Sopra Steria - 2018 Registration document

2018 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Notes to the consolidated financial statements

NOTE 1 114 1.1. Basis of preparation .......................................................................114 1.2. Application of new standards and interpretations..............................114 1.3. Material estimates and accounting judgments..................................118 1.4. Format of the financial statements and foreign currency translation...118 NOTE 2 SCOPE OF CONSOLIDATION 119 2.1. Main acquisitions ...........................................................................120 2.2. Other changes in scope..................................................................121 NOTE 3 SEGMENT INFORMATION 122 3.1. Results by reporting unit.................................................................122 3.2. Revenue by geographic area...........................................................123 3.3. Non-current assets by geographic area ...........................................123 NOTE 4 OPERATING PROFIT 124 4.1. Breakdown of revenue by reporting unit...........................................124 4.2. Other operating income and expenses included in Operating profit....126 NOTE 5 EMPLOYEE BENEFITS AND SHARE-BASED PAYMENTS 127 5.1. Staff costs .....................................................................................127 5.2. Workforce......................................................................................127 5.3. Retirement benefits and similar obligations......................................128 5.4. Share-based payments...................................................................133 5.5. Compensation of senior management (related parties)......................136 NOTE 6 CORPORATE INCOME TAX 136 6.1. Tax expense...................................................................................136 6.2. Reconciliation of theoretical and effective tax expense......................137 6.3. Deferred tax assets and liabilities ....................................................138 NOTE 7 COMPONENTS OF THE WORKING CAPITAL REQUIREMENT AND OTHER FINANCIAL ASSETS AND LIABILITIES 139 7.1. Other non-current financial assets...................................................139 7.2. Trade receivables and related accounts ...........................................141 7.3. Other current assets.......................................................................142 7.4. Other non-current liabilities.............................................................142 7.5. Other current liabilities ...................................................................143 ACCOUNTING POLICIES

NOTE 8 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS 143 8.1. Goodwill ........................................................................................143 8.2. Other intangible assets...................................................................145 8.3. Property, plant and equipment ........................................................147 NOTE 9 EQUITY-ACCOUNTED INVESTMENTS 148 9.1. Net profit from associates...............................................................148 9.2. Carrying amount of investments in associates..................................149 NOTE 10 PROVISIONS AND CONTINGENT LIABILITIES 151 10.1. Current and non-current provisions................................................151 10.2. Contingent liabilities......................................................................152 NOTE 11 FINANCING AND FINANCIAL RISK MANAGEMENT 152 11.1. Financial income and expenses .....................................................152 11.2. Cash and cash equivalents............................................................153 11.3. Financial debt – Net financial debt .................................................153 11.4. Derivatives reported in the balance sheet .......................................155 11.5. Financial risk management............................................................156 NOTE 12 CASH FLOWS 164 12.1. Change in net financial debt ..........................................................164 12.2. Reconciliation of WCR with the cash flow statement........................166 12.3. Other cash flows in the consolidated cash flow statement ...............167 NOTE 13 EQUITY AND EARNINGS PER SHARE 167 13.1. Equity ..........................................................................................167 13.2. Earnings per share........................................................................169 NOTE 14 RELATED-PARTY TRANSACTIONS 170 14.1. Transactions with equity-accounted associates and non-consolidated entities........................................................170 14.2. Subsidiaries and equity interests....................................................170 NOTE 15 OFF BALANCE SHEET COMMITMENTS 171 15.1. Contractual obligations..................................................................171 15.2. Commitments given related to current operations ...........................171 15.3. Commitments received .................................................................171 NOTE 16 SUBSEQUENT EVENTS 171

LIST OF GROUP COMPANIES

172

NOTE 17

STATUTORY AUDITORS’ FEES

174

NOTE 18

The Group’s consolidated financial statements for the year ended 31 December 2018 were approved by the Board of Directors at its meeting held on 11 April 2019.

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SOPRA STERIA REGISTRATION DOCUMENT 2018