.7) (1.7) (13.2) (14.9)

Goodwill amortisation (15.9) (12.5) (1.4) (13.9)

Operating income 45.4 24.4 46.2 70.6

As % of sales 3.0% 3.1% 5.8% 4.4%

Cost of net financial debt (23.1) (13) (16.0) (29.0)

Other financial income and expenses (3.0) (1.1) (1.1) (2.2)

Income tax charge (15.8) (15) (3.0) (18.0)

Net profit/(loss) 3.7 (4.7) 26.2 21.5

Minority interests (0.1) 0.2 (0.1) 0.1

NET PROFIT/(LOSS) ATTRIBUTABLE TO THE GROUP 3.8 (4.5) 26.1 21.6

Current operating income increased to €99.4 million in 2007 compared

with €76 million in 2006, resulting in a 6.2% current operating margin

in 2007. The current operating margin rose from 4.9% in the fi rst half

of 2007 to 7.6% in the second half of 2007.

Operating income came out at €70.6 million in 2007 (compared

with €45.4 million in 2006) after accounting for the negative impact

of non-recurring items of €14.9 million and €13.9 million in goodwill

impairment.

Cost of net fi nancial debt (-€29.0 million) is in line with group debt.

Net profi t attributable to the group totalled €21.6 million in 2007

compared with €3.8 million in 2006.

Group net debt under IFRS dropped to €359.5 million at 31 December

2007 from €379.9 million at 31 December 2006. The €77.7 million

reduction in group net debt in the second half of 2007 was due

to strong cash fl ow generation. This was the result of the group’s

improved operating margin and a reduction in DSO to 90 days at

31 December 2007.

Cost reduction plan

Increased efforts to reduce indirect costs were refl ected in a 1.2% drop

of the indirect cost rate, in 2007, which accounted for 26.3% of group

sales at 31 December 2007.

Refi nancing

Given the fi nancing agreement signed on 16 April 2008 with a banking

pool made up of four banks (see chapter 4 “Risk factors” of this

registration document for details), the scheduled increased use of

factoring, cash fl ow generation expected in 2008 and cash held at

group level, the group should have suffi cient fi nancial resources to

repay the convertible bond due on 1 January 2009.

Furthermore, as set out in detail in section 20.6 “Interim and other

fi nancial information” below, the company has announced its plans

to carry out a capital increase for a maximum of €130 million by

31 July 2008, which will enable it to strengthen its equity and

position the group to boost its development via targeted acquisitions.

3Selected fi nancial information


Selected fi nancial information3

Outlook

Altran aims to keep up with the market momentum despite an uncertain

macroeconomic environment. The trends seen at the end of 2007

have continued through into 2008.

In 2008 the group will pursue efforts to reduce its indirect costs and

aims to trend towards 20% of sales mid-term.

In particular, Altran will strive to maintain DSO at the current level.


The company’s risk factors are discussed in the management report in section 9.5 “Risks” on pages 35 -39 of this registration document.

4 Risk factors


5.1 Company history and development

5 Information about Altran

5.1.1 Company name

Altran Technologies S.A.

5.1.2 Place of registration and registration number

Paris Trade and Companies Register no. 702 012 956

Siret Number 702 012 956 00042

NAF code 742C

5.1.3 Date of incorporation and lifetime

Altran Technologies S.A. was created on 14 February 1970. Its life

extends until 14 February 2045, unless the company is dissolved

before this date or its life is extended beyond this date by law or by the

company’s Articles of Association.

5.1.4 Domicile, legal form, and governing legislation

Registered office: 58 Boulevard Gouvion-Saint-Cyr, 75017 Paris,

France.

Administrative headquarters: 2 Rue Paul Vaillant Couturier, 92300

Levallois-Perret, France.

Legal form: French public limited company with a Management Board

and Supervisory Board.

Governing legislation: French law including the French Commercial

Code and subsequent legislation concerning commercial businesses.

5.1 COMPANY HISTORY AND DEVELOPMENT 13

5.1.1 Company name 13

5.1.2 Place of registration and registration number 13

5.1.3 Date of incorporation and lifetime 13

5.1.4 Domicile, legal form, and governing legislation 13

5.2 INVESTMENTS 14

5.2.1 Principal investments 14

5.2.2 Principal future investments decided by management 14


Information about Altran5Investments

5.2 Investments

5.2.1 Principal investments

The signifi cant changes in 2007 to the company’s scope of

consolidation are as follows:

the merger of two companies in Belgium and six in Switzerland;

the sale of USM Endecar in Spain, which resulted in a €1,854 thousand

charge in the fi rst half (comprised of a €2,394 thousand divestment

loss, €222 thousand of related fees, and a €792 thousand provision

reversal);

the liquidation of the Cygnite subsidiary in the UK, which resulted in

an €8,000 charge; and

the creation of six new subsidiaries.

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The company sold The Johnsson group in the US in July 2007; the

liquidation was fi nalised at the end of the year. The Johnsson group

generated €8,057 million of revenue in 2006. This sale was recognised

in the 2007 half-year fi nancial statements, most notably through a

€7 million goodwill impairment related to the process of selling the

business.

In the third quarter of 2007, Altran exercised its option to purchase the

75% it did not own of Arthur D. Little’s Korean subsidiary, Arthur D. Little

Yuhan Hoesa; an option which Altran acquired in July 2004. Altran

is now the full owner of Arthur D. Little Yuhan Hosea, which added

€2.8 million to the company’s overall revenue in the second half of

2007.

The company’s earn-out programme and assumptions for future

payouts are discussed in note 7 to the consolidated fi nancial statements,

“Off-balance sheet commitments”.

Companies acquired over the past five fiscal years

2003 2004 2005 2006 2007

Company Country Company Country Company Country Company Country Company Country

Aktiva VIP

Holding Netherlands

Little

acquisition

Co Hong

Kong and

Little

acquisition

Co Singapore

Hong

Kong and

Singapore

Hilson Moran

Italie Italy

CQ

Consulting

GmbH Austria Little Brazil Brazil

ADL Yuhan

Hosea Korea

C Quential

SRL Italy

Consultores

CA Venezuela

The following table lists the amount paid for these acquisitions each year (initial payment plus earn-out).

(in million euros) 2004 2005 2006 2007

17.6 22.7 41.1 9.4

5.2.2 Principal future investments decided by management

Altran plans to invest in the following in 2008 in order to support its

transformation:

IT system upgrades (ERPs, networks, etc.);•

tools for employee communication and collaboration (company

intranet, knowledge management software, etc.); and

a streamlining of the company’s brands.

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6.1 Main businesses

6Information about the company’s businesses

Altran aims to support its customers throughout the life cycle of

a product or a service, from design or manufacturing through to

production process optimization. Altran consultants have a wide range

of skills covering just about every fi eld of engineering.

From the time the company was founded, Altran has been committed

to helping customers plan and implement important strategy, research,

and technology projects. Altran consultants play an active role in all

phases of product or service development’s life cycle.

The cornerstone of Altran’s high-quality service is its skills in mastering

a technology, and transferring that technology from one industry to

another. This unique approach to technological innovation, coupled

with an ability to break down complex procedures into manageable

steps, have prompted customers to select Altran as a preferred

partner. With the help of Altran consultants, customers can transform

innovation from a modern-day challenge to a strategic driver and

source of differentiation. Altran’s customers realise that in today’s

fast-paced markets, innovation is essential to securing a sustainable

competitive advantage.

Indeed, innovation is at the heart of Altran’s customers’ strategies,

as it will enable them to penetrate new markets and fuel continued

business growth.

Sales by business

6.1 MAIN BUSINESSES 15

6.2 MAIN MARKETS 16

6.2.1 Technology and R&D consulting 16

6.2.2 Organisation and information systems consulting 17

6.2.3 Strategy and management consulting 17

6.3 COMPETITION 18


Information about the company’s businesses6Main markets

6.2 Main markets

Altran operates in the following three markets:

technology and R&D consulting;

organisation and information systems consulting; and

strategy and management consulting.

6.2.1 Technology and R&D consulting

The market for technology and R&D consulting services was estimated

to be around €55 billion in the US and Europe in 2005, based on a 2005

Altran Positioning Study carried out by Pierre Audoin Consultants. This

means that the technology consulting market is now approximately the

same size as that for management consulting.

Sources: Altran Global Strategic Marketing and 2005 Altran Positioning Study by Pierre Audoin Consultants.

Altran is the leading technology consulting fi rm in Europe in terms

of revenue. Nevertheless, the European market remains highly

fragmented; the ten biggest players in Europe’s three main countries

(Germany, France, and the UK) have only a 30%-40% market

share. Altran’s market share was approximately 9.8% in France and

1.5%-5% in other European countries in 2005, according to Altran

Global Strategic Marketing.

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Technology consulting market in Western Europe in 2005


The technology consulting market should expand substantially in

France and the rest of Europe over the next few years, driven by the

following factors:

heavier R&D spending, since Western European countries invest a

lower percentage of their GDP in R&D and European manufacturers

realize that they must catch-up and slash their time-to-market if

they are to remain competitive; and

a greater reliance on R&D outsourcing. While the long-term

outsourcing rate is diffi cult to estimate, it currently stands at less

than 15% of total R&D spending in Europe (according to Pierre Audoin

Consultants). This percentage will undoubtedly rise – although

probably not to the levels seen for IT services outsourcing.

The technology consulting market is highly fragmented, but should

undergo consolidation in the coming years as a result of:

pressure from customers seeking industrial partnerships with

R&D consultants, as customers cut their number of suppliers and

standardize their procurement processes;

a shift in customer demand towards more content-focused,

packaged solutions which are diffi cult for consultants offering a

single service to provide;

a growing need for fi xed-price services requiring increasingly

technical knowledge, which pushes out small players providing only

technical support; and

globalization, which means that consultants must be able to provide

international services to customer sites around the world.

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Information about the company’s businesses 6Main markets

6.2.2 Organisation and information systems consulting

Approximately one-third of Altran’s revenue is generated by

organisation and information systems consulting. This market is more

structured than the technology consulting market, although Altran

has a smaller market share. The market for these services in Europe,

excluding outsourcing, is around €45 billion per year.

Altran does not intend to offer all the services typically provided by

large IT fi rms; rather, it has decided to focus on niche markets in the

IT space (SAP, application testing, etc.) where Altran already has a solid

reputation.

The software and services market grew 6.5% in France in 2006,

based on data from Syntec Informatique. This market has expanded

3-4 times faster than GDP and 1.5-2 times faster than corporate

investment spending. Much of this growth can be attributed to

business transformation projects, and the market should continue to

be supported by a wave of M&A activity. Consulting and applications

maintenance (especially third-party application maintenance) are the

market’s main drivers.

Growth has been particularly marked in the fi nancial sector, where

spending on these services jumped 8%, followed closely by the public

sector.

The organisation and information systems consulting market has

exceptional long-term growth potential as a result of expanding

business needs, a strong trend towards IT outsourcing, and repeated

technological advancements which open the doors to new uses and

fi elds of application.

6.2.3 Strategy and management consulting

Altran’s strategy and management consulting is carried out primarily

through its Arthur D. Little subsidiary, which was purchased during

an LMBO in 2002. Altran acquired all of Arthur D. Little’s operations

outside the US during this LMBO, as well as the global brand name.

The strategy and management consulting market has mushroomed

since 2005, driven by a fl urry of M&A deals in several sectors. This

market is estimated at approximately €50 billion a year in the US

and Europe, and is expected to grow 5%-7% over the next few years

(according to Kennedy Information Research group and Pierre Audoin

Consultants).

Altran’s services focus on a limited number of practices in order to take

advantage of Arthur D. Little’s robust skills in these areas on a global

level. The company has decided to target Arthur D. Little’s international

business development on fi ve industries, including healthcare, energy,

and automotive.


Information about the company’s businesses6Competition

6.3 Competition

Altran is the leading technology and R&D consulting fi rm in Europe. Its

competitors vary depending on the type of consulting project; these

competitors include:

strategy and/or management consultancies (particularly in terms

of Arthur D. Little’s competitors);

IT services companies;

engineering fi rms specialised in a specifi c fi eld (e.g., environmental,

mechanical, or acoustical engineering); and

listed or unlisted companies offering similar services (e.g., Alten,

AssystemBrime, and SII).

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However, none of these competitors have Altran’s geographic footprint,

nor do they have skills in such a wide array of industries or technologies.

Altran’s ability to leverage its international network, provide services in

many countries, and combine state-of-the-art knowledge in several

fi elds is a key differentiating factor – and one that can help Altran’s

customers succeed as they cross new borders.

Altran recently restructured its technology consulting business in

France. The business is now grouped by vertical industry, making its

services more clear to customers. The following table gives an overview

of Altran’s main technology consulting markets in Europe.

France United Kingdom Germany

Market size in 2005 €4.0 billion €4.0 billion €4.4 billion

Top sectors

Aerospace

Automotive

Energy*

Telecoms

Aerospace

Energy*

Telecoms

Public sector

Automotive

Industrial engineering

Energy*

Aerospace

Top three competitors

Altran

Assystem

Alten

Atkins

BAE Systems

QinetiQ

Siemens

T-Systems

ESG

Trends

Consolidation, globalization, fewer suppliers,

more powerful purchasing departments

* Utilities, chemicals, and environmental industries.



A list of companies included in Altran’s scope of consolidation is given

in section 20.3, in note 2 to the consolidated fi nancial statements,

“Scope of consolidation”. Recent changes to this scope are discussed

in section 5.2.1 “Principal investments”.

The company does not have any commitments to purchase minority

interests.

The following paragraphs discuss the payments made between the

parent company and its subsidiaries.

Management fees and subcontracted administrative services

Altran Technologies, the parent company, pays for support functions

(communications, human resources, accounting, legal and tax affairs,

etc.), and bills the costs for these services to its French subsidiaries and

foreign holding companies. These bills, which consist of management

fees and subcontracted administrative services, are calculated using

cost-plus accounting and divided among the subsidiaries and foreign

holding companies based on the revenue generated and resources

used.

The parent company billed its subsidiaries and foreign holding

companies a total of €34.7 million for support functions in fi scal 2007.

Support functions paid for by the parent company and not re-billed

amounted to €28.9 million for the year.

Centralized cash management

The parent company manages cash for all its entities through a cash

management subsidiary, GMTS, which covers subsidiary overdrafts

and pays interest on cash surpluses on a daily basis.

Dividends

Altran Technologies, the parent company, receives dividends from its

direct subsidiaries.

7 Organizational chart


Organizational chart7

Simplifi ed organizational chart

Altran Technologies SA owned 100% of Altran International BV when it was founded in 1997, but in 1997 sold a 5% stake to a former manager with

whom Altran is in legal proceedings.


8.1 Signifi cant property, plant, and equipment

8Property, plant, and equipment

Altran has a policy of leasing its business premises, although it owns

buildings with a combined value of €8.5 million in France, Italy, the

UK, and Venezuela. No property is owned either directly or indirectly

by Altran managers, nor is leased to Altran or an Altran subsidiary.

8.2 Environmental issues

Not material.

8.3 Brands and patents

Altran’s customers are the sole owners of new products and technology

developed with the help of Altran consultants. Altran has one subsidiary

that carries out development work and fi les patents exclusively

for Altran.

Altran owns all its brands.

8.1 SIGNIFICANT PROPERTY, PLANT, AND EQUIPMENT 21

8.2 ENVIRONMENTAL ISSUES 21

8.3 BRANDS AND PATENTS 21


9 Operating and fi nancial review

9.1 SIGNIFICANT EVENTS 24

9.1.1 Corporate governance 24

9.1.2 Changes in scope of consolidation 24

9.1.3 AMF’s Enforcement Committee Decision 24

9.1.4 2007/2009 Operational efficiency plan 24

9.1.5 The operational merger in Paris of Altran Consulting & Information Services (CIS) and Altran Telecoms, Electronics & Media (TEM). 25

9.1.6 Issuance of a new stock option plan and bonus share plan for employees 25

9.1.7 Refinancing 25

9.2 SITUATION OF THE COMPANIES INCLUDED IN THE CONSOLIDATION SCOPE 26

9.3 SEGMENT REPORTING 30

9.4 ACTIVITIES OF ALTRAN TECHNOLOGIES S.A. AND ITS MAIN SUBSIDIARIES 34

9.5 RISKS 35

9.6 RESEARCH AND DEVELOPMENT 39

9.7 FORESEEABLE FUTURE TRENDS AND OUTLOOK 40

9.8 SUBSEQUENT EVENTS 40

9.9 ALTRAN TECHNOLOGIES S.A.’S COMPANY FINANCIAL STATEMENTS AND ALLOCATION OF EARNINGS 41

9.10 SUBSIDIARIES AND EQUITY HOLDINGS 41

9.11 INFORMATION ON THE SHARE CAPITAL, CROSS-SHAREHOLDINGS, TREASURY SHARES 41

9.12 CONTROLLING COMPANIES AND THEIR OWNERSHIP INTEREST IN ALTRAN TECHNOLOGIES 41

9.13 TRANSACTIONS CARRIED OUT DURING THE YEAR SUBJECT TO ARTICLE L.621-18-2 OF THE FRENCH MONETARY AND FINANCIAL CODE AND ARTICLE 222-15-3 OF THE AUTORITÉ DES MARCHÉS FINANCIERS’ GENERAL REGULATION 42

9.14 SHARE BUYBACKS 42

9.15 INFORMATION ON THE CALCULATION METHODS AND EFFECTS OF ADJUSTMENTS TO THE CONVERSION BASIS FOR BONDS AND THE SUBSCRIPTION OR PURCHASE OF SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO SHARES 42

9.16 EMPLOYEE SHARE OWNERSHIP 43

9.17 STOCK OPTIONS 43

9.18 COMPANY MANAGEMENT – CORPORATE OFFICERS 46

9.18.1 Composition of the Supervisory and Management Boards 46

9.18.2 Compensation of corporate officers 58

9.19 COMMITMENTS MADE BY THE COMPANY TO ITS CORPORATE OFFICERS 60

9.20 ADDITIONAL INFORMATION 60


Operating and fi nancial review9Significant events

9.1 Signifi cant events

9.1.1 Corporate governance

The Management Board is comprised of two members:

Mr Yves de Chaisemartin, Chairman;

Mr Eric Albrand.

They were appointed by the Supervisory Board on 11 January 2007,

for a period of two years, in compliance with Altran Technologies’ by-

laws.

The Supervisory Board is currently comprised of the following

members:

Mr Dominique de Calan, Chairman;

Mr Michel Sénamaud, Vice-Chairman;

Mr Roger Alibault;

Mr Jacques-Etienne de T’Serclaes, Member of the Supervisory

Board and Chairman of the Audit Committee, appointed on 5 March

2007 with effect from 30 March 2007.

Their term of offi ce expires at the end of the Annual General Meeting

held to approve the fi nancial statements for the year ended 31 December

2008.

Mrs Guylaine Saucier resigned from the Supervisory Board on

15 February 2007.

9.1.2 Changes in scope of consolidation

During 2007 the group completed several transactions affecting its

scope of consolidation including:

Acquisitions

Since it became part of the group on 1 August 2007, Hilson Moran Italia

has generated sales totalling €1.4 million.

An option to purchase 75% of the share capital of the Korean subsidiary

Arthur D. Little Yuhan Hosea was exercised in August 2007. The

sales contribution of this company in the second half of 2007 was

€2.8 million.

Disposals

The US company The Johnsson group was sold on 2 July 2007 prior

to liquidation. 2006 sales totalled €12.6 million. The consequences of

this disposal were accounted for in the 2007 half yearly results, namely

the partial impairment of goodwill linked to the disposal of this activity,

with a negative impact of €7 million.

•

•

•

•

•

•

USM Endecar in Spain was sold on 5 February 2007. This company’s

sales totalled €2 million in 2006. This disposal had a net negative

impact of €1.9 million in the fi rst half of 2007 (including -€2.4 million

in capital losses arising from the deconsolidation, -€0.2 million in fees

linked to the transaction and +€0.8 million in reversal of provisions).

Mergers & liquidations

Within the framework of the group’s effort to streamline its scope of

consolidation Altran carried out a number of mergers and liquidations

in Switzerland, France, the United States, Belgium and the United

Kingdom.

Creations

The group created 6 new subsidiaries in 2007, namely to support the

geographical diversifi cation of the US subsidiary CSI.

9.1.3 AMF’s Enforcement Committee Decision

On 31 May 2007, Altran group was informed of the AMF’s Enforcement

Committee Decision relating to the accounting periods ending

31 December 2001 and 30 June 2002, imposing an administrative

penalty of €1.5 million. The Committee imposed a fi ne on the company

for the misconduct of its former managers who have all now left the

group. This decision does not take into account the Rapporteur’s

conclusions which recommended far more moderate fi nes. This

decision penalises all of Altran’s current Shareholders for past actions.

Altran has appealed against this decision. Nonetheless, the fi nancial

penalty has been paid in full.

9.1.4 2007/2009 Operational efficiency plan

At the Shareholders’ Annual General Meeting held on 29 June 2007,

Altran announced an operational effi ciency plan for 2007/2009 in an

aim to improve group performance and signifi cantly reduce its indirect

costs.

The objective is to cut indirect costs by at least three percentage points

by 2009 reducing them to 25% of sales. In the medium term the group

aims to bring indirect costs down towards the industry average of 20%

of sales.

The fi rst measures taken in collaboration with a consulting fi rm

covered:

sales effi ciency: reviewing the group’s sales organisation in terms

of costs and effi ciency;

•


Operating and fi nancial review 9Significant events

purchasing: reviewing the steps taken to implement a group

purchasing policy;

WCR: reviewing performance in terms of working capital

management;

support functions France: analysing the organisation and

performance of the support functions France;

international support functions: analysing the organisation and

performance of international support functions.

This plan is also supported by actions taken pursuant to the former

performance plan presented in 2005:

positive effect of investments already made (IT, property,

purchasing);

the group’s structure has been gradually simplifi ed since 2006 and

the number of companies has been reduced by a third;

the budget process has been reviewed; authorisation to incur

additional expenses is now subject to growth achievement;

full commitment to the execution of this plan is requested from

country managers.

9.1.5 The operational merger in Paris of Altran Consulting & Information Services (CIS) and Altran Telecoms, Electronics & Media (TEM).

Over the past few months the group has noted that both Information

Systems and Telecommunications have experienced strong growth in

France and that it is becoming harder to defi ne the frontier between

these two large markets.

•

•

•

•

•

•

•

•

Therefore the group has decided to merge these two businesses in

Paris, opening up opportunities to:

create a new and unmatched Telecommunications offer for our CIS

clients, mainly in the Bank and Insurance sector in which we are a

key player;

to expand our Information Systems offer for our TEM customers.

The group has also appointed a new management team to boost

creativity and increase shared offers between these two activities.

The skills and size of the Altran CIS Paris and Altran TEM teams will

make this new merged business the driving force behind creating the

group’s value added offer.

9.1.6 Issuance of a new stock option plan and bonus share plan for employees

On 20 December 2007, the group issued 2,589,830 stock options and

818,740 bonus shares to 2,191 employees. This plan represents 2.9% of

the company’s share capital.

9.1.7 Refinancing


pool made up of four banks (see section 9.5.1 “Liquidity risk”), the

scheduled increased use of factoring, cash fl ow generation expected

in 2008 and cash held at group level, the group should have suffi cient

fi nancial resources to repay the convertible bond due on 1 January

2009.

Furthermore, the company has announced its plan to carry out a

capital increase for a maximum of €130 million by 31 July 2008, which

will enable it to strengthen its equity and position the group to boost its

development via targeted acquisitions.

•

•


Operating and fi nancial review9Situation of the companies included in the consolidation scope

9.2 Situation of the companies included in the consolidation scope

(in million euros)

December 2007 December 2006

(12 months) (12 months)

Sales 1,591 1,495

Other revenue 2 3

TOTAL REVENUE 1,593 1,498

CURRENT OPERATING INCOME AND EXPENSES 99 76

Other non-recurring operating income and expenses (15) (15)

Goodwill impairment (14) (16)

OPERATING INCOME 71 45

Cost of net financial debt (29) (23)

Other financial income 6 5

Other financial expenses 9 8

Income tax (18) (16)

Share of net profit/(loss) from associated companies

NET PROFIT/(LOSS) BEFORE RESULTS OF DISCONTINUED AND HELD-FOR-SALE 22 4

NET PROFIT/(LOSS) AFTER TAX OF DISCONTINUED AND HELD-FOR-SALE

NET PROFIT/(LOSS) 22 4

Minority interests

NET PROFIT/(LOSS) ATTRIBUTABLE TO THE GROUP 22 4

Earnings per share (in euros) 0,18 0,03

Diluted earnings per share (in euros) 0,18 0,03

Current operating income (excluding non recurrent items) totalled

€99.4 million, implying a current operating margin of 6.2% up 1.1%

compared with 2006. This improved performance is due to strong

momentum in the second half of 2007 and is due to the combination

of four factors:

Technologies and Innovation (TI) in France returned to profi t. The

current operating margin in France came out at 5.9% in the second

half of 2007 compared with -0.1% in the fi rst half;

•

the Northern zone performed well, sustaining growth close to 10%

and containing wage increases;

the Southern zone driven by Spain (+9.5% growth between

the second half of 2007 and the second half of 2006) where

restructuring measures programmed in 2008 should support

recovery further;

the group’s holding company contributed to income optimisation

by reducing costs, refl ecting sustained efforts to streamline the

group’s central support functions.

•

•

•


Operating and fi nancial review 9Situation of the companies included in the consolidation scope

(in million euros) 2007 H2 2007 H1 2007 2006 H2 2006 H1 2006

Turnover 1,591 802 789 1,495 749 746

Gross margin 518 263 255 487 236 251

% 32.5% 32.8% 32.3% 32.6% 31.5% 33.6%

General fees (418) (202) (216) (411) (209) (202)

% (26.3)% (25.2)% (27.4)% (27.5)% (27.9)% (27.1)%

CURRENT OPERATING INCOME 99 61 39 76 27 49

% 6.2% 7.6% 4.9% 5.1% 3.6% 6.5%

Gross margin remained stable between 2006 and 2007 (32.5% vs.

32.6%), whilst overheads were reduced by 1.2%. The overhead rate

after consolidation adjustments dropped from 27.5% in 2006 to 26.3%

in 2007 (note that reported data indicated an overhead rate down

from 28.1% in 2006 to 26.4% in 2007).

Current operating margin came out at 7.6% for the second half of 2007

up from 4.9% in the fi rst half.

Goodwill impairment of €13.9 million was recorded in 2007 including

€12.2 million for the fi rst half and €1.7 million for the second half.

group fi nancial loss (-€31.2 million) is in line with group debt.

Net income totalled €21.6 million in 2007.

Sales

2007 sales totalled €1,591.4 million up 6.4% compared with 2006, i.e.

a €96 million increase. This growth rate takes into account the -0.6%

negative impact of currency movements and the -0.4% negative scope

effect.

This increase in group sales refl ects strong performance in the

Northern zone, a return to growth in France and in the Southern zone

in the second half of the year.

International activities were supported by strong performance in the

Benelux countries, Sweden, Germany and the UK, particularly in the

fi rst half of 2007. In the second half growth was mainly driven by Italy

and Spain.

In France, growth was strengthened by the reorganisation of

Consulting & Information Services (CIS) and Technologies & Innovation

(TI) activities, adding transparency to operational organisation and

enabling improved effi ciency. TI France showed strong sales growth,

particularly in the fourth quarter where the group gained market

share.

At group level, the main growth drivers are increased resources

(73%) and tariffs (18%). Increased resources were most evident in the

Northern zone, whereas tariffs rose mainly in the Southern zone (Italy,

Spain) and in Germany. These three countries represent 26.5% of total

sales and 37% of growth.

The positive impact of these two drivers was heightened by a +0.5%

increase in the billing rate, up from 84.1% to 84.6%.

Expenses

Current operating expenses showed a mixed trend over the year, but

overall sales outgrew expenses.

Taking each half-year separately:

in the fi rst half of 2007, with the exception of TI France, none

of the geographical areas managed to pass on wage increases

to customers, resulting in a tighter margin; the relative weight of

payroll expenses as a percentage of sales rose 1.5%, from 69% to

70.6%;

however, in the second half of 2007 sales grew (+7%) at a faster

pace than payroll expenses (+2.4%), as a result of the recovery of

TI France. Overall, there is a clear reduction in payroll expenses as a

percentage of sales (-3 percentage points).

•

•

(in million euros) 2007 2006 2007 vs 2006

Turnover 1,591 1,495 6.4%

Staff costs 1,096 1,042 5.3%

% Turnover 68.9% 69.7% (0.8) pt

(in million euros)

2007

H2

2007

H1

2006

H2

2006

H1

H2 2007

vs H2 2006

H1 2007

vs H1 2006

Turnover 802 789 749 746 7.0% 5.8%

Staff costs* 539 557 527* 515 2.4% 8.2%

% Turnover 67.3% 70.6% 70.3% 69.0% (3.0) pts 1.5 pt

* In this table the €512.4 million in payroll expenses reported for 2006. do not include stock options and employee benefits for €14.4 million which are included in the notes in the registration document.


Operating and fi nancial review9Situation of the companies included in the consolidation scope

External expenses

(in million euros) 2007 2006 2007 vs 2006

Total external charges 344 320 7.5%

% Turnover 21.6% 21.4% 0.2 pt

Sub-contracting 111 96 15.3%

% Turnover 7.0% 6.4% 0.5 pt

BC Red. 4 4 6.8%

% Turnover 0.2% 0.2% 0.0 pt

Simple rentals and external expenses 58 54 8.0%

% Turnover 3.6% 3.6% 0.1 pt

Training 10 9 6.1%

% Turnover 0.6% 0.6% 0.0 pt

External services and fees 46 49 (7.3)%

% Turnover 2.9% 3.3% (0.4) pt

Transportation and travels 75 68 9.4%

% Turnover 4.7% 4.6% 0.1 pt

Other purchases and outside services 41 40 3.4%

% Turnover 2.6% 2.7% (0.1) pt

(in million euros) H2 2007 H1 2007 H2 2006 H1 2006

H2 2007 vs

H2 2006

H1 2007 vs

H1 2006

Total external charges 174 170 161 159 8.5% 6.4%

% Turnover 21.7% 21.5% 21.4% 21.4% 0.3 pt 0.1 pt

Sub-contracting 57 53 48 48 19.8% 10.7%

% Turnover 7.2% 6.7% 6.4% 6.4% 0.8 pt 0.3 pt

BC red. 2 2 2 2 18.7% (3.9)%

% Turnover 0.2% 0.2% 0.2% 0.2% 0.0 pt 0.0 pt

Simple rentals and external expenses 30 28 27 27 11.1% 4.9%

% Turnover 3.7% 3.6% 3.5% 3.6% 0.1 pt 0.0 pt

Training 5 5 5 4 (6.9)% 23.3%

% Turnover 0.6% 0.6% 0.7% 0.5% (0.1) pt 0.1 pt

External services and fees 23 23 24 26 (5.2)% (9.3)%

% Turnover 2.8% 2.9% 3.2% 3.4% (0.4) pt (0.5) pt

Transportation and travel 38 37 34 35 12.9% 6.0%

% Turnover 4.7% 4.7% 4.5% 4.7% 0.2 pt 0.0 pt

Other purchases and outside services 20 21 22 18 (8.1)% 17.2%

% Turnover 2.5% 2.7% 2.9% 2.4% (0.4) pt 0.3 pt

External expenses rose by 7.5%, up €23.9 million, due to a hike in

subcontracting expenses (+15.3%, i.e. 0.5% of sales at €14.6 million)

which account for 61% of this increase.

The Northern zone, which represents 87.5% of the total increase in

group external expenses, saw a 20.8% increase in subcontracting to

overcome staff shortages in a number of countries. CIS France also

contributed to this increase (+46.1% rise in subcontracting), particularly

in the second half of the year.

“Travel expenses” (+9.4%) and “Operating leases” (+8%) explain the

remainder of the increase in external expenses. These items increased

across all geographic zones, with the exception of France where

operating lease expenses dropped 1.2%, due to the reorganisation

carried out at the end of 2006.

Due to continued efforts the group reduced fees, by 7.3% i.e. by

€3.6 million.

Cost of net fi nancial debt

Cost of net fi nancial debt corresponds mainly to fi nancial income

arising from the investment of cash and cash equivalents less fi nancial

expenses.

The latter include primarily interest due on the convertible bond (2009

OCEANE), credit lines and trade receivables due.

Cost of net fi nancial debt rose €5.9 million in 2007. This is mainly due

to a rise in short-term interest rates.


Operating and fi nancial review 9Situation of the companies included in the consolidation scope

Income tax

Income tax expenses totalled €18.0 million in 2007 compared with

€15.8 million in 2006. This increase is primarily due to the group’s

improved profi tability.

The effective tax rate dropped from 45% to 34% due to a better

recognition of deferred tax assets against tax losses and to lower

additional taxes in Germany (“Gewerbesteuer”) and in Italy (“IRAP”).

Cash fl ow

Cash fl ow statement for the years ending 31 December 2007 and 31 December 2006:

(in million euros)

2007

12 months

2006

12 months

Change

2006/2007

Net financial debt at opening (1 January) (338.7) (301.5) (37.2)

Net cash flow generated by business activities 53.5 9.7 43.8

Net cash flow generated by investment activities (27.6) (71.8) 44.1

Net cash flows before financing operations 25.9 (62.0) 87.9

Exchange rate impact and others (1.6) (0.6) (1.0)

Impact of capital increase (Spring) 25.4 (25.4)

Net financial debt at closing (31 December) (314.4) (338.7) 24.3

Net cash fl ow generated by operating activities

Net cash fl ow generated by operating activities rose sharply

from €9.7 million at 31 December 2006 to €53.5 million at

31 December 2007. This is mainly due to:

increased cash fl ow (+€30 million);

improved working capital requirements (+€32 million), mainly

linked to better recovery of trade receivables;

an increase in taxes paid (-€13 million).

•

•

•

Net cash used in investment activities

Net cash used in investment activities in the year ending

31 December 2007 totalled €27.6 million compared with €71.8 million

at 31 December 2006. This is due to:

lower earn-out payments (-€32 million), as the majority of the

earn-out contracts have now expired;

an asset renewal programme which is reduced compared with that

of 2006, which was affected by fi ttings purchased as part of the

group’s relocation in 2006 (-€12 million).

•

•

Group net debt

Net fi nancial debt is the difference between total fi nancial liabilities and cash and cash equivalents.

(in million euros) 31/12/2007 31/12/2006 Change

2009 Convertible 197.9 197.9 -

Medium-term credit line 30.7 62.4 (31.6)

Short-term credit line 263.4 204.7 58.7

of which factoring 196.1 159.0 37.1

Total financial debt 492.0 464.9 27.0

Cash and cash equivalents 177.6 126.2 51.4

Net financial debt 314.4 338.7 (24.4)

Employee profit sharing 10.9 14.1 (3.2)

Accrued interests 34.2 27.1 7.2

Net debt 359.5 379.9 (20.4)


Operating and fi nancial review9Segment reporting

The group’s net debt has been reduced by €20.4 million to

€359.5 million at 31 December 2007 (compared with €379.9 million at

31 December 2006).

Cash and cash equivalents totalled €177.6 million at 31 December 2007

compared with €126.2 million at 31 December 2006.

Change in number of staff

31/12/2005 30/06/2006 31/12/2006 30/06/2007 30/12/2007

Total workforce at the end of period 16,152 16,488 17,057 17,167 17,502

H2 2005 H1 2006 H2 2006 H1 2007 H2 2007

Average workforce during the period 16,202 16,313 16,808 17,072 17,189

At 31 December 2007, the group employed 17,502 people compared

with 17,057 at the end of 2006. This increase of 445 employees, 75%

of which were hired in the second half of the year, provides a solid basis

for growth in 2008.

The recruitment of consultants continued at an upbeat pace

(5,117 hired in 2007 compared with 4,947 in 2006 excluding disposals)

to support business growth, particularly in the Northern zone,

CIS France and Italy. The balance of 170 offsets the 0.3% increase

in consultant turnover (29.3% in 2007 compared with 29% in 2006).

For France TI, priority was given in the fi rst half of the year to reducing

the inter-contract rate and improving the billing rate. This cut staff

turnover by almost 5% (24.8% in 2007 compared with 29.6% in 2006)

while maintaining resources similar to 2006 (4,963 in 2007 compared

with 4,976 in 2006). Recruitments in France rose sharply in the second

half of the year (58% of recruitments were made in H2 2007 compared

with 53% in H2 2006), which explains the increase in the headcount in

the second half of 2007 compared with the fi rst half of 2007.

9.3 Segment reporting

In accordance with IAS 14 “Segment reporting”, the primary reporting

segment corresponds to geographical segments and the secondary

reporting segment to business segments.

Altran ’s geographical segments:

France;

Northern zone: Germany, Austria, Benelux, Ireland, East European

countries, United Kingdom, Sweden, Switzerland;

Southern zone: Andorra, Brazil, Spain, Italy, Portugal, Venezuela;

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•

•

Rest of the world: North America, Asia.

Business segments:

Technologies & Innovation;

Consulting & Information Services;

Strategy and Management consulting;

Other.

•

•

•

•

•

Sales by geographical area

Breakdown of sales by geographical area:

(in million euros)

2007 2006

Sector total

Inter-sector

eliminations

Total

revenues % revenues

Total

revenues % revenues Change

France 694 21 673 42.3% 642 42.9% 4.8%

North 533 18 515 32.4% 467 31.3% 10.2%

South 310 5 305 19.2% 284 19.0% 7.5%

Rest of the world 103 4 99 6.2% 102 6.8% (3.6)%

TOTAL 1,641 (49) 1,591 100.0% 1,495 100.0% 6.4%


Operating and fi nancial review 9Segment reporting

Sales for 2007 totalled €1,591 million up 6.4% compared with 2006,

i.e. an increase of €96 million.

The contribution to group sales of the Northern zone, the group’s most

profi table area, increased 1.1%, while France’s contribution decreased

(-0.6%) along with the Rest of the world (-0.6%). The Southern zone’s

contribution rose 0.2%, due to strong activity in the second half of

2007.

Breakdown of sales by country:

(in thousands euros)

YTD

2007

%

revenues H2 2007

%

revenues H1 2007

%

revenues

YTD

2006

%

revenues H2 2006

%

revenues H1 2006

%

revenues

2007

vs

2006

France 672,819 42.3% 340,289 42.4% 332,530 42.1% 641,929 42.9% 315,745 42.2% 326,184 43.7% 4.8%

Germany 154,302 9.7% 79,740 9.9% 74,562 9.4% 139,046 9.3% 72,185 9.6% 66,862 9.0% 11.0%

Austria/PECO 7,615 0.5% 4,303 0.5% 3,312 0.4% 6,355 0.4% 3,281 0.4% 3,074 0.4% 19.8%

Great-Britain/Ireland 130,430 8.2% 63,663 7.9% 66,767 8.5% 117,445 7.9% 62,663 8.4% 54,783 7.3% 11.1%

Benelux 153,618 9.7% 75,686 9.4% 77,932 9.9% 131,170 8.8% 69,133 9.2% 62,037 8.3% 17.1%

Switzerland 29,482 1.9% 13,714 1.7% 15,768 2.0% 40,620 2.7% 20,591 2.7% 20,029 2.7% (27.4)%

Sweden 39,314 2.5% 19,598 2.4% 19,716 2.5% 32,661 2.2% 15,753 2.1% 16,908 2.3% 20.4%

Romania 59 0.0% 37 0.0% 21 0.0% 0 0.0% 0 0.0% 0 0.0%

Italy 156,179 9.8% 79,658 9.9% 76,521 9.7% 141,581 9.5% 70,028 9.3% 71,554 9.6% 10.3%

Spain 111,480 7.0% 56,361 7.0% 55,120 7.0% 106,016 7.1% 51,492 6.9% 54,524 7.3% 5.2%

Portugal 18,584 1.2% 9,169 1.1% 9,415 1.2% 19,065 1.3% 9,670 1.3% 9,395 1.3% (2.5)%

Brazil/Venezuela 18,799 1.2% 9,269 1.2% 9,530 1.2% 17,080 1.1% 8,685 1.2% 8,395 1.1% 10.1%

ASIA 26,022 1.6% 16,607 2.1% 9,414 1.2% 16,819 1.1% 7,175 1.0% 9,644 1.3% 54.7%

USA 72,653 4.6% 33,787 4.2% 38,866 4.9% 85,561 5.7% 43,061 5.7% 42,501 5.7% (15.1)%

TOTAL 1,591,356 100.0% 801,881 100.0% 789,475 100.0% 1,495,350 100.0% 749,461 100.0% 745,890 100.0% 6.4%

In 2006, non-group sales (€467,3 million) were presented after intersegment eliminations, in contrast to the notes in the registration document.

Following the trend seen in 2006, sales growth (+6.4%) was generated

by Northern European countries in 2007, led by Sweden (+20.4%)

followed by the Benelux countries (+17.1%), the UK (+11.1%) and

Germany (+11%).

However, some of the Southern countries also reported double digit

growth between the second half of 2007 and the second half of 2006,

such as Italy (+10.3%), and Brazil (+10.1%) with Spain following closely

behind (+9.5%).

France, and more specifi cally the TI business, which until now had

shown negative growth, reported a 4.8% increase between 2006 and

2007.

Sales in Switzerland (-27.4%) and the United States (-15.1%;

-9.9% excluding changes in scope of consolidation) dropped

signifi cantly in 2007.

Net income by geographic zone

Northern zone

North

(in million euros) YTD 2007 H2 2007 H1 2007 YTD 2006 H2 2006 H1 2006 2007 vs 2006

Turnover, non-group 533.3 266.9 266.4 485.8 253.7 232.1 9.8%

Total operating income 533.9 267.3 266.6 486.1 253.9 232.2 9.8%

Total operating expenses (473.0) (237.7) (235.3) (428.0) (222.9) (205.2) 10.5%

Current operating income 60.9 29.6 31.3 58.1 31.0 27.1 4.8%

% Current operating income 11.4% 11.1% 11.7% 12.0% 12.2% 11.7% (0.5) pt

Operating income 58.5 27.3 31.2 59.3 33.1 26.2 (1.3)%

% Operating income 11.0% 10.2% 11.7% 12.2% 13.0% 11.3% (1.2) pt



Operating and fi nancial review9Segment reporting

The Northern zone reported sales growth of 9.8%, and alone, accounts

for almost 50% of group growth, i.e. €47.5 million.

The group has now started refocusing on two key East European

countries offering the most business development potential, namely

Slovakia and the Czech Republic.

The growth of this very dynamic area was driven by an increase in

resources, despite a tougher recruitment environment particularly in

the Netherlands (-3.7% vs 2006).

However, a good improvement in the invoicing rate (+0.5 point) did not

offset lower tariffs.

Operating expenses outpaced sales (+10.5%), reducing the current

operating margin by -0.5 point. The strong improvement in business

activity entailed the need for increased resources leading the

Northern zone to make considerable use of subcontracting. Indeed,

subcontractors alone accounted for almost half of the increase in

external expenses (+48.4%).

Wage increases were contained due to close monitoring of the

consultant turnover rate (+2.3 points vs. 2006). Sales outgrew payroll

expenses (+9.3%).

Operating income is down 1.3%, due to the non-recurrence of €7 million

in operating income recorded in 2006.

Southern zone

South





Current operating income 21.4 11.1 10.3 14.1 1.9 12.2 51.4%

% Current operating income 6.9% 7.1% 6.7% 4.9% 1.3% 8.4% 2.0 pts

Operating income 12.7 7.8 4.8 6.1 (1.2) 7.3 106.6%

% Operating income 4.1% 5.0% 3.1% 2.1% (0.8)% 5.0% 2.0 pts

In 2006, non-group sales (€283.7 million) were presented after intersegment eliminations. in contrast to the notes in the registration document.

Southern zone sales rose 7.8% up €22.4 million vs. 2006, accounting

for 23% of group growth.

This improvement is due for 54.5% to higher tariffs, particularly in

Spain, and for 31.7% to increased resources, mainly in Italy. The positive

impact of higher tariffs is compounded by the fact that the invoicing

rate remained stable at -0.2 point vs. 2006.

In contrast to the Northern zone, operating expenses for the Southern

zone rose less than sales (+5.4%), resulting in a 2% improvement in

current operating margin in 2007. Higher payroll expenses (+8%)

accounted for 97% of this increase and refl ect strong wage infl ation.

Subcontracting expenses in the Southern zone, which account for

41.2% of external expenses, increased less than group subcontracting

expenses (+6.8% vs +15.3%), mainly due to Italy where recruitments

were still robust (+10.8% vs 2006) despite a tight employment

market.

Operating income was affected by goodwill impairment (-€3.8 million)

and non-recurring items (-€4.9 million).

France

France

YTD 2007 H2 2007 H1 2007 YTD 2006 H2 2006 H1 2006 2007 vs 2006




Current operating income 20.6 20.8 (0.2) 2.9 (5.1) 7.9 615.3%

% Current operating income 3.0% 5.9% (0.1)% 0.4% (1.6)% 2.4% 2.5 pts

Operating income 11.1 12.6 (1.5) (16.8) (15.8) (1.0) 166.1%

% Operating income 1.6% 3.6% (0.4)% (2.6)% (4.9)% (0.3)% 4.2 pts



Operating and fi nancial review 9Segment reporting

More than 36% of group growth, i.e. €34.9 million is generated by

France, where sales grew 5.3% in 2007. Sales in France were up +8.2%

compared with the second half of 2006, as opposed to last year’s

negative growth -1.6% in H2 2006 vs. H2 2005.

France has returned to growth as a result of restructuring carried out

at the end of 2006.

As a result of a targeted reduction in the inter-contract rate, the

Technology & Innovation business is driven by an improved invoicing

rate up 3% (accounting for almost 45% of sales increase in France),

together with robust recruitments (+10%) and a lower consultant

turnover rate (4.8%).

Growth in Consulting & Information Services is due to increased

resources (+6.2%; i.e. 32.7% of the increase in sales). Recruitment

diffi culties (-5.4% vs 2006) and an increase in the consultant turnover

(4.1%) led the group to use subcontractors extensively.

Furthermore, the recovery felt in France is compounded by slightly

higher tariffs.

The increase seen in operating expenses (2.4%) was lower than that

of sales, resulting in a 2.5% improvement in the current operating

margin, as opposed to the trend seen in the fi rst half. The sharp rise

in subcontracting expenses incurred by the CIS business (+46.1% in

France, accounting for 64.1% of the rise in operating expenses) was

partly offset by lower fees (-15.3%) and a reduction in “Other purchases

and external services” (-9.7%).

France includes operating activities and the group holding activities

which group together management and cross-functional services. The

group holding central services costs totalled €28.9 million in 2007

(€19 million in H1 and €9.9 million in H2) compared with €41.8 million

in 2006, mainly due to lower expenses in the second half of 2007.

Operational profi tability in France (excluding central service costs)

came out at 7.1% in 2007 (5.5% in the fi rst half and 8.7% in the second

half) compared with 6.7% in 2006. This refl ects improved growth due

to an increased invoicing rate and contained overheads.

Rest of the world

Rest of the world


Turnover, non-group 103.0 52.4 50.6 105.8 52.1 53.7 (2.6)%

Total operating income 103.3 52.7 50.6 105.6 52.0 53.7 (2.2)%


Current operating income (3.5) (0.9) (2.6) 1.1 (0.5) 1.6 (419.0)%

% Current operating income (3.4)% (1.6)% (5.2)% 1.0% (1.0)% 3.0% (4.4) pts

Operating income (11.7) (1.7) (10.1) (2.8) (2.5) (0.3) (315.4)%

% Operating income (11.4)% (3.2)% (19.9)% (2.7)% (4.8)% (0.6)% (8.7) pts


Sales in this region (Asia and the United States) dropped 2.6%, mainly

because of the United States. Indeed, in the US, the group saw a

signifi cant slowdown in the business generated by the implementation

of Sarbanes-Oxley (SOX) and experienced diffi culties in the energy

sector. The invoicing rate in the United States dropped 9 points on a

comparable basis of consolidation.

Steps have been taken to offset the decline in activity at the US

subsidiary CSI, by developing the SOX activity in Japan.

This region’s foreign exchange impact, largely due to fl uctuations in

the US dollar, accounts for more than 85% of the group’ exchange rate

impact.

Operating expenses rose 2.1%, up €2.3 million, despite signifi cant

reductions in headcount, mainly at CSI. Personnel costs dropped 15.8%

between the second half of 2006 and the fi rst half of 2007. External

expenses were reduced by 3% between 2007 and 2006.

Operating income was mainly impacted by goodwill impairment

(€8.7 million).


Operating and fi nancial review9Activities of Altran Technologies S.A. and its main subsidiaries

9.4 Activities of Altran Technologies S.A. and its main subsidiaries

The table below presents the group’s 10 main companies.

Turnover, non group

(i n million euros) 2007 2006 2007 vs 2006

Altran Technologies 458.2 456.4 0.4%

Altran CIS (Italie) 73.1 51.4 42.2%

Datacep 46.6 41.2 13.1%

Arthur D. Little (Allemagne) 43.2 34.8 24.3%

Altran Systèmes d’Information 39.5 42.9 (8.1)%

Axiem 38.3 22.1 73.3%

Altran Europe 37.7 29.7 26.7%

Cambridge Consultants 35.8 29.8 20.4%

Hilson Moran Partnership 35.2 25.8 36.3%

Askon Consulting group 35.1 39.9 (12.1)%

TOTAL OF THE 10 COMPANIES 842.7 774.0 8.9%

Others 748.6 721.3 3.8%

TOTAL GROUP 1,591.4 1,495.4 6.4%

Altran Technologies (TI)

In 2006, Altran Technologies absorbed 26 companies from the TI

business. Operations are now organised by geographical area Paris/

Provinces, and by business lines: Automobile, Infrastructures and

Transport/Aeronautics, Space and Defence/Telecoms, Electronics and

Media/Energy, Industrial sectors and Life Sciences/Innovation.

This reorganisation was carried out in an aim to providing better client

satisfaction. It has been successful, as TI is now backing on the track

to growth.

Altran CIS (Italy) (CIS)

On 30 June 2006, three Italian companies made an asset contribution

to Altran CIS Italy. Therefore the comparison between 2006 and 2007

is not relevant.

Altran CIS Italy groups together CIS businesses in the following markets:

banking, insurance, manufacturing, media, energy, telecoms and public

administration. Telecoms and banking represent 50% of CIS’ activity,

with a client portfolio focused on major Italian accounts. Altran CIS Italy

operates mainly in Turin, Milan, Rome and Genoa. Insurance operations

have recently been expanded to Trieste.

This activity will be merged with Altran Italy in 2008 to group all of

Altran’s Italian operations together into a single entity. The company

will be organised by markets.

Datacep (CIS)

DATACEP (CIS) is present in Paris and Lille and continued on a strong

growth path in 2007. The client base is mainly comprised of clients

from the manufacturing, energy, retail and transport industries.

Activities include technical support and information systems.

Arthur D. Little (Germany) (Strategy and management consulting)

In 2007, this company maintained the strong growth initiated in 2006.

Growth is due both to a strong economic environment in Germany,

and also to the group’s expansion into Eastern Europe. Improved

collaboration between the Central European offi ces has provided a

sound base for business development. Robust activity in automobile,

energy and fi nancial institutions together with an improved billing rate,

turned growth into profi ts in 2007.

Altran Systèmes D’Information (CIS)

This company is focused mainly on markets with high added value,

particularly in the banking and insurance industries. The company’s

operations have progressed from the fi eld of information systems

technical support to business support, and more specifi cally on the

trading fl oor. This repositioning has been detrimental to growth but

has consolidated margins and granted the group a leading position on

niche markets with high added value.


Operating and fi nancial review 9Risks

Axiem (CIS)

At the end of 2006 Axiem was absorbed by the information systems

business of the former company Altior and redirected operations

towards its Project Management Offi ce offer. This resulted in a

signifi cant improvement in tariffs. Due to this company being

consolidated in 2006, the comparison between 2006 and 2007 is not

relevant.

Altran Europe (TI)

Altran EUROPE is based in Belgium. In 2007, this company reported

26.7% growth. The company’s projects are focused in the telecoms,

media and electronic industries.

Cambridge Consultants (Other)

Cambridge Consultants is based in the United Kingdom and reported

+20.4% growth in 2007. Cambridge Consultants is active in specifi c

research and development projects in medical devices, telecoms and

the industrial sector. Cambridge Consultants is very active in the United

States and also acts as an incubator for research activities.

Hilson Moran Partnership – HMP (Other)

Based in the United Kingdom, HMP reported 36.3% growth in 2007.

HMP is active in the construction industry.

Askon Consulting group (TI)

Based in Germany, Askon Consulting group’s client base is comprised

primarily of companies in the aeronautical and automobile industries.

Due to restructuring in this sector in 2007, Askon Consulting group

reported a -12.1% decline in sales in 2007.

9.5 Risks

9.5.1 Liquidity risk

On 22 December 2004 the group entered into an agreement with

its three main banks (BNP Paribas, Crédit Agricole Île de France and

Société Générale) for €150 million in credit lines. At 31 December 2007

the outstanding credit totalled €59.5 million.

Group net debt totalled €359.5 million at 31 December 2007 reduced

by €20.4 million compared with 31 December 2006. Breakdown of

net debt and consolidated cash fl ow are presented on page 27 of this

registration document.

Group ratios at 31 December 2007:

Net debt to equity 0.88

Net debt/EBITDA before profit-sharing (financial leverage) 2.71

At 31 December 2007 the group did not meet its fi nancial leverage

ratio covenant which must not exceed 2.5. Altran has asked the three

banks of the banking pool (BNP Paribas, Crédit Agricole Île de France

and Société Générale) not to exercise the early redemption clause on

these lines.

Furthermore, on 17 April 2008 Altran announced that it was in the

process of signing a refi nancing agreement with a group of banks: BNP

Paribas, Crédit Agricole Île de France, Natixis and Société Générale.

This refi nancing agreement grants a 5 year credit facility of €150 million,

and includes €26 million in existing credit lines that were initially due

in 2009.

This credit facility enables Altran to refi nance debt, and in particular its

convertible bond due in January 2009.

Pursuant to this termsheet the current credit lines will be rescheduled

and the banking pool will grant an additional €126 million in medium-

term credit lines by 1 January 2009. The group will therefore be granted

access to €150 million due 5 years from the date of fi rst drawdown.

This credit line, repayable on a half-yearly basis over 5 years from the

date of fi rst drawdown is subject to the following conditions:

as from 2009, one third of consolidated net cash fl ow above

€15 million must be allocated to debt reduction (excluding any

market operations);

acquisitions in 2008 and 2009 to be limited to €10 million per year

and thereafter €40 million per year, if no operations are carried out

to strengthen equity;

in the event of a capital increase or the issue of bonds redeemable

into shares for a minimum of €100 million, Altran is authorised to

make acquisitions for an aggregated amount of €50 million per year

without prior approval from the banks.

•

•

•


Operating and fi nancial review9Risks

The maximum cost of this credit is Euribor plus 155 basis points subject to the following ratios being met:

Net debt/EBITDA Net debt/Equity

31/12/2007 < 2.9 < 1.1

30/06/2008 < 2.9 < 1.0

31/12/2008 < 2.7 < 1.0

30/06/2009 < 2.5 < 1.0

31/12/2009 < 2.3 < 1.0

30/06/2010 < 2.1 < 1.0

31/12/2010 < 1.9 < 1.0

30/06/2011 < 1.7 < 1.0

31/12/2011 < 1.5 < 1.0

30/06/2012 < 1.3 < 1.0

31/12/2012 au 31/12/2013 < 1.0 < 1.0

These ratios will be calculated in compliance with IFRS and net debt

corresponds to net debt excluding employee profi t-sharing and

accrued interest on bond loans.

9.5.2 Interest rate risk

At 31 December 2007, group net debt totalled €359 million comprised

mainly of a convertible bond for €230 million at a 3.75% fi xed rate due

on 1 January 2009. The impact of interest rate changes is therefore

not signifi cant.

Breakdown by maturity of bank borrowings and fi nancial liabilities:

(in million euros) Within 1 year In 1 to 5 years Over 5 years

Financial liabilities (296) (241) -

Financial assets 178 - -

Net position before hedging (118) (241) -

Off balance sheet (interest rate hedge) 60 - -

Net position after hedging (58) (241) -

Pursuant to the credit agreement signed in December 2004, the

group has set up an interest rate hedge to cover at least 50% of total

revolving credit commitments for a minimum term of 3 years. Altran

thereby manages a structural fi xed rate/variable rate position (in

euros) to limit the cost of debt and uses interest rate instruments such

as swaps, caps and fl oors subject to the limits defi ned by Management

and the credit agreement

In addition, the group increasingly uses more factoring contracts for

fi nancing, which are indexed against EURIBOR.

9.5.3 Exchange rate risk

The majority of group assets in foreign currencies are comprised of

its investments in countries outside the Euro zone (mainly the United

States, Brazil, the United Kingdom, Sweden and Switzerland).

There were no fi nancial liabilities in foreign currencies outside the Euro

zone at 31 December 2007.

In 2007, group sales generated outside the Euro zone totalled

€316.2 million. As the income and expenses arising out of intellectual

services provided to clients are in the same currency, no foreign

exchange hedging policy has been implemented.


Operating and fi nancial review 9Risks

Commitments in foreign currencies at 31 December 2007

(in million euros)

Currency Assets Liabilities Net position

Exchange rate

at 31/12/2007

Net position in

euros before

hedging

Off balance

sheet

Net position

in euros after

hedging Sensitivity*

USD 77 2 75 1.4721 51 - 51 0.5

GBP 60 33 27 0.7334 37 - 37 0.4

CHF 72 7 65 1.6547 39 - 39 0.4

SEK 100 - 100 9.4415 11 - 11 0.1

SGD 37 - 37 2.1163 17 - 17 0.1

* Sensitivity to a 1% change in exchange rates.

9.5.4 Risks associated with intangible assets

Goodwill is not amortised but is subject to an impairment test at

31 December every year and more frequently if there are indications

that goodwill might be impaired.

The methodology used for impairment tests is set out in section 1.7

“Goodwill”

Impairment losses recognised in the income statement totalled

€13.9 million at 31 December 2007, i.e. €12.5 million for the fi rst half of

2007 and €1.3 million for the second half of 2007.

Impairment losses recognised involved 6 CGUs, which corresponds to

7 companies. The carrying amount of goodwill before impairment at

31 December 2007 totalled €488.6 million.

Impairment tests carried out on 31 December 2007, were based on

a discount rate after tax (WACC) of 8.92% (compared with 8.38% in

2006, i.e. a discount rate before tax of between 11% and 12%.

The assumption of a 1 percentage point increase in WACC (i.e. 9.92%)

would have resulted in total impairment of €18.3 million.

9.5.5 Environmental risk

Altran Technologies provides intellectual services. Environmental risks

are therefore insignifi cant.

9.5.6 Legal risks

Altran Technologies charges its clients based on the time spent by

its consultants. In the course of its business, the group may be faced

with legal actions, concerning employment litigation or other forms of

claims.

A detailed description of major litigation involving the group can be

found in section 6 “Major litigation and contingent liabilities”.

Whenever the group identifi es a risk, a conservative provision is

recorded based on advice from counsel. Total provisions made for all

litigation involving the group amounted to €17.1 million at 31 December

2007.

At present the criminal proceedings against Altran are ongoing,

for misuse of company property, forgery and disseminating false

information to infl uence the share price (see section 6 “Major litigation

and contingent liabilities” of the notes to the consolidated fi nancial

statements of this registration document for details). Although Altran

is not aware to date of any such information, other proceedings,

complaints and claims against the group cannot be ruled out. To Altran’s

knowledge, there are no pending governmental, legal or arbitration

proceedings, including any proceedings that the company is aware of,

likely to have or having had over the past 12 months, signifi cant effects

on the group’s fi nancial position or profi tability, other than those

described in section 6 “Major litigation and contingent liabilities” of the

notes to the consolidated fi nancial statements.

9.5.7 Risks associated with the convertible bond (OCEANE)






2009.

Furthermore, the company has announced its decision to carry out a





Operating and fi nancial review9Risks

9.5.8 Risks associated with Altran’s activity

Risks associated with the consulting market

The consulting market, and particularly technology and R&D consulting,

and organisation and information system consulting, are subject to

constant change, namely due to technological innovation, customer

requirements which evolve over time, the growing globalisation of

customers, changes in invoicing patterns and contractual commitments.

Consequently, the group’s performance depends on its capacity

to move with the changes of the industry, to use technological tools

skilfully and to provide its customers with satisfactory services.

Furthermore, the technology and R&D consulting market, the group’s

leading market, is still fragmented but there is a tendency towards

greater consolidation and customers are tending to cut down on the

number of suppliers. Some of the group’s competitors may have greater

fi nancial, commercial, technical and human resources than Altran’s.

These competitors could in the future conclude long-term strategic

or contractual relationships with customers or potential customers on

markets where the group operates or intends to develop operations.

Increased competition could therefore have an impact on the group’s

market share, activity, fi nancial position and outlook.

Altran’s customers are mainly major European private and public

accounts. The group does not publish a list of clients as this is strategic

information. However the group’s customer portfolio is very fragmented

as in 2007 no one client represented more than 6% of total group sales;

the fi ve largest customers represented 14.4% of total sales in 2007,

the 10 largest 22.6% and the fi fty largest 45.6%.

Risks associated with potential liability as regards clients and termination of contracts

The relationships forged by the group with its customers, particularly

as regards cost-plus service, are sometimes formalised only by one-

off orders. Typically cost-plus service orders often do not stipulate the

conditions for renewal and sometimes provide for termination with

only short-term notice requirements. This may provide a certain factor

of uncertainty which could affect the group’s activity, fi nancial position

and outlook.

In addition, the vast majority of services provided by the Altran group

companies are billed on a time basis at a fi xed rate. group companies

are only bound by an obligation of means. In the event of fi xed rate

contracts, accounting principles as regards the recognition of revenue,

require an assessment of risk on completion. Margins are only

recognised once it is established that there is no risk of them being

jeopardized due to a duty to achieve a given result.

Risks associated with a shortage of qualifi ed staff and higher payroll expenses

In the innovation and technology consulting and information technology

industries, employees are virtually all highly qualifi ed engineers who

are very sought after on the employment market in their respective

fi elds. The group’s growth capacity is largely dependent on its capacity

to attract, motivate and retain highly qualifi ed employees who have the

requisite skills and experience. The group is particularly exposed to the

risk of losing its consultants to competitors or to clients on completion

of a mission. The group devotes considerable efforts to reducing staff

turnover which is fairly high (29.4% in 2007). However, there is no

guarantee that the group will achieve this objective or that the group

will manage to retain the qualifi ed staff needed for future growth.

The group may be unable to pass on payroll costs resulting from

signifi cant changes in labour law or tighter employment market

conditions in the group’s main countries or sectors.

Risks associated with the implementation of the cost cutting strategy

Pursuant to its operational effi ciency plan for 2007/2009 and based

on the group’s outlook the group has set itself the specifi c objective

of cutting indirect costs via various measures, namely the legal

restructuring of the group, reducing the number of subsidiaries.

The group has taken steps to merge subsidiaries, to create synergies

and economies of scale, to apply and optimise standards, controls and

procedures and to deploy new tools. The achievement of objectives

within the allotted time span cannot be guaranteed at this stage,

and could therefore affect the group’s activity, fi nancial position and

outlook.

Risks associated with insurance cover

The group has defi ned a policy to insure the main risks linked to it

business (see below for details) and ensures that these policies are

extended to cover all group subsidiaries, subject to standard market

exclusions, limits and deductibles.

Subject to standard market exclusions, the group considers that its

current insurance cover is reasonable, as deductibles are consistent

with the frequency of losses. However, the company cannot guarantee

that all claims made by third parties or losses suffered are, and will in the

future be, covered by insurance, nor that the current insurance policies

will always be suffi cient to cover the cost and damages resulting from

Altran’s liability being incurred. In the event a loss is not covered by the

insurance policies or signifi cantly exceeding their limits or where the

insurer demands signifi cant reimbursement, the resulting costs and

damages could affect the group’s fi nancial position.


Operating and fi nancial review 9Research and development

Altran Technologies’ insurance policies are in line with the group’s

business and standard market conditions and are underwritten with

reputable insurance companies.

Liability

1- Professional liability, product liability and operational third

party liability insurance: This master policy, negotiated by Altran

Technologies is due to cover all group subsidiaries (excluding Altran

Technologies’ US and Canadian subsidiaries which are covered by

local policies), and covers the insured companies in the course of

their business for liability for bodily injury, property damage and

fi nancial loss caused to third parties.

2- Aviation insurance: this covers Altran Technologies and those

subsidiaries expressly cited which operate in the fi eld of aviation.

It covers the fi nancial loss resulting from liability incurred due to

products and intellectual services in engineering sciences or due to

fl ight interruption.

3- Environmental liability insurance: this global policy only covers

those group companies expressly cited. It covers fi nancial loss

resulting from liability incurred due to property damage, intangible

loss, bodily injury, caused by damage to the environment resulting

from the occurrence of unforeseeable events in the course of the

group’s business.

Fleet insurance

The use of motor vehicles by employees for business purposes is

covered by group policies which provide standard market cover.

Offi ce insurance

The group has offi ce insurance to cover losses arising from damage

to goods, furniture and fi xtures and insured parties (fi re, theft, water

damage, machinery breakdowns, etc.).

Complementary health insurance, providence insurance and personal assistance insurance

Altran Technologies’ employees benefi t from providence and

complementary health insurance and personal assistance insurance

when they travel abroad on business, all of which provide standard

market cover.

One-off insurance policies can be underwritten to cover specifi c

contracts for a limited period of time.

9.5.9 Investment risks

The majority of liquidities are invested in:

money market securities (SICAV);

negotiable debt securities;

foreign currency deposit accounts (GBP/USD and CHF).

Interest for the above investments is based on EONIA or LIBOR for

foreign currencies. The sensitivity of these investments, based on a

10% fl uctuation of the benchmark index (EONIA or LIBOR), is 0.40%.

The group is currently defi ning a procedure to determine how liquidities

should be used by each subsidiary and at group level.

Most of the guidelines are based on two main principles:

all cash surpluses are to be invested with Altran’s Global Management

Treasury Services (GMTS, company governed by French law);

in allocating these cash surpluses, GMTS gives priority to the

repayment of loans and/or uses money market instruments with

sensitivity and volatility rates of less than 1% per annum.

At 31 December 2007 the market value of the group’s marketable

securities totalled €97.5 million.

The group does not make investments involving signifi cant risk.

•

•

•

•

•

9.6 Research and development

At group level, research and development expenses totalled €4.8 million

at 31 December 2007.

No research and development expenses were capitalised by Altran

Technologies.


Operating and fi nancial review9Subsequent events

9.7 Foreseeable future trends and outlook

Altran has set the following four goals for 2008:

achieve a growth rate equal to or above that for its markets in

France and other countries;

boost profi tability by cutting overhead expenses;

manage cash fl ow effectively, with a particular focus on controlling

customer outstandings; and

•

•

•

refi nance medium-term borrowings.

These goals are part of Altran’s new strategy, Action 4, which should

allow the company to reach the following targets by 2010:

sales of €2 billion; and

EBIT margin of 8%-10%.

•

•

•

9.8 Subsequent events

At the end of 2007 group Management presented a Business

Development plan concerning its organisation and information systems

consulting activities in France.

This plan involves merging the Altran CIS Paris companies, which are

subsidiaries of Altran Technologies, into a single entity to be called

Altran CIS. The merger is due to be completed on 30 April 2008, with

retroactive effect for accounting and taxation purposes from 1 January

2008. To that purpose, on 5 March 2008 Altran Technologies sold

shares to its subsidiary Altran Systèmes d’Information so that the latter

would fully own the companies that it is due to absorb.

This Business Development plan is in line with the Group’s ambition to

position Altran CIS as a leading player in its market, and to grant it the

opportunity of achieving this ambition via:

a strong positioning with clearly distinguished activities;

a sustainable growth model.

This announcement is in line with other steps taken by the group over

the past two years to restructure the group’s activities in France, such

as the merger of the 26 French Innovation and Technology Consulting

companies into a single entity, and the operational merger of its

Organisation and Information System Consulting.

On 17 April 2008, Altran Technologies announced plans to proceed

with a capital increase with pre-emptive subscription rights up to a

maximum amount of €130 million, which is expected to be completed

before 31 July 2008.

•

•

The Funds managed by Apax Partners SA have committed to subscribing

all new shares that are unsubscribed by existing Shareholders through

the exercise of their pre-emptive subscription rights, at an issue price

per share of between €5 and €6.

A prospectus will be drawn up for approval by the Autorité des Marchés

Financiers, prior to the transaction.

The Apax Funds have concluded an agreement with Messrs Alexis

Kniazeff and Hubert Martigny, the founding Shareholders of Altran

Technologies, under which, subject to the capital increase, the founders

agree to:

sell 6 million company shares to the Apax Funds i.e. 5.1% of the

issued capital;

transfer all the pre-emptive subscription rights attached to their

remaining shares to Apax Funds;

contribute all the voting rights attached to their remaining shares to

a partnership that Apax Partners will manage and represent at the

Shareholders General Meetings for an initial period of 6 years.

At the next Shareholders General Meeting, the Shareholders will be

asked to approve the appointment of two additional members to the

Supervisory Board who will represent the Apax Funds.

In conjunction with the new shareholding structure, Apax Partners and

the company will also seek to implement an investment mechanism for

the company’s key managers.

•

•

•


Operating and fi nancial review 9Controlling companies and their ownership interest in Altran Technologies

9.9 Altran Technologies S.A.’s company fi nancial statements and allocation of earnings

Altran Technologies S.A. is the parent company of the Altran group. It

has both operational activities and group level functional activities.

Altran Technologies’ sales in 2007 totalled €494 million compared

with €491 million in 2006.

Operating profi t totalled €3.2 million compared with a loss of

€7.1 million in 2006.

Financial income totalled €5.8 million compared with total fi nancial

expenses of €3.1 million in 2006.

Extraordinary items totalled -€6.6 million in 2007 compared with -

€4.1 million in 2006.

After €7.5 million in tax income and tax credits the group recorded

net earnings of €9,869,014.07 for the year ending 31 December 2007,

which the Board proposes to allocate in full to retained earnings.

Retained earnings will now total €59,319,824.00.

As a reminder:

non-tax deductible expenses: €13,951,031;

including total non-tax deductible expenses pursuant to article 39.4

of the French Tax Code: €740,310 and corresponding tax:

€246,770.

As required by law, we inform you that no dividends have been paid out

for the past three fi scal years.

•

•

9.10 Subsidiaries and equity holdings


scope of consolidation, including:

Acquisitions

The group made no acquisitions of companies incorporated in France.

However in August 2007 the group did acquire the following stakes in

foreign companies:

75% of Arthur D. Little Yuhan Hosea in South Korea;

100% of Hilson Moran Italia in Italy.

•

•

Disposals & liquidations

USM Endecar in Spain was sold at the beginning of 2007.

The Johnsson group in the US was liquidated in 2007 after its business

was sold.

As part of the streamlining of its scope of consolidation Altran carried

out a number of mergers in Belgium, the United States, France, Sweden

and Switzerland.

9.11 Information on the share capital, cross-shareholdings, treasury shares

Information on Altran’s capital structure is presented in chapter 18 “Major Shareholders” of this registration document.

9.12 Controlling companies and their ownership interest in Altran Technologies

None.


Operating and fi nancial review9Information on the calculation methods and effects of adjustments to the conversion basis for bonds and the subscription or purchase of securities convertible or exchangeable into shares

9.13 Transactions carried out during the year subject to article L.621-18-2 of the French Monetary and Financial Code and article 222-15-3 of the Autorité des Marchés Financiers’ General Regulation

On 3 August 2007, Jacques-Étienne de T’Serclaes, Supervisory Board

Member, purchased 1,500 Altran shares at €9,225, bringing his total

share ownership to 2,500 shares. His wife owns 300 Altran shares,

which were purchased at €72.01 per share before Jacques-Étienne de

T’Serclaes was appointed to the Supervisory Board.

On 4 December 2007, Michel Senamaud, Vice-Chairman of the

Supervisory Board, purchased 3,000 Altran shares at €4.19 per share,

or a total of €12,570.

No other members of the Supervisory Board or Management

Board bought or sold any Altran shares during the fi scal year ended

31 December 2007.

9.14 Share buybacks

The Ordinary and Extraordinary Shareholders’ Meeting on

29 June 2007, voting with a quorum present and under the majority

criteria for Annual General Meetings, resolved to:

annul with immediate effect the unused portion of the share

buyback authorisation given by the Ordinary and Extraordinary

Shareholders’ Meeting on 8 June 2006; and

•

in its Fifth Resolution, authorise the company to trade in its own

shares in order to, among other purposes, mediate the Altran share

price. This authorisation has not been used to date.

Altran did not purchase any of its 2009 OCEANE convertible bonds

in 2007.

•

9.15 Information on the calculation methods and effects of adjustments to the conversion basis for bonds and the subscription or purchase of securities convertible or exchangeable into shares

None.


Operating and fi nancial review 9Stock options

9.16 Employee share ownership

Altran employees owned 3,109,117 Altran shares, or 2.6% of the

company’s shares and 2.2% of its voting rights, at 31 December 2007

through three company-sponsored mutual funds. Most of these shares

were obtained through an employee share ownership plan introduced

in the fi rst half of 2006.

The funds in the employee share ownership plan are able to use

leverage, and at 31 December 2007 the bank arranging the initial

transaction had borrowed 1,600,000 Altran shares from the funds.

As a result, the funds now have voting rights on 1,509,117 Altran shares,

or 1.3% of the company’s shares and 1.1% of its voting rights.

The bank has committed to making its best effort, subject to market

conditions, to return the shares to the funds at Annual General

Meetings so that the funds can exercise the full voting rights attached

to their shares.

9.17 Stock options

Share subscription options

On 20 December 2007, the group issued 2,589,830 stock options and 818,740 bonus shares to 2,191 employees. This plan represents 2.9% of the

company’s share capital.

Stock options

Share subscription plan and bonus shares

Plan Plan Plan Plan Plan Plan Plan

2000(a) 2001(a) 2003(a) 2003(a) (b) 2004 2005 2005

Date of AGM 26/06/1996 17/06/1999 17/06/1999 17/06/1999 28/06/2004 28/06/2004 28/06/2004

Date of Board of Directors

and Management Board meeting 11/04/2000 10/10/2001 11/03/2003 24/06/2003 29/06/2004 15/06/2005 20/12/2005

Total number of shares that may be

subscribed or allocated at the grant date 845,792 642,880 3,948,993 336,191 2,762,000 340,000 2,630,000

of which executive officers 67,242 186,785 80,000 200,00 210,000

of which number of shares that may be

subscribed by or allocated to the 10 highest

paid employees 144,892 85,708 875,218 106,734 510,000 140,000 635,000

Number of shares subscribed

at 31 December 2006 - - - - - -

Options expired during the year

Beginning of exercise period 01/07/2004 10/10/2005 12/03/2007 25/06/2007 30/06/2008 16/06/2009 21/12/2009

Date of final grant of bonus shares

Expiration date 11/04/2005 10/10/2006 11/03/2011 24/06/2011 29/06/2012 15/06/2013 20/12/2013

End of lock-in period for bonus shares

Subscription price/reference share price

(in euros) 76.20 39.34 2.97 6.73 9.37 7.24 9.62

Valuation method used

Black

& Scholes

Black

& Scholes

Black

& Scholes

Black

& Scholes

Black

& Scholes

Number of shares that may be subscribed

or allocated at 31/12/2006 2,233,349 225,119 1,859,498 131,000 2,096,000

Options granted in 2007

Options forfeited in 2007 95,268 13,570 167,250 169,500

Options exercised in 2007 911,725

Number of shares that may be subscribed

or allocated at 31/12/2007 1,226,356 211,549 1,692,248 131,000 1,926,500

(a) After the capital increase for cash with pre-emptive subscription rights maintained on 23 December 2003, the exercise price and the number of shares in each plan were adjusted to take into account the issue of 20,807,584 new shares.

(b) On 8 June 2006, the Ninth Resolution of the Extraordinary Shareholders General Meeting modified the vesting period of the plan dated 24 June 2003, extending it from 5 to 8 years.


Operating and fi nancial review9Stock options

Stock options Bonus shares

Share subscription and bonus share plan Plan 2007

Plan 2007

France

Plan 2007

Other countries

Date of AGM 29/06/2005 29/06/2005 29/06/2005

Date of Board of Directors and Management Board meeting 20/12/2007 20/12/2007 20/12/2007

Total number of shares that may be subscribed or allocated

at the grant date 2,589,830 482,240 336,500

of which executive officers 100,000

of which number of shares that may be subscribed

by or allocated to the 10 highest paid employees 340,000 93,240

Number of shares subscribed at 31 December 2006 - - -

Options expired during the year

Beginning of exercise period 21/12/2011

Date of final grant of bonus shares 21/12/2009 21/12/2011

Expiration date 20/12/2015

End of lock-in period for bonus shares 20/12/2011 20/12/2011

Subscription price/reference share price (in euros) 4.29 4.00 4.00

Valuation method used Hull&White CNC binomial CNC binomial

Number of shares that may be subscribed or allocated at 31/12/2006

Options granted in 2007 2,589,830 482,240 336,500

Options forfeited in 2007 1,000

Options exercised in 2007

Number of shares that may be subscribed or allocated at 31/12/2007 2,589,830 481,240 336,500

The following table details the adjustments made to stock option plans following the rights issue on 23 December 2003:

(in euros)

Plan Exercise price

Adjusted

exercise price

Number

of options

Adjusted number

of options

Factor used to adjust

the number of options

Granted on 11 March 2003 3.17 2.97 3,699,845 3,948,993 1.06734

Granted on 24 June 2003 7.18 6.73 314,980 336,191 1.06734

Summary table

Type of potentially dilutive security Issue date Exercise price

Potential

number

of new shares

Number

of securities

in issue

at 31.12.2007 Dilution %

Stock options 11 March 2003 2.97 3,948,993 1,226,356 1.04%

Stock options 24 June 2003 6.73 336,191 211,549 0.18%

Stock options 29 June 2004 9.37 2,762,000 1,692,248 1.43%


Stock options 20 December 2005 9.67 2,630,000 1,926,500 1.63%


TOTAL STOCK OPTIONS 12,607,014 7,777,483 6.58%

Bonus shares 20 December 2007 4.29 818,740 817,740 0.69%

2009 OCEANE convertible bonds 9 July 2004 12.70 18,110,236 18,110,236 15.32%

TOTAL 31,535,990 26,705,459 22.59%

No stock options were granted to Supervisory Board members in 2007.


Operating and fi nancial review 9Stock options

On 20 December 2007, the Management Board granted 50,000 stock

options to each Management Board member after obtaining approval

from the Supervisory Board, as required by article 14.1 of the Articles of

Association, and upon the recommendation of the Remuneration and

Appointment Committee.

The details of these stock options are given in the table below.

All options are for the purchase of new shares.

No bonus shares were granted to corporate offi cers.

On 4 February 2008, the Supervisory Board resolved that any shares

obtained from the exercise of these options must be held until the

Management Board member owning the shares leaves the company.

Stock options granted to Mr Yves de Chaisemartin, Chairman of the Management Board

Stock options granted

on 20 December 2007

Exercise price 4.29

Expiration date 20 December 2015

Number of options granted during the fiscal year 50,000

Number of options exercised during the fiscal year -

Number of options existing at 31 December 2007 50,000

Stock options granted to Mr Éric Albrand - Member of the Management Board

Granted on

11 March 2003

Granted on

24 June 2003

Granted on

29 June 2004

Granted on

20 December 2005

Granted on

20 December 2007

Exercise price 2.97 6.73 9.37 9.62 4.29

Expiration date 11 March 2011 24 June 2008 29 June 2012 20 December 2013 20 December 2015

Number of options granted

during the fiscal year 42,693 106,734 80,000 90,000 50,000

Number of options exercised

during the fiscal year - - - - -

Number of options existing

at 31 December 2007 42,693 106,734 80,000 90,000 50,000

Number of treasury shares purchased or sold during the period in connection with employee profi t sharing

None.

Share price fl uctuation risk

None.


Operating and fi nancial review9Company management – Corporate officers

9.18 Company management – Corporate offi cers

9.18.1 Composition of the Supervisory and Management Boards

Composition of the Supervisory Board

Name First appointed Term of offices expires Positions held

Mr Dominique de Calan 29/06/2005

AGM approving fiscal year

ending 31/12/2008 Chairman and Member of the Supervisory Board

Mr Michel Sénamaud 29/06/2005


ending 31/12/2008

Vice-Chairman and Member

of the Supervisory Board

Mr Roger Alibault 29/06/2005


ending 31/12/2008 Member of the Supervisory Board

Mr Jacques Étienne de T’Serclaes

5/3/2007

Effective 30/03/2007


ending 31/12/2008

Member of the Supervisory Board

and Chairman of the Audit Committee

On 29 September 2006, the Supervisory Board appointed

Mr Dominique de Calan as Chairman of the Supervisory Board to

replace Mr Yves de Chaisemartin, who resigned.

On 29 June 2007, the Ordinary and Extraordinary Shareholders’

Meeting approved the appointment Mr Jacques-Étienne de T’Serclaes

as member of the Supervisory Board. His term of offi ce is due to expire

at the end of the Annual General Meeting held to approve the fi nancial

statements for the fi scal year ended 31 December 2008.

Composition of the Management Board

Composition of the supervisory board:

Name First appointed Term of offices expires Positions held

Mr Yves de Chaisemartin 24/09/2006 10/01/2009 Chairman of the Management Board

Mr Éric Albrand 30/06/2005 10/01/2009 Member of the Management Board

On 11 January 2007, the Supervisory Board accepted the resignation

of Messrs. Yves de Chaisemartin and Eric Albrand as Chairman of

the Management Board and Member of the Management Board

respectively.

On the same date, the Supervisory Board appointed Messrs. Yves

de Chaisemartin and Eric Albrand for two years, as Chairman of

the Management Board and Member of the Management Board

respectively.


Operating and fi nancial review 9Company management – Corporate officers

Positions of corporate offi cers held in companies other than Altran Technologies, over the past fi ve years

Mr Yves de Chaisemartin – Chairman of the Management Board

First appointed Term of office expires Positions held Name of the company

2003

06/10/1994 23/12/2004 Manager Journaphone

06/10/1994 29/09/2003 Procorec

06/10/1997 23/12/2004 Promolouvre

06/10/1994 23/12/2004 Promoporte

01/01/2002 23/02/2003 Publicité Annonces

01/01/2002 22/12/2004 SCPI

17/12/1999 26/01/2005 Chairman and CEO SMRL

10/12/2001 21/12/2004 Soc Invest 1

10/12/2001 21/12/2004 Soc Invest 2

12/12/2002 04/01/2005 Soc Invest 3

12/12/2002 21/12/2004 Soc Invest 4

01/01/2002 June 2005 Conseil Supérieur Messageries

29/09/2003 31/10/2003 Liquidator Procorec

23/06/1999 13/12/2004 Chairman of the Management Board Société de gestion du Figaro

30/01/2002 08/07/2004 Socpresse

26/02/2002 02/03/2005 Vice-Chairman


Figaro Holding

31/03/2003 26/10/2004 Express Expansion group

10/06/2001 26/05/2005 Sole Director GIE du 31 rue des Jeuneurs

27/01/1998 28/04/2005 Director Cadremploi

25/07/2000 26/10/2004 Delaroche S.A.

12/06/2001 13/05/2005 Explorimmo

01/01/2002 26/10/2004 Le Bien Public

30/07/1999 23/12/2004 Publiprint

30/06/1997 30/09/2004 Société du Figaro

12/12/2002 04/01/2005 Soc Invest 3

04/12/2002 17/12/2004 Voix Du Nord Investissement

31/01/2003 Editions Génération

22/06/2000 L’Est Républicain

24/06/2002 15/11/2003 Member of the Supervisory Board Vivolio

02/10/2001 14/02/2005 FCNA

24/07/2002 14/11/2003 Member of the Executive Committee Moteurprint

30/06/1993 30/06/2004 Director Nord Éclair Belge (Belgium)

26/06/2002 27/06/2005 Managing Director Rossel et Cie S.A. (Belgium)

01/01/2002 01/10/2004 Director Board of Directors Figaro Magazine YK (Japa n)

2004

06/10/1994 23/12/2004 Manager Journaphone

06/10/1994 23/12/2004 Promolouvre

06/10/1994 23/12/2004 Promoporte

01/01/2002 22/12/2004 SCPI

22/06/2004 15/07/2004 TVES

01/01/2002 June 2005 Chairman and CEO Conseil Supérieur Messageries

17/12/1999 26/01/2005 SMRL

10/12/2001 21/12/2004 Soc Invest 1

10/12/2001 21/12/2004 Soc Invest 2

12/12/2002 04/01/2005 Soc Invest 3

12/12/2002 21/12/2004 Soc Invest 4




10/06/2001 26/05/2005 Sole Director GIE du 31 rue des Jeuneurs

17/03/2004 30/06/2007 Director Réunion des Musées Nationaux (RMN)


25/07/2000 26/10/2004 Delaroche S.A.

31/01/2003 Editions Génération

12/06/2001 Explorimmo


01/01/2002 26/10/2004 Le Bien Public

30/07/1999 23/12/2004 Publiprint

30/06/1997 30/09/2004 Société du Figaro AGO

12/12/2002 04/01/2005 Soc Invest 3

04/12/2002 17/12/2004 Voix Du Nord Investissement

23/06/1999 13/12/2004 Chairman of the Management Board Société de gestion du Figaro

30/01/2002 08/07/2004 Socpresse

26/02/2002 02/03/2005 Vice-Chairman


Figaro Holding

31/03/2003 28/10/2004 Group Express Expansion

02/10/2001 14/02/2005 Member of the Supervisory Board FCNA

08/07/2004 30/09/2004 Chief Executive Socpresse

30/06/1993 30/06/2004 Managing Director Nord Éclair Belge (Belgium)

26/06/2002 27/06/2005 Rossel et Cie S.A. (Belgium)

01/01/2002 01/10/2004 Director Board of Directors Figaro Magazine (Japan)

2005

07/12/1999 26/01/2005 Chairman and CEO SMRL

12/12/2002 04/01/2005 Soc Invest 3

01/01/2002 June 2005 Conseil Supérieur Messageries

10/06/2001 26/05/2005 Sole Director GIE Du 31, rue des Jeuneurs


31/01/2003 18/04/2005 Editions Génération

12/06/2001 13/05/2005 Explorimmo


12/12/2002 04/01/2005 Soc Invest 3

17/03/2004 30/06/2007 Réunion des Musées Nationaux (RMN)

26/02/2002 02/03/2005

Vice-Chairman

of the Supervisory Board Figaro Holding

02/10/2001 14/02/2005 Member of the Supervisory Board FCNA

September 2005 Chief Executive Marianne

July 2005 Senior Advisor Carlyle Europe

26/06/2002 27/06/2005 Managing Director Rossel et Cie S.A. (Belgium)

27/06/2005 Director Rossel et Cie S.A. (Belgium)

2006

02/10/2006 Chairman Fondation pour l’innovation Altran


February 2006 Director Marianne




27/06/2005 Director Rossel et Cie (Belgium and Lille)

19/10/2006 Director Cambridge Consultants Ltd (Altran group) (England)




2007

02/10/2006 Chairman Fondation pour l’innovation Altran


February 2006 Director Marianne



17/04/2007 Chairman of the Board of Directors Musée Rodin


27/06/2005 Director Rossel et Cie (Belgium and Lille)

06/09/2007 Representative of Altran Technologies S.A. in Axiem (Altran group)

19/10/2006 Director Cambridge Consultants Ltd (Altran group) (England)

26/03/2007 Director Altran Technologies India Ltd (India)

Mr Eric Albrand – Member of the Management Board


2003

10/11/2003 Director Altran (Switzerland) S.A.

24/04/2003 Altran Belgium S.A.

28/04/2003 Altran Consulting Solutions, Inc.

28/04/2003 Altran Consulting Systems, Inc.

13/06/2003 Altran Luxembourg S.A.

03/06/2003 Altran Technologies, Inc.

28/04/2003 Altran USA, Inc.

28/04/2003 Arthur D. Little North America, Inc. (Altran group)

28/04/2003 Arthur D. Little, Inc. (Altran group)

29/04/2003 FCI Microconnections

01/03/2003 FCI Connectors UK Ltd

Slivarente

20/10/2003 Manager/Director/

“Geschäftsführer”

Altran Austria GmbH

13/05/2003 Altran Deutschland GmbH

23/04/2003 Altran Holdings (Singapore) Pte Ltd

11/06/2003 Altran International B.V.

23/04/2003 Altran Ireland Ltd

16/05/2003 Altran Italia, S.R.L.

11/06/2003 Altran Netherlands B.V.

21/05/2003 Altran Portugal S.G.P.S. Ltda.

23/04/2003 Altran UK Ltd

12/06/2003 International Business Development Ltd (Altran group)

23/04/2003 Company secretary Altran Ireland Ltd


28/04/2003 Treasurer and secretary Altran Consulting Solutions, Inc.



28/04/2003 Manager ACS Holdings, L.L.C. (Altran group)

17/09/2003 “Apoderado” Ubica Solutions, S.L. (Altran group)




2004








09/11/2004 Altran USA Holdings, Inc.



Slivarente


“Geschäftsführer”

Altran Austria GmbH












28/04/2003 Treasurer and secretary Altran Consulting Solutions, Inc.


05/01/2004 Altran Corporation




03/03/2004 Strategy Consultors C.P.O.E., S.L. (Altran group)

2005














20/10/2003 Manager / Director /

“Geschäftsführer” / “Consejero

delegado”

Altran Austria GmbH


27/07/2005 Altran Estudios Servicios y Proyectos, S.L.








06/07/2005 CGS Executive Search S.A.R.L. (Altran group)

06/07/2005 Ethnos S.A.R.L. (Altran group)


30/05/2005Representative of Altran Luxembourg S.A. in DCE Consultants

Luxembourg S.A. (Altran group)

31/05/2005 Altran Technologies S.A. in Altran Luxembourg S.A.



28/04/2003 Altran Consulting Solutions

28/04/2003 Treasurer and secretary Altran Consulting Systems, Inc.

05/01/2004 Altran Corporation




03/03/2004 Strategy Consultors C.P.O.E., S.L. (Altran group)

2006






“Geschäftsführer”/“Consejero

delegado”

Altran Austria GmbH










06/07/2005 29/12/2006 CGS Executive Search S.A.R.L. (Altran group)

06/07/2005 Ethnos S.A.R.L. (Altran group)


30/05/2005Representative of Altran Luxembourg S.A. in DCE Consultants

Luxembourg S.A. (Altran group)




03/03/2004 “Apoderado” Altran D.S.D., S.L.




2007






“Geschäftsführer”/“Consejero

delegado”/“Amministratore delegato

del consiglio”/“Consejo delegado”

Altran Austria GmbH










06/07/2005 21/12/2007 Ethnos (Altran group)


26/03/2007 Altran Technologies India Ltd

28/04/2003 Altran Consulting Systems Inc.

30/05/2005Representative of Altran Luxembourg S.A. in DCE Consultants Luxembourg

S.A. (Altran group)




03/03/2004 “Apoderado” Altran D.S.D., S.L.

05/09/2007

Soluciones y plataformas orientadas al conocimiento

(Altran group)

03/10/2007 Strategy and innovation Advisors SL (Altran group)

05/09/2007 S2 Solutions serveis Informaticas (Altran group)

09/02/2007 21/12/2007 Chairman AFEM (Altran group)

14/05/2007 21/12/2007 DCE Consultants (Altran group)

10/08/2007 10/10/2007 MAP (Altran group)

26/09/2007 Aphrodite Technologies (Altran group)

26/09/2007 Apopis Technologies (Altran group)

26/09/2007 Dionysos Technologies (Altran group)

26/09/2007

Hélène Technologies (Altran group) which became

Altran Prototypes Automobiles on 06/02/08

26/09/2007 Loki Technologies (Altran group)

26/09/2007 Olivia Technologies (Altran group)

26/09/2007 Sylvie Technologies (Altran group)

26/09/2007 Valérie Technologies (Altran group)

19/10/2006 Director (England) Cambridge Consultants Ltd (Altran group)



Mr Dominique de Calan – Chairman of the Supervisory Board


2003

Director Giat Industries

Director ADEPT

28/03/2003

(renewed) Non-voting Director Brittany Ferries

Director AGIRC

Vice-Chairman GIE AGIRC-ARRCO

Vice-Chairman APEC

Vice-Chairman AFPA

Vice-Chairman UNPMI (CGPME)

Chairman AREAT

May 2003 Member of the Supervisory Board Bretagne Développement

Director Sabemen

Director SDR de Bretagne

Director Fondation Villette-Entreprises

Chairman OPCAIM

Executive Vice-President UIMM

Vice-Chairman ETHIC

2004

Director Giat Industries

Director ADEPT

Non-voting Director Brittanny Ferries

29/01/2004 Chairman AGIRC

22/06/2004 Chairman GIE AGIRC-ARRCO

Vice-Chairman APEC

Vice-Chairman AFPA


09/12/2004 Alternate Director FUP

Chairman AREAT

30/06/2004 end Member of the Supervisory Board Bretagne Développement

2004 end Director Sabemen

27/05/2004 end Chairman OPCAIM

Director SDR de Bretagne



Vice-Chairman ETHIC




2005

28/07/2005 renewed Director Giat Industries

Director ADEPT

Non-voting Director Brittanny Ferries

Chairman AGIRC

Chairman GIE AGIRC-ARRCO

Vice-Chairman APEC

Vice-Chairman AFPA

Vice-Chairman OPCAIM


Alternate Director FUP

Chairman AREAT



Director CTIP

26/01/2005 Vice-Chairman ETHIC

2006

Director NEXTER (ex Giat Industries)

Director ADEPT

Director CTIP

Non-voting Director Britanny Ferries

10/03/2006 Vice-Chairman AGIRC

28/06/2006 Vice-Chairman GIE AGIRC-ARRCO

Vice-Chairman APEC

Vice-Chairman AFPA


Vice-Chairman ETHIC

Vice-Chairman OPCAIM



Chairman AREAT


2007

Director NEXTER (ex Giat Industries)

Director ADEPT

April 2007 Treasurer

Association de soutien à la Cité Nationale de l’Histoire

and de l’Immigration

Director CTIP

21/03/2007 Director Group Malakoff

Vice-Chairman AGIRC

Vice-Chairman GIE AGIRC-ARRCO

Vice-Chairman APEC

Vice-Chairman AFPA


Vice-Chairman ETHIC


Chairman AREAT

01/01/2007 Chairman OPCAIM




Mr Michel Sénamaud – Vice-Chairman of the Supervisory Board


2003

Chairman SAS Franpresse

SAS Sodinfor

Director S.A. Cadremploi

S.A. Editions Génération

S.A. Explorimmo

S.A. Presse Nord

S.A. Publiprint

S.A. Société du Figaro

S.A. Salt

SASP Football Club de Nantes

S.A. Figaro Holding

Member of the Supervisory Board S.A. groupe Express Expansion

Member of the Management Board S.A. Socpresse

S.A. Société de gestion du Figaro

2004

Chairman SAS Franpresse

SAS Sodinfor

Director SA Cadremploi

S.A. Editions Génération

S.A. Explorimmo

S.A. Presse Nord

S.A. Publiprint

SASP Football Club de Nantes

S.A. Salt

S.A. Société du Figaro

Chief Executive S.A. Société du Figaro

Member of the Supervisory Board S.A. Figaro Holding

S.A. groupe Express Expansion

Member of the Management Board S.A. Socpresse

S.A. Société de gestion du Figaro

2005

No other position was held outside

Altran Technologies.

2006


Altran Technologies

2007


Altran Technologies



Mr Roger Alibault – Member of the Supervisory Board


2003

Chairman and Chief Executive Officer Apex – GAEC S.A.

2004

Chairman and Chief Executive Officer Apex – GAEC S.A.

2005

Chairman and Chief Executive Officer

Manager Apex – GAEC S.A. Apex ProvenceApex Fidus Hyères

2006



2007



Mr Jacques-Etienne de T’Serclaes – Member of the Supervisory Board


2004

01/01/2001 12/07/2005

Member and Chairman

of the Supervisory Board PWC Audit

2004 May 2007 Director Euro-India Center

2005

01/01/2001 12/07/2005

Member and Chairman

of the Supervisory Board PWC Audit

2004 May 2007

Director

Euro-India Center

2005 Gift In Kind International

2006

2004 May 2007

Director

Euro-India Center


27/07/2006 2010 Rémy Cointreau

2006 Operating Partner Advent International Private Equity

2007

2004 May 2007

Director

Euro-India Center


27/07/2006 2010 Rémy Cointreau

2006 Operating Partner Advent International Private Equity



Mrs Guylaine Saucier - Member of the Supervisory Board until 15 February 2007


2003

1991 Director Petro - Canada

1997 2005 Nortel Networks

1987 Axa

1992 Banque de Montréal

1991 2005 Tembec Inc.

2004



1987 Axa

1992 Banque de Montreal


2005



1987 Axa



2005 CHC Helicopter

2006


1987 Axa


2005 CHC Helicopter

2006 Groupe Areva

2007


1987 Axa


2005 CHC Helicopter

2006 Groupe Areva

Judgements for fraud, sanctions, or bankruptcies involving the corporate offi cers

To Altran Technologies’ best knowledge, no members of its

Management Board or Supervisory Board has in the past fi ve years:

been convicted of fraud;

been associated with a bankruptcy, receivership, or liquidation;

been the subject of an offi cial public incrimination and/or sanction

by statutory or regulatory authorities (including designated

professional bodies); or

Been disqualifi ed by a court from acting as a member of an

administrative, management, or supervisory body of an issuer or from

acting in the management or conduct of the affairs of an issuer.

•

•

•

Yves de Chaisemartin was ordered to appear before the Paris court

of summary jurisdiction for allegations of the misuse of corporate

assets while he served on the Board of Directors of Presse Alliance

(the publisher of France Soir, a French newspaper) in 1989. Yves de

Chaisemartin has fi led an appeal in response, which was judged

admissible.

Confl icts of interest among Management Board and Supervisory Board Members

To Altran Technologies’ best knowledge:

there are no confl icts of interest between any Altran Management

Board or Supervisory Board members’ duties to Altran Technologies

and their private interests; and

there have never been any family relationships among Altran

Management Board and Supervisory Board members.

•

•



9.18.2 Compensation of corporate officers

Gross compensation and benefi ts paid in 2007 to the corporate

offi cers by the company, and by the subsidiaries totalled €1,413,750:

corporate offi ce compensation: €1,062,500

employment contract compensation: None

Directors’ fees: €351,250

benefi ts in kind: None

•

•

•

•

Members of the Supervisory Board

Mr Dominique de Calan – Chairman of the Supervisory Board

2006 2007

Gross compensation paid by the company €32,500.33 €130,000.00

Gross compensation paid by a controlled company None None

Benefits in kind granted by the company None None

Directors’ fees paid by the company for his role as Member and Chairman of the Supervisory Board €80,000.00 €80,000.00

Mr Michel Sénamaud – Vice-Chairman of the Supervisory Board

2006 2007

Gross compensation paid by the company €90,000.00 None

Gross compensation paid by a controlled company None None

Benefits in kind granted by the company None None

Directors’ fees paid by the company for his role as Member and Vice-Chairman

of the Supervisory Board €70,000.00 €70,000.00

Mr Roger Alibault – Member of the Supervisory Board

2006 2007

Directors’ fees paid by the company for his role as Member of the Supervisory Board €70,000.00 €70,000.00

Mr Jacques-Etienne de T’Serclaes – Member of the Supervisory Board since 5 March 2007 with effect from 30 March 2007

2006 2007

Directors’ fees paid by the company for his role as Member of the Supervisory Board None €37,500.00

Mrs Guylaine Saucier – Member of the Supervisory Board until 15 February 2007

2006 2007

Directors’ fees paid by the company for her role as Member of the Supervisory Board €150,000.00 €93,750.00



Members of the Management Board

Mr Yves de Chaisemartin, Chairman of the Management Board

As Chairman of the Supervisory Board from 1 January 2006 to 24 September 2006:

Exceptional gross compensation paid by the company: €94,791.65

Gross compensation paid by a controlled company: None

Benefits in kind granted by the company: None

Directors’ fees paid by the company for his role as Member and Chairman of the Supervisory Board: €52,500.00

As Chairman of Management Board:

2006 2007

Fixed compensation paid over the period by the company: €53,889.00 €360,000.00

Gross compensation paid by a controlled company: None None

Benefits in kind granted by the company: None None

Variable gross compensation for 2006, paid in April 2007 €62,500.00

Variable compensation is fi xed by the Supervisory Board, by reference

to a target bonus of €340,000 (gross) based on performance-related

criteria. The following performance-related criteria are taken into

consideration:

EBIT;

sales growth;

•

•

strategy;

successfully completing the mergers in France.

No variable compensation was paid in 2007 for the fi scal year ending

31 December 2007. This decision will be made by the Supervisory

Board in 2008.

•

•

Mr Éric Albrand – Member of the Management Board

2006 2007

Fixed gross compensation paid over the period by the company €360,000.00 €360,000.00

Gross compensation paid by a controlled company: None None

Benefits in kind granted by the company: None None

Variable gross compensation for 2005, paid at the beginning of 2006 €260,000.00

Variable gross compensation for 2006, paid in April 2007 €150,000.00

Variable compensation is fi xed by the Supervisory Board, by reference

to a target bonus of €300,000 (gross) based on performance-related

criteria. The following performance-related criteria are taken into

consideration:

EBIT;

sales growth;

strategy;

cash position.

No variable compensation was paid in 2007 for the year ending

31 December 2007. This decision will be made by the Supervisory

Board in 2008.

Mr Éric Albrand’s employment contract was suspended at the start

of his term of offi ce as a company corporate offi cer. When such term

of offi ce expires and his employment contract is reinstated Mr Albrand

will receive an indemnity equal to 24 months of total compensation,

if his employment contract is terminated.

•

•

•

•

Mr Christophe Aulnette – Chairman of the Management Board from

30 June 2005 to 24 September 2006

The settlement reached between Mr Christophe Aulnette and the

company includes a non-competition clause under which Mr Aulnette

was paid a gross monthly amount of €45,333.33 until the end of October

2007. In accordance with this settlement agreement, the company

paid him €441,244.41 during 2007. It also paid him €41,555.55 for

compensation in lieu of notice and €23,534.84 in holiday pay. The

amount paid in 2006 pursuant to the non-competition clause totalled

€102,755.55.

Mr François-Xavier Floren – Member of the Management Board from

8 June 2006 to 20 November 2006

No termination compensation was paid when Mr François-Xavier Floren

resigned. The latter fi led a claim with the Paris Employment Tribunal

on 8 March 2007 to obtain a contractual indemnity which he claims

the company is liable to pay him. The case is due to be judged in

September 2008.


Operating and fi nancial review9Additional information

9.19 Commitments made by the company to its corporate offi cers

No commitments were made by the company concerning remuneration,

fi nancial guarantees, and benefi ts to be paid to members of the

Management Board for their services or following a termination of or

change their in duties.

The Supervisory Board has not approved a regulated agreement

subject to article L.225-86 of the French Commercial Code.

9.20 Additional information

Injunctions for anti-competitive practices imposed by the Competition Commission.

There were no injunctions at the date these fi nancial statements were

prepared.


10.1 / 10.2 Information about the issuer’s capital resources

10 Capital resources

Information about Altran’s capital is given in chapter 18 “Major Shareholders”.

10.3 Borrowing requirements

Altran’s borrowing requirements are discussed in section 9.5.1 “Liquidity risk”, and section 9.5.2 “Interest rate risk”.

10.4 Restrictions on the use of capital resources

Section 9.5.1 “Liquidity risk”, discusses the main restrictions on the use

of the credit lines obtained on 16 April 2008 through a new fi nancing

agreement with a consortium of four banks. These restrictions will

go into effect when the fi rst drawdown is made, and remain in effect

throughout the term of the credit agreement. These restrictions are:

one-third of Altran’s consolidated net cash fl ow above €15 million

(excluding any market operation) must be applied towards an

accelerated repayment of the loan starting in fi scal 2009;

•

Altran cannot spend more than €10 million on acquisitions in 2008

and 2009 each, and no more than €40 million each year thereafter,

unless it increases its Shareholders’ equity; and

Altran can spend up to €50 million on acquisitions per year without

prior approval from the majority of its lenders if it issues at least

€100 million of shares or mandatory convertible bonds.

•

•

10.1 / 10.2 INFORMATION ABOUT THE ISSUER’S CAPITAL RESOURCES 61

10.3 BORROWING REQUIREMENTS 61

10.4 RESTRICTIONS ON THE USE OF CAPITAL RESOURCES 61

10.5 FINANCING OF OPERATIONS 62


Capital resources10Financing of operations

10.5 Financing of operations

Based on the company’s projected cash fl ow for 2008, centralized

cash holdings, and greater use of factoring, coupled with the new

credit lines obtained from a consortium of four banks on 16 April 2008

(discussed in section 9.5.1 “Liquidity risk”), the company should have

enough funds to pay back the convertible bond maturing on 1 January

2009.

Altran plans to issue up to €130 million of shares between now and

31 July 2008; the proceeds from the issue will be used to increase

the company’s equity and make targeted acquisitions to accelerate

its business development. This share issue is discussed in section 9.8

“Subsequent events”.


The Altran group capitalized €657 thousand of research and

development expenses in 2007, bringing these expenses to a

cumulative €4.8 million at 31 December 2007.

No research and development expenses were capitalized by Altran

Technologies.

11 Research and development


12.1 Main trends

12 Trend information

Altran has set the following four goals for 2008:

achieve a growth rate equal to or above that for its markets in

France and other countries;

boost profi tability by cutting overhead expenses;

manage cash fl ow effectively, with a particular focus on DSO; and

•

•

•

refi nance medium-term borrowings.

These goals are part of Altran’s new strategy, Action 4, which should

allow the company to reach the following targets by 2010:

sales of €2 billion; and

EBIT margin of 8%-10%.

•

•

•

12.2 Post-balance sheet events

Altran’s management unveiled a new strategy for its French organisation

and information systems consulting business in late 2007. This strategy

involves consolidating subsidiaries in the Altran CIS Paris division into

a single entity called Altran CIS. This consolidation is scheduled to

be completed on 30 April 2008, with retroactive accounting and tax

effect on 1 January 2008.

On 5 March 2008 Altran Technologies sold its equity interests in the

subsidiaries to be consolidated to Altran Systèmes d’Information,

so that Altran Systèmes d’Information is now the full owner of these

subsidiaries.

This new strategy aims to anchor Altran CIS as a key player in its

market and give it the resources needed to achieve its business goals

through:

a clear, differentiated market positioning; and

a business model allowing for sustainable growth.

The new strategy completes a set of measures undertaken over the

past two years to restructure Altran’s French operations. These

measures included the consolidation of 26 French technology and

innovation consulting fi rms into a single entity, as well as the merger of

operations within the organisation and information systems consulting

business.

On 17 April 2008 Altran announced that it had fi nalized a refi nancing

agreement with a consortium of banks in order to solidify its fi nancial

structure. The corresponding press release can be found in section 20.6

“Interimediary and other fi nancial information”.

•

•

12.1 MAIN TRENDS 65 12.2 POST-BALANCE SHEET EVENTS 65


The markets for Altran’s three businesses – technology and R&D

consulting, organisation and information systems consulting, and

strategy and management consulting – should grow throughout

2008 and provide an opportune climate for Altran to continue with

its restructuring and anchor the steps already made. Altran does not

provide precise sales or earnings forecasts.

13 Forecasts


14.1 Members of corporate bodies

14.1.1 Supervisory Board members

Name Initial appointment date Term expiration date Main office within the company

Dominique de Calan 29/06/2005

AGM to approve

the 2008 financial statements Chairman of the Supervisory Board

Michel Sénamaud 29/06/ 2005

AGM to approve

the 2008 financial statements Vice-Chairman of the Supervisory Board

Roger Alibault 29/06/2005

AGM to approve

the 2008 financial statements Member of the Supervisory Board

Jacques Étienne de T’Serclaes

05/03/2007 with effect on

30/03/2007

AGM to approve

the 2008 financial statements Member of the Supervisory Board

14Administrative, management, and supervisory bodies

The Combined General Meeting on 29 June 2007 ratifi ed the

appointment of Jacques-Étienne de T’Serclaes as a Supervisory

Board member. His term of offi ce will expire at the close of the Annual

General Meeting held to approve the fi nancial statements for the fi scal

year ending 31 December 2008.

14.1.2 Management Board members

The following table lists Altran’s Management Board members.

Name Initial appointment date Term expiration date Main office within the company

Yves de Chaisemartin 24/09/2006 10/01/2009 Chairman of the Management Board

Éric Albrand 30/06/2005 10/01/2009 Member of the Management Board

On 11 January 2007, the Supervisory Board noted the expirations of

Yves de Chaisemartin’s term as Chairman of the Management Board

and Eric Albrand’s term as member of the Management Board, and

renewed these terms for a period of two years.

14.1 MEMBERS OF CORPORATE BODIES 69

14.1.1 Supervisory Board members 69

14.1.2 Management Board members 69

14.1.3 Offices held by Altran corporate officers in other companies over the past five years 70

14.2 CONVICTIONS OF FRAUD, SANCTIONS, OR BANKRUPTCIES INVOLVING THE CORPORATE OFFICERS 70

14.3 CONFLICTS OF INTEREST AMONG MANAGEMENT BOARD AND SUPERVISORY BOARD MEMBERS 70


Administrative, management, and supervisory bodies14Conflicts of interest among Management Board and Supervisory Board Members

14.1.3 Offices held by Altran corporate officers in other companies over the past five years

A list of offi ces held by Altran corporate offi cers in companies other than Altran Technologies over the past fi ve years is given in section 9.18.1

“Positions of executive offi cers held in companies other than Altran Technologies over the past fi ve years”.

14.2 Convictions of fraud, sanctions, or bankruptcies involving the corporate offi cers

To Altran Technologies’ best knowledge, no members of its

Management Board or Supervisory Board has in the past fi ve years:

been convicted of fraud;

been associated with a bankruptcy, receivership, or liquidation;

been the subject of an offi cial public incrimination and/or sanction

by statutory or regulatory authorities (including designated

professional bodies); or

•

•

•

been disqualifi ed by a court from acting as a member of an

administrative, management, or supervisory body of an issuer

or from acting in the management or conduct of the affairs of an

issuer.

Yves de Chaisemartin was ordered to appear before the Paris court

of summary jurisdiction for allegations of the misuse of corporate

assets while he served on the Board of Directors of Presse Alliance

(the publisher of France Soir, a French newspaper) in 1989. Yves de

Chaisemartin has fi led an appeal to this order in response, which was

judged admissible.

•

14.3 Confl icts of interest among Management Board and Supervisory Board Members

To Altran Technologies’ best knowledge:

there are no confl icts of interest between any Altran Management

Board or Supervisory Board members’ duties to Altran Technologies

and their private interests; and

•

there have never been any family relationships among Altran

Management Board and Supervisory Board members.

•


15.1 Remuneration paid to corporate offi cers

15 Remuneration and benefi ts

The remuneration paid to corporate offi cers is discussed in section 9.18.2 “Compensation of Directors” on pages 58-60.

15.2 Commitments made by the company to its corporate offi cers

The only commitments made by the company concerning remuneration,

fi nancial guarantees, and benefi ts to be paid to members of the

Management Board or Supervisory Board for their services or following

a termination of or change their in duties are discussed in section 9.18.2

“Compensation of Directors”.

The Supervisory Board has not approved a regulated agreement

subject to article L.225-86 of the French Commercial Code.

15.3 Stock options granted to corporate offi cers

No stock options were granted to Supervisory Board members in

2007.

On 20 December 2007, the Management Board granted 50,000 stock

options to each Management Board member after obtaining approval

from the Supervisory Board, as required by article 14.1 of the Articles of

Association, and upon the recommendation of the Remuneration and

Appointment Committee. The details of these stock options are given in

the table below. All options are for the purchase of new shares.

On 4 February 2008, the Supervisory Board resolved that any shares

obtained from the exercise of these options must be held until the

Management Board member owning the shares leaves the company.

No bonus shares have been granted to corporate offi cers.

15.1 REMUNERATION PAID TO CORPORATE OFFICERS 71

15.2 COMMITMENTS MADE BY THE COMPANY TO ITS CORPORATE OFFICERS 71

15.3 STOCK OPTIONS GRANTED TO CORPORATE OFFICERS 71


Remuneration and benefi ts15Stock options granted to corporate officers

Stock options granted to Yves de Chaisemartin, member of the Management Board

Stock options granted on 20 December 2007

Exercise price €4.29

Expiration date 20 December 2015

Number of options granted during the fiscal year 50,000

Number of options exercised during the fiscal year -

Number of options existing at 31 December 2007 50,000

Stock options granted to Éric Albrand, member of the Management Board

Granted on

11 March 2003

Granted on

24 June 2003

Granted on

29 June 2004

Granted on

20 December 2005

Granted on

20 December 2007

Exercise price €2.97 €6.73 €9.37 €9.62 €4.29

Expiration date 11 March 2011 24 June 2008 29 June 2012 20 December 2013 20 December 2015

Number of options granted during the fiscal year 42,693 106,734 80,000 90,000 50,000

Number of options exercised during the fiscal year - - - - -

Number of options existing at 31 December 2007 42,693 106,734 80,000 90,000 50,000


A description of the Management Board and Supervisory Board

practices is given in the Supervisory Board Chairman’s report on the

preparation and organization of the Board’s work and the company’s

internal controls, included in appendix 1 of this document.

Altran Technologies had a services contract in place with Jacques-

Étienne de T’Serclaes, Supervisory Board Member and Chairman of

the Audit Committee, before he was appointed to this position. This

contract was for the provision of consulting services to support Altran

Technologies’ expansion into Asia. Jacques-Étienne de T’Serclaes was

paid €69,000 under this contract in 2007.

16Management Board and Supervisory Board practices


17.1 Employee data

17 Employees

17.1.1 Number of employees

Altran added 445 new employees in 2007, bringing the total headcount to 17,502 at 31 December 2007.

17.1 EMPLOYEE DATA 75

17.1.1 Number of employees 75

17.1.2 Invoicing rate 76

17.1.3 Employee turnover 76

17.2 EMPLOYEE PROFIT-SHARING AND STOCK OPTIONS 76

17.2.1 Stock options 76

17.2.2 Employee profit-sharing and incentive schemes 76

17.2.3 Ten employees who are not corporate officers receiving the greatest number of stock options 76


Employees17Employee profit-sharing and stock options

17.1.2 Invoicing rate

Altran calculates its invoicing rate as the number of FTEs (full-time

equivalents) billed divided by the total possible number of FTEs,

where:

the number of FTEs billed = number of days billed / total number of

working days; and

the total possible number of FTEs = (number of employee days

– paid leave) / total number of working days.

•

•

Altran has been using this formula since 2004 and feels the published

fi gure gives a fair refl ection of the level of the company’s business.

However, the fi gure may still be adjusted. Because there is no standard

industry defi nition of percent billable time, it is diffi cult to compare

Altran with its competitors on this metric.

Altran’s percent invoicing rate averaged 84.6% in 2007, slightly higher

than in 2006 thanks to improved performance in France. The following

table details the percent billable time over 2007.

2006

average

Q1 2007

average

Q2 2007

average

H1 2007

average

Q3 2007

average

Q4 2007

average

H2 2007

average

2007

average

Invoicing rate 84.1% 83.5% 85.2% 84.3% 85.1% 84.6% 84.8% 84.6%

17.1.3 Employee turnover

Altran releases employee turnover data annually. Employee turnover

is calculated as the number of employees leaving the company for any

reason (resignation, decision to leave during a trial period, etc.) divided

by the total number of employees. Turnover was 29.4% in 2007 and

29.0% in 2006. Altran feels this level of turnover is too high, and is

taking steps to reduce it.

17.2 Employee profi t-sharing and stock options

17.2.1 Stock options

On 20 December 2007, Altran granted 2,589,830 stock options and

818,740 bonus shares, which represented 2.9% of the company’s

total share capital, to 2,191 employees. These stock options and bonus

shares were granted under Resolutions 10 and 11 of the Extraordinary

General Meeting on 29 June 2005, which authorised the company to

carry out issues for an amount up to 6% of its share capital.

The company’s stock option plans are discussed in section 21.1 “Share

capital”, on pages 162-165.

Stock options granted in March 2003 may be exercised since 12 March

2007 at a price of €2.97; 911,725 options had been exercised as of

31 December 2007.

17.2.2 Employee profit-sharing and incentive schemes

The following table lists the amounts paid to employees under profi t-

sharing schemes each year since 1999. These expenses are recognized

in the income statement in the year they are incurred.

Year

Amount


1999 8,074

2000 9,669

2001 15,578

2002 2,793

2003 6,209

2004 8,191

2005 7,723

2006 7,971

2007 2,590

17.2.3 Ten employees who are not corporate officers receiving the greatest number of stock options

The Management Board granted a total of 433,240 stock options on 20 December 2007 to the ten employees who are not corporate offi cers

receiving the greatest number of stock options.


18.1 Holders of Altran shares and voting rights

18 Major Shareholders

Altran does not have any Shareholders agreements.

Persons or legal entities owning more than 1/20th, 1/10th, 3/20th, 1/5th, 1/4th, 1/3rd, 1/2, 9/10th, or 19/20th of Altran shares or voting rights

31 December 2005 31 December 2006 31 December 2007

Number

of shares

% of

total

shares

Number

of voting

rights

% of

total

voting

rights

Number

of shares

% of

total

shares

Number

of voting

rights

% of

total

voting

rights

Number

of shares

% of

total

shares

Number

of voting

rights

% of

total

voting

rights

Alexis Kniazeff 10,570,593 9.24% 20,239,966 15.12% 10,570,593 9.01% 20,239,966 14.72% 9,976,285 8.44% 19,731,586 14.26%

Hubert Martigny 10,573,296 9.24% 20,242,648 15.13% 10,573,296 9.01% 20,242,648 14.72% 9,978,989 8.44% 19,734,341 14.26%

Altran Directors Funds - - - - - - - -

Free float 93,298,325 80.82% 93,348,324 69.75% 96,172,348 81.98% 96,989,499 70.56% 98,272,687 83.12% 98,902,260 71.48%

Total 114,442,214 100% 133,830,938 100% 117,316,237 100% 137,472,113 100% 118,227,961 100% 138,368,187 100%

Number of shares

in issue 114,442,214 114,442,214 117,316,237 118,227,961 138,368,187

Number of shares with

double voting rights 26,361,023 20,241,307 20,155,876 20,140,226

18.1 HOLDERS OF ALTRAN SHARES AND VOTING RIGHTS 77

Controlling companies and their ownership interest in Altran Technologies 78

Employee share ownership 78

18.2 TRANSACTIONS CARRIED OUT DURING THE YEAR SUBJECT TO ARTICLE L.621-18-2 OF THE FRENCH MONETARY AND FINANCIAL CODE 78

18.3 SHARE BUYBACKS 78

18.4 MARKET FOR ALTRAN TECHNOLOGIES SECURITIES 79

18.4.1 Altran Technologies share price 79

18.4.2 Price of Altran Technologies ADRs since 1 January 2006 80

18.4.3 Price of Altran Technologies OCEANE convertible bonds maturing on 1 January 2009 81

18.5 INFORMATION ON THE CALCULATION METHODS AND EFFECTS OF ADJUSTMENTS TO THE CONVERSION BASIS FOR BONDS AND THE SUBSCRIPTION OR PURCHASE OF SECURITIES CONVERTIBLE OR EXCHANGEABLE INTO SHARES 81


Major Shareholders18Share buybacks

Matignon Développement 3 owns Altran shares through an investment

portfolio managed by Axa Investment Managers Private Equity Europe.

On 27 October 2006, Matignon Développement 3 sent Altran a letter

stating that it had crossed the 5% threshold, and now owns 5.3% of

Altran shares (or 6,217,830 shares) and 4.55% of the voting rights

(based on a total of 117,912,266 Altran shares and 138,068,142 voting

rights). Altran has not received any new information regarding

Matignon Développement 3’s share ownership.

On 20 June 2007, Financière de l’Échiquier sent Altran a letter stating

that one of its funds had crossed the 5.5%, 6%, 6.5%, 7%, 7.5%, 8%,

and 8.5% thresholds and now owns 8.84% of Altran shares (or

10,423,500 shares) and 7.55% of the voting rights (based on a total

of 117,912,266 Altran shares and 138,068,142 voting rights). Altran has

not received any new information regarding Financière de l’Échiquier’s

share ownership.

On 8 February 2008, Caisse des Dépôts et Consignations sent Altran a

letter stating that it had crossed the 2% threshold and now owns 2.25%

of Altran shares (or 2,664,847 shares) and 1.92% of the voting rights.

To the company’s best knowledge, no other Shareholders acting alone

or in concert own, either directly or indirectly, more than 5% of Altran

shares or voting rights.

Controlling companies and their ownership interest in Altran Technologies

None.

Employee share ownership

Altran employees owned 3,109,117 Altran shares, or 2.6% of the

company’s shares and 2.2% of its voting rights, at 31 December 2007

through three company-sponsored mutual funds. Most of these shares

were obtained through an employee share ownership plan introduced

in the fi rst half of 2006.

The funds in the employee share ownership plan are able to use

leverage, and at 31 December 2007 the bank arranging the initial

transaction had borrowed 1,600,000 Altran shares from the funds. As

a result, the funds now have voting rights on 1,509,117 Altran shares, or

1.3% of the company’s shares and 1.1% of its voting rights.

The bank has committed to making its best effort, subject to market

conditions, to return the shares to the funds at Annual General

Meetings so that the funds can exercise the full voting rights attached

to their shares.

18.2 Transactions carried out during the year subject to article L.621-18-2 of the French Monetary and Financial Code

On 3 August 2007, Jacques-Étienne de T’Serclaes, Supervisory Board

Member, purchased 1,500 Altran shares at €9,225, bringing his total

share ownership to 2,500 shares. His wife owns 300 Altran shares,

which were purchased at €72.01 per share before Jacques-Étienne de

T’Serclaes was appointed to the Supervisory Board.

On 4 December 2007, Michel Senamaud, Vice-Chairman of the

Supervisory Board, purchased 3,000 Altran shares at €4.19 per share,

or a total of €12,570.

No other members of the Supervisory Board or Management

Board bought or sold any Altran shares during the fi scal year ended

31 December 2007.

18.3 Share buybacks

The Combined General Meeting on 29 June 2007, voting with a quorum

present and under the majority criteria for Annual General Meetings,

resolved to:

annul with immediate effect the unused portion of the share

buyback authorization given by the Combined General Meeting on

8 June 2006; and

•

in its Fifth Resolution, authorize the company to trade in its own

shares in order to, among other purposes, mediate the Altran share

price. This authorization has not been used to date.

Altran did not purchase any of its 2009 OCEANE convertible bonds

in 2007.

•


Major Shareholders 18Market for Altran Technologies securities

18.4 Market for Altran Technologies securities

18.4.1 Altran Technologies share price

Avg. daily

trading

volume

Avg. Price

(in euros)

High

(in euros)

Low

(in euros)

Market cap

(in million euros)

January 2006 796,039 10.82 11.43 9.48 1,279

February 2006 578,635 11.54 12.14 11.01 1,364

March 2006 553,596 11.46 12.00 10.95 1,355

April 2006 845,290 11.65 12.60 11.34 1,377

May 2006 943,513 10.68 11.85 9.55 1,262

June 2006 669,382 9.24 10.04 8.67 1,092

July 2006 610,267 8.90 9.78 8.11 1,052

August 2006 1,708,696 7.15 9.03 6.51 845

Sept. 2006 1,411,243 6.90 7.63 6.13 816

Oct. 2006 2,115,318 6.99 7.75 6.27 826

Nov. 2006 1,008,659 7.20 7.64 6.73 851

Dec. 2006 933,143 7.02 7.34 6.62 830

January 2007 1,420,626 6.99 7.53 6.58 826

February 2007 1,233,635 6.96 7.22 6.38 823

March 2007 1,054,390 6.35 6.68 5.94 751

April 2007 965,740 6.68 7.07 6.46 790

May 2007 559,945 6.97 7.30 6.78 824

June 2007 663,227 6.67 6.87 6.43 788

July 2007 532,369 6.27 6.47 6.12 741

August 2007 571,408 6.22 6.57 5.91 735

Sept. 2007 745,598 5.38 6.02 4.99 636

Oct. 2007 571,052 5.20 5.57 4.93 615

Nov. 2007 592,093 4.66 5.23 4.20 551

Dec. 2007 450,905 4.22 4.56 3.97 499

January 2008 978,810 3.68 4.14 3.32 435

February 2008 963,022 4.44 5.14 3.91 525

AVERAGE 902,946 7.32 7.91 6.82

Source: Bloomberg.

Altran’s market capitalisation is based on 118,227,961 shares in issue.


Major Shareholders18Market for Altran Technologies securities

18.4.2 Price of Altran Technologies ADRs since 1 January 2006

Altran Technologies is listed in the US in USD through Level I American Depositary Receipts (ADRs) under code 02209U108.

Avg. daily

trading

volume

Avg. Price

(USD)

High

(USD)

Low

(USD)

Avg. amount traded

(thousand USD)

January 2006 660 1.43 1.45 1.38 942

February 2006 605 1.48 1.50 1.45 892

March 2006 3,696 1.30 1.30 1.30 4,805

April 2006 723 1.48 1.60 1.35 1,066

May 2006 3,953 1.45 1.55 1.35 5,740

June 2006 3,000 1.20 1.20 1.20 3,600

July 2006 - - - - -

August 2006 482 0.87 1.02 0.75 421

Sept. 2006 9,026 0.80 0.80 0.80 7,221

Oct. 2006 - - - - -

Nov. 2006 960 0.90 0.90 0.90 864

Dec. 2006 209 0.96 0.99 0.92 200

January 2007 4,000 0.95 0.95 0.95 3,800

February 2007 - - - - -

March 2007 976 0.90 1.00 0.80 878

April 2007 - - - - -

May 2007 252 1.03 1.10 0.90 260

June 2007 1,154 0.78 0.81 0.75 900

July 2007 203 0.70 0.70 0.70 142

August 2007 - - - - -

Sept. 2007 2,078 0.78 0.88 0.68 1,621

Oct. 2007 1,835 0.70 0.70 0.70 1,285

Nov. 2007 1,000 0.65 0.65 0.65 650

Dec. 2007 - - - - -

January 2008 4,608 0.60 0.60 0.60 2,742

February 2008 - - - - -

AVERAGE 2,075 1.00 1.04 0.95

Source: Bloomberg.


Major Shareholders 18Information on the calculation methods and effects of adjustments to the conversion basis for bonds

and the subscription or purchase of securities convertible or exchangeable into shares

18.4.3 Price of Altran Technologies OCEANE convertible bonds maturing on 1 January 2009

18.5 Information on the calculation methods and effects of adjustments to the conversion basis for bonds and the subscription or purchase of securities convertible or exchangeable into shares

None.


None.

19 Related-party transactions


20Financial information concerning the company’s assets and liabilities, fi nancial position and profi ts & losses

20.1 Historical fi nancial information

All historical fi nancial information concerning the group’s assets and

liabilities, fi nancial position and profi ts and losses is included in the

prior years’ registration documents:

registration document 2002 R03-224 approved by the Commission

des Opérations en Bourse on 31 October 2003;

registration document 2003 R04-106 approved by the Autorité des

Marchés Financiers on 7 June 2004;

•

•

registration document 2004 R05-091 approved by the Autorité des

Marchés Financiers on 14 June 2005;

registration document 2005 D06-0488 fi led with the Autorité des

Marchés Financiers on 29 May 2006;

registration document 2006 D07-0561 fi led with the Autorité des

Marchés Financiers on 7 June 2007.

All these documents are available on www.altran.com.

•

•

•

20.2 Pro forma fi nancial information

None.

20.1 HISTORICAL FINANCIAL INFORMATION 85

20.2 PRO FORMA FINANCIAL INFORMATION 85

20.3 FINANCIAL STATEMENTS 86

CONSOLIDATED FINANCIAL STATEMENTS 86

Balance sheet - Assets 86

Balance sheet – equity & liabilities 87

INCOME STATEMENT 88

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY 89

CASH FLOW STATEMENT 90

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 91

FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS 137

1. Financial statements at 31 December 2007 137

2. Accounting notes to the financial statements at 31 December 2006 139

3. Notes concerning certain balance sheet items 142

4. Notes to the profit and loss account 148

5. Information on significant ongoing disputes 150

6. Off-balance sheet commitments 151

7. Subsequent significant events 152

8. Statement of subsidiaries and participating interests 153

9. Statement of earning for the last five financial years 154

20.4 VERIFICATION OF THE ANNUAL FINANCIAL INFORMATION 154

20.5 LATEST FINANCIAL INFORMATION 154

20.6 INTERMEDIARY AND OTHER FINANCIAL INFORMATION 155

20.7 DIVIDENDS DISTRIBUTION POLICY 159

20.8 LEGAL AND ARBITRATION PROCEEDINGS 159

20.9 SIGNIFICANT CHANGES TO THE FINANCIAL OR COMMERCIAL POSITION 159


Financial information concerning the company’s assets and liabilities, fi nancial position and profi ts & losses20Financial statements

20.3 Financial statements

CONSOLIDATED FINANCIAL STATEMENTS

Balance sheet - Assets

(in thousands euros) Notes

December 2007 December 2006 December 2005

Gross value Amort. prov. Net values Net values Net values

Consolidated goodwill 4.1 684,094 (209,316) 474,778 491,945 500,090

Intangible assets 4.2 63,506 (22,772) 40,734 41,385 39,881

Land 383 - 383 533 533

Construction 14,177 (6,052) 8,125 9,799 10,241

Other intangible assets 95,325 (62,391) 32,934 32,656 27,680

Fixed assets 4.3 109,885 (68,443) 41,442 42,988 38,454

Participating interests entered using

the equity method - - - (242) (457)

Non-current financial assets 4.4 27,755 (2,031) 25,724 29,967 25,600

Deferred tax assets 5.9 87,768 (26,446) 61,322 59,496 58,468

Non-current payable tax assets 5.9 3 3 120 854

Other non-current assets 4.5 14,426 (10,348) 4,078 1,943 2,182

TOTAL NON-CURRENT ASSETS 987,437 (339,356) 648,081 667,602 665,072

Inventory and work in process 4.6 1,338 (55) 1,283 1,137 1,998

Amounts paid on account 3,156 - 3,156 1,028 906

Accounts receivable (client) 4.7 513,877 (8,957) 504,920 511,189 433,072

Other receivables 4.8 78,251 (1,960) 76,291 68,110 74,938

Client accounts and other receivables 595,284 (10,917) 584,367 580,327 508,916

Current financial assets 4.9 948 (197) 751 874 552

Cash equivalents 4.11 97,517 - 97,517 54,700 61,069

Cash 4.11 80,082 - 80,082 71,526 102,043

TOTAL CURRENTS ASSETS 775,169 (11,169) 764,000 708,564 674,578

TOTAL ASSETS 1,762,606 (350,525) 1,412,081 1,376,166 1,339,650



Financial statements

Balance sheet – equity & liabilities

(in thousands euros) Notes December 2007 December 2006 December 2005

Capital 4.10 59,101 58,658 57,221

Share premiums 220,510 214,881 162,790

Reserves assignable to Shareholders in the parent company 106,554 100,604 118,707

Translation differences (10,368) 4,870 8,287

Earnings for fiscal year/period 21,594 3,787 231

Minority interest 92 125 312

SHAREHOLDER’S EQUITY III & 4.10 397,483 382,925 347,548

Convertible bond loans (>1 year) 222,059 214,487 207,515

Credit establishment borrowings and debts (>1 year) 28,347 59,565 72,293

Other non-current financial liabilities 13,839 12,781 17,251

Non-current financial liabilities 4.11 264,245 286,833 297,059

Provisions for long term liabilities and charges 4.12 16,004 11,519 14,121

Long-term personnel benefits 4.13 30,552 27,469 23,374

Deferred tax liabilities 5.9 11,730 11,300 8,265

Other long-term liabilities 4.14 771 203 2,557

Other non-current liabilities 59,057 50,491 48,317

TOTAL NON-CURRENT LIABILITIES 323,302 337,324 345,376

Accounts payable 4.15 72,910 74 ,022 53,258

Taxes payable 108,709 90,641 99,144

Current personnel benefits 4.13 162,910 184,012 170,176

Debts on assets 546 1,085 1,150

Other current debts 4.16 39,307 39,331 29,656

Suppliers accounts and other current payables 384,382 389,091 353,384

Provisions for short-term liabilities and charges 4.12 31,069 39,793 49,905

Debt on short-term securities 4.17 2,995 7,777 40,440

Current financial liabilities 4.11 272,850 219,256 202,997

TOTAL CURRENT LIABILITIES 691,296 655,917 646726

TOTAL LIABILITIES 1,412,081 1,376,166 1,339,650



INCOME STATEMENT

(in thousands euros) Note

December 2007

(12 months)

December 2006

(12 months)

December 2005

(12 months)

Turnover 5.1 & 5.2 1,591,356 1,495,350 1,434,473

Other income from operations 2,110 2,901 3,457

INCOME FROM ORDINARY OPERATIONS 1,593,466 1,498,251 1,437,930

Raw materials (14,323) (15,517) (13,121)

Variation in work-in-progress 414 (847) (414)

External expenses 5.3 (343,833) (319,925) (309,516)

Staff costs 5.4 (1,092,983) (1,035,366) (987,330)

Staff costs - payment in shares 5.4 (3,443) (6,333) (4,139)

Taxes and duties (12,352) (10,783) (12,425)

Net depreciation and provisions 5.5 (16,939) (22,130) (9,216)

Other operating income and charges (10,588) (11,365) (8,519)

CURRENT OPERATING PROFIT 99,419 75,985 93,250

Other non-recurring operating income 25,562 40,718 45,699

Other non-recurring operating charges (40,462) (55,374) (83,662)

Other non-recurring operating income and charges 5.6 (14,900) (14,656) (37,963)

Goodwill amortization 4.1 (13,870) (15,880) (26,463)

OPERATING PROFIT 70,649 45,449 28,824

Including goodwill amortization (13,870) (15,880) (26,463)

Income from cash and cash equivalent 2,211 2,916 2,249

Gross cost of debt (31,169) (26,010) (24,209)

Net cost of debt 5.7 (28,958) (23,094) (21,960)

Other financial revenue 5.8 6,283 4,761 17,943

Other financial expenses 5.8 (8,517) (7,766) (18,034)

Tax expenses 5.9 (18,000) (15,805) (6,166)

Equity share in net income of affiliates 90 110 (393)

NET PROFIT BEFORE NET EFFECT OF CEASED OPERATIONS

OR OPERATIONS CURRENTLY BEING CEASED 21,547 3,655 214

Net profit on ceased operations or operations currently being

ceased -

NET EARNINGS 21,547 3,655 214

Minority interest 47 132 17

GROUP NET EARNINGS 21,594 3,787 231

Earnings per share 0.18 0.03 0.00

Diluted earnings per share 0.18 0.03 0.00




STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY


Number

of shares Capital Premiums Reserves

Fair value

adjustments

and other

Translation

differences

Net

earnings

Total

group

share

Minority

interest Total

31 December 2005 114,442,214 57,221 162,790 101,794 16,913 8,287 231 347,236 312 347,548

Cambridge Consultant incubator 1,743 1,743 1,743

OCÉANE 2009 145 145 145

Construction efforts loans - - -

Translation differences (3,764) (3,764) (3,764)

Changes in value recorded

directly in Shareholder’s

equity - - - 1,888 (3,764) - (1,876) - (1,876)

Capital operations - Spring 2,872,255 1,436 24,578 26,014 26,014

Payments in shares 5,733 5,733 5,733

Earnings for the year 3,787 3,787 (132) 3,655

Allocation of earnings 231 (231) - -

Other transactions 1,768 1 21,780 (20,222) 347 1,906 (55) 1,851

31 December 2006 117,316,237 58,658 214,881 81,803 18,801 4,870 3,787 382,800 125 382,925

Cambridge Consultant incubator (2,314) (2,314) (2,314)

OCÉANE 2009 - -

Construction efforts loan - -

Translation differences (16,123) (16,123) (16,123)

Changes in value recorded

directly in Shareholder’s

equity - - - (2,314) (16,123) - (18,437) - (18,437)

Capital operations - Spring 885,063 443 2,186 2,629 2,629

Payments in shares 3,443 3,443 3,443

Earnings for the year 21,594 21,594 (48) 21,546

Allocation of earnings 3,787 (3,787) - -

Other transactions 4,477 885 5,362 15 5,377

31 DÉCEMBER 2007 118,201,300 59,101 220,510 90,067 16,487 (10,368) 21,594 397,391 92 397,483



CASH FLOW STATEMENT

The reconciliation of total cash on the balance sheet to net cash in the table above is as follows:

(in thousands euros) 31 December 2007 31 December 2006

Cash equivalents 97,517 54,700

Cash 80,082 71,526

Bank overdrafts -

NET CASH FLOW 177,599 126,226


2007

(12 months)

2006

(12 months)

Operating profit 70,649 45,449

Goodwill amortization 13,870 15,881

Operating income before goodwill amortization 84,519 61,330

Net operating depreciation expenses and provisions 15,756 3,590

Income and charges from stock options 3,443 6,333

Gains or losses on disposals 3,512 6,718

Other gains and charges (963) (2,596)

Cash flow, before net interest expenses and taxes 106,268 75,375

Change in inventory and work in progress (389) 871

Change in client accounts and other receivables (15,266) (94,696)

Change in supplier accounts and other payables 3,156 49,218

Change in working capital (12,499) (44,607)

Net operating cash flow 93,769 30,768

Interest paid (23,990) (19,365)

Interest received 1,125 2,213

Taxes paid (17,405) (4,613)

Cash impact of other financial income and expenses 34 729

NET CASH FLOW GENERATED BY BUSINESS ACTIVITIES 53,533 9,732

Cash outflows for acquisition of fixed and intangible assets (19,687) (39,892)

Cash inflows from disposal of fixed and intangible assets 3,235 11,589

Cash outflows for acquisition of financial assets (non-consolidated holdings) (99) -

Cash inflows from disposal of financial assets (non-consolidated holdings) 1,532 907

Outflows associated with earn-out (9,441) (41,710)

Impact of changes in scope of consolidation (2,925) (554)

Dividends received (affiliates, non-consolidated holdings) - -

Change in loans and advances granted (3,121) (5,615)

Investment subsidies received 24 323

Other flows associated with investment transactions 2,842 3,195

NET CASH FLOW GENERATED BY INVESTMENT ACTIVITIES (27,649) (71,757)

Sums received from Shareholders during capital increase 2,629 25,415

Inflows from new borrowings 3,923 42,432

Reimbursement of loans (38,103) (30,515)

Other flows associated with financing operations 57,284 (11,627)

NET CASH ASSOCIATED WITH FINANCING OPERATIONS 25,720 25,705

Impact of variations in exchange rates (905) (566)

Impact of changes in accounting principles 670

CHANGES IN NET CASH FLOW 51,371 (36,886)

Opening cash balance 126,226 163,112

Closing cash balance 177,599 126,226

NET CHANGE IN CASH POSITION 51,372 (36,886)




1. Basis of accounting and significant accounting policies

Altran Technologies is a French public limited company (société

anonyme) governed by French law, organised under the laws of France

subject to the laws and regulations governing commercial companies,

particularly the provisions of the French Commercial Code.

1.1 Basis of accounting

Under European regulation 1606/2002 of 19 July 2002, the Altran

Technologies group (“Altran”) is required to prepare its consolidated

fi nancial statements for the year ended 31 December 2007 using the

international accounting standards effective on 31 December 2007 as

endorsed by the European Union and in accordance with the related

IFRIC interpretations without modifi cation.

The group applied the following new standards and interpretations

since 1 January 2007:

amendments to IAS 1: Presentation of fi nancial statements;

IFRS 7: Financial Instruments: Disclosures.

The application of the following standards, amendments and interpretations is optional in 2007

The following standards, amendments and interpretations will not be

adopted by the group until a later date:

IFRS 8 – Operating segments (applicable as from 01/01/2009);

IAS 23 revised – Borrowing costs (applicable as from 01/01/09);

IFRIC 11 – IFRS 2 group and Treasury Share Transactions (applicable

to accounting periods starting on or after 01/03/07);

•

•

•

•

•

IFRIC 14 – IAS 19 The Limit on a Defi ned Benefi t Asset Minimum

Funding Requirements and their Interaction (applicable as from

01/01/08);

IAS 1 revised - Presentation of Financial Statements (applicable as

from 01/01/09).

The group is currently assessing the possible impact of these new

standards on the consolidated fi nancial statements.

1.2 Basis for first-time adoption of IFRS

Altran prepared an opening IFRS balance sheet at 1 January 2004

with retrospective application using the standards applicable for the

preparation of the fi rst IFRS fi nancial statements (at 31 December

2005), as if these standards had always applied, with the exception of

the options set out below.

Options linked to the opening balance sheet at 1 January 2004:

IFRS 1 sets out specifi c provisions for the retrospective treatment of

assets and liabilities in compliance with IFRS. The group has applied

the following options:

business combinations: Altran has chosen not to restate business

combinations prior to 1 January 2004 in compliance with the

provisions of IFRS 3;

property, plant & equipment and intangible assets: Altran has

chosen to recognise property, plant & equipment and intangible

assets at historical value and not at fair value at the date of transition

to IFRS;

•

•

•

•

1. Basis of accounting and significant accounting policies 91

2. Scope of consolidation 98

3. Review of significant events during the financial year 2007 106

4. Notes relating to certain balance sheet items 108

5. Notes to the income statement 118

6. Major litigation and contingent liabilities 129


8. Related party transactions 132

9. Exposure to exchange rate and interest rate risk 132

10. Subsequent events 136

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



post-retirement benefi ts: actuarial gains and losses arising

from pension liabilities existing at 1 January 2004 are included

in its retirement benefi t obligation, recognised directly under

equity. Actuarial gains and losses arising after 1 January 2004 are

recognised prospectively;

translation adjustments relating to foreign entities: reclassifi ed

in consolidated reserves all cumulative translation gains and losses

arising from the translation of the fi nancial statements of its foreign

subsidiaries at 1 January 2004. This adjustment had no impact on

opening Shareholders’ equity at 1 January 2004. These translation

adjustments will not be recognised in the income statement at a

later date when the foreign entities in question are deconsolidated;

share-based payment (stock options): Altran has adopted IFRS 2

for stock option plans granted after 7 November 2002 and that had

not vested at 1 January 2005. Stock option plans prior to 7 November

2002 are not measured or recognised;

fi nancial instruments: Altran has adopted IAS 32 and IAS 39 as

from 1 January 2005. French GAAP applies to the recognition of

fi nancial instruments on the balance sheet as at 1 January 2004,

30 June 2004 and 31 December 2004.

1.3 Consolidation

Subsidiaries over which Altran exercises exclusive control, either

directly or indirectly, are fully consolidated.

Companies which are not controlled by Altran but over which Altran

exercises signifi cant infl uence are accounted for using the equity

method.

1.4 Use of estimates

The fi nancial statements are prepared based on estimates and

assumptions which may have an impact on the carrying amount of

certain balance sheet or income statement items, and on information

set out in the notes. Altran reviews these estimates and assumptions

regularly to take account of past experience and other factors

considered relevant given the economic environment. These estimates,

assumptions or assessments are made based on information or situations

existing at the date the fi nancial statements were prepared, and may

subsequently differ from reality. These estimates mainly concern

provisions (€47.1 million), assumptions used for preparing business

plans used for carrying out impairment tests on intangible assets

(€515.5 million), recognition of deferred tax assets (€61.3 million) and

earn-out commitments (less than €1 million based on the assumption

of 5% annual growth in net income as from 2008).

•

•

•

•

1.5 Translation of financial statements of foreign subsidiaries

The group’s consolidated fi nancial statements are presented in euros.

Translation of financial statements of foreign subsidiaries

The balance sheets of companies whose functional currency is not the

euro are translated at the exchange rates prevailing on the closing date

and their income statements and cash fl ow statements at the average

exchange rate over the period. The resulting exchange differences are

recognised in equity under “Exchange differences”.

Goodwill and fair value adjustments arising upon acquisition of a

foreign entity are treated as assets and liabilities of the foreign entity.

Accordingly, they are expressed in the entity’s functional currency and

translated at the rate prevailing on the closing date.

The group recognised the exchange differences arising from the

translation of the fi nancial statements of its foreign subsidiaries

at 1 January 2004 in “Reserves attributable to equity holders of the

parent company” after taking into account other IFRS adjustments at

that date (see § 8).

Transactions in foreign currencies

Transactions in foreign currencies are recorded at the exchange rate

at the date of the transaction. At the end of the period, assets and

liabilities in foreign currencies are converted at the exchange rate

prevailing at the closing date.

The corresponding exchange differences are recorded in the income

statement:

under operating income for commercial transactions;

under fi nancial income/(expense) for fi nancial transactions.

1.6 Presentation of financial statements

Consolidated balance sheet

IAS 1 “Presentation of fi nancial statements” provides for a separate

presentation on the balance sheet of current and non-current items.

Asset and liability items relating to the operating cycle and which are

due within less than twelve months are presented as current items. All

other items are classed as non-current items.

Deferred tax assets and liabilities are non-current items.

Minority interests are recorded in equity on the consolidated balance

sheet.

Consolidated income statement

The group presents its income statement by nature.

The operating income represents all income and costs which do not

arise from fi nancial activities and tax.

Other non-recurring operating income and costs result from operations

which, by their nature, amount and/or frequency, cannot be considered

as part of the group’s regular activities and results.

•

•




In particular, net income from the disposal of a minority stake held

by Cambridge Consultants Ltd, restructuring charges, charges or

income relating to litigation, or any other non-recurring item affecting

the comparability of the current operating result from one period to

another.

Goodwill impairment is presented under non-current operating

income.

1.7 Goodwill

Goodwill represents the difference between the acquisition price of

consolidated or equity-accounted companies and the group’s share in

their re-stated net assets at the date the shares are acquired.

The price of shareholdings acquired consists of a fi xed amount

settled at acquisition and, in the majority of cases, additional annual

instalments sums which are variable and are calculated depending on

the future results of the companies acquired (earn-outs).

These additional earn-outs increase the initial goodwill.

The additional earn-outs are paid based on the earnings of the

previous year and are recognised in assets and offset by debts on fi xed

assets. The estimated amount of these additional earn-out payments

are recognised in off-balance sheet commitments, based on various

earnings assumptions.

Goodwill is not amortised, but is subject to an impairment test on



The impairment test assesses the recoverable value of each entity

generating its own cash fl ow (cash generating units) and concerns the

business value of each entity contributing to intangible and tangible

assets.

A cash generating unit (CGU) is the smallest identifi able group of

assets whose continuous use generates cash infl ows which are largely

independent of cash infl ows generated by other assets or groups of

assets.

In the past the group has acquired several companies in different

countries and the majority of these companies have maintained

the scope of their activity and a certain independence in terms of

management. For these companies, a CGU corresponds to the acquired

entities (that generate independent cash fl ows).

Where activities are grouped under a single operational branch, the

CGU is formed at national level or at geographical area level.

CGUs identifi ed within the group are therefore legal entities or an

operational unit, with the exception of:

where in any given country there is a parent company that owns

an operational subsidiary, then both entities together constitute a

CGU;

where several legal entities are managed by the same team and

have a unifi ed business plan, then these entities are grouped

together in a single CGU.

•

•

Changes to the operational scopes are assessed annually.

A CGU must therefore belong exclusively to one of the geographical

areas defi ned by Altran as a primary sector.

The recoverable value is the greater of either the fair value less costs to

sell, where the latter can be defi ned, or the value in use.

Fair value less costs to sell is the best estimate of the amount for which

property could be exchanged between knowledgeable, willing parties

in an arm’s length transaction. This estimate is made based on available

market information taking into account the specifi c context.

The value in use applied by Altran corresponds to the value based on the

discounted cash fl ows of the CGUs in question. They are determined

based on the following economic assumptions and forecasted operating

conditions:

the cash fl ows derived from the business plans of the units in

question and available on the valuation date, extended for a fi xed

period of fi ve years;

thereafter, the terminal value is calculated by capitalising the fi nal

cash fl ow for the explicit period (terminal growth rate of 3%);

the discount rate corresponds to a weighted average cost of capital

after tax

The recoverable values, essentially based on the value in use, are then

compared with the net book values to determine goodwill impairment.

1.8 Intangible assets

Intangible fi xed assets consist mainly of brands, licenses, software

and development costs. They are accounted for at their acquisition or

production cost.

Brands

Identifi able brands, recognised in the framework of business

combinations and which benefi t from legal protection, are recognised

as intangible assets. As they have an indefi nite useful life, they are

not amortised and are subject to an impairment test on 31 December

and more frequently if there are indications that goodwill might be

impaired. Brands are tested by all CGU’s which use them.

Brands developed internally are not capitalised.

Software

Software is amortised on a straight line basis over its estimated useful

life which does not exceed 5 years.

Patents

Patents are amortised on a straight line basis over their legal protection

period.

•

•

•



Development costs

All expenses meeting all the criteria set out by IAS 38, which defi nes

development costs, are registered as intangible assets and amortised

over the life of the project.

Other expenses are considered as research costs and are expensed in

the income statement.

1.9 Property, plant & equipment

Property, plant & equipment are accounted for at acquisition cost.

Borrowing costs are not included in the value of property, plant

& equipment. They are amortised on a basis that refl ects the pattern

in which their future economic benefi ts are expected to be consumed

in the case of each asset item on the basis of the acquisition cost, less

any residual value if applicable. The straight line method is applied for

the following:

fi xtures & fi ttings: 10 years

computer and offi ce equipment: 4 years

offi ce furniture: 10 years

These amortisation periods are reviewed annually and are modifi ed if

expectations differ from previous estimates.

Real estate assets have been valued by component at the date of

transition to IFRS and retrospectively. Amortisation is calculated

by component depending on the useful life of each component as

follows:

structure: 20 to 50 years

fi xtures & fi ttings: 10 to 30 years

1.10 Inventories and work in progress for services provided

Inventories are stated at the lower of cost and net realisable value.

An assessment of work in progress for services provided is made at

the closing date at cost price as long as all the formal conditions for

registering production and completion are not entirely met (see 1.19).

1.11 Financial assets as from 1 January 2005

Financial assets consist of long-term investments, long term loans

and receivables, trade receivables, various receivables and short-term

investments.

Long-term investments, long-term loans and receivables

Altran owns stakes in companies without exercising signifi cant infl uence

or control. These investments are made as part of an “incubator”

strategy. The intention is to invest in companies which seek to develop

innovative, high technology products. The shares in these non-

consolidated companies, which the Management intends to maintain in

•

•

•

•

•

the long-term, are treated as available for sale and are therefore valued

at their fair value at each closing date. The fair value corresponds to the

last known share price for listed shareholdings and the market value for

non-listed shareholdings. Positive and negative changes in fair value are

recorded in equity under “Reserves attributable to equity holders of the

parent company”. Where there is an objective indication of a durable

and signifi cant impairment of long-term investments, a provision for

depreciation is recognised under “non-recurring charges”.

Non-current fi nancial assets also include assets from pension funds,

“construction effort” loans and deposits and guarantees. They can be

subject to a provision for depreciation if there is an objective indication

of impairment. “Construction effort” loans do not bear interest and are

valued at their fair value, determined using a market discount rate for

a similar instrument.

Operating receivables and various receivables

Trade receivables and other receivables are accounted for at nominal

value. Receivables which are due within less than one year and/or less

than an operating cycle are classed as “current assets”. A provision

for depreciation is recognised when their book value, based on the

probability of recovery, is lower than the value entered for them.

Short-term investments

Short-term investments or cash equivalents are valued at their fair

value at each closing date. They consist primarily of monetary bonds

and deposit certifi cates. Gains or losses in value, unrealised or realised,

are registered in the income statement under “Income from cash and

cash equivalents”.

1.12 Financial liabilities as from 1 January 2005

Financial liabilities include a convertible bond loan, bank loans, banking

facilities and other current and non-current liabilities.

Bonds convertible into and/or exchangeable for new or existing shares (“OCEANE”)

This so-called “hybrid” fi nancial instrument contains both fi nancial

debt and equity components. In compliance with IAS 32 “Financial

Instruments”, the equity component corresponds to the difference

between the nominal value of the issue and the debt component. The

latter is calculated as the fair value of a debt without the conversion

option but otherwise presenting identical characteristics. The value

registered under equity corresponding to the conversion option is not

revalued during the term of the loan. The debt component is measured

at its depreciated cost over its estimated useful life.

The part of the bond loan due within one year is classed under “Current

bond loan”.

Bank loans

Bank loans are initially measured at fair value, less transaction costs

directly attributable to the transaction. Thereafter they are measured

at amortised cost based on the effective interest rate method. Loan

issuing costs are registered in the income statement under “Cost of




gross fi nancial debt” over the term of the loans and based on the

effective interest rate method.

Bank overdrafts

Bank overdrafts are recognised at nominal value.

Other current and non-current financial liabilities

These items mainly include employee profi t-sharing.

1.13 Derivative financial instruments as from 1 January 2005

As the income and expenses arising out of intellectual services

provided to clients are generally registered in the same country, and

are consequently in the same currency, no foreign exchange hedging

policy has been implemented.

Altran uses interest rate swaps and currency futures contracts to

manage its interest rate and exchange rate risks. These instruments

are used in connection with the group’s fi nancing operations and cash

management.

Measurement and presentation

Derivatives are measured at fair value when they are initially recorded.

Their fair value is reassessed at each closing date based on market

conditions.

Recognition of hedging derivatives

When derivatives are classed as hedging instruments pursuant to

IAS 39, their treatment varies depending on whether they are:

fair value hedges of existing assets or liabilities;

future cash fl ow hedges.

The group designates the hedging instrument and the hedged item

at the inception of the hedge. It formally documents the hedging

relationship, in order to measure its effectiveness over the given

period.

Hedge accounting has the following consequences:

for fair value hedges of existing assets or liabilities, changes in fair

value of the derivative are recorded in the income statement and

the corresponding hedged item registered in the balance sheet is

revalued and offset in the income statement. Any difference arising

between these two re-evaluations represents the ineffectiveness of

the hedging relationship;

for future cash fl ow hedges, the effectiveness of changes in fair

value of the hedging instrument are recognised directly in equity

in a specifi c reserve account and the hedge ineffectiveness is

recognised in the income statement. The amounts recognised in

the reserve account are recycled to the income statement as the

hedged fl ows are accounted for.

Recognition of derivatives which do not qualify as hedges

Derivatives which are not designated as hedges are initially and

subsequently valued at fair value. Changes in fair value are recognised

•

•

•

•

under “Other fi nancial income” or “Other fi nancial expenses” in the

income statement.

1.14 Treasury shares

Treasury shares purchased are deducted from equity on the basis of

their acquisition cost. When treasury shares are sold any gains and

losses are registered in consolidated reserves for the amount after tax.

1.15 Provisions for liabilities and charges

Pursuant to IAS 37 “Provisions, contingent liabilities and contingent

assets”, provisions for liabilities and charges are entered when, on the

closing date, the group has an obligation to a third party which probably

or certainly will result in an outfl ow of resources to the third party.

The estimate of the provision corresponds to the outfl ow of funds which

the group will probably have to bear in order to meet its obligation.

Provisions which correspond to outfl ows due in over two years’ time

are discounted.

Altran’s main provisions for liabilities and charges, excluding provisions

for pension related liabilities, include:

estimated costs for litigation, disputes and lawsuits with third

parties or former employees;

estimated restructuring costs.

In the event of restructuring, an obligation is recognised as soon as

the restructuring programme has been announced and the group has

drawn up or started to implement a detailed restructuring plan, prior to

the closing date.

Non-current provisions correspond to provisions which are not

directly linked to the operating cycle and which are due in over a year.

They include provisions for litigation. The proportion of non-current

provisions which is due in less than a year is presented on the balance

sheet in current provisions.

Contingent liabilities correspond to potential obligations resulting from

past events which are contingent upon the occurrence of future events

and over which the group does not have total control, or to probable

obligations for which the outfl ow of resources is uncertain. They are

set out in detail in § 6.

1.16 Employee benefits

Altran has commitments in various defi ned benefi ts retirement plans,

termination compensation/end of career compensation and other

forms of employee benefi ts. The specifi c characteristics of these plans

depend on the applicable regulations in the countries concerned.

The main countries which use retirement plans with defi ned benefi ts

are Germany, Japan and the Netherlands.

Termination compensation and end of career compensation is generally

paid via a lump sum calculated based on the employee’s years of

service and his/her annual salary upon termination/retirement. The

main plans of this kind concern employees of the group’s French and

Italian companies.

•

•



In compliance with IAS 19, the contributions paid in respect of defi ned

contributions plans are expensed over the period and all staff benefi ts

are measured annually using the projected unit credit method taking

into account the specifi c economic conditions of each country, some

of which are set out in § 4.13: mortality, staff turnover, salary increases,

discount rates and expected rates of return from funds invested to

guarantee pension plans.

These commitments are covered either by pension funds to which

Altran contributes, or by provisions registered on the balance sheet

as and when employees acquire the corresponding rights. The net

commitment is accounted for in “Non-current employee benefi ts”.

Actuarial gains and losses may result from the difference generated

between projected commitments and the actuarial valuation (based

on new projections and actuarial assumptions) and the difference

between the expected return and the actual return on the plan assets.

Altran has recorded actuarial gains and losses in the income statement

as from 1 January 2004 using the corridor method. This entails

spreading the actuarial losses and gains in excess of 10% of the greater

of the defi ned benefi t obligation or the fair value of plan assets, over the

residual employment term for those employees still in service. Where

the group creates a new plan or improves an existing one the vested

portion of the past service cost is recorded immediately in the income

statement and the unvested portion of past service cost is amortised

over the vesting period. Length of service bonuses connected with long

service medals were recognised for the fi rst time on 1 January 2004.

1.17 Share-based payments

In compliance with IFRS 2 “Share-based payments”, stock purchase

and subscription options and employee share issues are measured at

fair value on the date the options are granted.

Stock purchase and subscription options

Altran has created several stock option plans for the benefi t of certain

members of staff.

Stock options are measured at fair value on the date the options are

granted. Fair value is the value of the benefi t awarded to the employee.

It is recognised under “Employee benefi ts expense” in the income

statement, on a straight line basis over the vesting period, and offset

in equity.

The fair value of the stock option is determined using the “Black

& Scholes” or the “Hull & White” method, which use parameters such

as the exercise price of the options, the maturity of the options, the

share price at the date of grant, the share price’s implicit volatility,

assumptions as regards the turnover of employees benefi ting from

the options and the risk free interest rate. The parameters used at the

closing date are set out in § 5.4.

Employee share issue

During the fi rst half of 2006, Altran Technologies launched a share

issue reserved for employees within the scope of article L.225-138-1 of

the French Commercial Code and article L.443-5 of the French Labour

Code.

This share issue was offered to all group employees in France, Germany,

Spain, Italy, United Kingdom, Ireland, Sweden, Belgium, Luxembourg,

The Netherlands, Portugal and Austria.

The group gave employees the opportunity to become Shareholders

of the company via a share issue reserved for employees. In those

countries which satisfy the legal and tax requirements, the group

offered two types of investment: the traditional share ownership plan

(subscription of shares with a 20% discount on the listed share price)

and the leveraged plan (award of share subscription warrants for an

equivalent amount).

With regard to the traditional share ownership plan the benefi ts

granted to employees are valued at the fair value of the shares granted

on that date taking into consideration the lock-in cost. The discount

for non-transferability was estimated by valuing the cost of a hedging

strategy combining forward contracts for the sale of non-transferable

shares and the cash purchase, fi nanced via a loan, of an equivalent

number of transferable shares using a valuation model based on market

parameters. The difference between the discount and the lock-in cost

materialised by the purchase of futures contracts is expensed in the

income statement.

As regards the leveraged share ownership plan, the group values

the benefi t awarded to employees by creating a model based on the

following scenario:

the employee borrows an amount equal to the discounted share

price and pays the interest on the loan;

the employee sells its options (calls) to a bank.

The difference between the sale price of the options and the cost

of debt is expensed immediately in the income statement under

“Employee benefi ts expense” as there is no vesting period and is offset

in equity.

The parameters used are set out in note 5.4.

Bonus shares

In the second half of 2007, Altran launched a bonus share plan for the

group’s consultants.

The group values the benefi t awarded to employees based on the

guidance issued by the CNC the French national Accounting Board

(Conseil National de la Comptabilité):

the employee borrows an amount equal to the share price at the

defi ned price and pays the interest on the loan;

the employee sells forward its options (calls) to a bank.

The difference between the sale price and the cost of debt is expensed

in the income statement under “Employee benefi ts expense”, on a

straight line basis over the vesting period and is offset in equity.

•

•

•

•




1.18 Deferred taxes

Deferred taxes are recognised on all temporary differences between

the book value and tax base of assets and liabilities, and on tax losses,

using the liability method.

Altran offsets deferred tax assets and liabilities by fi scal entity. In

compliance with IAS 12 deferred tax assets and liabilities are not

discounted.

Deferred tax assets are only recognised when their recovery is

probable. In assessing its capacity to recover these assets, Altran takes

into account the following elements:

results forecasts as determined in the business plans used for

impairment tests;

tax losses arising before and after group tax relief.

Deferred taxes in relation to all intangible fi xed assets acknowledged

at the time of business combinations are accounted for (brands, etc.).

1.19 Sales

Sales correspond to the amount for services provided by all of the

consolidated companies of the group.

The recognition method for sales and costs depends on the nature of

the service. The group realises the majority of its services on a cost-

plus basis.

Cost-plus service

Sales and associated costs are recognised as the project advances on

the basis of time spent in relation to total time set out in the contract.

Fixed rate service

In cases where fi xed rate contracts are concluded with a result

obligation, sales and results are registered in compliance with IAS 18

using the percentage of completion method defi ned by IAS 11. The

stage of completion is determined based on the percentage of costs

incurred for work carried out compared with total estimated costs.

When it is likely that total estimated costs for the contract will exceed

total income from the contract, a provision is made for the expected

loss upon termination.

•

•

Services provided which do not meet the aforementioned conditions

are entered at cost price under “Work in progress”.

In compliance with IAS 18 “Revenue”, re-invoicing of non-margined

consultant fees linked to commercial services is deducted from

external charges.

1.20 Foreign exchange gains and losses

Realised and unrealised foreign exchange gains and losses resulting

from operational activities are recognised under “Other revenues”

or “Other operational income and expenses”. Those resulting from

fi nancing operations, or from the hedging of investing and fi nancing

activities, are recognised under “Cost of the gross fi nancial debt” and

“Other fi nancial income and expenses”.

1.21 Earnings per share

The group presents basic and diluted earnings per share.

The non-diluted (basic) earnings per share corresponds to net income

attributable to the group, divided by the weighted average number of

shares outstanding during the year, net of treasury shares.

The diluted earnings corresponds to the net income attributable to the

equity holders of the parent, after deducting the fi nancial cost of the

dilutive debt instruments and their impact on employee shareholding

and after the corresponding tax impact. The number of shares chosen

for the calculation of the diluted earnings takes into account the

conversion into ordinary shares of dilutive instruments outstanding

at year-end (share subscription options or convertible bonds) when

they are likely to have a dilutive effect, which is the case for share

subscription options, when their exercise price is lower than the market

price (average share price for Altran Technologies shares over the

year).

Diluted and basic earnings per share are identical when basic earnings

per share result in a loss. To ensure comparability of earnings per

share, the weighted average number of shares outstanding during the

year (and previous years) is adjusted to take into account any capital

increases carried out at a share price lower than the market price.

Treasury shares deducted from consolidated equity are not taken into

account in calculating earnings per share.



2. Scope of consolidation

The consolidated fi nancial statements include the fi nancial statements of Altran Technologies and of the subsidiaries it controls. All of the group’s

subsidiaries are fully consolidated.

Closing Opening

ChangeMethod

Consolidation

rate

Closing

rate

Interest

rate Method

Consolidation

rate

Closing

rate

Interest

rate

Northern

area

Germany

ALTRAN

DEUTSCHLAND

(ex-

BETEILIGUNGS) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

EUROSPACE FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

BERATA (DEU) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CHS DATA

SYSTEMS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ARTHUR

D. LITTLE (DEU) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

BERATA SERVICE

GMBH FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN CIS

(DEUTSCHLAND) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

SUTHERLAND

CONSULTING

(DEU) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ASKON

CONSULTING

GROUP GMBH FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

DE SIMONE

ET OSSWALD

BERLIN FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

Austria

GT CONSULTING

GMBH FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN

AUSTRIA GMBH FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ARTHUR

D. LITTLE

AUSTRIA FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

Romania

ALTRAN

ENGINEERING

ROMANIA SRL FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

Belgium

ALTRAN EUROPE FC 100.00 100.00 99.99 FC 100.00 100.00 99.99

ALTRAN CIS

(BELGIUM) FC 100.00 100.00 94.06 FC 100.00 100.00 94.06

DE VALCK

CONSULTANTS FC 100.00 100.00 94.10 FC 100.00 100.00 94.10

ALTRAN

BELGIUM FC 100.00 99.00 94.05 FC 100.00 99.00 94.05

NETARCHITECTS

EUROPE NC 0.00 0.00 0.00 FC 100.00 100.00 94.90 Merged

ADVENTEC NC 0.00 0.00 0.00 FC 100.00 100.00 94.05 Merged

DCE

CONSULTANTS

(BEL) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ARTHUR

D. LITTLE

BELGIUM FC 100.00 100.00 94.05 FC 100.00 100.00 94.05




Closing Opening

ChangeMethod

Consolidation

rate

Closing

rate

Interest

rate Method

Consolidation

rate

Closing

rate

Interest

rate

Northern

area

Luxembourg

ALTRAN

LUXEMBOURG FC 100.00 99.90 94.91 FC 100.00 99.90 94.91

ALTRAN CIS

(LUXEMBOURG) FC 100.00 100.00 94.91 FC 100.00 100.00 94.91

DCE

CONSULTANTS

(LUX) FC 100.00 99.90 94.81 FC 100.00 99.90 94.81

Netherlands

ALTRAN

INTERNATIONAL FC 100.00 95.00 95.00 FC 100.00 95.00 95.00

ALTRAN

TECHNOLOGIES

NETHERLANDS FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

FAGRO

CONSULTANCY FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN CIS B.V. FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN


ARTHUR

D. LITTLE


DCE HOLDING

(NLD) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

DCE

CONSULTANTS

BV (NLD) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

Sweden

ALTRAN

SCANDINAVIA FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN

TECHNOLOGIES

SWEDEN AB FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CONSIGNIT AB

SWEDEN FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

LILLA BOMEN

- SWEDEN

HOLDING NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

ARTHUR

D. LITTLE (SWE) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

DenmarkCONSIGNIT

DENMARK FC 100.00 100.00 100.00 NC 0.00 0.00 0.00 Creation

Switzerland

ALTRAN

SWITZERLAND FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

BERATA (CHE) NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

INNOVATICA NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

INFOLEARN NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

DE SIMONE

& OSSWALD

HOLDING NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

CONSULTRAN

(CHF) NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

ARTHUR

D. LITTLE

SCHWEIZ FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN AG

(CHE) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN AG NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

CSI SCHWEIZ FC 100.00 100.00 95.00 NC 0.00 0.00 0.00 Creation



Closing Opening

ChangeMethod

Consolidation

rate

Closing

rate

Interest

rate Method

Consolidation

rate

Closing

rate

Interest

rate

Northern

area

United

Kingdom

ALTRAN UK FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

HIGH INTEGRITY

SYSTEMS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN

TECHNOLOGIES

UK FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

PRAXIS HIGH

INTEGRITY

SYSTEMS LTD FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN

CRITICAL

SYSTEMS NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Liquidated

I.B.D. FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ASPECT

ASSESSMENT NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Liquidated

GRESHAM BELL NC 0.00 0.00 0.00 FC 100.00 95.00 95.00 Liquidated

CYGNITE NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Liquidated

HILSON MORAN

PARTNERSHIP FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CCL

ACQUISITION NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Liquidated

CAMBRIDGE


ARTHUR

D. LITTLE (GBR) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

DCE

CONSULTANTS

(GBR) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

SYNECTICS (UK) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

SUTHERLAND

CONSULTING

(UK) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CONSIGNIT

LIMITED UK FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

Ireland

ALTRAN

IRELAND FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN

TECHNOLOGIES

IRELAND FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

Southern

areaBrazil

ALTRAN DO

BRASIL FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

TECNOLOGIA E

CONSULTORIA

BRASILEIRA

(TCBR) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

TDA DESENHO E

ARTES FC 100.00 60.00 57.00 FC 100.00 60.00 57.00

ALTRAN

CONSULTORIA

EM TECNOLOGIA

(A.C.T) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ARTHUR

D. LITTLE

(BRAZIL) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00




Closing Opening

ChangeMethod

Consolidation

rate

Closing

rate

Interest

rate Method

Consolidation

rate

Closing

rate

Interest

rate

Southern

area

Venezuela

ARTHUR

D. LITTLE DE

VENEZUELA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

CONSULTORES FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

Spain

ALTRAN E.S.P. FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

SOFTWARE DE

BASE FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

STE

CONSULTING FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN CIS

SPAIN FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

INTELLIGENT

ADVISORS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN DSD FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CSI SPAIN FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CONSULTRANS

(ESP) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ADVANCED

GLOBAL

SOLUTIONS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

TRANSPORTES E

INFORMATICA FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

SERTEC

SOLUTIONES

INFORMATICAS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

S2 SOLUCIONS

SERVEIS

INFORMATICA FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

MEDIA

CONSULTORES

DE INGENIERIA FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

BARNAZ

HOLDING FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ARTHUR

D. LITTLE S.L.

(ESP) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

I.C.E.A.C.S.A. FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

U.S.M. ENDECAR NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Disposed

COBLENZA

HISPANA DE

SISTEMAS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

AGENCIA DE

CERTIFICATION

INNOVATION FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

STRATEGY AND

INNOVATION

ADVISORS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00



Closing Opening

ChangeMethod

Consolidation

rate

Closing

rate

Interest

rate Method

Consolidation

rate

Closing

rate

Interest

rate

Southern

area

Italy

ALTRAN ITALIA FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CEC

CONCURRENT

ENGINEERING

CONSULTING FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

INGENIERIA

DEI SISTEMI

LOGISTICI FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN CIS

(ITALY) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CEDATI FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

TQM CONSULT FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ATHENA (ex-

OTBA ITALIE) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ARTHUR

D. LITTLE (ITA) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

C-QUENTIAL

(ITA) HOLDING NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Liquidated

ALTRAN SERVIZI FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

RSI

TECHNOLOGIES FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CSI ITALIE FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

HILSON MORAN

ITALY FC 100.00 100.00 100.00 NC 0.00 0.00 0.00 Acquisition

Portugal

ALTRAN

PORTUGAL SGPS FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN CIS

Portugal FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTIOR

CONSULTORIA E

ENGENHARIA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRANTEC

CONSULTORIA

E ENGENHARIA

TECNOLOGICA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

AndorraSERTEC


France

ALTRAN


ALTRAN

SYSTèMES

D’INFORMATION FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ARENDI

CONSULTING FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

AXIEM FC 100.00 99.99 99.99 FC 100.00 100.00 100.00

DP CONSULTING FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN

INVOICING FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

T. MIS


DATACEP FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

TRININFOR NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

ACTISYS

(GROUPE

DATACEP) NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

CADIX NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

ETHNOS NC 0.00 0.00 0.00 FC 100.00 99.60 99.60 Merged




Closing Opening

ChangeMethod

Consolidation

rate

Closing

rate

Interest

rate Method

Consolidation

rate

Closing

rate

Interest

rate

France

EDIFIS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

DCE

CONSULTANTS

FRANCE NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

MAP FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

EXCELLIA FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

NESS

CONSULTING FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

DIOREM FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

IMNET FRANCE FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

S.S.C.E. NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

CERRI

CONSULTING

FRANCE NC 0.00 0.00 0.00 FC 100.00 99.72 99.72 Merged

ALGOPLUS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALGONORM FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ADL SERVICES FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ARTHUR

D. LITTLE (FRA) FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTIAM NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

GMTS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

ALTRAN FRANCE

EXECUTIVE

MANAGEMENT NC 0.00 0.00 0.00 FC 100.00 100.00 100.00 Merged

LOGIQUAL SO FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

APHRODITE

TECHNOLOGIES

SAS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

APOPIS

TECHNOLOGIES

SAS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

DIONYSOS


HÉLÈNE

TECHNOLOGIES

SAS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

CSI France FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

LOKI

TECHNOLOGIES

SAS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

OLIVIA

TECHNOLOGIES

SAS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

SYLVIE

TECHNOLOGIES

SAS FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

VALÉRIE


NESS OBJETCT FC 100.00 100.00 100.00 FC 100.00 100.00 100.00

NESS WARE FC 100.00 100.00 100.00 FC 100.00 100.00 100.00



Closing Opening

ChangeMethod

Consolidation

rate

Closing

rate

Interest

rate Method

Consolidation

rate

Closing

rate

Interest

rate

Rest

of the

world

United Arab

Emirates

ADL MIDDLE

EAST FC 100.00 100.00 95.00 NC 0.00 0.00 0.00 Creation

Hong Kong

ARTHUR

D. LITTLE

HOLDING

(JAPAN) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ARTHUR

D. LITTLE HONG

KONG (HKG) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN CHINA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

CONTROL

SOLUTIONS

INTERNATIONAL

- ASIA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

India

ALTRAN

TECHNOLOGIES

INDIA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

Japan

ARTHUR

D. LITTLE JAPAN FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN JAPAN

KK FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

CSI JAPAN FC 100.00 100.00 95.00 NC 0.00 0.00 0.00 Creation

Korea

ADL YUHAN

HOESA FC 100.00 100.00 95.00 NC 0.00 0.00 0.00 Now i n FC

ARTHUR

D. LITTLE

YUHAN HOESA NC 0.00 0.00 0.00 ME 25.00 25.00 23.75

Acquisition

of 75%

ALTRAN

TECHNOLOGIES

KOREA YUHAN FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

Malaysia

ARTHUR

D. LITTLE

(MALAYSIA) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

Singapore

ALTRAN

HOLDINGS

(SINGAPORE) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN

TECHNOLOGIES

SINGAPORE FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ARTHUR

D. LITTLE

SINGAPORE FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

DCE

CONSULTANTS

(SGP) NC 0.00 0.00 0.00 FC 100.00 100.00 95.00 Liquidated




Closing Opening

ChangeMethod

Consolidation

rate

Closing

rate

Interest

rate Method

Consolidation

rate

Closing

rate

Interest

rate

Rest

of the

world

Canada

ALTRAN CANADA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

CSI CANADA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

SYNECTICS

CANADA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

United States

ALTRAN USA

HOLDINGS FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN

SOLUTIONS

CORP FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN USA INC NC 0.00 0.00 0.00 FC 100.00 100.00 95.00 Merged

THE JOHNSSON

GROUP NC 0.00 0.00 0.00 FC 100.00 100.00 95.00 Disposed

ALTRAN

CONSULTING

SOLUTIONS NC 0.00 0.00 0.00 FC 100.00 100.00 95.00 Merged

CONTROL

SOLUTIONS


ALTRAN

CONSULTING

SYSTEMS FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN

SOLUTION INC NC 0.00 0.00 0.00 FC 100.00 100.00 95.00 Merged

IMAGITEK FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ARTHUR

D. LITTLE

NORTH AMeRICA NC 0.00 0.00 0.00 FC 100.00 100.00 95.00 Merged

ARTHUR

D. LITTLE (USA) FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

CAMBRIDGE

CONSULTANTS,

INC FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

SYNECTICS CORP NC 0.00 0.00 0.00 FC 100.00 100.00 95.00 Merged

SYNECTICS INC FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

China

ARTHUR

D. LITTLE CHINA FC 100.00 100.00 95.00 FC 100.00 100.00 95.00

ALTRAN

SHANGHAI FC 100.00 100.00 95.00 NC 0.00 0.00 0.00 Creation

CSI CHINA FC 100.00 100.00 95.00 NC 0.00 0.00 0.00 Creation



3. Review of significant events during the financial year 2007

3.1 Corporate governance

The Management Board is comprised of two members:

Mr Yves de Chaisemartin, Chairman;

and Mr Eric Albrand.

They were appointed by the Supervisory Board on 11 January 2007, for

a duration of two years, in compliance with Altran Technologies’ by-

laws.

The Supervisory Board is currently comprised of the following

members:

Mr Dominique de Calan, Chairman;

Mr Michel Sénamaud, Vice-Chairman;

Mr Roger Alibault;

Mr Jacques-Etienne de T’Serclaes, Member of the Supervisory

Board and Chairman of the Audit Committee, appointed on 5 March

2007 with effect from 30 March 2007.

Their term of offi ce is due to expire at the end of the Annual General

Meeting held to approve the fi nancial statements for the year ended

31 December 2008.

Madame Guylaine Saucier resigned from the Supervisory Board on

15 February 2007.

3.2 AMF’s Enforcement Committee Decision

On 31 May 2007, Altran group was informed of the AMF’s Enforcement

Committee Decision relating to the accounting periods ending

31 December 2001 and 30 June 2002, imposing an administrative

penalty of €1.5 million. The Committee imposed a fi ne on the company

for the misconduct of its former managers who have now all left the

group. This decision does not take into account the Rapporteur’s

fi ndings which recommended far more moderate fi nes. This decision

penalises all of Altran’s current Shareholders for past actions. Altran

has appealed against this decision. Nonetheless, the fi nancial penalty

has been paid in full.

3.3 2007/2009 Operational efficiency plan

At the Shareholders’ Annual General Meeting held on 29 June 2007,

Altran announced an operational effi ciency plan for 2007/2009 in an

aim to improve group performance and signifi cantly reduce its indirect

costs.

The objective is to cut indirect costs by at least three percentage points

by 2009 reducing them to 25% of sales. In the medium term the group

aims to bring indirect costs down towards the industry average of 20%

of sales.

•

•

•

•

•

•

The fi rst measures taken in collaboration with a consulting fi rm

covered:

sales effi ciency: reviewing the group’s sales organisation in terms

of costs and effi ciency;

purchasing: reviewing the steps taken to implement a group-level

purchasing policy;

WCR: reviewing performance in terms of working capital

management;

support functions France: analysing the organisation and

performance of the support functions France;

international support functions: analysing the organisation and

performance of all international support functions.

This plan is also supported by the actions taken pursuant to the former

performance plan presented in 2005:

positive effect of investments already made (IT, property,

purchasing);

the group’s structure has been gradually simplifi ed since 2006 and

the number of companies has been reduced by a third;

the budget process has been reviewed: authorisation to incur

additional expenses is now subject to growth achievement;

full commitment to the execution of this plan is requested from

country managers.

3.4 The operational merger in Paris of Altran Consulting & Information Services (CIS) and Altran Telecoms, Electronics & Media (TEM)

Over the past few months the group has noted that both Information

Systems and Telecommunications have experienced strong growth

in France and that it is becoming harder to establish the boundary

between these two large markets.

Therefore the group has decided to merge these two businesses in

Paris, opening up opportunities to:

create a new and unmatched Telecommunications offer for our CIS

clients, mainly in the Bank and Insurance sector in which we are a

key player;

to expand our Information Systems offer for our TEM customers.

The group has also appointed a new management team to boost

creativity and increase shared offers between these two activities.

The skills and size of the Altran CIS Paris and Altran TEM teams, will

make this new merged business the driving force behind creating the

group’s value added offer.

•

•

•

•

•

•

•

•

•

•

•




3.5 Issuance of a new stock option plan and bonus share plan for employees

On 20 December 2007, the group issued 2,589,830 stock options and

818,740 bonus shares to 2,191 employees. This plan represents 2.9% of

the company’s share capital.

3.6 Changes in scope of consolidation


scope of consolidation, including:

Acquisitions

Since it became part of the group on 1 August 2007, Hilson Moran Italia

has generated sales totalling €1.4 million.

An option to purchase 75% of the share capital of the Korean subsidiary

Arthur D. Little Yuhan Hosea was exercised in August 2007. The

sales contribution of this company in the second half of 2007 was

€2.8 million.

Disposals

The US company The Johnsson group was sold on 2 July 2007 prior

to liquidation. 2006 sales totalled €12.6 million. The consequences of

this disposal were accounted for in the 2007 half yearly results, namely

the partial impairment of goodwill linked to the disposal of this activity,

with a negative impact of €7 million.

USM Endecar in Spain was sold on 5 February 2007. This company’s

sales totalled €2 million in 2006. This disposal had a net negative

impact of €1.9 million in the fi rst half of 2007 (including -€2.4 million

in capital losses arising from the deconsolidation, -€0.2 million in fees

linked to the transaction and +€0.8 million in reversal of provisions).

Mergers & liquidations

Within the framework of the group’s aim to streamline its scope of

consolidation Altran carried out a number of mergers and liquidations

in Switzerland, France, the United States, Belgium and the United

Kingdom.

Creations

The group created 6 new subsidiaries in 2007, namely to support the

geographical diversifi cation of the US subsidiary CSI.

Disposals and liquidations had a negative impact of €1,823 thousand

on consolidated net profi t.


Non-current assets 3,035 Shareholder’s Equity 2,704

Current assets (295) Income from divestment or liquidation (1,823)

Non-current liabilities 487

Cash flow (340) Current liabilities 1,032

2,400 2,400

3.7 Refinancing






2009.







4. Notes relating to certain balance sheet items

4.1 Net goodwill

Changes in net goodwill:

Net value

Balance as of 31 December 2006 491,945

Earn outs 5,179

Loss in value (13,870)

Changes in perimeter 1,743

Exchange rate changes (10,401)

Other transactions 182

BALANCE AS OF 31 DECEMBER 2007 474,778

The increase in goodwill is mainly due to earn-out commitments on

acquisitions completed in former years for €6,140 thousand and

readjustments for earn-outs for 2006, paid in 2007 for a total of

(€961) thousand.

Changes in scope of consolidation includes: goodwill of €3,135 when

75% of ADL Yuhan Hoesa’s capital was acquired and a decrease

in goodwill arising from the disposal of “The Johnsson group” for

(€1,521) thousand.

The impairment losses recognised in the income statement totalled

€13,870 thousand in 2007, i.e. €12,535 thousand for the fi rst half of

2007 and €1,335 thousand for the second half of 2007.

The impairment losses involved 6 Cash Generating Units. The

carrying amount before impairment losses in 2007 totalled

€488,649 thousand.

At 31 December 2007, the goodwill impairment tests which led to the

recognition of the above impairments, were based on a discount rate

after tax (WACC) of 8.92%, i.e. a discount rate before tax of between

11% and 12%.


would have resulted in total impairment of €18,314 thousand.

4.2 Intangible assets

Brands

Development

costs Software Other TOTAL

As of 31 December 2006

Gross value at opening• 34,398 4,719 22,109 1,097 62,323

Amortization and provisions• (1,922) (2,712) (15,656) (648) (20,938)

Net value at opening• 32,476 2,007 6,453 449 41,385

Transactions during the period:

Acquisitions• 63 657 3,659 291 4,670

Disposals• (61) (11) (72)

Net Amortization and provision expenses• (66) (899) (3,606) (52) (4,623)

Changes in perimeter• (13) (137) (41) (191)

Exchange rate changes• 1 (95) (202) (9) (305)

Other transactions• 14 - (46) (98) (130)

TOTAL TRANSACTIONS (NET VALUE): (1) (474) (297) 121 (651)


Gross value at closing• 34,399 4,760 23,290 1,057 63,506

Amortization and provisions• (1,924) (3,227) (17,134) (487) (22,772)

Net value at closing• 32,475 1,533 6,156 570 40,734

The Arthur D. Little brand totals €31,968 thousand. In 2007, the net charge to depreciation and amortisation on intangible

assets totalled €4,623 thousand and are included in depreciation,

amortisation and provision charges.




4.3 Property, plant & equipment

Land Construction

General

facilities

fixtures and

furnishings

Office and

computer

equipment

and furniture Other TOTAL


Gross value at opening• 533 17,341 25,727 63,252 3,021 109,874

Amortization and provisions• (7,542) (14,293) (43,288) (1,763) (66,886)

Net value at opening• 533 9,799 11,434 19,964 1,258 42,988

Transactions during the period:

Re-valuations recognised as Shareholders’ equity• -

Losses in value recognised as Shareholders’ equity• -

Acquisitions• 224 4,419 9,318 311 14,272

Disposals• (150) (594) (1,319) (315) (79) (2,457)

Net amortization and provision expenses• (493) (2,892) (8,274) (357) (12,016)

Changes in perimeter• (16) 54 (3) (3) 32

Exchange rate changes• (726) (177) (498) (56) (1,457)

Other transactions• (69) 202 172 (225) 80

TOTAL TRANSACTIONS DURING THE PERIOD (150) (1,674) 287 400 (409) (1,546)


Gross value at closing• 383 14,177 27,834 64,913 2,578 109,885

Amortization and provisions• (6,052) (16,113) (44,549) (1,729) (68,443)

Net value at closing• 383 8,125 11,721 20,364 849 41,442

The group owns property in France, Italy, in the United Kingdom and in

Venezuela for a total of €8.5 million.

None of the fi xed assets which have been fully amortised but are still in

use, represent a signifi cant amount.

In 2007, the net charge to depreciation and amortisation on

property, plant and equipment totalled €12,016 thousand, including

€12,235 thousand under depreciation, amortisation and provision

charges and a net release of €219 thousand included in non-current

operating income.

4.4 Non-current financial assets

Non-current fi nancial assets are broken down as follows:

31/12/2007 31/12/2006

Available for sale

Cambridge Consultants incubator 4,145 8,760

Loans and credits generated by the group

Pension fund assets 8,990 8,944

Construction efforts loans 4,096 3,472

Construction efforts loans 8,493 8,791

21,579 21,207

TOTAL 25,724 29,967

4.4.1 Assets classed as “available-for-sale”

During 2007, the decrease of €4,615 thousand is namely due to the

devaluation of the Vectura and Elumin “Pelikon” shares, owned by CCL

in its activity as an incubator.

4.4.2 Loans and receivables

“Construction effort” loans totalled €4,096 thousand at 31 December

2007 compared with €3,472 thousand at 31 December 2006.

Compared with 31 December 2006, the increase of €624 thousand is

namely due to:

the impact of the fair value of the “construction effort” loans i.e.

€462 thousand, registered in the income statement;

and payments made in 2007 for a total of €1,086 thousand.

Other loans and receivables include deposits and guarantees.

•

•



4.5 Other non-current financial assets

Other non-current fi nancial assets mainly include:

the receivable on the disposal of the Fagro Belgique business for

€625 thousand;

€574 thousand placed in an escrow account in Brazil;

•

•

doubtful debts net of provisions for €891 thousand;

social security receivables due in more than one year for

€760 thousand.

•

•

4.6 Inventories

Inventories and work in progress are broken down as follows:

31/12/2007 31/12/2006

Raw materials 45 61

Service provisioning in progress 1,243 1,056

Finished goods 50 84

Provisions for inventory (55) (64)

TOTAL 1,283 1,137

The amount of inventories and their depreciation recognised as expense

totalled (€15) thousand in 2007 compared with (€39) thousand in

2006.

A write-down of inventories was registered in 2007 for €23 thousand.

A reversal of write-down of work in progress inventories was

recognised in income for a total of €8 thousand in 2007 compared

with €11 thousand in 2006.

The write-down of work in progress inventories totalled €32 thousand

in 2007 compared with €64 thousand in 2006.

4.7 Trade receivables

Trade receivables due within a year.

Total Matured Not Matured Total Matured Not Matured

Net accounts receivable (client) 504,920 108,788 396,132 511,189 165,959 345,230

The group is responsible for recovering trade receivables sold under

factoring agreements. These receivables are registered in assets and

offset in “Current fi nancial liabilities”.

Their recognition had the following impact on fi nancial statements:

(in thousands euros) Assets Current

financial

liabilities

Liabilities

31/12/2007 31/12/2006 31/12/2007 31/12/2006

Accounts receivable (client) 239,585 180,100 196,109 159,015

Cancellation of deposit (43,476) (21,085)

196,109 159,015 196,109 159,015

To date, the group has €260 million in factoring lines with no limitation

in time.

At 31 December 2007, the group obtained €196,1 million in fi nancing.

4.8 Other receivables

This item includes tax receivables and other operating receivables.

4.9 Current financial assets

This item includes deposits and guarantees which are due within one

year.




4.10 Shareholders’ equity and earnings per share

At 31 December 2007, Altran’s share capital totalled €59,100,650, made

up of 118,201,300 ordinary shares i.e. an increase of 885,063 shares

mainly due to the group employee share ownership plan (see 3.).

During the year ended 31 December 2007, the weighted average

number of ordinary shares outstanding totalled 117,656,139 shares and

the weighted average number of ordinary and dilutive shares totalled

118,312,087 shares.

Breakdown of equity capital Number Par value

Shares comprising equity capital at start of fiscal year 117,316,237 €0.50

Capital increase associated with the employee shareholding pla 885,063 €0.50

SHARES COMPRISING EQUITY CAPITAL AT END OF FISCAL YEAR 118,201,300 €0.50

31/12/2007 31/12/2006

Net earnings, Altran Technologies share (in thousands euros) 21,594 3,787

Impact of payments in shares which had a dilution effect 2,827 1,138

Ordinary shares 117,656,139 116,367,581

Options granted which had a dilution effect 655,948 2,826,657

Earnings per share (in euros) 0.18 0.03

Fully diluted earnings per share (in euros) 0.18 0.03

Options granted with dilutive effect estimated to date, concern share

subscription plans with an exercise price which is lower than the

average share price in 2007 i.e.:

share subscription plans set up in March 2003 involving a maximum

of 1,226,356 subscription options;

share subscription plans and bonus share plans set up in December

2007 involving a maximum of 2,589,830 subscription options and

817,740 bonus shares.

The exercise of these plans would result in the issuance of 655,948

new shares.

The following instruments for which the exercise price is higher than

the average share price in 2007 could have a dilutive effect on earnings

per share in the future but are not included in the calculation of diluted

earnings per share above:

the convertible bond loan issued in July 2004 involving a maximum

of 18,110,236 shares with one Altran share per bond, i.e. 15.8% of

ordinary shares outstanding (see 4.11);

•

•

•

share subscription plans which to date have no estimated dilutive

effect;

share subscription plans set up in June 2003 involving a maximum

of 211,549 share subscription options;


of 211,549 share subscription options 1,692,248;


of 211,549 share subscription options 131,000;

share subscription plans set up in December 2005 involving a

maximum of 1,926,500 share subscription options.

The attributes of the share subscription plans are described in

section 5.4.

•

•

•

•

•



4.11 Net financial debt

Net fi nancial debt is the difference between total fi nancial liabilities and cash and cash equivalents.

31/12/2007 31/12/2006

Cash and cash equivalents 177,599 126,226

Cash liability - -

Net cash 177,599 126,226

Convertible bond loans (> 1 year) 222,059 214,487

Credit establishment borrowings and debts (> 1 year) 28,347 59,565

Other non-current financial liabilities 13,839 12,781

Current bond loans 8,625 8,625

Current credit establishment borrowings and debts 31,458 30,884

Bank borrowings 231,960 173,894

Other current financial liabilities 807 5,853

GROSS FINANCIAL DEBT 537,095 506,089

NET FINANCIAL DEBT 359,496 379,863

The group’s net debt has been reduced by €20,367 thousand to €359,496 thousand at 31 December 2007 (compared with €379,863 thousand at

31 December 2006).

Cash equivalents

At 31 December 2007 cash equivalents totalled €97,517 thousand, broken down as follows:

31/12/2006 Acquisitions Disposals 31/12/2007

Certificates of deposit - - - -

Treasury bills and shares - - -

SICAVs (open-ended investment funds) and mutual funds 53,548 607,291 (563,361) 97,478

Bonds and medium-term negotiable bonds - - - -

Other 1,161 30 (1,152) 39

TOTAL 54,709 607,321 (564,513) 97,517

Breakdown of debt by maturity

The table below shows the break down of fi nancing costs by category and by maturity including accrued interest and after taking into account the

effect of hedging instruments:

Less than

one year

Between 1

and 2 years

Between 2

and 3 years

Between 3

and 4 years

Between 4

and 5 years Longer

Convertible bond loans (> 1 year) 222,059 - - - -

Credit establishment borrowings and debts (> 1 year) 28,347 - - - -

Other non-current financial liabilities 2,662 2,980 3,204 4,175 818

Current bond loans - 253,068 2,980 3,204 4,175 818

Current credit establishment 8,625

Long term financial liabilities 31,458

Bank borrowings 231,960

Other current financial liabilities 807

Short-term financial liabilities 272,850 - - - - -

272,850 253,068 2,980 3,204 4,175 818

Maturity of fi nancial liabilities at 31 December 2007:

within one year: 50.80%

1 to 5 years: 49.05%

over 5 years: 0.15%

•

•

•

Convertible bond loan

The 3.75% convertible bond loan issued in July 2004 totalled

€230 million at 31 December 2007 made of pf 18,110,236 bonds with a

par value of €12.70 each and a term of 4 years and 176 days.




Early redemption is possible at the group’s sole discretion:

for all or part of the bonds, at any time, via a buyback on the stock

market or over the counter or via public tenders;

for all outstanding bonds as of 1 July 2007 and until 31 December

2008 provided at least one months notice is given:

at an early redemption price equal to par plus any interest accrued

since the last interest payment date immediately prior to the early

redemption date up until the effective redemption date (“Early

redemption price”),

if the product of (i) the applicable share attribution ratio multiplied

by(ii) the arithmetic average of closing prices of the company’s

share on Euronext Paris S.A.’s Premier Marché over a period of

20 consecutive stock market days during which the share was

listed, and chosen by the company from among the 40 consecutive

stock market days during which the share is listed prior to the

publication of the notice of early redemption, exceeds 130% of the

bonds’ par value, i.e. €16.51;

at any time for all outstanding bonds if less than 10% of bonds issued

are outstanding via a redemption at the Early redemption price.

Application of IAS 32 at 1 January 2005 (date of fi rst application

of IAS 32/39 for the group) with regard to the 2009 OCEANE had a

positive impact on Shareholders’ equity at 1 January 2005 in the

•

•

−

−

•

amount of €24.2 million. The group’s fi nancial debt is thereby reduced

by the same amount.

The market rate applied and the breakdown of the debt component

and the equity component are presented hereafter:

discount rate applied to the debt: 6.15%

effective interest rate: 7.55%

fair value of the debt at date of issue: €202,657 thousand

Accrued interest for 2006, payable at term on 1 January 2007, is

€8,625 thousand.

The fi nancial expenses for 2007 is €16,197 thousand (see note 5.7).

An additional expense of €7,572 thousand is recorded in the income

statement at 31 December 2007 due to the difference between the par

value of the 3.75% OCEANE and the IFRS fi nancial expense calculated

based on the effective interest rate method in compliance with

IAS 32/39 at 1 January 2005.

Main changes in credit lines

Altran has an agreement with its banks granting it full access to its

credit lines which totalled €59.5 million at 31 December 2007 and

which mature in 2009.

•

•

•

Dec. 2004 June 2005 Dec. 2005 June 2006 Dec. 2006 June 2007 Dec. 2007 June 2008 Dec. 2008 June 2009 Dec. 2009

CADIF fixed rate 20,631 18,592 16,493 14,334 12,112 9,826 7,473 5,053 2,562 - -

CADIF Variable rate 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 -

Total CADIF 70,631 63,592 56,493 49,334 42,112 34,826 27,473 20,053 12,562 5,000 -

BNP Paribas Variable rate 40,000 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 4,000 -

SG Variable rate 40,000 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 4,000 -

TOTAL 150,631 135,592 120,493 105,334 90,112 74,826 59,473 44,053 28,562 13,000 -

At 31 December 2007 all credit lines had been used i.e. a total of

€59.5 million.

The majority of fi nancial liabilities are granted by banks at a variable

rate primarily indexed against EURIBOR or EONIA.

The company would be required to repay all these lines of credit if

the fi nancial ratios, defi ned on the basis of the fi nancial statements

presented according to French GAAP as presented in the table below,

were exceeded:

31/12/2005 31/12/2006 31/12/2007 31/12/2008 31/12/2009

Net debt/equity 1.15 1.0 1.0 1.0 1.0

Net debt/EBITDA 3.5 3 2.5 2 2



Due to the application of IFRS/IAS standards changing the accounting

rules for the borrower, as from 1 January 2005, the group has changed

the method for calculating its fi nancial ratios in agreement with its

three banks. The fi nancial ratios presented above remain unchanged.

At 31 December 2007 the group had not satisfi ed the previously

defi ned leverage ratio:

Net financial debt/equity 1.0 maximum

Net financial debt/EBITDA before profit-sharing 2.5 maximum

The group’s fi nancial ratios, before profi t-sharing and accrued interest

and after restatement for impact of the application of IAS 32 and IAS 39

to the 2009 OCEANE issued on 7 July 2004 are as follows:

Net financial debt/equity 0.88

Net financial debt/EBITDA before profit-sharing 2.71

Altran has asked the three banks of the banking pool (BNP Paribas,

Crédit Agricole Ile de France and Société Générale) not to exercise the

early redemption clause on these lines.

Pursuant to the credit agreement signed in December 2004, the group

has set up an interest rate hedge intended to hedge at least 50% of

total revolving credit commitments for a minimum term of 3 years.

Altran thereby manages a structural fi xed rate/variable rate position

(in euros) to limit the cost of debt and to this effect, uses interest rate

instruments such as swaps, caps and fl oors within the limits defi ned by

Management and the credit agreement.

At 31 December 2007, the main characteristics of this hedging agreement are as follows (see 5.8).

Maturity Deal Type Initial rate Initial nominal Variable rate Currency

SG127 01/04/08 A Cap 4.11% 15,000,000 Euribor3MP EUR


BNP 01/04/08 A Cap 3.89% 15,000,000 Euribor3MP EUR

CA 01/04/08 A Cap 3.79% 15,000,000 Euribor3MP EUR

SG128 01/04/08 V Floor 2.00% 15,000,000 Euribor3MP EUR


BNP 01/04/08 V Floor 2.00% 15,000,000 Euribor3MP EUR

CA 01/04/08 V Floor 2.00% 15,000,000 Euribor3MP EUR

BNP & CA & SG 01/04/08 SWAP IRS 60,000,000 EIB 3M EURIBOR EUR

The fair value of this derivative is €216 thousand and changes are recognised in the income statement under gains on trading derivatives.




4.12 Provisions for liabilities and charges

Changes in short and long term provisions for liabilities and charges over the period:

31/12/2006

Allocation

for fiscal

year

Write-down

(prov.

used)

Write-down

(prov. not

used)

Changes in

exchange

rate

Changes in

perimeter

Other

changes 31/12/2007

Provision for labour disputes 2,723 1,180 (629) (496) 120 1,921 4,819

Provision for other disputes 5,190 655 (1,703) (75) 4,067

Provision for tax disputes and penalties 161 177 (177) 5 67 233

Provision for other risks > 1 year 1,155 4,002 (27) (2) 18 14 5,160

Provision for restructuring 1,361 328 (1,027) (153) 509

Other provisions for charges 929 535 (207) 50 (91) 1,216

TOTAL PROVISIONS FOR LONG-TERM

RISKS AND CHARGES 11,519 6,877 (3,593) (675) 193 - 1,683 16,004

Provision for labour disputes 9,555 3,602 (2,993) (872) 189 (1,606) 7,875

Provision for other disputes 1,063 223 (785) (429) 72

Provision for tax disputes and penalties 33 4 (22) (1) 14

Provision for losses upon completion 474 853 (735) 10 (52) 550

Provision for other risks 5,189 972 (792) (27) (88) (728) 4,526

Provision for restructuring 12,978 7,499 (12,145) (50) 152 8,434

Provision for other charges 10,501 127 (1,231) (33) (10) 244 9,598

TOTAL PROVISIONS FOR SHORT-

TERM RISKS AND CHARGES 39,793 13,280 (18,703) (905) (78) 101 (2,419) 31,069

Other changes mainly include re-classifi cations between “non-

current” and “current” which result from forecast dates of outfl ows

being changed.

At 31 December 2007, reversals of provisions for contingencies and

charges, net, totalled €3,719 thousand, i.e. (€1,420) thousand in

depreciation and provisions included in the operating income and a net

reversal of €5,139 thousand included in the non-recurring operating

income.

Provisions for restructuring

Changes in provisions for restructuring:

2006 Allocations Reversals

Exchange rate

differential 2007

Payroll charges (10,417) (5,528) 10,707 (5,238)

Real estate project (2,786) (2,299) 2,298 50 (2,738)

Other (1,136) 168 (968)

TOTAL (14,339) (7,827) 13,172 50 (8,944)

4.13 Employee benefits

Liabilities arising from current and non-current employee benefi ts:

2007 2006 Change

Personnel and social security 162,904 183,979 (21,075)

Other current benefits after employment 6 33 (27)

162,910 184,012 (21,102)

Non-current personnel benefits 29,278 26,393 2,885

Other non-current benefits after employment 1,274 1,076 198

30,552 27,469 3,083

TOTAL 193,462 211,481 (18,019)



Changes in “Personnel costs and payroll taxes” are primarily due

to payment made during the reporting period in relation to the

liquidation of the Cambridge Consultants Limited pension fund. The

€24,783 thousand debt at 31 December 2006 has being entirely paid

off.

The group’s total commitment as regards retirement plans and post-

employment benefi ts, recognised in “non-current employee benefi ts”

involve mainly France, Italy, Germany, Japan and The Netherlands as

follows:

Change in provision

2007 2006

Total

End of

retirement

obligations

End of

contract

payouts

Other

personnel

charges Total

End of

retirement

obligations

End of

contract

payouts

Other

personnel

charges

Net liabilities at opening 26,421 10,042 9,282 7,097 23,368 8,057 8,932 6,379

Expenses for fiscal year 8,322 1,889 3,595 2,838 8,213 2,200 3,484 2,529

Net sums paid by employer (5,403) (89) (3,124) (2,190) (5,256) (76) (3,507) (1,673)

Translation differences (58) - - (58) (120) - - (120)

Change in perimeter - - - - 216 (139) 373 (18)

NET LIABILITIES AT CLOSING 29,282 11,842 9,753 7,687 26,421 10,042 9,282 7,09

Assessment of commitments and provisions at 31 December 2006 and 31 December 2007

Changes in actuarial value of cumulative rights

2007 2006

Total

End of

retirement

obligations

End of

contract

payouts

Other

personnel

charges Total

End of

retirement

obligations

End of

contract

payouts

Other

personnel

charges

Actuarial present value

of accrued credits

at beginning of fiscal year 45,593 10,961 11,014 23,617 44,804 10,318 14,066 20,420

Credits accrued during the year 4,187 1,504 181 2,502 6,781 1,636 2,802 2,343

Financial cost 2,057 395 557 1,105 1,773 391 499 883

Reduction of future credits 3,564 3,564 - - (322) - - (322)

Liquidation of commitments/

Curtailment (962) (19) (943) - (533) - - (533)

Specific advantages - - - - - - - -

Employee contributions 466 - - 466 418 - - 418

Services paid (3,613) (89) (3,124) (400) (3,911) (76) (3,507) (328)

Actuarial gains and losses (4,753) (4,667) 2,046 (2,132) (3,553) (1,258) (3,222) 927

Creation/Acquisition - - - - 327 (50) 377 -

Translation differences

and other (91) - - (91) (200) - - (200)

ACTUARIAL PRESENT VALUE

OF CREDITS ACCUMULATED

AT END OF FISCAL YEAR 46,448 11,650 9,731 25,068 45,584 10,961 11,015 23,608




Change in fair value of hedging assets

2007 2006

Total

End of

retirement

obligations

End of

contract

payouts

Other

personnel

charges Total

End of

retirement

obligations

End of

contract

payouts

Other

personnel

charges

Fair value of coverage assets

at beginning of fiscal year 15,143 - - 15,143 13,244 - - 13,244

Yields expected from assets 272 - - 272 745 - - 745

Reduction of future credits - - - - (533) - - (533)

Liquidation of commitments - - - - - - - -

Employee contributions 466 - - 466 418 - - 418

Employer contributions 5,403 89 3,124 2,190 5,256 76 3,507 1,673

Services paid by coverage

assets (3,613) (89) (3,124) (400) (3,911) (76) (3,507) (328)

Creation/Acquisition - - - - - - - -

Translation differences

and other (29) - - (29) (74) - - (74)

FAIR VALUE OF COVERAGE

ASSETS AT END OF FISCAL

YEAR 17,642 - - 17,642 15,145 - - 15,145

Balance sheet commitments

2007 2006

Total

End of

retirement

obligations

End of

contract

payouts

Other

personnel

charges Total

End of

retirement

obligations

End of

contract

payouts

Other

personnel

charges

Shortfall versus accrued

credits 28,836 11,679 9,731 7,426 30,449 10,961 11,014 8,474

Actuarial gains and losses

not entered 3,827 3,757 22 48 (4,231) (920) (1,711) (1,600)

Cost of past services

not entered (3,351) (3,564) - 213 222 - - 222

Levelling of assets - - - - - - -

NET PROVISIONS ENTERED

ON BALANCE SHEET 29,312 11,872 9,753 7,687 26,440 10,041 9,303 7,096

Hedging assets are mainly used in Germany, The Netherlands and

Japan. They mainly include mutual funds, insurance contracts or

equities.

The main actuarial assumptions used to estimate long-term employee

benefi t commitments are as follows:

31 December 2007 31 December 2006

Inflation rate

Yield expected

from assets Wage inflation Inflation rate

Yield expected

from assets Wage inflation

Euro Zone 2.00% 5.00% 2.5%-5% 2.00% 4.30% 2.5%-3.5%

Japan 1.00% 2.00% 1.00% 2.00%

Holland 2.00% 5.00% 3.00% 2.00% 4.30% 3.00%

USA 2.00% 6.00% 2.00% 5.50%



The following table shows the impact on consolidated operating income:

Charge to income statement

2007 2006

Total

Retirement

obligations

End of

contracts

pay-out

Other

personnel

charges Total

Retirement

obligations

End of

contracts

pay-out

Other

personnel

charges

Costs of services rendered

during fiscal year 4,187 1,504 181 2,502 6,863 1,709 2,778 2,376

Interest expenses 2,057 395 557 1,105 1,773 391 499 883

Expected return from coverage

assets (778) - - (778) (714) - - (714)

Actuarial gains and losses

entered 41 4 18 19 306 100 208 (2)

Cost of past services (9) - - (9) 9 - - 9

Effect of reduction or

liquidation of pension plan - - - - (91) - - (91)

Curtailment 2,825 (14) 2,839 - (86) - - (86)

8,322 1,889 3,595 2,838 8,060 2,200 3,485 2,375

4.14 Other long-term liabilities

Other long-term liabilities are liabilities due in over 12 months.

4.15 Trade payables

Trade payables totalled €72,910 thousand at 31 December 2007

compared with €74,022 thousand at 31 December 2006.

4.16 Other current liabilities

Other current liabilities mainly include deferred revenue.

4.17 Short-term securities debt

Amounts due on non-current assets primarily include liabilities arising

from short-term securities for a total of €2,995 thousand, mainly

comprised of earn-out commitments of €2,153 thousand for 2007

(compared with €7,778 thousand in total in 2006 and €6,264 thousand

in earn-outs).

5. Notes to the income statement

5.1 Segment reporting at 31 December 2007

Pursuant to IAS 14 “Segment Reporting”, the group is required to

communicate segment fi nancial information by geographical segment

and business segment and to determine, in accordance with the criteria

set out in IAS 14, which of these two factors (geographical or business)

constitutes the primary level of segment information. The group

has determined that the primary reporting segment corresponds to

geographical segments and the secondary reporting segment to

business segments.

The primary reporting segment is divided into:

4 geographical areas:

France,

North: Germany, Austria, Benelux, Sweden, Switzerland, United

Kingdom, Ireland,

•

−

−

South: Brazil, Spain, Italy, Portugal, Andorra, Venezuela,

Rest of the world: Asia, North America, China.

The services provided by Altran Technologies or the country holding

companies to operating subsidiaries are reinvoiced according to

business criteria (turnover and payroll), in compliance with the legal

and fi scal provisions applicable in each country.

the secondary reporting segment is divided into 4 business

segments:

Technology and innovation consulting,

Organisation and information systems consulting,

Strategy and management consulting,

Other.

−

−

•

−

−

−

−




Segment reporting by geographical area


(in million euros) France North South Rest of World

Inter-sector

cancellations Altran Total

Total revenues

External 672.8 514.8 305.0 98.7 1,591.4

Inter-sector 21.2 18.5 5.3 4.4 (49.3) (0.0)

TOTAL INCOME 694.0 533.3 310.3 103.0 (49.3) 1,591.4

Total operating income 694.9 533.9 310.6 103.3 (49.2) 1,593.5

Total operating expenses (674.4) (473.0) (289.3) (106.8) 49.3 (1,494.0)

Current operating profit

Current operating profit by area 20.6 60.9 21.4 (3.5) - 99.4

% Current operating profit 3.0% 11.4% 6.9% (3.4)% - 6.2%

Expenses not allocated

Operating profit 11.1 58.5 12.7 (11.7) 0.1 70.6

% Operating profit 1.6% 11.0% 4.1% (11.4)% (0.2)% 4.4%

Cost of gross debt (35.9) (15.2) (10.5) (3.9) 34.3 (31.2)

of which interest expenses associated

with OCEANE 2009 (16.2) (16.2)

Income from cash equivalents 28.7 7.0 0.6 0.2 (34.3) 2.2

Cost of net debt (7.2) (8.2) (9.9) (3.7) (0.0) (29.0)

Other financial revenue 5.2 0.5 0.3 0.2 0.2 6.3

Other financial charges (6.6) (0.8) (0.3) (0.7) (0.2) (8.5)

Tax expenses (2.5) (19.1) (1.8) 5.4 - (18.0)

Earnings from affiliates - - - 0.1 - 0.1

Minority interests (0.0) (0.5) 0.0 0.5 - 0.0

NET EARNINGS - GROUP SHARE (0.0) 30.4 1.1 (9.9) 0.0 21.6

Other information

Assets by area 1,236.0 573.3 255.1 73.1 (725.4) 1,412.1

Non-allocated assets - - - - - -

Equity holdings - - - - -

TOTAL ASSETS 1,236.0 573.3 255.1 73.1 (725.4) 1,412.1

Amortization and depreciation expenses by area (7.9) (5.6) (2.4) (1.0) (16.9)

Losses in value entered during fiscal year -

in earnings• (1.4) - (3.8) (8.7) - (13.9)

directly in Shareholder’s equity• - - - - - -

Reversals of losses in value entered

during fiscal year -

in earnings• - - - - - -




As of 31 December 2006 France North South Rest of World

Inter-sector

cancellations Altran Total

Total revenues

External 641.9 467.3 283.7 102.4 1,495.3

Inter-sector 17.2 18.5 4.2 3.4 (43.3) -

TOTAL INCOME 659.1 485.8 287.9 105.8 (43.3) 1,495.3

Total operating income 661.3 486.2 288.4 105.7 (43.3) 1,498.2

Total operating expenses (658.6) (428.0) (274.3) (104.5) 43.2 (1,422.2)

Current operating profit

Current operating profit by area 2.7 58.2 14.0 1.1 - 76.0

% Current operating profit 0.4% 12.0% 4.9% 1.1% - 5.1%

Expenses not allocated

Operating profit (16.8) 59.2 6.1 (2.8) (0.3) 45.4

% Operating profit (2.5)% 12.2% 2.1% (2.6)% 0.7% 3.0%

Cost of gross debt (28.9) (12.6) (7.4) (3.8) 26.8 (25.9)

of which interest expenses associated

with OCEANE 2009 (15.7) (15.7)

Income from cash equivalents 22.6 6.0 0.6 0.5 (26.7) 3.0

Cost of net debt (6.4) (6.6) (6.8) (3.3) 0 (23.1)

Other financial revenue 2.3 1.8 0.6 - - 4.7

Other financial charges (5.2) (1.9) (0.1) (0.4) - (7.6)

Tax expenses 4.9 (11.7) (7.7) (1.3) - (15.8)

Earnings from affiliates - - - 0.1 - 0.1

Minority interests 0.1 (0.6) 0.2 0.4 0.1

NET EARNINGS - GROUP SHARE (21.1) 40.2 (7.7) (7.3) (0.3) 3.8

Other information

Assets by area 1,219.0 607.6 263.2 80.1 (793.5) 1,376.4

Non-allocated assets - - - - - -

Equity holdings - - - (0.2) - (0.2)

TOTAL ASSETS 1,219.0 607.6 263.2 79.9 (793.5) 1,376.2

2,438.0 1,215.2

Amortization and depreciation expenses by area (7.6) (5.7) (8.5) (0.3) (22.1)

Losses in value entered during fiscal year

in earnings• - (5.9) (6.6) (3.4) - (15.9)

directly in Shareholder’s equity•

Reversals of losses in value entered

during fiscal year - - - - - -

in earnings• -


France includes operating subsidiaries and the group’s registered offi ce

which groups together management and cross-functional services.

At 31 December 2007 sales totalled €1,591,356 thousand up 6.42%.




Sales broken down by geographical area, in line with the group’s segment organisation (in thousands euros ):

(in million euros)

2007 2006

Sector total

Inter-sector

elimination

Total

revenues % revenues

Total

revenues % revenues Change

France 694 21 673 42.3% 642 42.9% 4.8%

North 533 18 515 32.4% 467 31.3% 10.2%

South 310 5 305 19.2% 284 19.0% 7.5%

Rest of the world 103 4 99 6.2% 102 6.8% (3.6)%

TOTAL 1,641 (49) 1,591 100.0% 1,495 100.0% 6.4%

The table sets out intersegment eliminations between the four geographical segments.

Breakdown of sales by country:


YTD

2007

%

sales

H2

2007

%

sales

H1

2007

%

sales

YTD

2006

%

sales

H2

2006

%

sales

H1

2006

%

sales

2007

vs

2006

France 672,819 42.3% 340,289 42.4% 332,530 42.1% 641,929 42.9% 315,745 42.2% 326,184 43.7% 4.8%

Germany 154,302 9.7% 79,740 9.9% 74,562 9.4% 139,046 9.3% 72,185 9.6% 66,862 9.0% 11.0%

Austria & PECO 7,615 0.5% 4,303 0.5% 3,312 0.4% 6,355 0.4% 3,281 0.4% 3,074 0.4% 19.8%

Great-Britain/Ireland 130,430 8.2% 63,663 7.9% 66,767 8.5% 117,445 7.9% 62,663 8.4% 54,783 7.3% 11.1%

Benelux 153,618 9.7% 75,686 9.4% 77,932 9.9% 131,170 8.8% 69,133 9.2% 62,037 8.3% 17.1%

Switzerland 29,482 1.9% 13,714 1.7% 15,768 2.0% 40,620 2.7% 20,591 2.7% 20,029 2.7% (27.4)%

Sweden 39,314 2.5% 19,598 2.4% 19,716 2.5% 32,661 2.2% 15,753 2.1% 16,908 2.3% 20.4%

Romania 59 0.0% 37 0.0% 21 0.0% 0 0.0% 0 0.0% 0 0.0%

Italy 156,179 9.8% 79,658 9.9% 76,521 9.7% 141,581 9.5% 70,028 9.3% 71,554 9.6% 10.3%

Spain 111,480 7.0% 56,361 7.0% 55,120 7.0% 106,016 7.1% 51,492 6.9% 54,524 7.3% 5.2%

Portugal 18,584 1.2% 9,169 1.1% 9,415 1.2% 19,065 1.3% 9,670 1.3% 9,395 1.3% (2.5)%

Brazil/Venezuela 18,799 1.2% 9,269 1.2% 9,530 1.2% 17,080 1.1% 8,685 1.2% 8,395 1.1% 10.1%

ASIA 26,022 1.6% 16,607 2.1% 9,414 1.2% 16,819 1.1% 7,175 1.0% 9,644 1.3% 54.7%

USA 72,653 4.6% 33,787 4.2% 38,866 4.9% 85,561 5.7% 43,061 5.7% 42,501 5.7% (15.1)%

TOTAL 1,591,356 100.0% 801,881 100.0% 789,475 100.0% 1,495,350 100.0% 749,461 100.0% 745,890 100.0% 6.4%

Segment reporting by business segment



Technology

consulting

Organization

and

information

systems

consulting

Management

& strategy

consulting Other Total

Revenues 756,398 519,781 222,395 92,782 1,591,356

Total assets 242,422 98,220 135,057 936,458 1,412,157

Intangible and fixed assets investments 2,314 476 (2,318) 5,358 5,831

As % of revenues 47.53% 32.66% 13.98% 5.83% 100.00%

As % of total assets 17.17% 6.96% 9.56% 66.31% 100.00%

As % of investments 39.68% 8.17% (39.75)% 91.90% 100.00%





Technology

consulting

Organization

and

information

systems

consulting

Management

& strategy

consulting Other Total

Revenues 643,984 444,192 288,653 118,522 1,495,350

Total assets 421,195 185,603 97,311 672,056 1,376,166

Intangible and fixed assets investments (9,225) (3,705) 382 6,880 (5,668)

As % of revenues 43.07% 29.70% 19.30% 7.93% 100.00%

As % of total assets 30.61% 13.49% 7.07% 48.84% 100.00%

As % of investments 162.74% 65.37% (6.74)% (121.37)% 100.00%

5.2 Sales

Breakdown of sales:

2007 2006 Var

Sales of goods 8,669 5,915 46.6%

Sales of services 1,580,563 1,487,861 6.2%

Royalties 2,124 1,574 34.9%

TOTAL 1,591,356 1,495,350 6.42%

In 2007, fi xed rate contracts generated €359,559 thousand in sales (compared with €292,160 thousand in 2006).

5.3 External expenses

Breakdown of external expenses at 31 December 2007:

2007 2006 Change

Sub-contracting 110,633 95,988 15.26%

Operating leasing and related expenses 57,999 53,724 7.96%

Training 9,883 9,316 6.09%

Professional fees and external services 45,821 49,419 (7.28)%

Transportation and travel 74,668 68,246 9.41%

Other purchases and outside services 44,829 43,232 3.69%

TOTAL 343,833 319,925

External expenses rose by 7.5% mainly due to additional sub-contracting

expenses and travel expenses.

Operating lease expenses for 2007 totalled €57,999 thousand

(compared with €53,724 thousand in 2006). The group has

commitments under operating leases (mainly property leases). None of

the group’s operating leases contain any contingent lease payment or

renewal options, or impose specifi c restrictions, for example concerning

dividends, additional debt or further leasing.

Group commitments as regards non-cancellable leases at 31 December

2007 are analysed by term in section 7.




5.4 Personnel costs

Breakdown of personnel costs at 31 December 2007:

2007 2006 Variation Note

Salaries and compensation (including payroll taxes) 1,085,018 1,019,296 65,722

Employee profit sharing 2,590 7,971 (5,381)

1,087,608 1,027,267 60,341

Expenses related to payment in shares 3,443 6,333 (2,890) a

Long-term personnel benefits 5,375 8,099 (2,724)

TOTAL 1,096,426 1,041,699 54,727

Personnel costs are in line with the increase in headcount and include

employee profi t sharing for a total of €2,590 thousand.

a) Share-based payments

At 31 December 2007 the total cost of share-based payments amounted

to €3,443 thousand for the year as follows:

€3,440 thousand for share subscription options;•

€3 thousand for the bonus share plan launched in the second half

of 2007.

Share subscription optionsOn 21 December 2007 the Management Board decided to grant

2,589,830 share subscription options and 818,740 bonus shares

acting on the authority conferred by the Ordinary and Extraordinary

Shareholders General Meeting on 29 June 2005.

At 31 December 2007, these plans had the following attributes:

•

Stock-options

Stock-options and allocation of shares plans 2000 Plan(a) 2001 Plan(a) 2003 Plan(a)

2003

Plan(a) (b) 2004 Plan 2005 Plan 2005 Plan

Shareholder Meeting date 26/06/1996 17/06/1999 17/06/1999 17/06/1999 28/06/2004 28/06/2004 28/06/2004

Date of Board of Dir.

or Mgmt Board meeting 11/04/2000 10/10/2001 11/03/2003 24/06/2003 29/06/2004 15/06/2005 20/12/2005

Total number of shares available for

purchase or allocation on date of attribution 845,792 642,880 3,948,993 336,191 2,762,000 340,000 2,630,000

Of which corporate officers 67,242 186,785 80,000 200,000 210,000

Of which number of shares available

for purchase by or allocation to 10 highest

paid individuals, including the senior

management committee 144,892 85,708 875,218 106,734 510,000 140,000 635,000

Number of shares purchased

on 31 December 2006 - - - - - - -

Options expired during the period

Start date for exercising options 01/07/2004 10/10/2005 12/03/2007 25/06/2007 30/06/2008 16/06/2009 21/12/2009

Date of Permanently allocation of shares

Expiration date 11/04/2005 10/10/2006 11/03/2011 24/06/2011 29/06/2012 15/06/2013 20/12/2013

End date of inalienability period

for allocated shares

Purchase price (in euros) 76.20 39.34 2.97 6.73 9.37 7.24 9.62

Valuation model used

Black

& Scholes

Black

& Scholes

Black

& Scholes

Black

& Scholes

Black

& Scholes

Number of shares available for purchase

or allocation as of 31/12/2006 2,233,349 225,119 1,859,498 131,000 2,096,000

Created rights in 2007

Lost rights in 2007 95,268 13,570 167,250 169,500

Exercised rights in 2007 911,725

Number of shares available for purchase

or allocation as of 31/12/2007 1,226,356 211,549 1,692,248 131,000 1,926,500

(a) After the capital increase for cash with pre-emptive subscription rights maintained on 23 December 2003, the exercise price and the number of shares in each plan were adjusted to take into account the issue of 20,807,584 new shares.

(b) On 8 June 2006, the Ninth Resolution of the Extraordinary Shareholders General Meeting modified the vesting period of the plan dated 24 June 2003, extending it from 5 to 8 years.



Stock-options Allocation of shares

Stock-options and allocation of shares plans 2007 Plan

2007 Plan

France

2007 Plan

outside France

Shareholder Meeting date 29/06/2005 29/06/2005 29/06/2005

Date of Board of Dir. or Mgmt Board meeting 20/12/2007 20/12/2007 20/12/2007

Total number of shares available for purchase or allocation

on date of attribution 2,589,830 482,240 336,500

Of which corporate officers 100,000

Of which number of shares available for purchase by or allocation

to 10 highest paid individuals, including the senior management committee 340,000 93,240

Number of shares purchased on 31 December 2006 - - -


Start date for exercising options 21/12/2011

Date of Permanently allocation of shares 21/12/2009 21/12/2011

Expiration date 20/12/2015

End date of inalienability period for allocated shares 20/12/2011 20/12/2011

Purchase price (in euros) 4.29 4.00 4.00

Valuation model used Hull & White Binomiale CNC Binomiale CNC

Number of shares available for purchase or allocation as of 31/12/2006

Created rights in 2007 2,589,830 482,240 336,500

Lost rights in 2007 1,000

Exercised rights in 2007

Number of shares available for purchase or allocation as of 31/12/2007 2,589,830 481,240 336,500

The total expense for 2007 was €3,443 thousand (compared with

€3,133 thousand for 2006).

Stock purchase and subscription optionsThe 2003-2004-2005 options were measured at the date they were

granted using a Black-Scholes type method on the basis of implicit

volatility of 35%. The implicit volatility corresponds to the expected

volatility of the 2009 OCEANE, issued in July 2004.

The other parameters used for the calculation are as follows:

pay-out rate: 0.0%

risk-free interest rate: 2.9%

average vesting period: 4 years

The 2007 options were measured at the date they were granted using

a Hull and White type method on the basis of implicit volatility of 40%.

The implicit volatility of the 2009 OCEANE issued in 2004 was not

used as it is considered to have “quasi-bond” status.

The other parameters used for the calculation are as follows:

pay-out rate: 0.0%


average vesting period: 4 years

The SPRING employee shareholding planAs part of the group’s employee shareholding policy, Altran offered its

employees the opportunity to purchase Altran Technologies shares at

a 20% discount to the average of closing prices of the company’s share

over the last 20 stock market days prior to 11 May 2006.

•

•

•

•

•

•

At the closing of the transaction on 24 May 2006, 2,872,255 new

shares (i.e. 2.5% of the share capital) had been subscribed for a total of

€26.9 million by 2,500 employees.

Traditional shareholding planThe main market parameters used to evaluate the notional lock-in cost

of these shares, determined at the date the shares are granted are as

follows:

spot price of the Altran share: €11.55


interest rate for a 5-year credit facility applicable to benefi ciaries of

the locked-in shares: 7.0%

No charge has been recognised in respect of the traditional

shareholding plan.

The leveraged planThe main market parameters used to evaluate the discount determined

at the date the shares are granted are as follows:

spot price of the Altran share: €11.55



the locked-in shares: 7.0%

repurchase price of the call option by a bank: 30% per option

origination fee: 4.0%

The notional lock-in cost for subscribed shares as a percentage of the

spot price at the date the shares are granted is 26.6%.

•

•

•

•

•

•

•

•




The charge recognised in respect of the employee shareholding plan

with leverage is €3,200 thousand.

Bonus share planBonus shares were evaluated at the date they were granted based on a

model using the CNC guidelines the French National Accounting Board

(Conseil National de la Comptabilité).

The main market parameters used to evaluate the notional lock-in cost

of these shares, determined at the date the shares are granted are as

follows:

spot price of the Altran share on 20/12/07: €4.00;•

risk-free interest rate: 5.9%;


the locked-in shares: 4.0%;

vesting period: 2 years for employees with a French employment

contract with a lock-up period of an additional 2 years and 4 years

for employees outside France.

The notional lock-in cost for subscribed shares as a percentage of the

spot price at the date the shares are granted is 22.5%.

b) Long-term employee benefits

(see 4.13)

•

•

•

5.5 Depreciation, amortisation and provision

2007

(12 months)

2006

(12 months)

Amortization of intangible and fixed assets (16,858) (15,535)

Provisions for current assets 1,339 (1,957)

Provisions for risks and charges (1,420) (4,638)

(16,939) (22,130)

5.6 Other non recurring operating income and expenses

2007

(12 months)

2006

(12 months)

Net proceeds from disposal of the Cambridge Consultants Ltd incubator (228)

Income from disposal of fixed and intangible assets 1,443 (316)

Income from divestment & liquidation of holdings in consolidated subsidiaries (1,823) (908)

Reversals of provisions for miscellaneous taxes (2,044) 5,072

Miscellaneous compensation received 1,269 1,045

Income from debt cancellation 3,027

Officer severance pay (2,175)

Pension plan (2,857) 3,065

Other 19 (54)

Exchange income from disposal of ADL Venezuela real estate (785)

Expenses associated with the merger of T&I activities (1,381)

Restructuring charges (15,458) (39,238)

Restructuring provisions 5,564 17,208

TOTAL (14,900) (14,655)

Dispute with former sales persons of a Spanish subsidiary

The group’s Spanish holding was involved in a dispute with former

management of one of the subsidiaries over the amount of the earn-out

that they had received. They are also accused of diverting business to

satellite companies that they control and of poaching group employees

for these satellite companies.

The court has ruled in favour of the group’s Spanish holding company.

A settlement was reached in 2007 which gave rise to the recognition of

€1,069 thousand under non recurring income.

Non amortised accumulated actuarial gains and losses were recognised

in the income statement due to a regulatory change in Italy regarding

the method of measuring long-term employee benefi ts (TFR).

Gain or loss on disposals and liquidation of consolidated shareholdings

(see 3.6)



Restructuring costs

2007

(12 months )

2006

(12 months )

Restructuring charges

Albatros Plan 2005

Furnitures write-offs (1, 4) (6, 3)

Salaries (8, 8) (21, 3)

Real estate project (7, 8)

Others (1, 2) (3, 9)

(11, 4) (39, 3)

Performance Plan 2007

Furnitures write-offs

Salaries (1, 7)

Real estate project (2, 3)

Others

(4, 0)

(15, 4) (39, 3)

Restructuring charges

Albatros Plan 2005

Furnitures write-offs 0, 2 2, 1

Salaries 0, 8 8, 3

Real estate project - 6, 2

Others 0, 2 0, 7

1, 2 17, 2

Performance plan 2007

Furnitures write-offs

Salaries 4, 3

Real estate project 0, 2

Others

4, 4

5, 6 17, 2

ARCHIMÈDE COSTS(T&I ACTIVITIES MERGERS) - (1, 4)

5.7 Cost of net financial debt

2007 2006

Gain on cash & cash equivalents

Interest income generated by cash and cash equivalent 1.124 2.213

Income from disposal of cash equivalent 1.087 703

2.211 2.916

Gross cost of debt

Interest expenses associated with bond loans (16.197) (15.665)

Interest expenses on other financing operations (14.972) (10.345)

(31.169) (26.010)

COST OF NET FINANCIAL DEBT (28.958) (23.094)

Net fi nance cost of €28,958 thousand mainly includes €16,197 thousand in interest on the bond loan and €14,972 thousand in interest on overdrafts

and medium-term credits.




5.8 Other financial income and expenses

2007 2006

Financial revenue

Profit from disposal of other capital assets 173

Financial gains from conversion to present value 208 124

Foreign exchange profit 5,397 3,884

Income from interest and exchange rate hedging

Reversal of provision on non consolidated assets and other non current financial assets 164 -

Profit on derivatives 273

Other financial income 241 580

6,283 4,761

Financial expense

Loss on disposal of financial assets (5)

Depreciation of non-consolidated holdings and other non-current financial assets (92) (41)

Foreign exchange loss (7,197) (6,657)

Financial charges from conversion to present value (672) (614)

Loss from derivatives (158)

Other financial expense (551) (296)

(8,517) (7,766)

5.9 Tax expenses

Deferred taxes

Analysis of changes in deferred taxes on the balance sheet:

(in thousands euros) 2006

IMPACT ON

P&L

OTHER

CHANGES

IMPACT ON

EQUITY

CHANGES IN

SCOPE OF

CONSOLIDATION

TRANSLATION

AJDMTS 2007

I.D.A. 59,496 5,330 (16,095) 1,045 12,832 (1,286) 61,322

I.D.P. 11,300 7,572 (19,917) 0 13,044 (269) 11,730

TOTAL 48,196 (2,242) 3,822 1,045 (212) (1,017) 49,592

Deferred tax income (1,889) (2,242)

Deferred taxes recognised under equity over the period (in thousands

euros) :

Fair value reserve for application of IAS 32/39 at 1 January 2005 1,045

TOTAL 1,045

Tax losses carried forward likely to be deducted in the future

totalled €138,364 thousand. They represent a tax savings of

€43,444 thousand.

Tax losses resulting in recognition of deferred tax assets, provisioned

as it was uncertain that they would be deducted in the future, totalled

€91,230 thousand at 31 December 2007:

Tax losses

which expire in less than 1 year• 9,147

which expire in 1 to 5 years• 7,011

which expire in over 5 years• 1,989

no expiration date• 73,083

TOTAL 91,230



Deferred tax assets and liabilities at 31 December 2007:

(in thousands euros) 2007 2006

Deferred taxes assets by timing difference

Employees benefits 9,644 14,678

Other assets and liabilities 12,504 20,165

Other 3,253 9,467

Unused tax losses 43,444 40,607

68,845 84,917

Deferred tax liabilities by timing difference

Assets (18,001) (32,597)

Provisions for liabilities and charges (1,252) (4,139)

(19,253) (36,736)

NET ASSETS 49,592 48,181

Analysis of tax expenses on earnings

Tax expenses:


Current taxes:

For the period• (16,896) (13,637)

Adjustment of current taxes based on previous reporting periods• (220) 1,154

Impact of Dutch tax audit• 0 8,058

Other income taxes payable• (8,607) (9,580)

Impact of non-liability for current taxes• 0 0

Carry back• 9,909) 0

Deferred taxes:

Deferred taxes associated with changes in taxable base• (11,757) 869

Deferred tax associated with changes in rate• (3,289) (5,350)

Impact of taxes associated with prior fiscal years• (1,153) 6,997

Impact of Dutch tax audit• (8,215)

Change in amortization of deferred tax assets• 13,957 3,810

Tax credit (family and sponsorship)• 54 89

TOTAL (18,000) (15,805)

Deferred taxes associated with changes in taxable base are linked to

tax losses offset by companies returning to profi t (Germany, Spain,

The Netherlands, Japan, Switzerland) or eliminated due to liquidation

(England, France)

The differences between the corporate income tax taken into account

and the theoretical tax obtained by applying the French rate of taxation

areas follows:


Net income 21,595 3,787

Share of companies accounted for using the equity method 91 110

Minority interests 48 132

Pre-tax profit before goodwill amortisation 53,327 35,230

Theoretical tax charge at rate applied to parent company (33.33%) (17,774) (11,743)

Other income taxes payable• (8,607) (9,580)

Change in amortisation of deferred tax assets• 13,957 3,810

Difference in tax rates in foreign countries• (605) (2,213)

Other permanent differences• (4,972) 3,921

EFFECTIVE TAXES PAID (18,000) (15,805)

Effective tax rate 34% 45%




Other income taxes payable mainly includes secondary taxes paid in Italy (€4.4 million) and Germany (€3.5 million).

Analysis of deferred tax income:


Timing differences 223 (6,695)

Tax losses 1,760 3,810

Consolidation restatements (4,225) 996

TOTAL (2,242) (1,889)

6. Major litigation and contingent liabilities

Three of the group’s companies are involved in litigation with Ilyad

Value. The group has submitted a claim for the repayment of sums

outstanding by Ilyad Value (€3.5 million), linked to studies and training

sessions sold to Ilyad in 2001. This outstanding amount has been fully

provisioned by the group. Ilyad Value claims that the group should

reimburse this amount, plus interest for late payment. The group

believes, based on advice from counsel, that Ilyad Value’s claim is

unfounded. It would appear that Ilyad Value fi led a criminal complaint

against Altran Technologies in March 2003 with an action for damages

as regards the service contracts signed between Altran Technologies

and Ilyad Value at the end of 2001. Altran Technologies does not have

any information about these proceedings.

Following their dismissal, two former managers of one of the group’s

subsidiaries (Altiam which was acquired in 2002), have brought

a case before the Commercial Court against Altran Technologies

claiming a sum in the region of €10 million, in earn-outs and damages.

Altran Technologies brought a case before the Commercial Court

against these two former managers for fraud during the sale of

shares in the subsidiary and claimed the repayment of the sum paid

for the acquisition of the subsidiary plus compensatory damages.

Altran Technologies’ claims totalled €6 million. The Commercial Court

dismissed Altran Technologies’ claims and ordered the latter to pay

an additional earn-out, which is however, much lower than the sum

claimed by the former managers. The former managers have appealed

against this decision.

The-E-Consulting group (ECG) brought a case before the Paris

Commercial Court in August 2001 against Altran Technologies

claiming €2.3 million in damages. These proceedings are linked to

Altran Technologies’ decision in June 2001, not to acquire a stake in ECG.

ECG considers that Altran Technologies is liable to pay compensation

for the prejudice suffered by ECG.

These proceedings have been taken over by ECG’s liquidator since

ECG’s judicial liquidation in September 2001.

Proceedings are still ongoing and there has been no judgement to

date.

In addition, some of ECG’s Shareholders also brought a claim against

Altran Technologies before the Paris Commercial Court in August 2001

for damages. The initial claim was in the region of €3 million, however

their most recent claim totals €64.4 million. Like ECG’s liquidator, these

Shareholders claim that Altran Technologies’ decision not to acquire a

stake in ECG, was prejudicial to them.

These separate proceedings are still ongoing as the plaintiffs appealed

the Commercial Court’s judgement which dismissed their claims.

Altran’s initial provision has been adjusted to take into consideration

the plaintiffs’ most recent claims.

The Commission des Opérations de Bourse (which has become the

Autorité des Marchés Financiers) launched an inquiry during the

summer of 2002 into the evolution and movements of Altran

Technologies’ share price.

The company received a statement of objections and submitted its

defence in October 2004.

On 29 May 2007, the AMF Enforcement Committee imposed a

€1.5 million fi ne on the company (as a reminder the Rapporteur had

recommended €500,000). The company has appealed this decision.

Further investigations carried out by the former Statutory Auditors into

the fi nancial statements for the accounting periods ending 31 December

2001 and 31 June 2002 caused adjustments to be made to the 2002

half-yearly reports.

A preliminary inquiry was then initiated by the Paris Public Prosecutor’s

Offi ce, which in January 2003 became an investigation into charges

of misuse of company property, forgery and disseminating false

information to infl uence the share price.

The scope of the investigation was extended in June 2004 to include

misrepresentation of fi nancial accounts giving a misleading impression

of the company. The scope of the investigation was extended a second

time in September 2004 to cover insider trading. As part of this

investigation, several former managers and one current manager of

the company have been indicted.



In February 2003, Altran Technologies joined a claim for damages to the

criminal proceedings. In April 2005 Altran Technologies was indicted

for forgery, use of forged documents and disseminating misleading

information to infl uence the share price. This indictment did not affect

the company’s civil claim for damages. The investigation is still ongoing.

A number of the former managers brought an action for annulment of

the report of the two experts appointed by the investigating magistrate.

This action was dismissed. The plaintiffs have lodged an appeal before

the Cour de Cassation (French Supreme Court).

Thirteen individuals or legal entities have joined a claim for damages in

the course of this investigation.

The French minority Shareholder group, APPAC, has also lodged a

complaint and a civil claim for damages.

In February 2003 Altran Technologies lodged a criminal complaint

and joined a claim for damages to the criminal proceedings for the

prejudice suffered due to destabilisation and manipulation of the share

price since the beginning of 2002.

This complaint of destabilisation of the share price was rejected on

6 December 2005.

Finally, two criminal complaints with a civil claim for damages were

lodged in October 2004 by the former Statutory Auditors against some

of Altran’s former managers for hindrance to perform their role as

Statutory Auditors.

A manager of one of the group’s subsidiaries (Imnet) has fi led

proceedings against Altran Technologies for breach of its duty of

loyalty, wilful concealment and dishonest execution of the contract

under which this subsidiary was acquired.

A former manager of the subsidiary Gerpi, after having failed to obstruct

the merger between Altran and Gerpi, fi led an action against the group

claiming the payment of an additional earn-out. The Commercial Court

ruled partially in favour of the former manager. The company has

appealed this decision.

In France, the group is the subject of several claims from former

employees who contend the grounds for their dismissal.

A former group manager has brought legal action against Altran

Technologies and the Altran Foundation for unfair dismissal in

humiliating circumstances. A provision for the fi nancial consequences

of these two disputes has been recorded.

Several former employees have brought an action against Altran

Technologies, and in certain cases, against some of its former managers,

for false accusation. One of these cases against Altran Technologies

has been dismissed. However the claimant has appealed the decision.

A second case decided in favour of the claimant. Altran Technologies

has appealed this decision. There is a stay of proceedings in the third

case.

In Spain, the group is involved in a major dispute:

The group’s Spanish holding has brought an action against two former

managers of one of the subsidiaries claiming the repayment of an

earn-out payment. The group has claimed in the region of €4 million.

The Court of fi rst instance ruled in favour of Altran. The defendants

have appealed this decision. The Court of Appeal confi rmed the fi rst

instance decision, but the defendants have appealed before the

Spanish Supreme Court.

In Switzerland the group has fi led a claim against the former managers

of one if its subsidiaries to obtain the repayment of earn-outs overpaid

in previous years.

The company’s Statutory Auditors reported these facts to the Public

Prosecutor’s Offi ce.

Total provisions to cover all of the above mentioned disputes and

litigation amounted to €17.1 million at 31 December 2007.

To the knowledge of the company, there is no other litigation, arbitration

or exceptional fact capable of having a material effect on the fi nancial

situation, activity or assets of the company or group.




7. Off-balance sheet commitments

Breakdown of commitments at 31 December 2007:


Total

31/12/07 Within 1 year In 1 to 5 years In over 5 years

Total

31/12/06

Commitments granted:

pledges, security deposits and guarantees• 28,942 10,379 8,089 10,474 60,270

collateralised debt•

discounted notes not yet matured• - -

minimum payments for operational leases (see 5.3)• 165,198 39,601 109,413 16,184 113,842

non-competition clause concerning former employees:•

gross amount• 186 186 781

social security contributions linked to non-competition

clauses concerning former employees

•

84 84 274

Equity investments (see below)•

Earn-outs for companies acquired

(generally over a period of 5 years)

Commitments received:

pledges, security deposits and guarantees• None None

Individual right to training

The off balance sheet commitment for individual right to training for all

group employees is estimated at 339,000 hours.

Earn-outs vary depending on the acquired company’s future earnings,

generally over a period of 5 years

Reminder of the earn-out mechanism

Group acquisitions are made via an initial lump sum payment and earn-

outs paid generally over a period of 5 years.

If, in any given year, the acquired company’s earnings are lower than

its historical high then no earn-out is paid for that year, except for

companies who have accepted the new earn-out formula.

In 2003, Altran decided to modify the earn-out formula to take into

account cash fl ow generation. Companies with an earn-out agreement

were offered the possibility of replacing the coeffi cient applied to

increased earnings by:

the payment of a fi xed percentage of earnings;

payment of earn-out based on changes in the company’s trade

receivables account. A company with trade payables representing

90 days of sales receives 75% of the earn-out due based on

earnings: the remainder is paid once the trade receivables have

been settled.

•

•

The previous earn-out formula, maintained by certain companies is

illustrated in the diagram below:

Earn-out

Net earnings

Earn-out

Earn-out

No earn-out

N N+1 N+2 N+3 N+4 Year

There is only one company in the earn-out programme in 2008, which

will result in an earn-out payment in 2009 of less than €1 million based

on the company’s internal forecasts.

In 2007, 11 companies were still part of the earn-out programme and

2 companies will be paid earn-outs in 2008 for their earnings in 2007.

The total amount of earn-outs due in 2008 based on 2007 earnings

is €2.2 million.



8. Related party transactions

Transactions with principal executive officers

Other compensation and benefi ts paid to the executive offi cers by

Altran and companies controlled by it, totalled €1,062,500 in 2007:

short-term benefi ts: 1,062,500;

post-employment benefi ts: none;

other long-term benefi ts: none;

termination compensation: none;

share-based payments: none.

•

•

•

•

•

Commitments granted by Altran to executive officers

No commitments have been granted for the benefi t of any of the

members of the Management Board corresponding to remuneration,

compensation or benefi ts that may be due upon termination of or

change in these functions, or subsequent to such termination.

9. Exposure to exchange rate and interest rate risk

9.1 Liquidity risk

On 22 December 2004 the group entered into an agreement with

its three main banks (BNP Paribas, Crédit Agricole Île de France and

Société Générale) for €150 million in credit lines. At 31 December 2007

the outstanding credit totalled €59.5 million.

Group net debt totalled €359.5 million at 31 December 2007 reduced

by €20.4 million compared with 31 December 2006. Breakdown of net

debt and consolidated cash fl ow are presented on pages 102 and 103

of this registration document.

Group ratios at 31 December 2007:

Net debt to equity 0.88

Net debt/EBITDA before profit-sharing (financial leverage) 2.71

At 31 December 2007 the group did not meet its fi nancial leverage

ratio covenant which must not exceed 2.5. Altran has asked the three

banks of the banking pool (BNP Paribas, Crédit Agricole Île de France

and Société Générale) not to exercise the early redemption clause on

these lines.

Furthermore, on 17 April 2008 Altran announced that it was in the

process of signing a refi nancing agreement with a group of banks: BNP

Paribas, Crédit Agricole Île de France, Natixis and Société Générale.

This refi nancing agreement grants a 5 year credit facility of €150 million,

and includes €26 million in existing credit lines that were initially due

in 2009.

This credit facility enables Altran to refi nance debt, and in particular its

convertible bond due in January 2009.

Pursuant to this termsheet the current credit lines will be rescheduled

and the banking pool will grant an additional €126 million in medium-

term credit lines by 1 January 2009. The group will therefore be granted

access to €150 million due 5 years from the date of fi rst drawdown.

This credit line, repayable on a half-yearly basis over 5 years from the

date of fi rst drawdown is subject to the following conditions:

as from 2009, one third of consolidated net cash fl ow above

€15 million must be allocated to debt reduction (excluding any

market operation);

acquisitions in 2008 and 2009 to be limited to €10 million per year

and thereafter €40 million per year, if no operations are carried out

to strengthen equity;

in the event of a capital increase or the issue of bonds redeemable

into shares for a minimum of €100 million, Altran is authorised to

make acquisitions for an aggregated amount of €50 million per year

without prior approval from the banks.

The maximum cost of this credit is Euribor plus 155 basis points subject

to the following ratios being met:

•

•

•




Net debt/EBITDA Net debt/Equity

31/12/2007 < 2.9 < 1.1

30/06/2008 < 2.9 < 1.0

31/12/2008 < 2.7 < 1.0

30/06/2009 < 2.5 < 1.0

31/12/2009 < 2.3 < 1.0

30/06/2010 < 2.1 < 1.0

31/12/2010 < 1.9 < 1.0

30/06/2011 < 1.7 < 1.0

31/12/2011 < 1.5 < 1.0

30/06/2012 < 1.3 < 1.0

31/12/2012 to 31/12/2013 < 1.0 < 1.0

These ratios will be calculated in compliance with IFRS and net debt

corresponds to net debt excluding employee profi t-sharing and

accrued interest on bond loans.

9.2 Interest rate risk

At 31 December 2007, group net debt totalled €359 million comprised

mainly of a convertible bond for €230 million at a 3.75% fi xed rate

redeemable on 1 January 2009. The impact of interest rate changes is

therefore not signifi cant.

Breakdown by maturity of bank borrowings and fi nancial liabilities:

(in million euros) Within 1 year In 1 to 5 years Over 5 years

Financial liabilities (296) (241) -

Financial assets 178 - -

Net position before hedging (118) (241) -

Off balance sheet (interest rate hedge) 60 - -


has set up an interest rate hedge to cover at least 50% of total revolving

credit commitments for a minimum term of 3 years. Altran thereby

manages a structural fi xed rate/variable rate position (in euros) to limit

the cost of debt and uses interest rate instruments such as swaps, caps

and fl oors subject to the limits defi ned by Management and the credit

agreement

In addition, the group increasingly uses more factoring contracts for

fi nancing, which are indexed against EURIBOR.

9.3 Exchange rate risk

The majority of group assets in foreign currencies are comprised of

its investments in countries outside the Euro zone (mainly the United

States, Brazil, the United Kingdom, Sweden and Switzerland).

There were no fi nancial debts in foreign currencies outside the Euro

zone at 31 December 2007.

In 2007, group sales generated outside the Euro zone totalled

€316.2 million. As the income and expenses arising out of intellectual

services provided to clients are in the same currency, no foreign

exchange hedging policy has been implemented.

Commitments in foreign currencies at 31 December 2007

(in million euros)

Currency Assets Liabilities Net position

Exchange rate

at 31/12/2007

Net position in

euros before

hedging

Off balance

sheet

Net position

in euros after

hedging Sensitivity*

USD 77 2 75 1.4721 51 - 51 0.5

GBP 60 33 27 0.7334 37 - 37 0.4

CHF 72 7 65 1.6547 39 - 39 0.4

SEK 100 - 100 9.4415 11 - 11 0.1

SGD 37 - 37 2.1163 17 - 17 0.1

* Sensitivity to a 1% movement in exchange rates.



9.4 Risks associated with intangible assets

Goodwill is not amortised but is subject to an impairment test at



The methodology used for impairment tests is set out in paragraph 1.7

“Goodwill”.

Impairment losses recognised in the income statement totalled

€13,870 thousand at 31 December 2007, i.e. €12,535 thousand for the

fi rst half of 2007 and €1,335 thousand for the second half of 2007.

Impairment losses recognised involved 6 CGUs, which corresponds to

7 companies. The carrying amount of goodwill before impairment at

31 December 2007 totalled €488,649 thousand.

Impairment tests carried out on 31 December 2007, were based on a

discount rate after tax (WACC) of 8.92%, i.e. a discount rate before tax

of between 11% and 12%.


would have resulted in total impairment of €18,314 thousand.

9.5 Environmental risk

Altran Technologies provides intellectual services. Environmental risks

are therefore insignifi cant.

9.6 Legal risks

Altran Technologies charges its clients based on the time spent by

its consultants. In the course of its business, the group may be faced

with legal actions, concerning employment litigation or other forms of

claims.

A detailed description of major litigation involving the group can be

found in paragraph 6 “Major litigation and contingent liabilities”.

Whenever the group identifi es a risk, a conservative provision is

recorded based on advice from counsel. Total provisions made for all

litigation involving the group amounted to €17.1 million at 31 December

2007.

At present the criminal proceedings against Altran are ongoing,

for misuse of company property, forgery and disseminating false

information to infl uence the share price (see paragraph 6 “Major

litigation and contingent liabilities” on pages 125 and 127 of this

registration document for details). Although Altran is not aware to date

of any such information, other proceedings, complaints and claims

against the group cannot be ruled out. To Altran’s knowledge, there are

no pending governmental, legal or arbitration proceedings, including

any proceedings that the company is aware of, likely to have or having

had over the past 12 months, signifi cant effects on the group’s fi nancial

position or profi tability, other than those described in paragraph 6

“Major litigation and contingent liabilities”.

9.7 Risks associated with the convertible bond (OCEANE)

Given the fi nancing agreement signed on 16 April 2008 with a

banking pool made up of four banks (see section 9.5.1 “Liquidity risk”

on pages 32 and 33 of this registration document), the scheduled

increased use of factoring, cash fl ow generation expected in 2008

and cash held at group level, the group should have suffi cient fi nancial

resources to repay the convertible bond due on 1 January 2009.





9.8 Risks associated with Altran’s activity

Risks associated with the consulting market

The consulting market, and particularly technology and R&D consulting,

and organisation and information system consulting, are subject to

constant change, namely due to technological innovation, customer

requirements which evolve over time, the growing globalisation of

customers, changes in invoicing patterns and contractual commitments.

Consequently, the group’s performance depends on its capacity

to move with the changes of the industry, to use technological tools

skilfully and to provide its customers with satisfactory services.

Furthermore, the technology and R&D consulting market, the group’s

leading market, is still fragmented but there is a tendency towards

greater consolidation and customers are tending to cut down on the

number of suppliers. Some of the group’s competitors may have greater

fi nancial, commercial, technical and human resources than Altran’s.

These competitors could in the future conclude long-term strategic

or contractual relationships with customers or potential customers on

markets where the group operates or intends to develop operations.

Increased competition could therefore have an impact on the group’s

market share, activity, fi nancial position and outlook.

Altran’s customers are mainly major European private and public

accounts. The group does not publish a list of clients as this is strategic

information. However the group’s customer portfolio is very fragmented

as in 2007 no one client represented more than 6% of total group sales;

the fi ve largest customers represented 14.4% of total sales in 2007,

the 10 largest 22.6% and the fi fty largest 45.6%.

Risks associated with potential liability as regards clients and termination of contracts

The relationships forged by the group with its customers, particularly

as regards cost-plus service, are sometimes formalised only by one-

off orders. Typically cost-plus service orders often do not stipulate the

conditions for renewal and sometimes provide for termination with

only short-term notice requirements. This may provide a certain factor

of uncertainty which could affect the group’s activity, fi nancial position

and outlook.




In addition, the vast majority of services provided by the Altran group

companies are billed on a time basis at a fi xed rate. group companies

are only bound by an obligation of means. In the event of fi xed price

contracts, accounting principles as regards the recognition of revenue,

require an assessment of risk on completion. Margins are only

recognised once it is established that there is no risk of them being

jeopardized due to a duty to achieve a given result.

Risks associated with a shortage of qualified staff and higher payroll expenses

In the innovation and technology consulting and information technology

industries, employees are virtually all highly qualifi ed engineers who

are very sought after on the employment market in their respective

fi elds. The group’s growth capacity is largely dependent on its capacity

to attract, motivate and retain highly qualifi ed employees who have the

requisite skills and experience. The group is particularly exposed to the

risk of losing its consultants to competitors or to clients on completion

of a mission. The group devotes considerable efforts to reducing staff

turnover which is fairly high (29.4% en 2007). However, there is no

guarantee that the group will achieve this objective or that the group

will manage to retain the qualifi ed staff needed for future growth.

The group may be unable to pass on payroll costs resulting from

signifi cant changes in labour law or tighter employment market

conditions in the group’s main countries or sectors.

Risks associated with the implementation of the cost cutting strategy

Pursuant to its operational effi ciency plan for 2007/2009 and based

on the group’s outlook (see paragraph 3.3 for details), the group has

set itself the specifi c objective of cutting indirect costs via various

measures, namely the legal restructuring of the group, reducing the

number of subsidiaries.

The group has taken steps to merge subsidiaries, to create synergies

and economies of scale, to apply and optimise standards, controls and

procedures and to deploy new tools. The achievement of objectives

within the allotted time span cannot be guaranteed at this stage,

and could therefore affect the group’s activity, fi nancial position and

outlook.

Risks associated with insurance cover

The group has defi ned a policy to insure the main risks linked to it

business (see below for details) and ensures that these policies are

extended to cover all group subsidiaries, subject to standard market

exclusions, limits and deductibles.

Subject to standard market exclusions, the group considers that its

current insurance cover is reasonable, as deductibles are consistent

with the frequency of losses. However, the company cannot guarantee

that that all claims made by third parties or losses suffered are, and will

in the future be, covered by insurance, nor that the current insurance

policies will always be suffi cient to cover the cost and damages resulting

from Altran’s liability being incurred. In the event a loss is not covered

by the insurance policies or signifi cantly exceeding their limits or where

the insurer demands signifi cant reimbursement, the resulting costs

and damages could affect the group’s fi nancial position.

Altran Technologies’ insurance policies are in line with the group’s

business and standard market conditions and are underwritten with

reputable insurance companies.

Liability1. Professional liability, product liability and operational third

party liability insurance: This master policy, negotiated by Altran

Technologies is due to cover all group subsidiaries (excluding Altran

Technologies’ US and Canadian subsidiaries which are covered by

local policies), and covers the insured companies in the course of

their business for liability for bodily injury, property damage and

fi nancial loss caused to third parties.

2. Aviation insurance: this covers Altran Technologies and those

subsidiaries expressly cited which operate in the fi eld of aviation.

It covers the fi nancial loss resulting from liability incurred due to

products and intellectual services in engineering sciences or due to

fl ight interruption.

3. Environmental liability insurance: this global policy only covers

those group companies expressly cited. It covers fi nancial loss

resulting from liability incurred due to property damage, intangible

loss, bodily injury, caused by damage to the environment resulting

from the occurrence of unforeseeable events in the course of the

group’s business.

Fleet insuranceThe use of motor vehicles by employees for business purposes is

covered by group policies which provide standard market cover.

Office insuranceThe group has offi ce insurance to cover losses arising from damage

to goods, furniture and fi xtures and insured parties (fi re, theft, water

damage, machinery breakdowns, etc.).

Complementary health insurance, providence insurance and personal assistance insuranceAltran Technologies’ employees benefi t from providence and

complementary health insurance and personal assistance insurance

when they travel abroad on business, all of which provide standard

market cover.

One-off insurance policies can be underwritten to cover specifi c

contracts for a limited period of time.



9.9 Investment risks

The majority of liquidities are invested in:

money market securities (SICAV);

negotiable debt securities;

foreign currency deposit accounts (GBP/USD and CHF).

Interest for the above investments is based on EONIA or LIBOR for

foreign currencies. The sensitivity of these investments, based on a

10% fl uctuation of the benchmark index (EONIA or LIBOR), is 0.40%.

The group is currently defi ning a procedure to determine how liquidities

should be used by each subsidiary and at group level.

Most of the guidelines are based on two main principles:

all cash surpluses are to be invested with Altran’s Global Management

Treasury Services (GMTS, company governed by French law);

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•

•

•

in allocating these cash surpluses, GMTS gives priority to the

repayment of loans and/or uses money market instruments with

sensitivity and volatility rates of less than 1% per annum.

At 31 December 2007 the market value of the group’s marketable

securities totalled €97.5 million.

The group does not make investments involving signifi cant risk.

9.10 Commitment to buy out minority interests

The group has not entered into any commitment to buy out minority

interests, or any non-consolidated special purpose entities.

In addition, since July 2004, the group held an option to purchase 75%

of the share capital of the Korean subsidiary ADL Yuhan Hosea. The

group exercised this option in August 2007, thereby acquiring the

remaining 75% stake in the subsidiary. The sales contribution of ADL

Yuhan Hosea in the second half of 2007 was €2.8 million.

•

10. Subsequent events

At the end of 2007 group Management presented a Business

Development plan concerning its organisation and information systems

consulting activities in France.

This plan involves merging the Altran CIS Paris companies, which are

subsidiaries of Altran Technologies, into a single entity to be called

Altran CIS. The merger is due to be completed on 30 April 2008, with

retroactive effect for accounting and taxation purposes from 1 January

2008. To that purpose, on 5 March 2008 Altran Technologies sold

shares to its subsidiary Altran Systèmes d’Information so that the latter

would fully own the companies that it is due to absorb.

This Business Development plan is in line with the group’s ambition to

position Altran CIS as a leading player in its market, and to grant it the

opportunity of achieving this ambition via:

a strong positioning with clearly distinguished activities;

a sustainable growth model.

This announcement is in line with other steps taken by the group over

the past two years to restructure the group’s activities in France, such

as the merger of the 26 French Innovation and Technology Consulting

companies into a single entity, and the operational merger of its

Organisation and Information System Consulting.

On 17 April 2008, Altran Technologies announced plans to proceed

with a capital increase with pre-emptive subscription rights up to a

maximum amount of €130 million, which is expected to be completed

before 31 July 2008.

•

•


all new shares that are unsubscribed by existing Shareholders through

the exercise of their pre-emptive subscription rights, at an issue price

per share of between €5 and €6.

A prospectus will be drawn up for approval by the Autorité des Marchés

Financiers, prior to the transaction.



Technologies, under which, subject to the capital increase, the founders

agree to:

sell 6 million company shares to the Apax Funds i.e. 5.1% of the

issued capital;

transfer all the pre-emptive subscription rights attached to their

remaining shares to Apax Funds;

contribute all the voting rights attached to their remaining shares to

a partnership that Apax Partners will manage and represent at the

Shareholders General Meetings for an initial period of 6 years.

At the next Shareholders General Meeting, the Shareholders will be


Supervisory Board who will represent the Apax Funds.

•

•

•




1. Financial statements at 31 December 2007 137

2. Accounting notes to the financial statements at 31 December 2006 139

3. Notes concerning certain balance sheet items 142

4. Notes to the profit and loss account 148

5. Information on significant ongoing disputes 150


7. Subsequent significant events 152

8. Statement of subsidiaries and participating interests 153

9. Statement of earning for the last five financial years 154

1. Financial statements at 31 December 2007

1.1 Balance sheet at 31 December 2007

Balance sheet – Assets

(in euros) Notes

31/12/2007 31/12/2006

Gross

Deprec.

amort. & prov. Net Net

Intangible assets 3.1 272,536,966 18,104,099 254,432,867 257,799,708

Intangible assets

Patents, licences, brands 8,517,839 5,376,209 3,141,630 2,876,250

Other intangible assets 41,374,441 304,898 41,069,543 41,069,543

Work in progress 205,940 0 205,940 64,720

Property, plant and equipment

Other property, plant and equipment 21,777,513 11,561,252 10,216,261 9,877,944

Work in progress 142,004 142,004 63,480

Long-term investments

Investments and advances 144,152,805 14,389 144,138,416 145,803,606

Loans and other long term investments 56,366,424 847,351 55,519,073 58,044,165

Current assets 567,398,634 8,197,468 559,201,166 591,858,735

Work in progress for services provided 250,776 31,829 218,947 167,245

Trade receivables 3.3 42,098,935 8,165,639 33,933,296 38,022,072

Other receivables and advances 3.3 509,640,218 509,640,218 540,685,869

Cash on hand and marketable securities 15,408,704 15,408,704 12,983,549

Prepayments and accrued income 4,775,378 4,775,378 4,053,416

Prepaid expenses 3.13 3,562,351 3,562,351 1,630,621

Expenses to be amortised over several periods 3.14 1,213,027 1,213,027 2,422,740

Unrealised foreign exchange losses 0 55

TOTAL ASSETS 844,710,978 26,301,567 818,409,411 853,711,859

FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS



Balance sheet – Equity & Liabilities

(in euros) Notes 31/12/2007 31/12/2006

Shareholders’ equity 3.4 328,855,137 316,357,483

Share capital 3.5 59,100,650 58,658,118

Share premium 204,568,939 202,382,833

Statutory reserve 5,865,723 5,865,723

Retained earnings 49,450,810 52,745,428

Net profit (loss) for the period 9,869,014 (3,294,619)

Provisions for liabilities and charges 3.2 29,378,432 29,966,561

Liabilities 454,161,698 503,945,246

Convertible bond loans 3.7 238,692,913 238,692,920

Bank borrowings 3.8 20,248,634 19,984,621

Other borrowings 3.8 62,150,095 93,406,863

Trade payables 3.9 21,872,137 23,481,624

Tax and social security liabilities 3.9 105,958,606 106,082,222

Payables to suppliers of fixed assets 3.9 382,744 19,393,325

Other payables 3.9 4,856,569 2,903,671

Prepayments and accrued expense 6,014,144 3,442,568

Deferred income 3.13 6,014,144 3,236,062

Unrealised foreign exchange gains 206,506

TOTAL EQUITY AND LIABILITIES 818,409,411 853,711,859

1.2 Income statement

(in euros) Notes 31/12/2007 31/12/2006

Total revenues 4.1 493,969,710 490,850,486

Change in inventory 43,356 (181,766)

Own work capitalized 0 60,403

Grants and subsidies 14,538 12,660

Reversals of provisions and transfer of charges 11,552,346 7,105,490

Other revenue 367,010 3,373,291

Operating revenue 505,946,959 501,220,564

Other purchases and external costs (101,735,722) (106,331,217)

Taxes & duties (16,877,465) (16,586,759)

Salaries & wages (258,657,556) (255,590,645)

P ayroll taxes (109,698,755) (110,575,847)

Amortization expenses and provisions (12,894,058) (13,322,782)

Other costs (2,920,755) (5,894,748)

Operating expenses (502,784,311) (508,301,998)

Operating income 3,162,648 (7,081,434)

Recorded profit or transferred loss 0 4,035

Financial revenue 33,657,005 15,205,524

Interest expenses (27,889,983) (18,299,299)

Non-operating income 4.2 5,767,022 (3,093,775)

Pre-tax income excluding extraordinary items 8,929,670 (10,171,174)

Extraordinary revenue 8,695,582 32,113,614

Extraordinary expenses (15,253,717) (36,181,654)

Extraordinary income 4.3 (6,558,135) (4,068,040)

Participation 0 (5,508,709)

Corporate income tax 4.4 7,497,479 16,453,304

NET INCOME 9,869,014 (3,294,619)




2. Accounting notes to the financial statements at 31 December 2006

2.1 Key events

Operational efficiency plan 2007/2009

At the Annual General Assembly of Shareholders of 29 June 2007,

Altran announced the launch of the operational effi ciency plan

2007/2009 which targets the improvement of group performance

and an appreciable reduction of indirect costs.

At the Annual General Assembly of Shareholders of 29 June 2007,

Altran announced the launch of the operational effi ciency plan

2007/2009 which targets the improvement of group performance

and an appreciable reduction of indirect costs.

Cost reduction and performance improvement plan

The associated restructuring costs generate charges excluding a

provision reversal of €4.44 million (€7.09 million in charges covered

by provision reversals in the amount of €6.87 million). These costs

concern:

€3.95 million in wages;

€2.16 million in fees, rental costs and various expenses;

€0.98 million in fi xtures disposed of following relocations.

Reorganisation of the group

During 2007 Altran Technologies performed a complete transfer of

assets and liabilities of the following companies: Altiam, Altran France

Executive Management, Cerri Consulting (France), DCE Consultants

France, Ethnos and Trininfor.

In application of the provisions of article 1844-5, paragraph 3, of

the French Civil Code, these dissolutions were performed without

liquidation.

These operations generated the recognition of merger losses in

fi nancial expenses of €3,653,963 and a merger profi t of €41,670.

2.2 Accounting rules and methods

2.2.1 Basis for preparing the annual financial statements

The general accounting conventions were applied in compliance with

the principle of prudence and in accordance with the basic assumptions

of:

going concern;

consistency of accounting methods from one fi nancial year to the

next;

independence of fi nancial years;

and in compliance with general rules for the establishment and

presentation of annual fi nancial statements.

The basic method used for the evaluation of items entered into the

accounting books is the method of historic costs.

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2.2.2 Use of estimates

The preparation of the fi nancial statements requires the use of estimates

and assumptions that can have an impact on the book value of certain

items on the balance sheet or profi t and loss statement, as well as on

the information provided in certain notes to the fi nancial statements.

Altran regularly reviews these estimates and assessments in order to

take into account past experience and other factors deemed pertinent

in respect of economic conditions. These estimates, assumptions and

assessments are established on the basis of information and situations

in existence on the date of preparation of the fi nancial statements,

which may prove in the future to be different from reality. They primarily

concern the provisions and assumptions retained for the preparation

of the business plans used to value participating interests.

2.2.3 Intangible assets

The intangible assets mainly include the brands, licences, software,

development expenses as well as business assets. They are recognised

at their acquisition or production cost.

Altran Technologies’ intangible assets are mainly composed of

business assets, which correspond mainly to technical losses reported

at the merging of 26 companies in 2006, which are the subject to

impairment tests.

2.2.3.1 BrandsBrands correspond to brand submission costs. They are not

amortised.

2.2.3.2 SoftwareCreated software intended for internal or commercial usage is primarily

entered under expenses. However, it may be entered under assets

when the following conditions are met:

the project is clearly identifi ed and monitored in an individual and

reliable manner;

the project has substantial chances of being technically successful;

the project has substantial chances of being commercially profi table

for the software intended to be rented, sold or marketed;

the company displays its intention to produce, market or internally

use the software concerned;

the costs activated are direct, internal and external costs undertaken

during the phases of organic analysis, programming, testing and for

the development of this software.

Amortisation is calculated using the straight-line method in accordance

with the anticipated useful life of the software from 12 months to

5 years.

2.2.3.3 Development costsAll expenses that meet all criteria that defi ne development costs

are recognised under intangible fi xed assets and amortised over the

project’s lifespan. All other expenses are considered research costs

and recognised under charges.

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•

•



2.2.3.4 Business assetsThe business assets comprise:

the historical costs for funds acquired by merged companies;

the technical merger loss corresponding to the difference between

the net value of shares in absorbed companies appearing under

the assets of the absorbing company and the book value of these

companies.

2.2.4 Tangible fixed assets

Tangible fi xed assets correspond to installations and fi xtures, offi ce

equipment, IT equipment and furniture.

They are valued at their acquisition cost, which includes all the expenses

directly attributable to fi xed assets.

Fixed investments are primarily depreciated on a straight-line basis in

accordance with the estimated useful life:

buildings 10 to 30 years

fi xtures and installations 10 years

vehicles 5 years

IT equipment 3 years

offi ce equipment 2 to 5 years

offi ce furniture 10 years

2.2.5 Financial fixed assets

The fi nancial fi xed assets are composed of investments and long-term

loans and receivables.

The gross value of participating interests and other fi nancial fi xed

assets appearing on the balance sheet is comprised of their acquisition

cost, which includes all the expenses directly attributable to fi xed

assets.

The purchase price of participating interests comprises in the majority

of cases a set amount settled upon acquisition and an earn-out that

varies in accordance with the company’s future earnings generally over

a period of 5 years.

Earn-outs to be paid in respect of earnings for year N are recorded

under assets as a counter-entry to the payables on fi xed assets entry.

Earn-outs in respect of future years constitute off-balance sheet

commitments.

The inventory value of securities corresponds to their value in use for

the company. This is determined by taking into account an enterprise

value determined using earnings prospects (revenue, EBIT, cash fl ow,

rate of growth) based on business plans.

A depreciation is recorded when the inventory value thusly defi ned

falls below the acquisition cost.

2.2.6 Service work in progress

A valuation of service work in progress is performed at the closing at

cost of sale when all of the formal conditions gathered to recognise

percentage of completion are not fully met.

Depreciation is recorded when the inventory value falls below the

nominal value.

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2.2.7 Receivables

Receivables are valued at their nominal value.

The inventory value of advances to subsidiaries is determined using

the depreciation method retained for participating interests.

Depreciation is recorded when inventory value falls below the nominal

value.

2.2.8 Deferred charges

The expenses associated with issuing the 2004 convertible bond loan

are amortised over 4 years and 176 days.

2.2.9 Provisions for liabilities and charges

Provisions for liabilities and charges are recognised when, at the close

of the fi nancial year, the company has an obligation regarding a third

party where it is likely or certain that said obligation will give rise to a

payment of resources to this third party, without a counter-entry at

least equivalent in value expected from this.

The estimated provision amount corresponds to the resource outfl ow

that the company will probably have to bear to settle its obligation.

The main provisions for liabilities and charges that the company is

required to recognise include:

estimated costs in respect of disputes, litigation and claims on the

part of third parties or former employees;

estimated restructuring costs.

In the event of re-structuring operations, a provision is made before

closing once the operations have been announced and a detailed plan

is available or once operations commence.

Contingent liabilities correspond to potential obligations resulting from

past events whose existence will only be confi rmed by future events

that are often beyond the company’s control or probable obligations

involving a certain outfl ow of resources.

2.2.10 Commitments relating to retirement gratuities

Upon retirement, employees of the company receive a gratuity amount

in keeping with law and the provisions of the collective agreement.

Retirement commitments, based on the Syntec agreement and the new

terms of the Fillon law, were evaluated by Towers Perrin actuaries.

These retirement provisions correspond to the rights acquired by

employees by means of conventional and legal mechanisms. They

result from an actuarial calculation.

Contributions made are recorded as charges for the period and all

employee benefi ts are valued annually using the projected credit unit

method with consideration given to the following specifi c economic

conditions:

death rates: INSEE 98

evolution of salaries: 3%

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staff turnover: from 30% (20-24 years) to 0% (> 50 years)

discount rate: 5%

infl ation rate: 2%

The impact of the social security fi nance law of 2008 will increase the

annual expense by approximately €170,000 in the next 15 years.

2.2.11 Currency transactions and translation adjustments

Charges and income in foreign currencies are recognised at their euro

equivalent on their date of occurrence. Debts, receivables and cash

balances in foreign currencies are reported on the balance sheet at

their euro equivalent, using the exchange rate in effect at the end of

the fi nancial year.

Gains and losses arising from the translation of debts and receivables

in foreign currencies at the latter rate appear on the balance sheet

under translation adjustments in the case of non-eurozone currencies

and latent losses give rise to a contingency provision.

2.2.12 Long-term transactions and recognition of Revenues

Revenues correspond to sums received from provisions of service

conducted by the company.

The method used for recognising Revenue and costs depends on

the nature of the services. The company performs the majority of its

services on a cost basis.

Time and materialRevenue and associated costs are recognised in accordance with the

stage of completion based on the time spent as compared with the

total time appearing in the contract.

This concerns services that have a daily rate fi xed in the contract. The

Revenue and associated costs related to these services are recognised

in accordance with the time spent by consultants on the projects.

Fixed price servicesIn circumstances where fi xed price contracts are concluded together

with a performance obligation, revenue and earnings are recognised

in accordance with the percentage of completion method. The

percentage of completion is determined in accordance with the

percentage of costs incurred for the work performed as compared

with the total estimated costs.

When it is likely that the total estimated costs of the contract will be

higher than the total income of the contract, a provision is immediately

made for the anticipated losses upon completion.

The costs corresponding to the services performed that do not meet

the aforementioned conditions are recorded at the cost of sale under

“Work in progress”.

2.2.13 Income tax and tax consolidation

2004 saw the implementation of tax consolidation in which Altran

Technologies acts as a group leader.

All of the French subsidiaries form an integral part of the tax

consolidation scope.

All agreements primarily feature the following points:

•

•

•

General principleThe neutrality principle is used, under which, insofar as is possible,

subsidiaries must recognise in their accounts, throughout the duration

of consolidation into the group, an income tax charge or gain and

additional contributions similar to those they would have recognised

had they not been consolidated.

Business taxesFor each fi nancial year, subsidiaries record the tax that they would

have had to pay had they never been consolidated.

In practical terms, this is the tax determined after the allocation of

previous losses.

The recognition of this tax gives rise to an Altran Technologies

receivable of an identical amount in respect of the subsidiaries.

Subsidiaries may not opt for a carryback of their loss during the period

in which they belong to the group.

Tax credits and assetsThese tax credits and assets, whether reimbursable by the Public

Treasury or not, are assigned to tax due from subsidiaries by application

of the rules.

Receivables from loss carrybacksSubsidiaries’ receivables on loss carrybacks arising before the

consolidation period cannot be allocated to tax due by the

subsidiaries.

In exchange, subsidiaries may sell to Altran Technologies the

receivable(s) in question as per the conditions established in

article 223G of the French General Tax Code.

Tax payment termsDuring the fi nancial year of entry into the scope of consolidation,

subsidiaries pay the four income tax instalments directly to their own

tax offi ce and the instalments of contributions due, if applicable.

From the second fi nancial year of consolidation, subsidiaries pay Altran

Technologies the income tax instalments, additional contributions and

settlements under the standard conditions.

The recording of these amounts at Altran Technologies in the

subsidiaries’ current account does not bear interest.

PeriodThe agreement is concluded for the period of consolidation of the

subsidiaries, namely 5 years from 1 January 2004.

Terms upon exit from the groupSubsidiaries exit the group if one of the conditions required under

article 223A of the French General Tax Code for belonging to the

consolidated group is no longer met.

Exit from the group takes retroactive effect on the fi rst day of the

fi nancial year in which the originating event occurs.

Subsidiaries once again become liable for separate taxes on earnings

and long-term net capital gains realised at the close of the fi nancial

year in which the event causing the exit occurred.

The income tax charge resulting from the use of consolidated

subsidiaries is held by Altran Technologies in the event of exiting the

subsidiary scope.



3. Notes concerning certain balance sheet items

3.1 Fixed assets and depreciations

Fixed assets

(in euros)

Opening

amount TAL* Acquisitions

Sold/

discarded/

transferred

Closing

amount

Intangible assets:

Goodwill 2,083,699 2,083,699

Other intangible assets 39,290,742 39,290,742

Patents, licences, brands 7,321,512 30,343 1,776,565 610,581 8,517,839

Intangible assets in progress 64,720 205,940 64,720 205,940

TOTAL 1 48,760,673 30,343 1,982,505 675,301 50,098,220

Property, plant and equipment:

Other property, plant and equipment 19,593,333 158,200 4,633,949 2,607,970 21,777,512

Work in progress 63,480 142,004 63,480 142,004

TOTAL 2 19,656,813 158,200 4,775,953 2,671,450 21,919,516

Long-term investments

Investments and advances 152,629,697 1,961,610 10,438,502 144,152,805

Loans and other long term investments 58,845,395 33,011 1,628,727 4,140,708 56,366,424

TOTAL 3 211,475,092 33,011 3,590,337 14,579,210 200,519,229

GRAND TOTAL (1+2+3) 279,892,578 221,554 10,348,795 17,925,961 272,536,966

* TAL: Complete transfer of assets and liabilities.

Depreciations & Provision of assets

(in euros)

Opening

amount TAL* Increases Decreases

Closing

amount

Intangible assets:

Patents, licenses, brands 4,445,262 20,401 1,521,047 610,501 5,376,209

Goodwill 304,898 304,898

TOTAL 1 4,750,160 20,401 1,521,047 610,501 5,681,107

Fixed assets:

Other tangible assets 9,715,390 68,652 3,655,479 1,878,270 11,561,252

TOTAL 2 9,715,390 68,652 3,655,479 1,878,270 11,561,252

GRAND TOTAL (1+2) 14,465,550 89,053 5,176,526 2,488,771 17,242,359





3.2 Provisions and depreciations

Provisions & depreciations recorded on the balance sheet

(in euros)

Opening

amount TAL* Increases Decreases

Closing

amount

Investments and related receivables 6,826,091 724,946 7,536,648 14,389

Other long-term investments 801,229 46,122 847,351

TOTAL LONG-TERM INVESTMENTS 7,627,320 0 771,068 7,536,648 861,740

Inventories 40,175 8,346 31,829

Trade receivables 6,824,501 1,792,646 451,507 8,165,639

Provisions for charges and litigation 22,845,514 32,000 10,190,688 12,113,931 20,954,271

Provisions for pensions 7,120,992 72,294 1,250,909 20,034 8,424,161

Provisions for foreign exchange losses 55 55 0

TOTAL 29,966,561 104,294 11,441,596 12,134,020 29,378,432

TOTAL 44,458,558 104,294 14,005,310 20,130,521 38,437,640


including reversal of provision used for: €9,478,483

(of which €9,458,394 for liability, €55 for exchange differences and €20,034 for retirement compensation )

including reversal of provision not used for: €2,655,537

(of which €2,655,537 for liability, €0 for retirement compensation)

The provision for restructuring under the Albatros plan totalled €6,309,725 on 31 December 2007.

3.3 Summary of receivables due dates

(in euros) Gross amount Due in less than 1 year Due in over 1 year

Long-term receivables 69,986,872 146,037 69,840,835

Receivables from controlled entities 13,633,653 0 13,633,653

Loans 54,330,577 69,605 54,260,972

Other long-term investments 2,022,642 76,432 1,946,210

Short-term receivables 555,285,097 536,162,725 19,122,372

Trade receivables 42,098,935 32,266,558 9,832,377

Employees and social security 1,816,635 1,816,635

State 14,796,908 5,506,913 9,289,995

Group and associates 449,848,713 449,848,713

Other receivables 43,161,554 43,161,554

Prepaid expenses 3,562,351 3,562,351

TOTAL 625,271,969 536,308,762 88,963,207

Altran Technologies uses factoring to a large degree. Pending

receivables transferred to the Factor are recognised in off-balance

sheet commitments as €103,968,000 on 31 December 2007 and

€118,990,000 on 31 December 2006 (see paragraph 6).

Information concerning factoring transactions

customer outstandings: €103,968,088

current Account and Factor Guarantee: €16,909,688

short-term factor advance: €87,058,400

•

•

•



3.4 Changes to Shareholders’ equity

(in euros)

Opening

amount

Movements in equity Allocation of

earnings year

n-1

Net profit/

loss year n

Closing

amountIncreases Decrease

Capital 58,658,119 442,531 59,100,650

Share premium 180,301,128 2,186,105 182,487,233

Merger premium 22,081,706 22,081,706

Legal reserve 5,865,723 5,865,723

Retained earnings 52,745,428 (3,294,619) 49,450,810

Net profit (loss) for the period (3,294,619) 3,294,619 9,869,014 9,869,014

SHAREHOLDERS’ EQUITY 316,357,485 2,628,637 0 0 9,869,014 328,855,137

3.5 Shareholding structure

Number Par value

Number of shares at opening 117,316,237 €0.5

Capital increase in relation to stock option plan 885,063 €0.5

Number of shares at closing 118,201,300 €0.5

3.6 Stock Options

The Board of Directors meeting of 20 December 2007 ruled on the

allocation of share subscription of options and free shares in accordance

with the authorisation granted by the Ordinary and Extraordinary

General Meeting of 29 June 2005 for a total number of shares of

2,589,830 and 818,740 respectively, to the benefi t of 2,191 employees.

This plan represents 2.9% of the total capital for the business.

Au 31 On 31 December 2007, the main characteristics of the plans were as follows:

Stock-options Free shares

Share subscription plan and free shares2000 Plan(a)

2001 Plan(a)

2003 Plan(a)

2003 Plan(a) b)

2004 Plan

2005 Plan

2005 Plan

2007 Plan

2007 Plan

2007 Plan

Shareholder Meeting date 26/06/1996 17/06/1999 17/06/1999 17/06/1999 28/06/2004 28/06/2004 28/06/2004 29/06/2005 29/06/2005 29/06/2005

Date of Board of Dir. or Mgmt Board meeting 11/04/2000 10/10/2001 11/03/2003 24/06/2003 29/06/2004 15/06/2005 20/12/2005 20/12/2007 20/12/2007 20/12/2007

Total number of shares available for purchase on date of attribution 845,792 642,880 3,948,993 336,191 2,762,000 340,000 2,630,000 2,589,830 482,240 336,500

of which corporate officers• 67,242 186,785 80,000 200,000 210,000 100,000

of which number of shares available for purchase by 10 highest paid individuals, including the senior management committee

•

144,892 85,708 875,218 106,734 510,000 140,000 635,000 340,000 93,240

Number of shares purchased on 31 December 2006 - - - - - - - - - -


Start date for exercising options 01/07/2004 10/10/2005 12/03/2007 25/06/2007 30/06/2008 16/06/2009 21/12/2009 21/12/2011

Date of final allocation of free shares 21/12/2009 21/12/2011

Expiration date for the options 11/04/2005 10/10/2006 11/03/2011 24/06/2011 29/06/2012 15/06/2013 20/12/2013 20/12/2015

End of the period of assignments of free shares 20/12/2011 20/12/2011

Purchase price (in euros) 76.20 39.34 2.97 6.73 9.37 7.24 9.62 4.29 4.00 4.00

Method Used

Black &

Scholes

Black &

Scholes

Black &

Scholes

Black &

Scholes

Black &

Scholes Hull & White

Binomiale

CNC

Binomiale

CNC

Number of shares available for purchase on 31/12/2006 2,233,349 225,119 1,859,498 131,000 2,096,000

Rights created in 2007 2,589,830 482,240 336,500

Rights lost in 2007 95,268 13,570 167,250 169,500 1,000

Rights exercised in 2007 911,725

Number of shares available for purchase on 31/12/2007 1,226,356 211,549 1,692,248 131,000 1,926,500 2,589,830 481,240 336,500

(a) As a result of the capital increase in cash with retention of their pre-emptive right to purchase of 23 December 2003, the exercise price and the number of shares of the stock option purchase plans were adjusted in order to reflect the issuance of 20.8 million shares.

(b) The Extraordinary General Assembly dated 8 June 2006 has, in its Ninth Resolution, modified the accounting period plan in date on 24 June 2003 to extent the accounting period from 5 to 8 years.




3.7 Convertible Bond Loans

Convertible bond loans issued in July 2004 totalled €230,000,000

on 31 December 2007, including 18,110,236 bonds with a par value of

€12.70 with a maturity of 4 years and 176 days.

The remuneration provided is 3.75% a year, payable on 1 January of

each year.

Total interest incurred in 2007 and payable in arrears on 1 January

2007 is €8,692,913.

This borrowing could dilute basic earnings per share in the future,

due to an exchange parity of one share in the company for one bond

to a maximum of 18,110,236 shares, or 15.80% of ordinary shares

outstanding.

This programme has enabled fi nancing sources to be diversifi ed and

the average maturity of debt to be lengthened.

3.8 Main changes in lines of credit

Altran has an agreement with its bankers ensuring full access to

lines of credit totalling €59.5 million as at 31 December 2007 and the

availability of which extends to 2009.

Dec. 2004 June 2005 Dec. 2005 June 2006 Dec. 2006 June 2007 Dec. 2007 June 2008 Dec. 2008 June 2009 Dec. 2009

CADIF fixed rate 20,631 18,592 16,493 14,334 12,112 9,826 7,473 5,053 2,562 - -

CADIF Variable rate 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 -

Total CADIF 70,631 63,592 56,493 49,334 42,112 34,826 27,473 20,053 12,562 5,000 -

BNP Paribas Variable rate 40,000 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 4,000 -

SG Variable rate 40,000 36,000 32,000 28,000 24,000 20,000 16,000 12,000 8,000 4,000 -

TOTAL 150,631 135,592 120,493 105,334 90,112 74,826 59,473 44,053 28,562 13,000 -

31/12/2005 31/12/2006 31/12/2007 31/12/2008 31/12/2009

Net debt/equity 1.15 1.0 1.0 1.0 1.0

Net debt/EBITDA 3.5 3 2.5 2 2

Due to the application of IFRS/IAS standards changing the accounting

rules for the borrower, as from 1 January 2005, the group has changed

the method for calculating its fi nancial ratios in agreement with its

three banks. The fi nancial ratios presented above remain unchanged.

At 31 December 2007 the group had not satisfi ed the previously

defi ned leverage ratio:

Net financial debt/equity 1.0 maximum

Net financial debt/EBITDA before profit-sharing 2.5 maximum

The group’s fi nancial ratios, before profi t-sharing and accrued interest

and after restatement for impact of the application of IAS 32 and IAS 39

to the 2009 OCEANE issued on 7 July 2004 are as follows:

Net financial debt/equity 0.88

Net financial debt/EBITDA before profit-sharing 2.71

Altran has asked the three banks of the banking pool (BNP Paribas,

Crédit Agricole Île de France and Société Générale) not to exercise the

early redemption clause on these lines.


has set up an interest rate hedge intended to hedge at least 50% of

total revolving credit commitments for a minimum term of 3 years.

Altran thereby manages a structural fi xed rate/variable rate position

(in euros) to limit the cost of debt and to this effect, uses interest rate

instruments such as swaps, caps and fl oors within the limits defi ned by

Management and the credit agreement.

At 31 December 2007 all credit lines had been used i.e. a total of

€59.5 million.

The majority of fi nancial liabilities are granted by banks at a variable

rate primarily indexed against EURIBOR or EONIA.

The company would be required to repay all these lines of credit if

the fi nancial ratios, defi ned on the basis of the fi nancial statements

presented according to French GAAP as presented in the table below,

were exceeded:



At 31 December 2007, the main characteristics of this hedging agreement are as follows (see 5.8).

Maturity Deal Type Initial rate Initial nominal Variable rate Currency



BNP 01/04/2008 A Cap 3.89% 15,000,000 Euribor3MP EUR

CA 01/04/2008 A Cap 3.79% 15,000,000 Euribor3MP EUR



BNP 01/04/2008 V Floor 2.00% 15,000,000 Euribor3MP EUR

CA 01/04/2008 V Floor 2.00% 15,000,000 Euribor3MP EUR

BNP & CA & SG 01/04/2008 SWAP IRS 60,000,000 EIB 3M EURIBOR EUR

3.9 Altran Technologies: liabilities payable at 31 December 2007

(i n euros) Gross amount Due within 1 year Due in 1 to 5 years

Convertible bond loans 238,692,913 238,692,913

Bank borrowings 20,248,634 17,685,904 2,562,730

Other borrowings 61,392,152 27,998,680 33,393,472

Group and associates 757,943 757,943

Trade payables 21,872,137 21,872,137

Tax and social security liabilities 105,958,606 105,958,606

Payables to suppliers of fixed assets 382,744 382,744

Other payables 4,793,219 4,793,219

DEFERRED INCOME 6,014,144 6,014,144

TOTAL 460,112,492 185,463,377 274,649,115

3.10 Associates and equity holdings

(in euros)

Equity holdings 130,518,054

Receivables from controlled entities 13,620,362

Loans 46,600,000

Work in progress for services provided

Trade receivables 7,538,024

Other receivables and prepaid expenses 450,149,831

Cash on hand 690,882


Other borrowings 771,721

Advances and down payments 55,795

Trade payables 3,294,371

Payables to suppliers of fixed assets

Other payables and deferred income 5,149,292




Associates and equity holdings

(in euros)

Operating income 27,284,614

Operating expenses 15,406,095

Financial income 33,536,493

Financial expenses 4,275,642

Exceptional income

Exceptional expenses 174,831

3.11 Accrued income

(in euros)

Long-term investments 52,101

Trade receivables 12,073,923

Other receivables 454,054

Tax and social security receivables 1,661,153

Cash on hand 690,822

TOTAL 14,932,054

3.12 Accrued expenses

(in euros)

Convertible bond loans 8,692,913


Other borrowings 1,139,532

Trade payables 8,635,424

Tax and social security liabilities 51,091,163

Other payables 666,669

TOTAL 70,268,744

3.13 Accrued income and expenses

(in euros) Expenses Income

Operating expenses/income 3,562,351 6,014,144

TOTAL 3,562,351 6,014,144

3.14 Expenses to be amortised over several periods

(in euros) Opening amount Increases

Depreciation

and amortisation

for the year Closing amount

Expenses to be amortised over several periods * 2,422,740 1,209,713 1,213,027

TOTAL 2,422,740 1,209,713 1,213,027

* Expenses to be spread out (issue costs of 2004 convertible bond loan): spread over 4 years and 176 days.



4. Notes to the profit and loss account

4.1 Breakdown of net sales

(in euros)

By business segment

Sales of bought-in goods 26,428

Contracts to supply goods and services 493,943,282

TOTAL 493,969,710

By geographical area

Sales generated in France 456,539,540

Sales generated in foreign countries 37,430,170

TOTAL 493,969,710

4.2 Financial income/(expenses) at 31/12/07

(in euros) Financial expenses Financial income

Impairment losses on equity investments 771,068

Interest on group current account 4,115,047

Interest on bank borrowings 575,442

Interest on convertible bond loan 8,692,907

Interest on employee profit sharing 846,898

Interest on overdrafts 130,806

Interest on Dailly receivables 972,756

Interest on revolving credit 3,849,394

Foreign exchange losses 25,248

Financial expenses related to factoring activities 4,032,987

Loss on merger 3,653,963

Other financial expenses 223,466

Dividends received by the group 10,970,000

Interest on group current account 22,566,493

Interest on loans 1,921

Foreign exchange gains 23,781

Other financial income 94,755

Reversal of provisions for exchange differences 55

TOTAL FINANCIAL EXPENSES AND INCOME 27,889,983 33,657,005




4.3 Extraordinary items at 31/12/07

(in euros) Extraordinary expenses Extraordinary income

Extraordinary restructuring expenses 6,107,181

Other extraordinary expenses 1,586,051

Book value of assets derecognised from the balance sheet 29,515

Book value of assets linked to restructuring 981,985

Provisions for liabilities and charges 2,324,005

Provisions for extraordinary liabilities and charges linked to restructuring 4,224,981

Extraordinary income from restructuring

Extraordinary income from management transactions

Income from asset disposals 16,553

Reversal of provisions for restructuring 6,869,654

Reversal of extraordinary provisions 1,809,376

TOTAL EXTRAORDINARY EXPENSES AND INCOME 15,253,717 8,695,582

4.4 Tax and 2007 impacts of tax consolidation

(in euros) Base Tax Net earnings

Operative results 8,929,670 (2,976,557)

Extraordinary results (6,558,135) 2,186,045

Earnings before taxes 2,371,535 2,371,535

Corresponding Corporate tax (790,512)

Impact of non-liability for current taxes

Permanent differences• (12,667,628) 4,222,543

Temporary differences• (5,685,545) 1,895,182

Impact of tax consolidation (2,554,213) 851,404

Other income taxes payable 107,366

Tax credit

Tax credit for research• 285,000

Tax credit for sponsorship• 90,000

Current tax adjustment for previous years

Carry-back• 875,578

Others• (39,082)

FISCAL RESULT (18,535,851)

COUNTED TAXES ON RESULTS (PRODUCT) 7,497,479 7,497,479

NET RESULT 9,869,014

Subsidiaries’ income tax is recognised in their accounts and refl ected

in Altran Technologies’ accounts via current accounts; this income

tax is recorded under income at Altran Technologies in the amount of

€7,548,462.

Income tax as a whole, determined based on the taxable income of the

consolidated group, is recognised as an expense by Altran Technologies

in the amount of €1,301,854.

However, the tax consolidation profi t recognised by Altran Technologies

in its own income amounts to €6,246,608.

In respect of standard total tax losses, Altran Technologies also

recognised additional carryback income and receivables estimated at

€875,578 in 2006 and a research tax credit of €285,000 in 2007.



4.5 Increases and decreases in timing differences

(in euros)

Nature of timing differences Amount Tax

Decreases: Organic 2007 874,352 291,451

Non-deductible provisions 2007 10,720,001 3,573,334

TOTAL 11,594,353 3,864,785

Tax losses arising prior to the tax consolidation amount to €26.4 million.

4.6 Staff

On 31 December 2007 Salaried staff

Management 5,653

Employees 224

TOTAL 5,877

4.7 Director Remuneration

Total remuneration paid to members of the Management Board and

Supervisory Board of Altran Technologies in 2007 came to €1,431,000,

of which €369,000 represents attendance fees.

No loans or advances were granted to these members during the 2007

fi nancial year.

5. Information on significant ongoing disputes

There is an existing dispute between Altran Technologies and Ilyad

Value. Altran Technologies is claiming from Ilyad Value the balance of

outstanding payments (€3.5 million), relating to studies and training

modules assigned to Ilyad in 2001. Full provisions have been made for

the receivable held by Altran Technologies in respect of Ilyad Value.

Meanwhile, Ilyad Value is claiming the reimbursement of sums it

paid to Altran Technologies, plus late interest. Based on the opinion

of its advisers, Altran Technologies believes that Ilyad Value’s claim

is baseless. It would appear that in March 2003, Ilyad Value fi led a

complaint and suit for damages in criminal proceedings against Altran

Technologies and relating to provision of service contracts concluded

between the Altran Technologies and Ilyad Value companies at the end

of 2001. Altran Technologies has no available information on these

proceedings.

Following the revocation of their respective mandates, two former

Directors of a subsidiary of the group (Altiam), acquired during 2002,

have taken Altran Technologies to the Commercial Court and are

claiming a sum of around €10 million for earn-out sums along with

damages and interest. Meanwhile, Altran Technologies has taken

action against these two former Directors at the Commercial Court

for fraud during the sale of shares in the subsidiary and is requesting

the return of the purchase price of the subsidiary and the payment of

damages and interest. The claims made by Altran Technologies as they

stand total €6 million. The Commercial Court did not rule in favour of

the latter and ordered it to pay an earn-out sum, much lower than that

requested by the former Directors. The latter are appealing the Court’s

decision.

In August 2001, The-E-Consulting Group (ECG) undertook proceedings

against Altran Technologies at the Paris Commercial Court regarding

the payment of a sum of around €2.3 million for damages and interest.

These proceedings follow Altran Technologies’ decision in June 2001

to not acquire an interest in the capital of ECG, a decision that ECG

judged to be wrong and likely to engage the responsibility of Altran

Technologies.

These proceedings were resumed by ECG’s liquidator after the

liquidation of ECG in September 2001. Proceedings are still under way

and no ruling has yet been made.

In addition, some ECG Shareholders undertook proceedings against

Altran Technologies at the Paris Commercial Court in August 2001,

initially for the payment of a sum of around €3 million for damages and

interest, which has risen to €64.4 million in their latest papers. As with

the liquidator of ECG, these Shareholders criticise Altran Technologies

for its decision to not take a participating interest in the capital of

ECG.

These separate proceedings are still under way, since the plaintiffs

have lodged an appeal against the judgement with the Commercial

Tribunal, which has non-suited their claims in their entirety.

The original provision has been adjusted in the light of the new claims.




The Commission des Opérations de Bourse (now A.M.F.) opened an

enquiry in the summer of 2002 into the price of the Altran Technologies

share.

The company received notifi cation of grievances and submitted its

observations in defence in October 2004.

In these proceedings, the company risks a maximum administrative

fi ne of €1.5 million.

In its decision of 29 May 2007, the AMF Sanctions Commission

imposed a fi ne of €1.5 million on the company, whereas the reporter

had recommended a sentence in the amount of €500,000. The

company has lodged an appeal against this ruling.

Further investigations carried out by the former college of Statutory

Auditors on the accounts for 2001 and the fi rst half of 2002 gave rise

to adjustments to the accounts for the fi rst half of 2002.

A preliminary enquiry was then opened by the Paris Public Prosecutor’s

Offi ce, an enquiry which then became an investigation which started in

January 2003 on the principal misuses of company assets, forgery and

distribution of false information so as to infl uence the share price.

The court submission of the investigating magistrate was given a fi rst

hearing in June 2004 to consider the offence of submitting accounts

that failed to give a true and accurate picture of the company.

It received a second hearing in September 2004 to consider the

offence proceedings previously commenced. As part of this order,

several former managers and one serving manager were questioned.

Altran Technologies issued a suit for damages in criminal proceedings

in February 2003 and was indicted in April 2005 for charges of forgery

and the use of forged documents and the distribution of misleading

information liable to infl uence share prices; this indictment did not

affect the suit for damages. This investigation is currently still under

way. An action for annulment instituted by certain former managers

against the report by the two experts appointed by the investigating

magistrate were rejected. The claimants have submitted their case to

the Court of Appeal.

As part of the investigation, 13 natural persons or legal entities have

sued for damages. Furthermore, a complaint and suit for damages in

legal proceedings has been fi led by the APPAC.

In addition, in February 2003, Altran Technologies fi led a complaint and

suit for damages in legal proceedings due to share price destabilisation

and manipulation events of which it believes it has been a victim since

the beginning of 2002. The investigation into this destabilisation

complaint was dismissed on 6 December 2005.

Finally, two complaints and suits for damages in criminal proceedings

were fi led in October 2004 against certain Directors by the former

Statutory Auditors, both stating the same charge of hindrance of the

role of Statutory Auditor.

A Director of a subsidiary of the group (Imnet) has fi led proceedings

against Altran Technologies for breach of its loyalty obligation, wilful

concealment and dishonest execution of the contract under which this

subsidiary was acquired.

A former Director of the subsidiary Gerpi, after unsuccessfully attempting

to block the merger of the latter into the company, summonsed the

company in order to obtain payment of an additional earn-out. The

company lodged an appeal against this judgement by the Commercial

Tribunal, which ruled partly in favour of the former Director.

In France, Altran Technologies is in dispute with several of its former

employees, who are contesting the reasons for their dismissal.

Altran Technologies and the Altran Foundation have had proceedings

taken out against them by a former Director of the group for abusive

redundancy and persecutory dismissal. These two disputes have given

rise to provisions in the accounts.

Altran Technologies, along with, in certain cases, some of its former

Directors, has had legal proceedings taken out against it by several of

its former employees for false accusation. One of these actions, which

concluded with an acquittal of Altran Technologies, has been appealed.

The second, which ended with the sentencing of Altran Technologies,

is also being appealed. The third is the subject of a deferred ruling

To the company’s knowledge, there are no other lawsuits or exceptional

events liable to have a signifi cant effect on the fi nancial position,

activity or assets of Altran Technologies.

6. Off-balance sheet commitments

6.1 Commitments given


Deposits and guarantees 83,789

commitments 103,968

Other: car rental 3,362

Non-competition clauses 0

Earn-outs 0

Individual right to training (number of hours) 255,392



6.2 Commitments received


Revolving credit 52,000

7. Subsequent significant events

At the end of 2007, the group’s management put forward a strategic

development plan for its Consultancy activities and information system

in France.

The plan includes a merger project for companies at the Paris Altran CIS

centre – subsidiaries of Altran Technologies – into a single legal entity,

known as Altran CIS. The scheduled date for implementation of the

merger is 30 April 2008, with accountancy and taxation being applied

retrospectively with effect from 1 January 2008. Accordingly, Altran

Technologies went ahead on 5 March 2008 with stock disposals in

favour of its subsidiary Altran Information Systems, so that the latter

would directly hold 100% of the capital in the companies taken over.

The development plan forms part of the desire to position the Altran CIS

centre as a key player in its market, and to ensure it has the resources

needed to achieve its own goals with:

a clear, well-differentiated positioning of its activities;

a sustainable model for economic growth.

This announcement supplements a set of measures being put in place

over the past two years to reorganise all the group’s French operations,

including the merger of the 26 French technology and innovation

consultancy companies, into a single company, also the operational

consolidation of organisational consultancy and information-system

activities.

On 17 April 2008, Altran Technologies announced that it had decided

in principle on an increase in capital, while retaining the preferential

•

•

subscription right (DPS) by a maximum of €130 million, which should

be completed by 31 July 2008.

Funds managed by Apax Partners S.A. have undertaken to subscribe

to all new shares issued and not subscribed by Shareholders as part of

their DPS at an issue price of between €5.00 and €6.00 per share.

Before its launch, this operation will be subject to the distribution of

a prospectus that has received approval from the Financial Markets

Authority (Autorité des Marchés Financiers).

Furthermore, the Apax Funds have reached an agreement with

Mr Alexis Kniazeff and Mr Hubert Martigny, Shareholders and founders

of Altran Technologies, pursuant to which the latter have agreed to the

launch of a capital increase, subject to conditions:

to assign 6 million company shares, representing 5.1% of capital, to

Apax Funds;

to assign all DPSs associated with share retained by the founders

to Apax Funds;

to transfer the benefi ts of all their residual voting rights over to

a company with a shareholding, among which Apax Partners

will provide management and their representation at General

Assemblies for an initial period of 6 years.

At the company’s next Assembly, it should be proposed that the

Shareholders appoint two additional members to the Supervisory

Board representing the Apax Fund.

•

•

•




8. Statement of subsidiaries and participating interests

Company

Share

capital

Other

Shareholders’

equity

Equity

holding (%)

Book value of

investments

Loans and

advances

granted

by the

company

not yet

repaid

Guarantees

provided

by the

company

Sales

(excl.

VAT)

in last

period

Net profit

or loss

in last

period

Dividends

received

by the

company

during

the yearGross Net

French subsidiaries more than 50% owned (in thousands euros)

ALTRAN SYSTÈMES

D’INFORMATION - ASI 3,000 38,760 100.00 2,874 2,874 55,440 5,036 7,000

AXIEM 200 6,355 99.99 5,822 5,822 42,674 1,394 0

DP CONSULTING 37 319 100.00 2,984 2,984 4,735 659 0

ALTRAN INVOICING 470 92 100.00 419 419 154 6 0

T MIS CONSULTANTS 200 1,228 100.00 5,221 5,221 7,843 494 1,000

EDIFIS 224 1,860 100.00 10,391 10,391 14,212 1,726 2,000

NESS 40 212 100.00 7,584 7,584 13,914 1,525 1,020

DIOREM 40 (259) 100.00 1,103 1,103 2,302 (263) 0

A.D.L. SERVICES 40 983 100.00 6,413 6,413 5,985 (421) 0

ARENDI 37 (802) 100.00 39 39 714 (493) 0

LOGIQUAL SO 37 54 100.00 37 37 847 65 0

APHRODITE TECHNOLOGIES 37 (13) 100.00 37 37 0 (2) 0

APOPIS TECHNOLOGIES 37 (13) 100.00 37 37 0 (2) 0

DIONYSOS TECHNOLOGIES 37 (10) 100.00 37 37 0 (2) 0

ALTRAN PROTOTYPES

AUTOMOBILES 37 (13) 100.00 37 37 0 (2) 0

CSI FRANCE 37 (69) 100.00 37 37 357 (57) 0

LOKI TECHNOLOGIES 37 (13) 100.00 37 37 0 (2) 0

OLIVIA TECHNOLOGIES 37 (13) 100.00 37 37 0 (2) 0

SYLVIE TECHNOLOGIES 37 (13) 100.00 37 37 0 (2) 0

VALÉRIE TECHNOLOGIES 37 (13) 100.00 37 37 0 (2) 0

G.M.T.S. 200 12,242 80.00 160 160 445,803 0 (13,268) 0

Foreign subsidiaries (IFRS in thousands of euros)

ALTRAN ESTUDIOS

SERVICIOS Y PROYECTOS 25,000 (23,014) 99.99 25,142 25,142 0 3,317 9,438 (1,570) 0

ALTRAN EUROPE 62 14,921 99.84 31 31 0 0 38,797 5,944 0

ALTRAN UK 17,045 (15,699) 100 20,928 20,928 0 0 0 9,979 0

ALTRAN DEUTSCHLAND 200 43,026 100 202 202 0 0 3,121 11,723 0

ALTRAN HOLDING

(PREVIOUSLY ALTRAN

ITALIA) 98 32,032 100 40,305 40,305 0 0 4,111 (4,003) 0

ALTRAN SCANDINAVIA 11 1,281 100 12 12 0 0 656 1,387 0

ALTRAN (SWITZERLAND) 302 (1,351) 100 298 298 84 0 1,279 3,226 6,104

ALTRAN INTERNATIONAL 20 21,554 95 18 18 0 0 6,902 296

ALTRAN DO BRASIL 28,171 (13,997) 0.01 1 1 0 0 874 561 0

ALTRAN ENGINEERING

ROMANIA 195 (4) 100 200 200 0 0 228 3 0

Equity holdings (in thousands euros)

CQS


Financial information concerning the company’s assets and liabilities, fi nancial position and profi ts & losses20Latest financial information

9. Statement of earning for the last five financial years

Closing date 31/12/2003 31/12/2004 31/12/2005 31/12/2006 31/12/2007

Duration of the period 12 months 12 months 12 months 12 months 12 months

Capital at year end:

Share capital 57,220,857 57,221,107 57,221,107 58,658,118 59,100,650

Number of ordinary shares 114,441,715 114,442,214 114,442,214 117,316,237 118,201,300

Transactions and results (in euros):

Sales (excl. VAT) 193,061,183 169,422,415 160,781,329 490,850,486 493,969,709

Profit (loss) before tax, profit sharing, depreciation,

amortisation and provisions (16,137,831) (6,722,306) (2,675,935) (15,916,378) 9,617,839

Income tax (8,144,071) (10,285,518) (13,003,418) (16,453,304) (7,497,479)

Employee profit sharing 0 0 0 5,508,709 0

Profit (loss) after tax, profit sharing, depreciation,

amortisation and provisions (31,726,074) 17,640,588 (5,174,588) (3,294,619) 9,869,014

Dividends distributed 0 0 0 0 0

Earnings per share (in euros)


amortisation and provisions (0.07) 0.03 0.09 (0.04) 0.14


amortisation and provisions (0.28) 0.15 (0.05) (0.03) 0.08

Dividends distributed 0.00 0.00 0.00 0.00 0.00

Employees

Total staff 1,740 1,698 1,545 5,579 5,877

Total wages and salaries (in euros) 83,634,379 80,654,174 77,865,245 255,590,645 258,657,556

Amount paid in social benefits (in euros)

(social security, charities, etc.) 35,849,742 33,563,048 32,429,870 110,575,847 109,698,754

20.4 Verifi cation of the annual fi nancial information

Statutory Auditors reports on consolidated fi nancial statements and annual fi nancial accounts are enclosed on appendix 3 of the present

document.

20.5 Latest fi nancial information

None



Intermediary and other financial information

20.6 Intermediary and other fi nancial information

20.6.1 First Quarter 2007 revenues press release published on 3 May 2007

Revenues for the fi rst quarter 2007 stood at €394.3 m. In comparison

with the fi rst quarter revenues in 2006, business was up by 6.1%. This

growth rate is computed after taking into account:

a negative working days impact of 1.0%;

a negative foreign exchange impact of 0.5%;

•

•

divestitures with a negative impact of 0.5%.

In France, for the fi rst quarter 2007 alone, the group made €167.0 m,

showing stable revenues compared to the fi rst quarter 2006

(€167.5 million). On a like for like basis of working days France operation

grew of 1.2% compared to the same period of 2006.

Revenues outside France were at €227.4 million, up by 11.4% compared

to the same quarter in 2006.

•

(in million euros) Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007

Sales excluding contribution from acquired or/and divested companies (a) 370.0 372.4 353.7 393.3 394.2

Contribution from companies acquired (b)

Contribution of divested companies (c) 1.6 1.9 1.4 1.2 0.1

TOTAL SALES (A) + (B) + (C) 371.6 374.3 355.1 394.5 394.3

Total staff numbers for the group stood at 17,037 at the end of March 2007, down by 20 with respect to 31 December 2006.

Outlook

On international markets, Altran targets to keep a growth level higher than the estimated market growth.

In France, the trend needs to be confi rmed and accelerated.

20.6.2 Second quarter 2007 revenues press release published on 31 July, 2007

(in million euros) Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007

Sales excluding contribution from acquired or/and divested companies (a) 370.0 372.4 353.7 393.3 394.2 395,1

Contribution from companies acquired (b) - - - - - -

Contribution of divested companies (c) 1.6 1.9 1.4 1.2 0.1 -

TOTAL SALES (A) + (B) + (C) 371.6 374.3 355.1 394.5 394.3 395,1

Total staff numbers for the group stood at 17,167 at the end of June

2007, up by 130 with respect to 31 March 2007.

Group’s target defi ned at the beginning of the year remains unchanged:

increase growth both in and outside France

Revenues for the second quarter 2007 stood at €395.1 million. In

comparison with the second quarter revenues in 2006, business was

up by 5.6%. This growth rate is computed after taking into account:


divestitures with a negative impact of 0.5%.

•

•

In France, for the second quarter 2007 alone, the group made

€165.4 million, up by 4,3% compared to the second quarter 2006

(€158.5 million).


to the same quarter in 2006.


Financial information concerning the company’s assets and liabilities, fi nancial position and profi ts & losses20Intermediary and other financial information

20.6.3 Third quarter revenues press release published on 6 November 2007

Revenues for the third quarter 2007 stood at €378.7 million. In

comparison with the third quarter revenues in 2006, business was up

by 6.6%. Total growth rate is computed after taking into account:

a negative perimeter impact of 1,5%;


•

•

a positive working days impact of 0.5%.

In France, for the third quarter 2007 alone, the group made

€160.6 million, up by 7,5% compared to the third quarter 2006. Organic

growth stood at 7.6%


to the same quarter in 2006. Organic growth stood at 8.5% on the

third quarter 2007, given divestiture and acquisition made since the

beginning of 2007.

•

(in million euros) Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007

Sales excluding contribution from acquired or/and divested companies (a) 369.8 349.6 390.2 390.3 391.9 378.1

Contribution from companies acquired (b) - - 0.6

Contribution of divested companies (c) 4.5 5.5 4.3 4.0 3.2 -

TOTAL SALES (A) + (B) + (C) 374.3 355.1 394.5 394.3 395.1 378.7

Total staff numbers for the group stood at 17,234 at the end of

September 2007, up by 67 with respect to 30 June 2007. The invoicing

rate stood at 85.1% in the third quarter 2007 an increase of 1.4%

compared to the same period last year.

Net debt has decreased by around €40 million including non recurring

positive items for €6 million at the end of September.

The group confi rms its targets of coming back by the end of the year to

the DSO level of 2006 (98 days) and of reducing this level to 90 days

by the end of 2008.

Outlook

The group will concentrate its efforts on:

a continued acceleration of France operations growth;

maintaining a high level of growth of international operations;

pursuing group’s margin improvement through the reduction of

indirect costs;

pursuing the debt reduction;

ensuring group’s refi nancing.

•

•

•

•

•

20.6.4 Fourth quarter 2007 revenues press release published on 5 February 2008

(in million euros) Q4 2006 FY 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 FY 2007

Sales excluding contribution from acquired or/and divested companies (a) 390.2 1,476.6 390.3 391.9 378.1 421.0 1,581.3

Contribution from companies acquired (b) - - 0.6 2.2 2.8

Contribution of divested companies (c) 4.3 18.8 4.0 3.2 - - 7.2

TOTAL SALES (A) + (B) + (C) 394.5 1,495.4 394.3 395.1 378.7 423.2 1,591.4

2007 revenues at €1,591.4 million were up by 6.4% compared to 2006

(€1 495.4 million).

Revenues for the fourth quarter 2007 stood at €423.2 million. In

comparison with the fourth quarter revenues in 2006, business was

up by 7.3%.

In France, for the fourth quarter 2007 alone, the group made

€180.1 million, up by 8,5% compared to the fourth quarter 2006.


to the same quarter in 2006. Organic growth stood at 7.4% on the

fourth quarter 2007, given divestiture and acquisition made since the

beginning of 2007. Foreign exchange had a negative impact of 2.5% on

the fourth quarter 2007 compared to the fourth quarter 2006.

Total staff numbers for the group stood at 17,502 at the end of

December 2007, up by 268 with respect to 30 September 2007. The

invoicing rate stood at 84.6% in the fourth quarter 2007, an increase of

0.5% compared to the same period last year.

Q4 2006 FY 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 FY 2007

Invoicing rate 84.1% 84.1% 83.5% 85.2% 85.1% 84.6% 84.6%



Intermediary and other financial information

Net debt reduction

During the second semester 2007, group’s net debt decreased by

€70 million approximately to reach €365 million (€437 million as of

30 June 2007). This improvement is the result of group’s efforts to

reduce its DSO from the level reached at the end of the fi rst semester

2007.

Improved EBIT margin

The acceleration of group’s revenue growth combined with a better

control of indirect costs resulted in an improvement of the group EBIT

margin throughout the second semester 2007. Group’s EBIT margin

should be higher than 7% for the second semester 2007.

New employee shareholding plan

On 20 December 2007, the group issued 2.589.830 stock options and

818.240 free shares to 2.191 employees. This plan represents 2.9% of

group’s total number of shares.

Outlook

The group will concentrate its efforts on the following:

ensuring group’s refi nancing;

pursuing the debt reduction, with a 90 DSO target by yearend;

pursuing group’s margin improvement through a continued

reduction of indirect costs;

maintaining market like growth in and outside France.

20.6.5 2007 results press release published on 28 March 2008

Revenues for 2007 are €1,591.4 million, up 6.4% compared to 2006

(€1,495.4 million).

•

•

•

•

(in million euros) 31/12/2006 S1 2007 S2 2007 31/12/2007

Revenues 1,495.4 789.5 801.9 1,591.4

Current operating income 76.0 38.7 60.7 99.4

As % of sales 5.1% 4.9% 7.6% 6.2%

Non recurring income/losses (14.7) (1.7) (13.2) (14.9)

Goodwill depreciation (15.9) (12.5) (1.4) (13.9)

Operating income 45.4 24.4 46.2 70.6

As % of sales 3.0% 3.1% 5.8% 4.4%

Net cost of debt (23.1) (13) (16.0) (29.0)

Others financial income/losses (3.0) (1.1) (1.1) (2.2)

Income taxes (15.8) (15) (3.0) (18.0)

Net result of integrated companies 3.7 (4.7) 26.2 21.5

Minority interests (0.1) 0.2 (0.1) 0.1

GROUP’S NET RESULT 3.8 (4.5) 26.1 21.6

2007 current operating income stands at €99.4 million (6.2% of

current operating income margin). The current operating income

margin improved from 4.9% in the fi rst semester 2007 to 7.6% in the

second semester 2007.

The operating income at €70.6 million is impacted by negative

non recurring items of €14.9 million and goodwill write-downs of

€13.9 million.

Net cost of debt (-€29.0 million) is in line with the group debt level.

The group net result is €21.6 million in 2007 against €3.8 million in

2006

As of 31 December 2007, the group net debt stood at €359.5 million

under IFRS rules, to be compared to €379.9 million at the end of

2006. The net debt decrease is the result of a €77.7 million cash

fl ow generation in the second semester 2007. This reduction is the

combined result of improved operating margin and the reduction of

DSO to 90 days at the end of 2007.

Cost reduction plan

A tighter control on indirect costs translates into a reduction of 1.2% of

revenues of these costs. They represented 26.3% of group revenues at

the end of 2007.

Refi nancing

Group’s refi nancing aims to:

secure the refi nancing of the 2009 CB redeemable on 1 January

2009;

regain some fi nancial fl exibility to restart focused acquisitions, once

balance sheet will sustain it.

•

•


Financial information concerning the company’s assets and liabilities, fi nancial position and profi ts & losses20Intermediary and other financial information

Altran is therefore working on various scenarios, all being a possibility

(Market operation, credit facility…)

Altran is in discussion with its current banking pool and a new bank to

defi ne conditions that could make possible the setting up of new mid-

term credit lines and a renegotiation of its current credit lines.

Outlook

Altran wants to maintain a market-like growth despite macroeconomic

uncertainties. 2008 starts on the same trends compared to the end

of 2007.

ltran will pursue its efforts in 2008 to reduce indirect costs and has for

ambition to trend to 20% mid-term.

Altran will pay particular attention to the DSO with a target of

maintaining its level around the current level

20.6.6 Refinancing press release published on 17 April 2008

Altran announces the signature of a refi nancing termsheet with a

banking pool composed of BNP Paribas, Crédit Agricole Île de France,

Natixis and Société Générale.

This agreement give access to a 5 years medium credit line of

€150 million, including €26 million of current credit lines normally

reedemable in 2009 and that have been rescheduled.

Main characteristics of this new line are:

a 5 year term starting on the fi rst date of drawing;

half yearly amortization starting on the fi rst date of drawing;

a maximum cost of 155 basis points over the Euribor.

This credit is subject to fi nancial covenants, a cash fl ow allowance to

credit and a restriction of acquisitions.

This agreement gives Altran the means to face coming needs and

especially the redemption of its 2009 convertible next January.

Altran is also announcing today the strengthening of its capital structure

and welcomes Apax Partners as a new Shareholder to accelerate its

growth (see separate press release).

•

•

•

20.6.7 Press release published on 17 April 2008 announcing a strenghtening of capital of capital structure and the arrival of Apax as a new Shareholder

The Altran Technologies company plans to proceed with a capital

increase with preferential subscription rights up to a maximum amount

of €130 million, which is expected to be completed before 31 July

2008.


for new shares that are unsubscribed by existing Shareholders through

the exercise of their preferential subscription rights, at an issue price

per share amounting to between €5 and €6.

A prospectus will be drawn up for approval by the French securities

regulator, the Autorité des Marchés Financiers, prior to the transaction.



Technologies, under which, subject to the launching of the capital

increase, the founders agree to:

sell 6 million shares of the company, representing 5,1% of the issued

capital, to the Apax Funds;

transfer to the Apax Funds all the preferential subscription rights

attached to their remaining shares;

contribute all the voting rights attached to their remaining shares

to a partnership (Société En Participation) that Apax Partners will

manage and represent at the General Meetings for an initial period

of 6 years.

At the next General Meeting of the company, the Shareholders shall be


Supervisory Board representing the Apax Funds.

In conjunction with the new shareholding structure, Apax Partners and

the company will also seek to implement an investment mechanism for

the key managers of the company.

Yves de Chaisemartin, CEO of Altran Technologies, said: “This is very

good transaction for our group, which is in line with the objectives set 18

months ago. It will strengthen our share capital and give us the means to

accelerate our development”.

•

•

•



Significant changes to the financial or commercial position

20.7 Dividends distribution policy

31/12/2002 31/12/2003 31/12/2004 31/12/2005 31/12/2006 31/12/2007

Num ber of shares 93,634,131 114,441,715 114,441,715 114,442,214 117,314,469 118,201,300

Dividend paid per share (excluding tax credit) None None None None None None

Total amount of dividend paid out (in euros) None None None None None None

20.8 Legal and arbitration proceedings

All information regarding disputes and legal instructions or arbitration

proceedings underway is included in this reference document in

section 6 ‘’Follow-up of signifi cant disputes and possible liabilities’’ on

pages 129/130 of the notes to the consolidated accounts.

20.9 Signifi cant changes to the fi nancial or commercial position

Since the close of the 2007 fi nancial year, no events have occurred that are liable to signifi cantly alter the group’s fi nancial or commercial position.


21.1 Share capital

21 Additional information

21.1 SHARE CAPITAL 161 21.2 MEMORANDUM AND ARTICLES OF ASSOCIATION 164

Changes in share capital and rights attached to shares

Changes in Altran’s share capital and rights attached to shares are

subject to governing regulations; Altran’s Articles of Association do

not impose any conditions that are more restrictive than those in the

regulations.

Share capital

Altran’s share capital totalled €59,100,650 at 31 December 2007,

comprised of 118,201,300 fully-paid up shares, all of the same category.

Following stock options exercised since that date, the share capital,

amended by the Management Board on 4 February 2008, now stands

at €59,113,980.50, comprised of 118,227,961 shares.

Authorized, unissued shares

On 7 March 2006, the Supervisory Board allowed the Management

Board to use the authorization given by the Thirteenth Resolution of

the Combined General Meeting on 29 June 2005 to issue shares for

employees of Altran and Altran subsidiaries in France, Germany, Spain,

Italy, the UK, Ireland, Sweden, Switzerland, Belgium, Luxembourg, the

Netherlands, Portugal, and Austria.

Therefore on 10 March 2006 the Management Board decided to issue

shares and/or share warrants of an amount up to €3,000,000, which

corresponds to 6,000,000 new shares (including shares resulting

from warrant exercises and subject to any adjustments).

Only the number of shares actually subscribed may be issued, without

a minimum requirement. The dividend entitlement date for new shares

was set at 1 January 2005.

The Combined General Meeting on 29 June 2007 authorized the

Management Board to issue with pre-emptive rights up to €15 million

of securities convertible or exchangeable into shares immediately or in

the future; this authorization is valid for 26 months. The Meeting set

the maximum issue amount for securities convertible or exchangeable

into shares at €250 million, and the maximum nominal amount for

a capital increase through the incorporation of reserves, earnings,

additional paid-in capital, or other capital surplus at €15 million.


Management Board to issue shares or securities convertible or

exchangeable into shares for use in contributions-in-kind. This

authorization is capped at 10% of the company’s share capital and a

€10 million nominal capital increase, and is valid for 26 months.


Management Board to issue up to 15% more shares or securities than

the initial issue, at the same share or security price as the initial issue,

if there is excess subscription demand. This authorization is valid for

26 months.


Management Board to issue up to €1.2 million of shares for members

of Altran’s employee savings plan; this authorization is valid for

26 months.

The Extraordinary General Meeting on 17 September 2007 authorized

the Management Board to issue bonds convertible into new or existing

shares (OCEANE convertible bonds) without pre-emptive rights but

with a priority subscription period. Up to €250 million of OCEANE

convertible bonds may be issued, and may give rise to a maximum of

€15 million of new shares. This authorization is valid for 26 months.


Additional information21Share capital

The Extraordinary General Meeting on 17 September 2007 authorized

the Management Board to issue up to 15% more securities than the

initial issue, at the same price as the initial issue and within 30 days

after the initial subscription period ends, if there is excess subscription

demand for one of the issues listed above. This authorization is valid

for 26 months.

Potentially dilutive securities

Stock options

On 20 December 2007, Altran issued 2,589,830 stock options and

818,740 bonus shares, representing 2.9% of the company’s share

capital, to 2,191 employees.

Granted on

11 March 2003*

Granted on

24 June 2003*

Granted on

29 June 2004

Granted on

15 June 2005

Granted on

20 December 2005

Granted on

20 December 2007

AGM date 17 June 1999 17 June 1999 28 June 2004 28 June 2004 28 June 2004 29 June 2005

Board meeting date 11 March 2003 24 June 2003 29 June 2004 15 June 2005 20 December 2005 20 December 2007

Number of shares that can be subscribed 3,948,993 336,191 2,770,000 340,000 2,630,000 3,408,570

Of which from options owned by corporate

officers 186,785 - 80,000 200,000 210,000 100,000

Of which from options owned by the top ten

employees who are not corporate officers** 875,218 106,734 510,000 340,000 635,000 433,240

Vesting date 12 March 2007 25 June 2007 30 June 2008 16 June 2009 21 December 2009 21 December 2011

Expiration date 11 March 2011 24 June 20011** 29 June 2012 15 June 2013 20 December 2013 20 December 2015

Exercise price (in euros) 2.97 6.73 9.37 7.24 9.62 4.29

Number of shares subscribed 911,725 - - - -

* Number of options and exercise price have been adjusted to account for the rights issue of 20,807,584 new shares, payable in cash, on 23 December 2003 (see the following table).

** The Annual General Meeting on 8 June 2006 in its Ninth Resolution extended the lifetime of these options from 5 to 8 years.

The following table details the adjustments made to stock option plans following the rights issue on 23 December 2003.

(in euros)

Plan Exercise price

Adjusted

exercise price

Number

of options

Adjusted number

of options

Factor used to adjust

the number of options

Granted on 11 March 2003 3.17 2.97 3,699,845 3,948,993 1.06734

Granted on 24 June 2003 7.18 6.73 314,980 336,191 1.06734

Summary table

Type of potentially dilutive security Issue date Exercise price

Potential number

of new shares

Number of securities

in issue at 31 Dec. 2007 % dilution

Stock options 11 March 2003 2.97 3,948,993 1,226,356 1.04%


Stock options 29 June 2004 9.37 2,762,000 1,692,248 1.43%




Total stock options 12,607,014 7,777,483 6.57%

Bonus shares 20 December 2007 4.29 818,740 817,740 0.69%

2009 OCEANE convertible bonds 9 July 2004 12.70 18,110,236 18,110,236 15.31%

TOTAL 31,535,990 26,705,459 22.57%


Additional information 21Share capital

Share buybacks

The Combined General Meeting on 29 June 2007, voting with a

quorum present and under the majority criteria for Annual General

Meetings, annulled with immediate effect the unused portion of the

share buyback authorization given by the Combined General Meeting

on 8 June 2006, and in its Fifth Resolution authorized the Management

Board to buy back Altran shares within the limit of 5% of the company’s

share capital. This authorization has not been used to date.

OCEANE convertible bonds

OCEANE convertible bonds maturing on 1 January 2009

Following the authorisation granted by the Thirteenth Resolution of

the Combined General Meeting on 28 June 2004, the Management

Board decided on 29 June 2004 to issue bonds convertible into new

or existing shares (OCEANE convertible bonds) for an amount of up

to €400 million, and gave the Chairman of the Management Board

all powers, under the authority to delegate granted by the Thirteenth

Resolution of Combined General Meeting on 28 June 2004, to carry

out the bond issue and set the amount, dates, procedures, and terms

and conditions.

Therefore, on 1 July 2004 the Chairman of the Management Board set

the following bond features.

Type of security

Bond convertible into new or existing shares (OCEANE convertible

bond)

Nominal amount

€230,000,000

Number of bonds issued and issue price

18,110,236 bonds at €12.70 each

Coupon dates and maturity

Coupon date of 9 July 2004 with maturity of 4 years and 176 days;

the fi rst term ends on 1 January 2005

Annual coupon

3.75%

Repayment

Bonds will be repaid in full on 1 January 2009 (or the fi rst working

day thereafter) at the face value of €12.70 per bond, unless they are

repaid early or converted into shares

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•

Conversion

Bond holders may convert their bonds into shares anytime between

the settlement date, 9 July 2004, and the seventh working day

before the regular or early repayment date. Bonds will be converted

at the ratio of one bond per Altran share, although this ratio may be

adjusted to account for any capital transactions carried out during

the conversion period. The company may decide whether to give

bondholders new or existing shares.

Callability

The company has the right to repay bonds before their scheduled

maturity date (1 January 2009) under the following conditions.

some or all of the bonds may be repaid at any time through a

repurchase transaction on a securities exchange or over-the-

counter, or through a public offer,

all outstanding bonds may be repaid any time between 1 July 2007

to 31 December 2008 with a minimum notifi cation period of one

month, and:

at their face value plus all interest accrued between the early

repayment date and the last coupon date before the early

repayment date (the early repayment price), and

if Altran’s average closing share price on Eurolist by Euronext

Paris over 20 consecutive market trading days selected by the

company out of the 40 consecutive market trading days before

the announcement of the early repayment is made multiplied

by the bond conversion ratio is more than 30% higher than the

bonds’ face value;

all outstanding bonds may be repaid at any time at the early

repayment price if less than 10% of the issued bonds remain

outstanding.

Trading in the company’s own convertible bonds

The company did not buy back any of its OCEANE convertible bonds

in 2007.

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Additional information21Memorandum and Articles of Association

Changes in the company’s share capital since 25 March 1998

Date Transaction

Change

in number

of shares

Nominal share

capital

(in euros)

Total share

capital

(in euros)

Additional

paid-in capital

(in euros)

Number

of shares

in issue

25 March 1998 Bonus shares 7,343,130 11,194,529.52 14,926,039.36 9,790,840

25 June 1998

Merger of Altran International

and elimination of old shares 19,018 28,992.75 14,955,032.11 1,940,710.75 9,809,858

21 December 1999 Option exercises 195,236 297,635.36 15,252,667.48 3,207,021.03 10,005,094

21 December 1999 Conversion into euros (5,247,573.48) 10,005,094 10,005,094

21 December 1999 Bonus shares 20,010,188 20,010,188 30,015,282 30,015,282

2 January 2001 Two-for-one stock split 30,015,282 30,015,282 30,015,282 60,030,564

2 January 2001 Incorporation of retained earnings 30,015,282 15,007,641 45,022,923 90,045,846

31 December 2001 Conversion of OCEANEs 27 13.5 45,022,936.5 90,045,873

31 December 2001 Option exercises 1,670,508 835,254 45,858,190.5 9,104,268.60 91,716,381

31 December 2002 Conversion of OCEANEs 21 10.5 45,858,201 91,716,402

31 December 2002 Option exercises 1,917,729 958,864.5 46,817,065.5 11,352,955.68 93,634,131

23 December 2003 Share issue payable in cash 20,807,584 10,403,792 57,220,857.50 135,522,072 114,441,715

10 February 2004 Conversion of OCEANEs 147 73.50 57,220,931 114,441,862

9 March 2004 Conversion of OCEANEs 3 1.50 57,220,932.50 114,441,865

22 December 2004 Conversion of OCEANEs 230 115 57,221,047.50 114,442,095



27 December 2004 Conversion of OCEANEs 87 43.50 57,221,107 114,442,214

23 May 2006 Issue of shares to employees 2,872,255 1,436,127.50 58,657,234.50 117,314,469

29 December 2006 Share issue related to the merger 1,768 884 58,658,118.50 117,316,237

26 July 2007 Option exercises 596,029 298,014.50 58,956,133 1,411,545 117,912,266

31 October 2007 Option exercises 289,034 144,517 59,100,650 118,201,300

4 February 2008 Option exercises 37,070 18,535 59,119,185 118,238,370

21.2 Memorandum and Articles of Association

Date of incorporation and lifetime

Altran Technologies S.A. was created on 14 February 1970. Its life

extends until 14 February 2045, unless the company is dissolved

before this date or its life is extended beyond this date by law or by the

Articles of Association.

Corporate purpose

The corporate purpose of Altran Technologies, as set forth in article 3

of the Articles of Association, is to carry out the following, both in

France and internationally:

consulting and research in engineering and advanced technologies,

along with the related services; and

any manufacturing, fi nancial, sales, or marketing activities that are

directly or indirectly associated with these consulting and research

services or likely to facilitate their development and expansion.

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Trade and Companies Register

Paris Trade and Companies Register no. 702 012 956

Siret Number: 702 012 956 00042

NAF code: 742C

Shareholders’ right to information

Shareholders have the permanent right to obtain information about the

company, which may be obtained from the company’s headquarters in

accordance with the law.


Additional information 21Memorandum and Articles of Association

Fiscal year

Altran Technologies’ fi scal year runs from 1 January to 31 December of

each calendar year.

Statutory allocation of earnings (article 21 of the Articles of Association)

At least 5% of the earnings from each fi scal year, less any previous

losses, are allocated to the legal reserve until this reserve reaches

10% of the company’s share capital. The remainder constitutes the

distributable earnings for the year, plus any retained earnings and

less any other reserve allocations required by law or by the Articles of

Association.

The Annual General Meeting, upon a proposal from the Management

Board, determines how much of these distributable earnings to

allocate to retained earnings, general reserves, and special reserves.

The remaining distributable earnings are divided in full among the

company’s shares.

The Annual General Meeting may decide to allocate funds from the

available reserves, and in this case will clearly indicate the specifi c

reserves from which the funds will be taken.

If needed, an exception may be made to this Article in order to allocate

earnings to a special employee profi t-sharing reserve as required by

law.

The Annual General Meeting, upon a proposal from the Management

Board, may decide to allocate some or all of a fi scal year’s earnings to

retained earnings or one or more reserves.

Dividend payment

The Annual General Meeting held to approve a fi scal year’s fi nancial

statements may give Shareholders the option to receive some or all of

that fi scal year’s dividend (regular or interim dividend) in cash or in new

shares issued in accordance with the law.

Shareholders may claim dividends up to fi ve years after the dividend

distribution date. Any dividends not claimed after fi ve years become

the property of the French Treasury Department, as required by law.

Unclaimed dividends from prior fi scal years

1999 €865.66

2000 €3,360.56

2001 €2,706.00

2002 None

2003 None

2004 None

2005 None

2006 None

General Meetings of Shareholders (article 20 of the Articles of Association)

Annual General Meetings and Extraordinary General Meetings of

Shareholders are convened and deliberate under the conditions set

forth by law. They take place at the company’s headquarters unless

another location is specifi ed in the Meeting notice.

The Management Board may decide to publicly broadcast the entire

Meeting through videoconferencing, webcasting, or other electronic

means. Similarly, the Management Board may decide to allow

Shareholders to vote by videoconferencing, webcasting, or other

electronic means. Any such decisions will be stated in the Meeting

notice published in the French bulletin of legal notices (BALO) and will

comply with all applicable regulations.

The Management Board may appoint two works council members to

attend General Meetings. These members’ opinions must be heard

for all resolutions requiring unanimous Shareholder approval, if the

members so request.

Shareholders may vote or be represented by proxy through an

authorized intermediary Meeting the criteria set forth in the third

and fourth paragraphs of article L.228-1 of the French Commercial

Code. This intermediary must, upon the request of the company or

the company’s agent and before casting any votes at the General

Meeting, provide a list of the non-French resident Shareholders being

represented by proxy. This list must meet any conditions stipulated in

applicable regulations. Proxy votes submitted by an intermediary who is

either undeclared or does not disclose the identity of the Shareholders

being represented will not be considered.


Additional information21Memorandum and Articles of Association

All Shareholders may attend General Meetings, regardless of the

number of shares owned, provided that their shares are fully paid-up.

All Shareholders may vote in General Meetings, either personally or by

proxy, after providing proof of identity and share ownership. This right

is subject to all applicable regulations.

Shareholders may vote by mail. Instructions for obtaining the mail

voting form will be given in the Meeting notice.

French law sets the criteria for a quorum at General Meetings based

on the type of Meeting and number of shares with voting rights. Votes

submitted by mail are not included in the calculation of a quorum unless

the company receives the voting forms, properly completed, at least

three days before the Meeting date.

Items that Shareholders wish to discuss during the Meeting must be

addressed in writing to the Management Board in accordance with

article L.225-108 of the French Commercial Code, and received by the

Management Board within the legally-prescribed deadline.

The criteria for a majority at General Meetings depend on the type of

Meeting and number of voting rights attached to the shares owned by

the Shareholders present, represented, or voting by mail.

Any undeclared shares belonging to one or more Shareholders

who, upon the request of the company, have not met the disclosure

requirements given in article L.233-7 of the French Commercial Code

and own at least 5% of the company’s shares will not have voting rights.

This will be recorded in the General Meeting minutes.

The Supervisory Board Chairman, or the Vice-Chairman in the

Chairman’s absence, presides over General Meetings. If neither of

these two people are able to preside over the Meeting, the Supervisory

Board will appoint someone to preside over the Meeting, or if this is not

possible, the General Meeting will appoint someone.

Copies of the minutes of General Meetings are certifi ed by the

Supervisory Board Chairman, Supervisory Board Vice-Chairman,

Member of the Management Board, or General Meeting Secretary.

Double voting rights (article 9 of the Articles of Association)

The Annual General Meeting on 20 October 1986 allowed for double

voting rights. Each share in the company carries one voting right. The

number of votes attached to shares is proportional to the percentage

of the company’s capital that the shares represent, with each share

bearing the right to one vote.

However, holders of registered shares or their representatives have

double voting rights at Annual General Meetings and Extraordinary

General Meetings if the shares have been registered in their name for

at least four years and are fully paid-up, or if the shares arise from the

reverse stock split of fully paid-up shares registered in their name for

at least four years.

Shares converted to bearer shares or transferred to another Shareholder

lose the double voting rights mentioned above, unless the transfer

results from an inheritance, the liquidation of spouses’ jointly-owned

assets, or an inter vivos donation to a spouse or a family member who is

an entitled successor. Such a transfer does not interrupt the four-year

period mentioned above.

Share ownership thresholds (article 7 of the Articles of Association)

As required by Articles L. 233-7 et. seq. of the French Commercial Code,

any Shareholder acting alone or in concert which exceeds or falls below

the thresholds of one-twentieth, one-tenth, one-fi fth, one-third, one-

half, or two-thirds of the company’s shares or voting rights must inform

the company and the AMF of the number of shares and voting rights

that it holds.

Any Shareholder acting alone or in concert which exceeds or falls below

the threshold of owning, directly or indirectly, 0.5% or a multiple of

0.5% of the company’s shares, voting rights, or securities convertible or

exchangeable into shares must send the company, within fi fteen days

of crossing the threshold, a registered letter with return receipt stating

the total number of shares, voting rights, or securities convertible

or exchangeable into shares that it holds either alone or in concert,

directly or indirectly.

A failure to comply with these regulations will be penalised, in

accordance with the law, at the request of one or more Shareholders

owning at least 5% of the company’s shares or voting rights and

recorded in the General Meeting minutes.

Identity of holders of bearer shares (article 7 of the Articles of Association)

In order to know the identity of its Shareholders, the company may ask

its settlement agent for the information outlined in article L.228-2 of

the French Commercial Code.


The only material contract (other than contracts entered into during

the normal course of business) which the company has entered into

as of the date of this registration document is the fi nancing agreement

discussed in section 9.5.1 “Liquidity risk”.

22 Material contracts


None.

23Third-party information, expert statements, and declarations of interest


The company issues fi nancial press releases to news agencies and

journals, and all its fi nancial information (press releases, investor

presentations, annual reports, etc.) is available on the company’s

website, www.altran.com.

24 Documents available to the public

Press releases issued since 1 January 2007

Title Date

Q4 2006 revenue 9 February 2007

Appointment of Jacques-Étienne de T’Serclaes 27 February 2007

Full-year 2006 earnings 2 April 2007

Q1 2007 revenue 3 May 2007

Altran receives the decision from the AMF sanctions committee 31 May 2007

Annual General Meeting 29 June 2007

Q2 2007 revenue 31 July 2007

Documents for the Extraordinary General Meeting on 17 September 2007 8 August 2007

H1 2007 earnings 31 August 2007

Annual General Meeting 17 September 2007

Q3 2007 revenue 6 November 2007

Q4 2007 revenue 5 February 2008

Full-year 2007 earnings 28 March 2008

Altran obtains €150 million of additional financing through credit lines 17 April 2008

Apax Partners acquires a stake in Altran, improving Altran’s financial structure 17 April 2008

Investor calendar

Q1 2008 revenue 28 April 2008

Annual General Meeting 16 June 2008

Q2 2008 revenue 28 July 2008

H1 2008 earnings 1 September 2008

Q3 2008 revenue 3 November 2008


Information on investments in associates included in the company’s

scope of consolidation is given in section 7 “Organizational chart”.

25 Information on holdings


Internal controls

A1 Appendix 1

As required by article L.225-68 of the French Commercial Code, this

report outlines the manner in which the Supervisory Board’s work is

prepared and organized, as well as the company’s internal control

procedures. More specifi cally, it discusses the following items:

the company’s corporate governance and the practices followed by

Supervisory Board and Board Committees; and

the company’s internal controls and accounting information

system.

1. Corporate Governance and Functioning of the Supervisory Board and Board Committees

In June 2005 Altran Technologies adopted a corporate governance

structure comprised of a Management Board and Supervisory Board,

with management functions and powers shared equally between the

two bodies.

1.1 Corporate governance

The Management Board has two members: Yves de Chaisemartin,

Chairman; and Eric Albrand, member . They were appointed by

the Supervisory Board on 11 January 2007 for a term of two years,

consistent with the company’s Articles of Association. Details about

the Board Members’ terms of offi ce and duties are given in section 7 of

the management report.

An Executive Committee was formed in late 2006 to help the

Management Board run the company. This Committee meets weekly

and is comprised of members of the Management Board as well as the

following three individuals:

Pascal Brier, Executive Vice President, Strategy, Marketing, and

Communications;

Cyril Roger, Executive Vice President; and

Frédéric Grard, Executive Vice President.

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Altran also has a Management Committee to review issues related to

strategy or organizational structure. This Committee is comprised of

members of the Executive Committee as well as the following four

individuals:

Dominique d’Andrimont, Senior Vice President, Benelux and

Scandinavia;

Jose Ramon Magarzo, Senior Vice President, Spain;

Yves Rommel, Senior Vice President, Germany, Austria, and

Switzerland; and

Michaël Träm, Chief Executive Offi cer, Arthur D. Little.

The Management Board meets as often as needed for the interests

of the company. It met seven times in 2007 with a 100% attendance

rate.

Limitations on the Management Board’s powers

Under article 14.1 of the company’s Articles of Association, the

Management Board must obtain approval from a majority of the

Supervisory Board as defi ned by article 16-4 of the Articles of

Association, for the following:

any capital increase or capital reduction beyond a specifi c amount

set by the Supervisory Board;

any other transactions involving the acquisition of shares in the

company, beyond a specifi c amount set by the Supervisory Board;

any issue of securities other than shares beyond a specifi c amount set

by the Supervisory Board, except for securitization transactions;

the amount and general conditions for granting stock options or

bonus shares; the Management Board has the authority to select

the benefi ciaries and the number of stock options or bonus shares

granted to each, except for stock options or bonus shares granted

to Management Board members, which must be approved by the

Supervisory Board;

the acquisition or sale by any means of a business or company by

Altran or one of its subsidiaries beyond a specifi c amount set by

the Supervisory Board, except for acquisition or sale transactions

between the Altran parent company and its subsidiaries;

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Appendix 1A1Internal controls

transactions which result in Altran losing control (as defi ned by

article L.233-3 of the French Commercial Code) or management

over a company with a net book value above a specifi c amount set

by the Supervisory Board;

any merger or sale transaction involving a stake in Altran or Altran

as a whole;

any change in Altran’s corporate purpose or legal structure;

any sale of Altran’s non-current assets or investments, beyond a

specifi c amount set by the Supervisory Board;

any borrowings for an amount above an amount set by the

Supervisory Board, excluding securitization and factoring

transactions; and

any material transaction that substantially changes the fi nancial

structure of Altran or the Altran group.

Therefore on 30 June 2005, the Supervisory Board set the following

amounts, which were renewed during Supervisory Board meetings on

8 June 2006 and 11 June 2007:

1. €5 million for the acquisition or sale by any means of a business or

company by Altran or one of its subsidiaries, except for acquisition

or sale transactions between the Altran parent company and its

subsidiaries;

2. €5 million for the net book value of a company over which Altran

loses control (as defi ned by article L.233-3 of the French Commercial

Code) or management pursuant to a transaction;

3. €5 million for the sale of any of Altran’s non-current assets or

investments; and

4. €5 million for all borrowings, excluding securitization and factoring

transactions.

1.2 Functioning of the Supervisory Board and its Special Committees

Supervisory Board members

The Supervisory Board has the following members:

Dominique de Calan, Chairman;

Michel Sénamaud, Vice-Chairman;

Roger Alibault; and

Jacques-Étienne de T’Serclaes (appointed on 5 March 2007 with

effect on 30 March 2007).

Their terms of offi ce will expire at the Annual General Meeting

held to approve the fi nancial statements for the fi scal year ending

31 December 2008. Guylaine Saucier resigned from the Supervisory

Board on 15 February 2007. Details about the Board Members’ terms

of offi ce and duties are given in section 7 of the management report.

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Altran’s Supervisory Board members meet the independence criteria

set forth in France’s Bouton report, in that they are free from any

relationship with the company, its group, and its management that

could comprise their objective judgement.

The following Works Council members are invited to attend Supervisory

Board meetings:

Heni Massouri; and

Bertrand Cahuzac.

Supervisory Board practices

The Supervisory Board has instituted a rule of procedure. The

Chairman, or Vice-Chairman if the Chairman is absent, calls Supervisory

Board meetings and leads the discussion. The Supervisory Board

and Management Board together set the meeting agenda. Every

Supervisory Board member is sent a memo detailing the topics on the

agenda before each Board meeting. The Corporate Counsel serves as

the meeting secretary.

Draft meeting minutes are sent to Supervisory Board members with the

notice for the next meeting, and are approved at the next meeting.

The Supervisory Board meets as often as needed for the interests of

the company. It met 12 times in 2007 with a 98% attendance rate;

Management Board members were also present. The following main

topics were discussed:

appointment of Management Board members;

the Management Board report, state of the company’s businesses

and subsidiaries, management forecasts, and budget;

the introduction of a new organizational structure;

the restructuring plan;

the fi nancial statements at 31 December 2006 and 30 June 2007,

and quarterly revenue data;

the company’s fi nancing;

work carried out by the internal audit department;

signifi cant litigation;

authorizations for the Management Board to provide guarantees

and securities; and

the approval of stock options and bonus shares.

The Supervisory Board has two Committees: the Audit Committee and

the Remuneration and Appointment Committee.

Audit CommitteeThe Audit Committee members from July 2005 to 15 February 2007

were Guylaine Saucier, Chairman, Roger Alibault, and Michel Sénamaud.

On 5 March 2007 the Supervisory Board appointed Jacques-Étienne

de T’Serclaes as Chairman to replace Guylaine Saucier, with effect on

30 March 2007.

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Appendix 1 A1Internal controls

The Audit Committee helps the Supervisory Board confi rm the

accuracy and faithfulness of Altran’s consolidated and individual

company fi nancial statements, and ensure that the Statutory Auditors

are independent and are given quality information.

The Audit Committee’s specifi c duties include:

evaluating any accounting assumptions; reviewing the full-year, half-

year, and quarterly consolidated and individual company fi nancial

statements before submission to the Supervisory Board; reviewing

the company’s fi nancial position, cash fl ow, and commitments;

reviewing any regulated agreements, policies for recognizing

provisions, and changes in accounting method; and presenting the

Board with its conclusions and any observed discrepancies from

accounting regulations;

assessing the relevance of the company’s accounting methods and

suggesting any pertinent changes;

evaluating the company’s internal controls and suggesting ways to

improve the internal audit department and its functioning;

reviewing all relevant documentation arising from audits of

Altran Technologies and its subsidiaries, and the corresponding

responses given by the Management Board;

giving the Supervisory Board its opinion on the Statutory Auditors

that the Management Board intends to nominate at the Annual

General Meeting, as well as opinions on the auditors’ duties and

fees, the audit scope and timetable, any related services beyond the

legally-required audit, and the effect that these services might have

on the auditors’ independence, recommendations, and Altran’s

implementation of these recommendations;

reviewing the press releases on Altran’s full-year fi nancial

statements, half-year fi nancial statements, and quarterly revenue,

along with any other fi nancial communications;

reviewing all litigation, including tax litigation, that could have a

signifi cant impact on the fi nancial statements or fi nancial position

of Altran or the Altran group;

evaluating Altran’s risk exposure, off-balance sheet commitments,

off-balance sheet commitments stemming from regular business

operations, complex commitments, any other material contractual

obligations, and fi nancial liabilities if the company runs into

diffi culties (i.e., default clauses);

evaluating Altran’s legal, industrial, and fi nancial market risks

(including currency, interest rate, and share price risks); and

assessing Altran’s procedures for ensuring compliance with stock

market regulations.

The Audit Committee’s rules of procedure were adopted by the Board

of Directors on 7 October 2003 and remain in effect. They apply to

the Audit Committee appointed by the Supervisory Board on 5 March

2007.

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The Audit Committee met nine times in 2007 with a 100% attendance

rate; the Statutory Auditors attended eight of these meetings. The

following main topics were discussed:

the full-year 2006 and half-year 2007 fi nancial statements;

quarterly revenue data;

fi nancial communications (i.e., press releases, analyst presentations,

the annual report, and the registration document);

the company’s fi nancing;

the fi ndings of the 2007 internal audit and the resulting actions

taken;

changes in the internal audit procedure and steps to bring it in-

house;

progress on improvements to the company’s internal controls; and

the budget for Statutory Auditors’ fees.

The Audit Committee also reviewed this Supervisory Board report at its

meetings on 19 February 2008 and 20 March 2008. At its meeting on

20 March 2008 the Committee reviewed the 2007 full-year fi nancial

statements. Committee members met with the Statutory Auditors at

the beginning of these meetings, before the management team was

brought in.

The Audit Committee is responsible for making sure that meeting

participants receive all necessary information about items on the

agenda at least three days before the meeting, and Committee

members hold preparatory meetings the night before to briefl y go over

this information.

In 2008 the Committee introduced a self-assessment program

including a survey on items such as the Audit Committee’s rules of

procedure, composition, practices, and overall effectiveness.

Remuneration and Appointment CommitteeThe Remuneration and Appointment Committee worked throughout

2007. Between July 2005 and 15 February 2007 the Remuneration

and Appointment Committee members were Dominique de Calan,

Chairman, Guylaine Saucier, and Michel Sénamaud. On 5 March

2007 the Supervisory Board appointed Roger Alibault to

replace Guylaine Saucier.

The Remuneration and Appointment Committee advises the

Supervisory Board on the following items:

the fi xed company, variable compensation, and insurance,

retirement, and other benefi ts paid to members of the Management

Board, members of the Management Committee, and other Altran

executives;

the method for linking the variable compensation paid to

Management Board members and other Altran executives to annual

performance reviews, and the application of this method;

the breakdown between fi xed and variable compensation, the basis

for calculating variable compensation, and rules for granting any

bonuses or premiums;

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human resources policies, including initiatives to build employee

loyalty;

appointments of Management Committee members and executives

of the parent company and biggest subsidiaries;

the amount of Board Member fees to be submitted to the Annual

General Meeting, and the procedure for allocating and distributing

these fees among Board Members;

the list of Management Board members and other Altran executives

to receive stock options or bonus shares;

the list of employees to receive funds under Altran’s profi t-sharing

scheme; and

the procedures for setting up and implementing an employee share

ownership plan.

The Remuneration and Appointment Committee met fi ve times in

2007 and discussed the following main topics:

the compensation paid to Management Board members;

the compensation policy for Management Committee members;

the employee share ownership plan; and

stock options and bonus shares granted to employees and corporate

offi cers.

The procedure set by the Supervisory Board for determining the

compensation and benefi ts to be paid to corporate offi cers is discussed

in section 7.2.2 of the Management Board report.

2. Internal controls and accounting information system

Altran’s internal controls, structured and implemented properly, aim to

control the risks stemming from its businesses and limit the chances

of error or fraud, especially in terms of its accounting and fi nancial

information. They help ensure compliance with laws and regulations,

promote transparency, protect the company’s assets, maintain effective

management of the company’s operations, improve performance,

control costs, and ensure reliable accounting and fi nancial data.

Nevertheless, like any control system, Altran’s internal controls can

only provide a reasonable assurance, but not a full guarantee, that all

such risks will be eliminated.

Altran has been steadily enhancing its internal controls by setting

up a structure to defi ne its internal control procedures, standardise

its accounting information system, and improve the security of its

accounting and fi nancial data.

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More specifi cally, the company has introduced the following:

a new organizational structure and a legal restructuring in Altran’s

main countries;

new software and internal control procedures to ensure effective

management of operations and business risks;

procedures for treating and presenting accounting and fi nancial

data;

a list of key internal controls and a self-assessment tool;

an internal controls department; and

greater involvement by the Statutory Auditors.

These steps, which cover all entities in Altran’s scope of consolidation,

have considerably strengthened the company’s auditing, internal

controls, and corporate governance systems.

2.1 New organizational structure and legal restructuring in Altran’s main countries

Altran made major changes to its organizational structure 2006 and

2007, in an effort to boost effi ciency and make the company more

transparent to its customers. Altran’s operations are now divided

into two divisions: Technology and Innovation (TI); and Consulting

& Information Systems (CIS). This new structure has been implemented

at country sites according to local conditions, through either a merger,

the consolidation of operating activities, or the introduction of a single

brand, Altran CIS, with increased sales and marketing cooperation.

This new structure allows Altran to:

group operations under a common management;

begin introducing standard operating procedures;

better align products and services with customer needs;

more effi ciently locate and hire new consultants; and

set up shared, professional support functions.

Arthur D. Little has had its own corporate governance structure

in place since 2006; this structure includes a CEO who oversees

Arthur D. Little’s offi ces in each country.

The change in Altran’s organizational structure was followed by a

legal restructuring in the main countries (Belgium, France, Spain, Italy,

Portugal, and Switzerland). A restructuring of Altran’s support functions

is currently underway. The number of Altran operating companies

with over €1 million of revenue has dropped dramatically, from 131 at

end-2005 to 98 at end-2006, 93 at end-2007, and a projected 62 at

end-2008 (based on planned mergers).

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These changes will help drive Altran’s business development and

simplify, streamline, and standardize its business processes. Moreover,

the new operating, legal, and administrative framework will institute

a culture of risk management and facilitate the roll-out of shared

software and procedures. The benefi ts of these changes have already

been seen in the marked turnaround of the company’s profi tability.

2.2 Internal controls designed to improve management effectiveness, track operations, and mitigate risks

2.2.1 New software

In 2007 Altran continued the program started in late 2005 to gradually

upgrade and standardize its IT system architecture and management

applications, in an effort to boost effi ciency and cut costs. The company

is currently installing ERP software at its European subsidiaries

(excluding France and Arthur D. Little). By the end of 2007, 65% of

Altran’s revenue outside France was being processed using this ERP,

and this fi gure is expected to exceed 80% by the end of 2008.

Altran’s France operations (excluding Arthur D. Little) began using a

single application for accounting and a single application for payroll on

1 January 2008. An enterprise IT system will be rolled-out throughout

2008; a prototype was introduced in February 2008 with a pilot

scheduled for June 2008. Altran aims to have all its operating entities

on the enterprise system by the end of 2008.

All Altran subsidiaries began using the Magnitude account consolidation

and reporting software in 2004, so as to allow for centralized

communication and a common database.

These IT system enhancements will help structure the company’s

internal controls and should result in productivity gains.

2.2.2 Main internal control procedures

Since 2004, Altran has been steadily introducing internal control

procedures designed to ensure sound corporate governance for the

group and each operating entity.

Framework proceduresAltran has set up framework procedures designed to reinforce

its internal controls, standardize business practices, and enhance

operations. However, audits and self-assessment surveys revealed

inconsistencies in the way these procedures were being implemented.

Therefore the company undertook an initiative to determine, at each

subsidiary, the key internal controls for processes deemed critical to

management, then used this list of key internal controls as a basis for

improving Altran’s overall internal controls.

The lists for Arthur D. Little and Altran’s corporate functions are still

being fi nalized, and should be ready in 2008.

Human resourcesAltran places a great deal of importance on the effective management

of its human resources. In 2007 the company established procedures

for calculating the compensation paid to operating managers, which

include specifi c targets and measurement methods. These procedures

have given Altran a corporate-wide management compensation policy

based on ongoing targets.

In 2006 Altran formed a corporate human resources department,

then introduced career management programs and revamped its

recruitment methods. An employee and payroll administration unit was

set up for its France operations in 2007, as a specialized unit within

the France human resources department. This arrangement allows

Altran’s HR staff to:

exploit synergies between experts in HR management, payroll, and

labour law;

standardize HR procedures;

implement corporate HR policies more effectively; and

better manage the payroll process.

2.2.3 Procedures for treating and presenting accounting and fi nancial data

Altran has established a set of rigorous procedures to ensure that

its accounting and fi nancial data are handled appropriately. These

procedures are designed to generate reliable information in accordance

with applicable regulations and the company’s own standards.

When Altran transitioned to IFRS in 2005, it issued a corporate

accounting methods guide outlining the company’s main accounting

principles and the methods for treating the most important

transactions.

Procedures for preparing period-end fi nancial statements, which

include written instructions, the company’s accounting calendar,

methods for intra-group reconciliations, etc., are updated at the end of

each half-year and full-year period and sent to all Altran subsidiaries.

Finance and operating managers at each Altran subsidiary send a letter

along with the subsidiary’s fi nancial statements confi rming that they

have followed the company’s accounting methods and that to the

best of their knowledge, the subsidiary has not breached any of the

company’s internal control procedures.

Altran was able to successfully shorten the time needed to generate

period-end fi nancial statements for H1 2007, while still meeting all

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regulatory requirements, thanks to efforts made in this area. These

efforts included reducing the number of operating subsidiaries,

extending the role of shared functions, and improving corporate

procedures. These efforts also helped improve the quality of the

company’s fi nancial information.

In 2005 Altran set up shared services departments in most of the

countries in which it operates (outside France). These departments are

intended to streamline the company’s support functions and enable

them to operate more professionally; they cover primarily accounting,

sales administration, and payroll. While an increasing number of

operating entities have set up shared services departments, they

remain somewhat mixed in practice. Altran undertook an initiative in

2007 to better organize these departments by appointing a Director of

Finance and Administration for each main country and an Accounting

Manager.

The company created a corporate-level accounting department and

a separate accounting department for its France operations in 2007.

The company uses Magnitude accounting software to consolidate the

monthly accounting reports from the subsidiaries into the corporate

accounts.

In 2007 Altran began using key performance indicators to track

fi nancial performance across the company. Signifi cant changes were

also made to Altran’s budgeting process, so that the process now

involves operating managers and is oriented towards the strategy

goals set by the Management Board. The Executive Committee works

with managers to review the budget for each country.

2.2.4 List of key internal controls

In early 2006 the internal audit department undertook an initiative

to identify the internal controls related to Altran’s critical business

processes, in order to generate a list of the company’s key internal

controls. This program involved breaking down Altran’s operations into

processes and sub-processes at either a local level (i.e., at operating

entities) or at a corporate level. The key internal controls were then

reconciled with those in the accounting and fi nancial internal controls

survey proposed by the AMF.

Based on this list of key internal controls, in 2006 the internal audit

department developed a self-assessment tool for the company’s

critical business processes. This self-assessment tool should help

subsidiaries better understand their risks and implement a continuous

improvement approach in order to meet Altran’s goals.

2.3 Internal audit department

The Board of Directors, following a suggestion from the Audit

Committee, set up an internal audit department which was outsourced

to PricewaterhouseCoopers in June 2004. This department operates

under an internal audit charter (with latest version dated 20 July

2006) approved by the Management Board, Supervisory Board, and

Audit Committee. The department submits reports to the Management

Board Chairman, Supervisory Board Chairman, and, if delegated by the

Supervisory Board Chairman, the Audit Committee Chairman.

An initial review of Altran’s risks carried out in 2004 was updated in

early 2006 in order to generate a risk map for the company’s critical

business processes, as determined by management, at both a local

level (i.e., at operating entities) and a corporate level. The risk map was

then used to develop a list of key internal controls, which served as the

basis for work performed by the internal audit department in 2007.

Meetings were held with managers in late 2006 in order to obtain their

perceptions of the company’s risks, and this data was used to develop

an internal audit plan for 2007. This audit plan was designed to be

consistent with the company’s internal audit charter, and forms part

of a program to audit every Altran entity over a three-year cycle (the

current cycle runs from 2006 to 2008).

The internal audit department audited eleven Altran entities in 2007

(six in France and fi ve in other countries) on some or all of the priority

issues set by management. The department also followed-up on

its recommendations from 2006 audits, helped subsidiaries carry

out self-assessments, and reviewed the results of self-assessments

completed in 2006.

Based on the audit fi ndings, the department issued recommendations

for improving the entities’ internal control procedures and gave

each entity’s management responsibility for implementing the

recommendations. The self-assessment exercise carried out by

subsidiaries should help them better understand their risks and

implement a continuous improvement approach in order to meet

Altran’s goals.

In 2008 Altran brought its internal audit activities back in-house.

This change will allow the company to broaden its internal audits so

that they cover not only compliance with company rules, but also the

effectiveness of the company’s overall operations.

2.4 Statutory Auditors

Altran’s Statutory Auditors are Deloitte & Associés and Mazars

& Guérard. They serve as the Statutory Auditors for all entities in

Altran’s scope of consolidation for which an audit is legally required,

as well as all entities without this legal requirement. By using the

same, limited number of Statutory Auditors for all entities, audits can

be standardized across the company, and audit fi ndings can be easily

communicated back to corporate headquarters.



In 2007 the Statutory Auditors once again carried out revenue audits,

which consisted of quarterly, on-site reviews at each subsidiary making

up at least 40% of Altran’s revenue. The fi ndings of these audits were

presented to the Audit Committee and Supervisory Board before the

quarterly revenue fi gures were released.

The Statutory Auditors communicate regularly with the Audit

Committee and Altran’s fi nance managers.

Conclusion

Over the past few years Altran has substantially enhanced its corporate

governance, internal controls, and audit procedures. In 2006 and 2007

the company made major changes to its organizational structure that

will help streamline business processes and further advance business

development after an initial adjustment period has been completed.

In addition, Altran has made special efforts to implement the new or

modifi ed procedures related to this organizational change. Audits

carried out during the year have revealed that subsidiaries are steadily

adopting the company’s internal control procedures.

In 2008 Altran plans to step-up these measures in order to further

strengthen its internal controls.

Dominique de Calan

Chairman of the Supervisory Board

Supervisory Board observations on the fi nancial statements for the fi scal year ended 31 December 2007 and the Management Board report

As required by French law, the Management Board presented the

Supervisory Board with the Altran consolidated fi nancial statements,

the Altran Technologies S.A. fi nancial statements, the individual

company fi nancial statements, and the Management Board report

on the company’s operations and results for the fi scal year ended

31 December 2007.

The Supervisory Board has reviewed the fi nancial statements and

Management Board report, and has heard opinions from the Audit

Committee. The Supervisory Board does not have any observations to

make on these documents.


A2 Appendix 2

2007 environmental and labour report

Human resources and environmental DATA

Number of employees

Altran Technologies had 5,877 employees at 31 December 2007,

98.92% of which were permanent employees. The company hired

1,372 permanent employees and 60 temporary employees in 2007.

Redundancies

40 employees were laid off in 2007.

Overtime

Because the vast majority (96.15%) of Altran employees have “Manager”

classifi cation under French law and therefore work a fi xed 218 days a

year, any signifi cant overtime is compensated through time off with pay

(comp time) in lieu of overtime pay, as set forth in the Syntec national

agreement on working hours in France. Under this agreement, Altran’s

“Manager” employees typically receive between 9 and 13 days off a

year, while non-“Manager” employees typically receive around 12 days

off per year. The provisions of this comp time agreement mean that the

number of overtime hours is not signifi cant.

Contracted labour

In 2007 Altran spent a total of €1,251,083 on contracted, short-term

labour.

Working hours

The standard working week at Altran is 35 hours. However, most

employees work a fi xed 218 days a year, broken down into 38.5 hours

a week with periodic days off as comp time. 126 of Altran’s

5,877 employees work part time.

Compensation and salary increases

Altran continues to make efforts to control its salary expenses and

set personalised compensation levels. Annual performance reviews

are now mandatory, and a Career Management Committee is being

created.

Personnel expenses

Personnel expenses totalled €241,610,695 in 2007. Employee benefi ts

accounted for €24,543,011 of this amount, comprised of €4,060,695

for health and personal insurance and €20,482,316 for supplementary

pension schemes. Other personnel expenses include French social

security, unemployment insurance, medical visits, etc.

Workplace equality

Altran has made a concerted effort to establish the same pay scale for

men and women across the company. However, existing salaries are

still slightly different between men and women, depending on the job

position.

Labour relations and French collective agreements

66 Ordinary and Extraordinary Meetings were held in 2007 with

representatives from subsidiary works councils, the corporate works

council, and consultative councils. 80 meetings were held with

employee delegates. In 2006 (mostly in February), several of Altran’s

subsidiaries elected employee representatives.


Appendix 2A22007 environmental and labour report

Company communications and data sharing

Altran has several tools in place to share data and pass information up

and down the company. These include:

an intranet;

a works council newsletter;

a bimonthly company newsletter;

e-mail updates for Altran consultants on assignment;

meetings involving managers from Altran’s operating entities; and

business unit conferences on special topics.

In addition, performance reviews are held regularly between:

consultants and their managers; and

administrative or support staff and their supervisors.

Altran executives and managers also undergo performance reviews.

Legal disputes

44 disputes were settled out-of-court in 2007. 304 judicial proceedings

were still ongoing at 31 December 2007.

Workplace health and safety

Altran’s health and safety committee met 29 times in 2007. The

company continued several initiatives in 2007 to set up prevention

programs at customer sites and support consultants on assignment in

countries with an unstable political climate or health-related risks.

Workplace and commuting accidents

36 lost-time accidents occurred in 2007. These accidents did not

involve temporary workers or contractors, nor did they result in any

permanent disabilities.

Work-related illnesses

Altran is not aware of any work-related illnesses reported to Social

Security agencies, nor of any pathological condition resulting from

work for Altran.

Training

2,309 employees received a total of 66,499 hours of training in 2007.

This training took place on Altran premises as well as outside sites, and

was paid for by either Altran or FAFIEC, a French fund for engineering

and consulting training.

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Altran contributed €2,340 thousand in 2007 to FONGECIF, a French

vocational training fund, and FAFIEC to help fi nance continuing

education, apprenticeships, and paid training leave.

The total expense recognized in 2007 for this training and the related

contributions was €3,217 thousand.

Disabled workers

Nine employees recognised by Cotorep as being disabled were declared

for Social Security in 2007.

Employee programs

Altran allocated €1,076,752 to its works council in 2007 for employee

programs and € to the operating budget.

Use of subcontractors

Altran spent a total of €18,432,235 on subcontractors in 2007. This

includes services provided to Altran through centralized agreements,

secondment agreements, and outside services.

Effect on community employment and regional development

Altran is aware of the effect that its businesses can have on community

employment regional development, and has instituted programs to

support employees at all its sites. These programs include health and

insurance benefi ts, repatriation assistance, and centralized processing

for visa and work permit requests.

For its subcontracted operations, Altran has centralized cooperation

agreements with its subsidiaries. Foreign subsidiaries regularly consider

their impact on the local environment and regional development.

Hiring policy

Altran is actively expanding its work force. In 2007 the company

hired 1,432 new employees, which were mostly management-level

employees on permanent contracts.

Altran employees are selected for their knowledge, communication

skills, and career potential. All Altran consultants and managers have at

least fi ve years of higher education; consultants typically have degrees

in engineering while managers have degrees in either engineering or

management.


A3 Appendix 3

Statutory Auditor’s reports

Statutory Auditors’ report on the Consolidated Financial Statements For the year ended 31 December 2007

This is a free translation into English of the Statutory Auditors’ report on the consolidated fi nancial statements issued in French and is provided solely for the convenience of English speaking users. The Statutory Auditors’ report on the consolidated fi nancial statements includes information specifi cally required by French law in such reports, whether modifi ed or not. This information is presented below the opinion on the consolidated fi nancial statements and includes an explanatory paragraph discussing the auditors’ assessments of certain signifi cant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the consolidated fi nancial statements taken as a whole and not to provide separate assurance on individual account captions or on information taken outside of the consolidated fi nancial statements.

This report on the consolidated fi nancial statements should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

To the Shareholders,

In accordance with our appointment as Statutory Auditors by your Annual

General Meeting, we have audited the accompanying consolidated fi nancial

statements of Altran Technologies for the year ended 31 December 2007.

The consolidated fi nancial statements have been approved by the

Management Board. Our role is to express an opinion on these fi nancial

statements, based on our audit.

I. Opinion on the consolidated fi nancial statementsWe conducted our audit in accordance with professional standards

applicable in France. Those standards require that we plan and perform

the audit to obtain reasonable assurance about whether the consolidated

fi nancial statements are free of material misstatement. An audit includes

examining, on a test basis, evidence supporting the amounts and

disclosures in the fi nancial statements. An audit also includes assessing

the accounting principles used and the signifi cant estimates made by

management, as well as evaluating the overall presentation of the fi nancial

statements. We believe that our audit provides a reasonable basis for our

opinion.

In our opinion, the consolidated fi nancial statements give a true and fair

view of the assets and liabilities and of the fi nancial position of the group

as at 31 December 2007, and of the results of its operations for the year

then ended in accordance with IFRSs as adopted by the European Union.

II. Justifi cation of our assessmentsPursuant to the provisions of article L.823-9 of the French Commercial

Code (Code de commerce) governing the justifi cation of our assessments,

we draw your attention to the following:

As indicated in note 1.4 “Use of estimates”, the preparation of the

fi nancial statements requires the use of estimates and assumptions.

These estimates and assumptions are primarily used in the valuation

of provisions and the preparation of business plans for the purposes of

impairment tests on intangible assets and the recognition of deferred tax

assets.

Our procedures consisted in assessing the reasonableness of the data and

assumptions on which the estimates are based.

Note 1.7 “Goodwill” to the fi nancial statements describes the goodwill

valuation policies and methods adopted and the corresponding impairment

recognized in the fi nancial year.

The company performs annual impairment tests on goodwill balances

and intangible assets with an indefi nite life, and at the time of the interim

accounts closing when there are indications of impairment loss.

We have examined the implementation of these impairment tests and the

activity forecasts and assumptions used and verifi ed the inclusion of the

appropriate disclosures in the note to the fi nancial statements.

Our procedures enabled us to assess the consistency of the estimates

performed with the assumptions adopted.

Note 1.18 “Deferred taxes” to the fi nancial statements describes the

valuation policies and methods applied to deferred tax assets.

At each year-end, the company systematically analyses the value of

deferred tax assets and impairments recorded in accordance with the

procedures set out in this note. We examined the implementation of these

analysis procedures and the activity forecasts and assumptions used and

verifi ed the inclusion of the appropriate disclosures in the note to the

fi nancial statements.

Our procedures enabled us to assess the consistency of the estimates

performed with the assumptions adopted.

These assessments were made in the context of our audit of the

consolidated fi nancial statements taken as a whole, and therefore

contributed to the opinion expressed in the fi rst part of this report.

III. Specifi c verifi cationIn accordance with professional standards applicable in France, we have

also verifi ed the information provided in the group’s management report.

We have no matters to report as to its fair presentation and its consistency

with the consolidated fi nancial statements.

La Défense and Neuilly-sur-Seine, 21 April 2008

The Statutory Auditors

Mazars & Guérard Deloitte & Associés

Jean-Luc Barlet Guy Isimat-Mirin Henri Lejetté


Appendix 3A3Statutory Auditor’s reports

Statutory Auditors’ report on the fi nancial statements for the year ended 31 December 2007

This is a free translation into English of the Statutory Auditors’ report on

the fi nancial statements issued in French and is provided solely for the

convenience of English speaking users. The Statutory Auditors’ report on the

fi nancial statements includes information specifi cally required by French

law in such reports, whether modifi ed or not. This information is presented

below the opinion on the fi nancial statements and includes an explanatory

paragraph discussing the auditors’ assessments of certain signifi cant

accounting and auditing matters. These assessments were considered for

the purpose of issuing an audit opinion on the fi nancial statements taken

as a whole and not to provide separate assurance on individual account

captions or on information taken outside of the fi nancial statements.

This report should be read in conjunction with, and construed in accordance

with, French law and professional auditing standards applicable in France.


In accordance with our appointment as Statutory Auditors by your

Annual General Meeting, we hereby report to you for the year ended

31 December 2007 on:

the audit of the accompanying fi nancial statements of Altran

Technologies;

the justifi cation of assessments;

and the specifi c procedures and disclosures required by law.

These fi nancial statements have been approved by the Management

Board. Our role is to express an opinion on these fi nancial statements,

based on our audit.

I. Opinion on the fi nancial statements

We conducted our audit in accordance with professional standards

applicable in France. Those standards require that we plan and

perform the audit to obtain reasonable assurance about whether

the fi nancial statements are free of material misstatement. An audit

includes examining, on a test basis, evidence supporting the amounts

and disclosures in the fi nancial statements. An audit also includes

assessing the accounting principles used and signifi cant estimates

made by management, as well as evaluating the overall fi nancial

statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

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In our opinion, the fi nancial statements give a true and fair view of the

fi nancial position and the assets and liabilities of the company as at

31 December 2007 and the results of its operations for the year then

ended in accordance with French accounting regulations.

II. Justifi cation of assessments

Pursuant to the provisions of article L.823-9 of the French Commercial

Code (Code de commerce) governing the justifi cation of our assessments,

we draw your attention to the following:

As indicated in note 2.5 “Use of estimates”, the preparation of the

fi nancial statements requires the use of estimates and assumptions.

These estimates and assumptions are primarily used in the valuation

of provisions and the preparation of business plans used to assess the

value of investments.

Our procedures consisted in assessing the reasonableness of the data

and assumptions on which the estimates are based.

Such assessments were performed as part of our audit approach for

the fi nancial statements taken as a whole, and contributed to the

expression of our unqualifi ed opinion in the fi rst part of this report.

III. Specifi c verifi cations and disclosures

We have also performed the specifi c verifi cations required by law in

accordance with professional standards applicable in France.

We have no matters to report regarding:

the fair presentation and the consistency with the fi nancial

statements of the information provided in the management report

of the Management Board, and in the documents addressed to the

Shareholders with respect to the fi nancial position and the fi nancial

statements;

the fair presentation of the information provided in the management

report in respect of remuneration and benefi ts granted to certain

company offi cers and any other commitments made in their favour

in connection with, or subsequent to, their appointment, termination

or change in function.

In accordance with the law, we verified that information relating to the

identity of holders of share capital and voting rights was disclosed in the

management report.

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Appendix 3 A3Statutory Auditor’s reports

Statutory Auditors’ report prepared in accordance with article L.225-235 of the French Commercial Code (Code de Commerce) on the report prepared by the Chairman of the Supervisory Board of Altran Technologies with respect to the internal control procedures for the preparation and treatment of accounting and fi nancial information

This is a free translation into English of the Statutory Auditors’ report

issued in the French language and is provided solely for the convenience of

English speaking readers. This report should be read in conjunction with,

and construed in accordance with, French law and professional auditing

standards applicable in France.


In our capacity as Statutory Auditors of Altran Technologies and in

accordance with article L.225-235 of the French Commercial Code

(Code de Commerce), we hereby report to you on the report prepared by

the Chairman of the Supervisory Board of your company in accordance

with article L.225-68 of the French Commercial Code for the year

ended 31 December 2007.

In his report, the Chairman reports, in particular, on the conditions for

the preparation and organization of the Supervisory Board’s work and

the internal control procedures implemented by the company.

It is our responsibility to report to you our observations on the

information set out in the Chairman’s report on the internal control

procedures relating to the preparation and treatment of fi nancial and

accounting information.

We performed our procedures in accordance with professional

guidelines applicable in France. These require us to perform

procedures to assess the fairness of the information set out in the

Chairman’s report on the internal control procedures relating to the

preparation and treatment of fi nancial and accounting information.

These procedures notably consisted of:

obtaining an understanding of the internal control procedures

relating to the preparation and treatment of the accounting and

fi nancial information on which the information presented in the

Chairman’s report and existing documentation are based;

obtaining an understanding of the work involved in the preparation

of this information and existing documentation;

determining if any signifi cant weaknesses in the internal control

procedures relating to the preparation and treatment of the

accounting and fi nancial information that we would have noted

in the course of our engagement are properly disclosed in the

Chairman’s report.

On the basis of these procedures, we have no matters to report

in connection with the information given on the internal control

procedures relating to the preparation and treatment of fi nancial and

accounting information, contained in the Chairman of the Supervisory

Board’s report, prepared in accordance with the last paragraph

article L.225-68 of the French Commercial Code.

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Appendix 3A3Statutory Auditor’s reports

Statement of Statutory Auditors’ fees


Mazars Deloitte

Amount (net of VAT) As a % Amount (net of VAT) As a %

Years covered: 31/12/2006 et 31/12/2007 2006 2007 2006 2007 2006 2007 2006 2007

Audit

Statutory Auditor, certification, validation of corporate and

consolidated year-end accounts(a) 2,176 2,033 95% 94% 2,222 2,108 98% 99%

Altran Technologies S.A.• 1,149 1,026 1,077 1,047

Subsidiaries• 1,027 1,007 1,115 1,061

Other duties and services directly related to the Statutory

Auditor’s mission(b) 123 141 5% 6% 48 10 2% 1%

Altran Technologies S.A.• 38 0

Subsidiaries• 123 141 10 10

SUB-TOTAL (I) 2,299 2,174 100% 100% 2,270 2,118 100% 100%

Other services rendered for the subsidiaries

Legal, taxation, corporate(c)• 0

Others(d)• 0

SUB-TOTAL (II) 0 0% 0% 0 0 0%

TOTAL = (I) + (II) 2,299 2,174 100% 100% 2,270 2,118 100% 100%

(a) Audit services include all services invoiced by the Statutory Auditors for the audit of consolidated year-end financial statements and services provided by these auditors as required under legal or regulatory provisions or with regard to the group’s commitments. They particularly include a review of the interim financial statements of the company and its subsidiaries.

(b) Other services related to the Statutory Auditors’ mission and involving, for example, consultations on the matter of accounting standards applicable with regard to the publication of financial information and due diligence required with regard to acquisitions.

(c) Taxation consultations represent all services concerning compliance with taxation regulations and taxation advice provided with regard to actual or potential transactions, payroll processing for expatriated employees or the analysis of transfer prices.

(d) Other services include consulting provided on matters such as HR, cost-cutting measures and asset valuations for the purpose of disposals, in respect of the provisions of article 24 of the Code of Ethics.

ALTRAN TECHNOLOGIESS.A. à Directoire et Conseil de Surveillance

Capital : 58 658 118,50 euros

Headquarters58 boulevard Gouvion Saint-Cyr - 75017 PARIS

702 012 956 RCS Paris

Document de référence - Altran

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