SOPRA_STERIA_REGISTRATION_DOCUMENT_2017

2017 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

The €2.2 million increase in Other financial income and expenses derived from foreign exchange gains and losses for €4.6 million and from the rise in the net interest expense on retirement benefit obligations for €2.2 million, offset by the €5.4 million increase in other income,

which included a gain of €6.5 million arising on the conversion into shares of convertible bonds issued by CS Communication & Systèmes. The net interest expense on retirement benefit obligations is detailed in Note 5.3 “Post-employment and similar benefit obligations”.

11.2.Cash and cash equivalents

31/12/2017

31/12/2016

(in millions of euros)

Investment securities

84.2 78.2

112.8 152.6 265.4

Cash

Cash and cash equivalents

162.4

Current bank overdrafts

-6.5

-3.7

TOTAL

155.9

261.7

Net cash and cash equivalents include available liquid funds (cash at bank and in hand), liquid marketable securities that meet the definition of cash equivalents, bills of exchange presented for collection and falling due before the balance sheet date and temporary bank overdrafts. Net debt, as presented in Note 11.3, is more representative of the Group’s financial position. Marketable securities and other short-term investments include money-market holdings, short-term deposits and advances under the liquidity provider’s agreement. The risk of a change in value on these investments is negligible. Of the €162.4 million in cash and cash equivalents (excluding current bank overdrafts) at 31 December 2017, €21.9 million was held by the parent company and €140.5 million by the subsidiaries. Among the subsidiaries, Indian entities contributed €86.8 million to net cash and cash equivalents at 31 December 2017 (€114.1 million at 31 December 2016), a decline mainly due to the dividend distribution carried out by the Indian entity. If that cash held by the Indian entity is repatriated in the form of dividends, a withholding tax will apply, for which a provision has been recognised.

Cash and cash equivalents comprise cash, bank demand deposits, other highly liquid investments with maturities not exceeding three months, and bank overdrafts. Bank overdrafts are included in current liabilities as part of Financial debt – short-term portion. Cash equivalents are defined as short-term, highly liquid investments that are readily convertible to known amounts of cash, and that are subject to an insignificant risk of changes in value, with the exception for foreign exchange impacts. UCITS classified by the AMF (France’s financial markets regulator) as belonging to the money market and short-term money market categories are, for practical purposes, presumed to automatically meet all four quoted eligibility criteria. Other cash UCITS cannot be presumed to be eligible for classification as cash equivalents: an analysis must be carried out to establish whether or not the four quoted criteria are met. Cash equivalents are recognised at fair value; changes in fair value are charged to profit and loss under Cost of net financial debt.

11.3.Financial debt – Net financial debt

Current

Non-current

31/12/2017

31/12/2016

(in millions of euros)

Bonds

6.4

181.1 211.1

187.6 234.9

190.0 235.2

Bank borrowings

23.8

Finance lease liabilities

6.4

6.7

13.2

14.7

Other sundry financial debt Current bank overdrafts

230.5

- -

230.5

327.8

6.5

6.5

3.7

FINANCIAL DEBT Investment securities

273.6

398.9

672.5

771.4 -112.8 -152.6 506.0

-84.2 -78.2

- -

-84.2 -78.2

Cash

NET FINANCIAL DEBT

111.2

398.9

510.1

171

SOPRA STERIA REGISTRATION DOCUMENT 2017