Sopra Steria - 2018 Registration document

2018 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

In 2017, Other financial income included non-recurring income of €6.5 million related to the conversion of CS Communication & Systèmes convertible bonds into shares. In addition, 2018 saw a €2.2 million favourable change in foreign exchange gains and losses, which were balanced in 2018, in part thanks to the implementation of centralised management of foreign exchange risk.

The net interest expense on retirement benefit obligations is detailed in Note 5.3 “Retirement benefits and similar obligations”.

11.2.Cash and cash equivalents

31/12/2018

31/12/2017

(in millions of euros)

Investment securities

50.3

84.2 78.2

Cash and cash equivalents Cash and cash equivalents

120.0 170.3 -10.5 159.8

162.4

Current bank overdrafts

-6.5

NET CASH IN THE CASH FLOW STATEMENT

155.9

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 agreement. The risk of a change in value on these investments is negligible. Of the €170.3 million in cash and cash equivalents (excluding current bank overdrafts) at 31 December 2018, €88.2 million was held by the parent company and €82.1 million by the subsidiaries. Among the subsidiaries, the entity in India contributed €52.9 million to net cash and cash equivalents at 31 December 2018 (versus €86.8 million at 31 December 2017) following dividend distributions. Should this cash held in India be repatriated in the form of dividends, a withholding tax would 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 of foreign exchange impacts. UCITS classified by the AMF (France’s financial markets regulator) as belonging to the “money market fund” and “short-term money market fund” 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 or loss under Cost of net financial debt.

11.3.Financial debt – Net financial debt

Current

Non-current

31/12/2018

31/12/2017

(in millions of euros)

Bonds

185.0

-

185.0 242.3

187.6 234.9

Bank borrowings

24.0

218.3

Finance lease liabilities

8.3

8.6

16.9

13.2

Other sundry financial debt Current bank overdrafts

225.1

111.4

336.5

230.5

10.5

-

10.5

6.5

FINANCIAL DEBT Investment securities

452.9

338.3

791.2

672.5

-50.3

- -

-50.3

-84.2 -78.2

Cash and cash equivalents NET FINANCIAL DEBT

-120.0 282.6

-120.0 620.9

338.3

510.1

153

SOPRA STERIA REGISTRATION DOCUMENT 2018