SOPRA_STERIA_REGISTRATION_DOCUMENT_2017

PARENT COMPANY FINANCIAL STATEMENTS Notes to the income statement

4.4. Financial income and expenses

2017

2016

(in thousands of euros)

Dividends received from equity interests

34,205 -10,878

19,871 -11,692

Interest on bank borrowings and similar charges

Interest on employee profit-sharing Discounting of the pension provision

-440

-946

-1,119 2,054

-1,325 1,160 26,580

Interest received and paid on Group current accounts

Positive and negative foreign exchange impact (including provision)

586

Impairment of equity interests

11,693 10,775 46,876

645

Other financial income and expenses

4,569

FINANCIAL ITEMS

38,862

The detail of dividends received is listed in the table of subsidiaries and other equity interests (see Note 5.9). Foreign exchange gains and losses mainly arise from transactions carried out in pounds sterling during the year.

The change in impairment of equity interests is detailed in Note 3.1.3.b. Other financial income and expenses includes in particular a capital gain of €6.467 million arising on the conversion into shares of the CS Communication & Systèmes convertible bonds.

4.5. Exceptional income and expenses

Expenses

Income

(in thousands of euros)

Scrapping of property, plant and equipment

-710

-

Disposal of financial investments

-1,355 -11,121

6,220

Gains or losses on treasury share transactions

14,191

Provision for taxes

-765

2,769

Expenses related to vacant premises p actual expenses/income for the year p additions to/reversals of provisions

-3,792

-

-

2,927 2,159

Other

-3,371

EXCEPTIONAL ITEMS

-21,114

28,266

4.8. Corporate income tax

The main movements in exceptional income and expenses were: p capital gains on the sale of Diamis and Intest shares; p a capital gain on the sale of treasury shares in connection with the We Share 2017 plan in the amount of €2.710 million. 4.6. Employee profit-sharing The amount of legally prescribed employee profit-sharing was nil in 2017, due to the fact that net taxable profit was less than 5% of equity. 4.7. Incentives Incentives for 2017 were provisioned in the amount of €12.918 million. Additional incentives in respect of 2016 were paid in 2017 in the amount of €3.633 million.

4.8.1. TAX CONSOLIDATION Sopra Steria Group and its subsidiaries Sopra Banking Software, Sopra HR Software, Sopra I2S, Beamap, CIMPA and Sopra Steria Services have opted to file as a tax consolidation group as from financial year 2013. Each of the companies computes and recognises its own income tax charge as if it were taxed separately. The tax saving arising from application of the Group tax regime, equal to the difference between the sum of tax paid to the parent company by consolidated companies and tax calculated on Group earnings and actually payable to the French Treasury, will accrue to the parent company. However, given the provisions laid down in Article 2 of these agreements, tax savings recognised by the parent company during the financial year, arising from the use of tax losses and net long-term capital losses reported by consolidated companies, are only temporary, since they will be taken into account by consolidated companies when the latter determine their taxes for subsequent financial years. In 2017, Sopra Steria Group recognised a tax expense of €1.554 million, including tax consolidation gains in the amount of €5.790 million.

213

SOPRA STERIA REGISTRATION DOCUMENT 2017