SOPRA_STERIA_REGISTRATION_DOCUMENT_2017

PARENT COMPANY FINANCIAL STATEMENTS Accounting principles and policies

1.2. Financing

1.3. Acquisitions during the year Over the course of the year, the Company acquired: p 88.13% of the shares of Tecfit for €46.708 million; p 8.00% of the shares of La FoncièreNumérique for €80 thousand; p 11.39% of the shares of CS Communication & Systèmes SA through the conversion of the convertible bonds held by the Company since July 2014. In order to streamline the legal structure of its Property Solutions business, Sopra Steria Group acquired the following entities from its indirect subsidiary KSEOP Holdings at 31 December 2017: p Cassiopae Real Estate Paris SAS for €12.921 million; p SA Ingénierie Topographie Informatique (ITI), Cassiopae Real Estate’s holding company, for €16.266 million.

1.2.1 EXTENSION OF THE EXPIRY DATE OF THE SYNDICATED LOAN

In 2017, following the exercise of the initial one-year extension option, the expiry date was postponed to 30 September 2022, with a further one-year extension option (see Note 3.5.1) available to be exercised in 2018. 1.2.2 DIVERSIFICATION OF BORROWINGS As part of its efforts to diversify the Group’s borrowings, the Company launched a €300 million NEU MTN programme in December 2017 to supplement its €700 million NEU CP programme. This programme has been presented in documentation available on the Banque de France’s website, which was last updated on 30 June 2017. In addition, the Group arranged a €30 million two-year bilateral bank term loan drawn down in April 2017.

2. Accounting principles and policies

The financial statements for the period under review were prepared and are presented in accordance with the accounting methods in force within the Group and in compliance with the principles laid down in Articles 121-1 and 121-5 et seq. of France’s 2014 national chart of accounts (plan comptable général) . Accounting conventions have been applied in accordance with the provisions of the French Commercial Code and ANC Regulation 2016- 07 on the revision of the national chart of accounts applicable at the period-end. Generally accepted accounting principles were applied on a prudent basis and in accordance with the following underlying assumptions: p going concern basis; p consistency of accounting methods from one year to the next; p accrual basis; and p in accordance with general guidelines for the preparation and presentation of annual financial statements. No changes were made to accounting policies during the periods under review, with the exception of the application of ANC Regulation 2015- 05, as set out below. 2.1. Software development costs All research and development costs are charged to the income statement in the year they are incurred. Development costs for software and solutions may be capitalised if all of the following can be demonstrated: p the technical feasibility of completing the intangible asset for use or sale; p the intent to complete the intangible asset and use or sell it; p the ability to use or sell the intangible asset;

p the manner in which the intangible asset will generate probable future economic benefits; p the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; p the ability to reliably measure the expenditure attributable to the intangible asset during its development. No development costs for software and solutions were recognised under intangible assets, since the conditions described above were not satisfied in their entirety. The only research and development costs recognised are from the accounts of companies acquired and subsequently merged. Intangible assets also include development costs for fundamentally important computer applications used for the specific needs of companies formerly belonging to the Steria group. These development costs are amortised over their expected useful lives, subject to a maximum of seven years. 2.2. Acquired software Software is recognised at purchase cost. It is amortised on a straight- line basis over one to ten years. 2.3. Goodwill Goodwill consists of acquired assets of a business that cannot be shown in any other balance sheet item. As such, it is calculated by deducting from the total value of a business those elements of that business that can be recognised separately in the balance sheet. Sopra Steria Group conducts goodwill impairment tests every year.

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SOPRA STERIA REGISTRATION DOCUMENT 2017