Euronext // 2021 Universal Registration Document

Financial Statements

Notes to the Consolidated Financial Statements

The hedge ineffectiveness can arise from: n different interest rate curve applied to discount the hedged item and hedging instrument; n differences in timing of cash flows of the hedged item and hedging instrument; n the counterparties’ credit risk differently impacting the fair value movements of the hedging instrument and hedged item.

payment and reset dates). The Group has established a hedge ratio of 1:1 for the hedging relationships as the underlying risk of the interest rate swap is identical to the hedged risk component. To assess the hedge effectiveness, the Group compares the changes in the fair value of the hedging instrument against the changes in fair value of the hedged item attributable to the hedged risk.

The impact of respectively the hedging instrument and the hedged item on the balance sheet as at 31 December 2021 was as follows:

Change in fair value used for measuring ineffectiveness for the period

Line item in the balance sheet Derivative financial instruments

Notional amount

Carrying amount

In thousands of euros

Interest rate swaps

500,000

11,901

(11,834)

Change in fair value used for measuring ineffectiveness for the period

Accumulated fair value adjustments

Line item in the balance sheet

Carrying amount

In thousands of euros

Senior Unsecured note #1

513,139

13,139 Non-currrent Borrowings

(11,136)

The impact of respectively the hedging instrument and the hedged item on the balance sheet as at 31 December 2020 was as follows:

Change in fair value used for measuring ineffectiveness for the period

Line item in the balance sheet Derivative financial instruments

Notional amount

Carrying amount

In thousands of euros

Interest rate swaps

500,000

23,735

4,382

Change in fair value used for measuring ineffectiveness for the period

Accumulated fair value adjustments

Line item in the balance sheet

Carrying amount

In thousands of euros

Senior Unsecured note #1

524,275

24,275 Non-currrent Borrowings

4,409

As per 31 December 2021 the ineffective part of the hedge was a loss of €0.7 million (2020: loss of €27k) recognised in “hedging result” in the Statement of Profit or Loss (see Note 13).

Hedge of net investment in foreign operations The Group had designated a EUR/GBP foreign exchange contract as a hedge of the investment in Commcise Software Ltd., a Group subsidiary in the United Kingdom, due to the uncertainty that was looming in regard to the negative impact of Brexit on GBP. There was an economic relationship between the hedged item and the hedging instrument as the net investment created a translation risk that matched the foreign exchange risk on the GBP foreign exchange contract. The Group had established a hedge ratio of 1:1 as the underlying risk of the hedging instrument was identical to the hedged risk component. The hedge effectiveness was assessed by comparing changes in the carrying amount of the foreign exchange contract that was attributable to a change in the spot rate with changes in the investment in the foreign operation due tomovements

in the spot rate (the offset method). Gains or losses on this foreign exchange contract related to the effective part of the hedge were transferred to other comprehensive income to offset any gains and losses on translation of the net investment in the subsidiary. On 20 December 2020, the Group entered into a new EUR/GBP foreign exchange contract with a notional amount of £27.3 million, expiring on 21 March 2021. As at 31 December 2020 the hedge was effective. As Brexit now has materialised, removing the existing uncertainties, the foreign exchange forward contract was not extended, consistent to the Group’s policy not to hedge foreign exchange risk (see Note 37.3). As a result, no value remains on the Consolidated Balance Sheet for this instrument as at 31 December 2021.

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2021 UNIVERSAL REGISTRATION DOCUMENT