SOPRA_STERIA_REGISTRATION_DOCUMENT_2017

2017 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Notes to the consolidated financial statements

NOTE 1 136 1.1. Basis of preparation .......................................................................136 1.2. Application of new standards and interpretations..............................136 1.3. Material estimates and accounting judgments..................................137 1.4. Format of the financial statements and foreign currency translation...138 NOTE 2 SCOPE OF CONSOLIDATION 139 2.1. Main acquisitions ...........................................................................139 2.2. Other changes in scope..................................................................141 NOTE 3 SEGMENT INFORMATION 141 3.1. Results by reporting unit.................................................................141 3.2. Revenue by geographic area...........................................................142 3.3. Non-current assets by geographic area ...........................................142 NOTE 4 OPERATING PROFIT 143 4.1. Revenue ........................................................................................143 4.2. Other operating income and expenses included in Operating profit....144 NOTE 5 EMPLOYEE BENEFITS 145 5.1. Staff costs .....................................................................................145 5.2. Workforce......................................................................................145 5.3. Retirement benefits and similar obligations......................................145 5.4. Share-based payments and related items........................................152 5.5. Compensation of senior management (related parties)......................154 NOTE 6 CORPORATE INCOME TAX 154 6.1. Tax expense...................................................................................154 6.2. Reconciliation of theoretical and effective tax expense......................155 6.3. Deferred tax assets and liabilities ....................................................156 NOTE 7 COMPONENTS OF THE WORKING CAPITAL REQUIREMENT AND OTHER FINANCIAL ASSETS AND LIABILITIES 157 7.1. Other non-current financial assets...................................................157 7.2. Trade accounts receivable ..............................................................159 7.3. Other current assets.......................................................................160 7.4. Other non-current liabilities.............................................................160 7.5. Other current liabilities ...................................................................161 NOTE 8 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS 161 8.1. Goodwill ........................................................................................161 8.2. Other intangible assets...................................................................163 8.3. Property, plant and equipment ........................................................165 8.4. Non-current assets classified as held for sale ..................................166 ACCOUNTING POLICIES

NOTE 9 167 9.1. Net profit from associates...............................................................167 9.2. Carrying amount of investments in associates..................................167 NOTE 10 PROVISIONS AND CONTINGENT LIABILITIES 169 10.1. Current and non-current provisions................................................169 10.2. Contingent liabilities......................................................................170 NOTE 11 FINANCING AND FINANCIAL RISK MANAGEMENT 170 11.1. Financial income and expenses .....................................................170 11.2. Cash and cash equivalents............................................................171 11.3. Financial debt – Net debt ..............................................................171 11.4. Derivatives reported in the balance sheet .......................................173 11.5. Management of risk factors...........................................................174 NOTE 12 CASH FLOWS 182 12.1. Change in net financial debt ..........................................................182 12.2. Reconciliation of the working capital requirement with the statement of cash flows....................................................184 12.3. Other cash flows...........................................................................185 NOTE 13 EQUITY AND EARNINGS PER SHARE 185 13.1. Equity ..........................................................................................185 13.2. Earnings per share........................................................................187 NOTE 14 RELATED-PARTY TRANSACTIONS 188 14.1. Transactions with equity-accounted associates and non-consolidated entities........................................................188 14.2. Subsidiaries and associated entities...............................................188 NOTE 15 OFF BALANCE SHEET COMMITMENTS 189 15.1. Contractual obligations..................................................................189 15.2. Commitments given related to current operations ...........................189 15.3. Commitments received .................................................................189 NOTE 16 SUBSEQUENT EVENTS 189 EQUITY-ACCOUNTED INVESTMENTS

LIST OF GROUP COMPANIES

190

NOTE 17

STATUTORY AUDITORS’ FEES

192

NOTE 18

The Group’s consolidated financial statements for the year ended 31 December 2017 were approved by the Board of Directors at its meeting held on 11 April 2018.

135

SOPRA STERIA REGISTRATION DOCUMENT 2017