SOPRA_STERIA_REGISTRATION_DOCUMENT_2017

2017 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

be amortised over the period to July 2019 as a reduction to interest expense. At 31 December 2017, the amount remaining to amortise is €4.3 million (€7.0 million at 31 December 2016). 11.3.2. Bank borrowings In 2014, the Group took out a €1,200 million five-year borrowing facility with two options to extend the expiry date by one year. This facility comprised a €200 million amortising tranche, an £80 million amortising tranche and a €900 million multi-currency revolving credit line. In 2017, following the exercise of the first one-year extension option, the expiry date was postponed to 6 July 2022. The second one-year extension option is available to be exercised in 2018. At 31 December 2017, the outstanding amount drawn on the loan is from the two amortising tranches (€144 million and £57.6 million after contractual amortisations for the period). The €900 million multi-currency revolving credit facility is undrawn. Furthermore, the Group arranged a €30 million two-year bilateral bank term loan drawn down in April 2017. 11.3.3. Finance lease liabilities The outstanding amount of liabilities on finance leases came to €13.2 million at 31 December 2017, versus €14.7 million at 31 December 2016. The €1.5 million decrease in the outstanding amount derived from the arrangement of €5.9 million in new lease agreements and the €7.4 million in amortisation on previous leases. Depending on the type of asset financed, the term of these finance leases is either three or four years.

Financial debt essentially comprises: p bond debt and bank borrowings: initially recognised at fair value net of transaction costs incurred. Borrowings are subsequently recognised at amortised cost; any difference between the capital amounts borrowed (net of transaction costs) and the amounts repayable is recognised in profit or loss over the duration of the borrowings using the effective interest method; p NEU CP short-term negotiable securities (previously referred to as commercial paper), which have a maturity of less than 12 months and are thus recognised at amortised cost; p liabilities on finance leases: a liability is recognised at the inception of each lease is based on the present value of future lease payments, discounted using the interest rates implicit in each lease; p bank overdraft facilities. Financial debt repayable within 12 months of the balance sheet date is classified as current liabilities. 11.3.1. Bonds The Group has a bond issued by Groupe Steria to institutional investors in 2013, in the amount of €180 million, maturing in July 2019, and with a fixed annual coupon of 4.25%. Upon the acquisition of Steria, this liability was revalued at fair value at the takeover date, with a resulting revaluation gain of €13.0 million. This amount will

31/12/2017

31/12/2016

Minimum payments for finance leases

Present value of future lease payments

Present value of future lease payments

Future financial expense

(in millions of euros)

Less than one year One to five years More than five years

6.5 6.7

- - - -

6.4 6.7

6.4 8.3

-

-

-

TOTAL

13.2

13.2

14.7

11.3.4. Other financial debt In 2015, the Group arranged an unrated multi-currency NEU CP (previously referred to as commercial paper) programme of short- term negotiable securities that was not underwritten, in a maximum amount of €700 million. This programme has been presented in documentation available on the Banque de France’s website, which was last updated on 30 June 2017. The average amount outstanding under the NEU CP programme was €458.2 million in 2017, compared with €443.9 million in 2016, and was very active throughout 2017. The Group benefited from the fall in short-term euro rates as well as investor interest in maturities of 6 to 12 months. The outstanding amount under the NEU CP programme at 31 December 2017, is €210.6 million (€302.7 million at 31 December 2016). The NEU CPs are included in Other sundry financial debt . In December 2017, as part of its efforts to diversify its borrowings, the Group arranged an NEU MTN programme of medium-term negotiable securities that was not underwritten, with a maximum amount of €300 million. As is the case for the earlier NEU CP programme, the NEU MTN programme is presented in documentation available on the Banque de France’s website. At 31 December 2017, no NEU MTNs had been issued. At 31 December 2017, the impact of the sale of trade accounts receivable with recourse in France for an amount of €19.8 million (€25.0 million at 31 December 2016) was recognised in Other sundry financial debt (see Note 7.2).

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. These leases give rise to the recognition of a financial liability corresponding to the present value of the minimum lease payments. Each lease payment is apportioned between the finance charge and the reduction of the outstanding liability so as to produce a constant periodic rate of interest on the remaining balance of the liability. The corresponding contractual lease commitments, net of finance costs, are included within Financial debt . The corresponding finance costs are recognised over the lease term in profit or loss, under Cost of financial debt. In contrast, leases under which the lessor retains substantially all the risks and rewards incidental to ownership are treated as operating leases. These leases are not recorded as either assets or liabilities, specifically including via financial liabilities, and no financial expense is recognised.

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SOPRA STERIA REGISTRATION DOCUMENT 2017