SOPRA_STERIA_REGISTRATION_DOCUMENT_2017

2017 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Property, plant and equipment essentially comprises land and buildings, fixtures, office furniture and equipment and IT equipment. Property, plant and equipment is measured at acquisition cost (excluding any borrowing costs) less accumulated depreciation and any impairment losses. No amounts have been remeasured. Depreciation is based on the straight-line method in accordance with the expected useful economic lives of each fixed asset category as follows: p buildings: 25 to 30 years;

p fixtures and fittings: 4 to 10 years; p IT hardware and equipment: 3 to 8 years; p vehicles: 4 to 5 years; p office furniture and equipment: 4 to 10 years.

Depreciation is applied against assets’ acquisition cost after deducting any residual value. Assets’ residual values and expected useful lives are reviewed at each balance sheet date.

Finance leases relating to IT investments are presented in the balance sheet in the following amounts:

31/12/2017

31/12/2016

(in millions of euros)

Gross value Depreciation NET VALUE

36.9 -22.9 14.0

34.9 -19.5 15.4

Leases Leases of tangible fixed assets under which the Group takes on substantially all the risks and rewards incidental to ownership of the assets are treated as finance leases. They are recognised at the lower of the leased asset’s fair value and the present value of the minimum lease payments. Assets acquired under finance leases are depreciated over the shorter of their estimated useful lives or the applicable lease terms:

p property leases: built assets are depreciated on a straight-line basis over twenty-five years; p IT equipment leases: hardware is depreciated on a straight-line basis over four years, the most common lease term. In contrast, leases under which the lessor retains substantially all the risks and rewards incidental to ownership are treated as operating leases. Payments under such leases are expensed on a straight-line basis over the lease term, and no fixed asset is recognised.

8.4. Non-current assets classified as held for sale In 2017, the Group completed the sale of a portion of its premises in India, which had been classified as non-current assets held for sale. This sale’s impact on profit and loss came to €1.1 million, and was recognised under Other operating income and expenses included in Operating profit.

a. A non-current asset classified as held for sale is: p an asset whose carrying amount will be recovered principally through a sale transaction rather than through continuing use; p available for immediate sale in its present condition (subject only to terms that are usual and customary for sales of such assets); p whose sale is highly probable. For the sale to be considered highly probable: p the appropriate level of management must be committed to a plan to sell the asset; p an active programme to locate a buyer and complete the plan must have been initiated; p the sale is expected to be completedwithin one year (this periodmay be extended if there is evidence that the entity remains committed to its plan to sell the asset); p it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn; p the asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value.

b. A discontinued operation is a component of an entity that either has been disposed of or is classified as held for sale, and: p represents a separate major line of business or geographical area of operations; p or is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations. Once an asset is classified in non-current assets held for sale or discontinued operations, it is no longer depreciated. In the balance sheet, these assets are carried at the lower of carrying amount and fair value less costs to sell. They are presented separately in assets and liabilities, with no offsetting. The Group separates the results of discontinued operations from continuing operations and presents them separately in the income statement. This includes the post-tax profit or loss of these operations and, where applicable, the result of their fair value measurement. The Group discloses this information for prior periods in comparison to the current period. The same applies for the cash flows arising from discontinued operations.

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SOPRA STERIA REGISTRATION DOCUMENT 2017