Assystem - 2018 Register document

BUSINESS REVIEW AND FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

Deferred taxes Deferred tax assets are recognised for the carry forward of unused tax losses and unused tax credits and deductible temporary differences only to the extent that it is probable that the Company and/or its subsidiary(ies) concerned will have sufficient future taxable profit against which the unused tax losses, tax credits or temporary differences can be utilised. In assessing whether it will have sufficient taxable profit to recover deferred tax assets, the Group takes into account forecasts of future taxable profits, non-recurring expenses included in past losses and which should not be incurred again in the future, and its past history of taxable profit for prior years. Figures for deferred taxes related to unused tax losses and temporary differences are presented in Note 12.3 – Deferred taxes. Goodwill impairment The estimates used in the assumptions for calculating goodwill impairment are set out in Note 3.4 – Goodwill impairment testing. Employee benefit obligations The estimates and assumptions used for calculating employee benefit obligations and the related sensitivity analyses are set out in Note 5.3.2 – Employee benefit obligations.

to completion may be updated throughout the life of the contract, which could significantly impact future profit.

Provisions for losses on completion of contracts and project warranty costs Provisions for expected losses on engineering contracts may be recognised when applying the percentage of completion method in accordance with IAS 37 (see Note 5.1 – Revenue and working capital requirement). When it becomes probable that total contract costs will exceed total contract revenue a provision is recognised for the related loss, after deducting any previously recognised losses. However, the loss actually recognised on completion of the contract may differ from the amounts originally provisioned, and may have an impact on future profit. Figures relating to provisions are presented in Note 9 – Provisions. Impairment of trade receivables A lower recoverability rate for a receivable than initially estimated or a default by a major client could adversely affect the Group’s future profit. Figures relating to impairment of trade receivables are presented in Note 5.1 – Revenue and working capital requirement.

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SIGNIFICANT EVENTS OF THE YEAR

NOTE 2

In order to finance this additional investment, the Group (i) put in place a €30 million medium-term bullet loan repayable in September 2022 and (ii) drew down €30 million of its revolving credit facility set up in September 2017. At the same time, the maximum amount of this revolving credit facility was increased from €120 million to €150 million. External growth The Group carried out further external growth transactions in France in 2018, strengthening its skills in the project management field (see Note 3.2 – Business combinations).

The following significant events took place in 2018:

Additional investment in Expleo Group On 31 January 2018 the Group took up €60.72 million worth of shares and convertible bonds (split into 50% ordinary shares and 50% convertible bonds with a capitalisable 9% annual coupon) issued by Expleo Group as part of equity and quasi-equity financing raised to help fund the acquisition of Software Quality Systems AG (“SQS”) by an Expleo Group subsidiary. Consequently, Assystem now holds a 38.16% interest in Expleo Group’s capital and 38.17% of its equity and quasi-equity instruments.

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ASSYSTEM

REGISTRATION DOCUMENT 2018