Sopra Steria - 2018 Registration document

2018 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

The Group’s residual exposure to interest rate risk is as follows:

Less than 1 year

More than 5 years

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Rate 31/12/2018

(in millions of euros)

Fixed rate

-

-

- - - - -

- - - - -

- - - - -

- - - - -

- - - - - - - - - - - - - - - - - - - - - -

Investment securities

Floating rate Floating rate Fixed rate Floating rate Total financial assets

50.8 50.8 119.5 119.5

Cash and cash equivalents

-

-

170.3 170.3

Financial assets

170.3 170.3 -185.0 -185.0

- -

- -

- -

- -

Bonds

Fixed rate

Bank borrowings Bank borrowings

Floating rate

-181.5 -23.2 -21.5 -10.8 -10.8 -115.4

Fixed rate

-60.0

-

-

-60.0

- - - - - - - -

- -

NEU CP (commercial paper) & MTN NEU CP (commercial paper) & MTN

Floating rate

-236.0 -157.0 -65.0 -14.0

Fixed rate Fixed rate

-20.0

-

-

-20.0

-16.9 -8.3 -5.8 -2.2 -0.4 -0.1

Finance lease liabilities

Floating rate

-

-

- - - - -

-

- - - - -

Fixed rate

-13.2 -0.8 -68.1 -68.1

-12.4

Other financial debt

Floating rate

- - -

Fixed rate

-

-

Current bank overdrafts

Floating rate Fixed rate Floating rate Total financial liabilities FIXED RATE FLOATING RATE Fixed-rate payer swaps in euros Fixed-rate payer swaps in foreign currency Fixed-rate payer options

-10.5 -10.5

-295.1 -194.1 -5.8 -74.6 -0.4 -20.1 -496.1 -258.8 -86.5 -24.8 -10.8 -115.4

Financial liabilities (gross exposure before hedging)

-791.2 -452.9 -92.3 -99.4 -11.2 -135.4 -295.1 -194.1 -5.8 -74.6 -0.4 -20.1 -325.8 -88.5 -86.5 -24.8 -10.8 -115.4

NET EXPOSURE BEFORE HEDGING

50.0 50.0

-

-

-

-

-

-

-

-

-

-

-

-

Interest rate hedging instruments

300.0

-

- 300.0

-

-

- - - - -

FIXED RATE

-645.1 -244.1 -5.8 -374.6 -0.4 -20.1 -146.1 -208.8 -86.5 275.2 -10.8 -115.4 -645.1 -244.1 -5.8 -374.6 -0.4 -20.1 24.2 -38.5 -86.5 275.2 -10.8 -115.4

GROSS EXPOSURE AFTER HEDGING

FLOATING RATE

FIXED RATE

NET EXPOSURE AFTER HEDGING

FLOATING RATE

As part of its general risk management policy, the Group systematically hedges against foreign currency transaction risks that constitute material risks for the Group as a whole. Centralised management of foreign currency transaction risk is in place with the Group’s main entities (apart from India). Sopra Steria Group acts as the centralising entity, granting exchange rate guarantees to subsidiaries and, after netting internal exposures, hedges the residual exposure through the use of derivatives. Foreign currency risk hedging mainly relates to transaction exposures involving the Group’s production platforms in India and Poland and certain commercial contracts denominated in US dollars. Changes in fair value corresponding to these hedges are taken to profit or loss for invoiced items and to equity for future cash flows. The remeasurement through profit or loss of these financial instruments hedging balance sheet items is offset by the revaluation of foreign currency receivables over the period.

The fair value of interest rate hedging derivatives is measured using the following assumptions:

p Level 1: Quoted data: 0%;

p Level 2: Observable data: 100%;

p Level 3: Internal models: 0%. 11.5.4.Foreign currency risk The Group is subject to three main types of risks linked to fluctuations in exchange rates: p translation risk in the various financial statements making up the Group’s consolidated financial statements for business conducted in countries with a functional currency other than the euro; p transaction risk linked to purchases and sales of services, where the transaction currency is different from that of the country in which the service is recognised; p financial foreign currency risk arising from the Group’s foreign- currency borrowings (risk arising from changes in the value of the financial debt denominated in pounds sterling).

161

SOPRA STERIA REGISTRATION DOCUMENT 2018