Sopra Steria - 2018 Registration document

PARENT COMPANY FINANCIAL STATEMENTS Notes to the balance sheet

4.4. Provisions for contingencies and losses

Amounts (beginningof period)

Reversals for the year

Changes in scope

Additions for the year

Amounts (end of period)

Notes

Used Not used

(in thousands of euros)

Provisions for retirement bonuses

63,194

1,417

6,458

2,069 2,200

1,202

67,798

4.4.1

Provisions for restructuring

5,710 1,798 2,537

- - -

- -

-

3,510

Provisions for commercial disputes Provisions for employee disputes Provisions for foreign exchange losses Provisions for contingencies on free share plans Other provisions for contingencies Provisions for taxes

298 647

1,500

0

402

146

2,147

10,332 22,813

- -

5,519 10,332

- -

5,519

10,877

-

33,690

4.4.2

9,592

- -

-

- -

1,669

7,923 1,388

4.4.3

-

1,388

-

TOTAL

115,976

1,417

24,644 15,546

4,517

121,975

4.4.1. PROVISIONS FOR RETIREMENT BONUSES Sopra Steria Group recognises provisions for its employee benefit obligations in accordance with the terms of voluntary and compulsory retirement under the Syntec collective bargaining agreement, as amended in 2004 following the French pension reform act of 21 August 2003. Provisions for retirement bonuses are recognised on an actuarial basis as described in Note 3.10.1. Assumptions referring to mortality rates are based on published statistical data. Turnover tables are based on five-year age brackets and are updated at each balance sheet date to reflect separation data for the last five years. The discount rate used to calculate the present obligation is the yield on high-quality corporate bonds (rated AA or higher) denominated in the payment currency and with a maturity close to the average estimated term of the retirement benefit obligation concerned. The Company uses the 20-year Bloomberg rate for the eurozone as the benchmark for discounting its retirement benefit obligations. At 31 December, this rate stood at 1.89%. The total obligation in respect of retirement bonuses amounted to €67.798 million.

4.4.2. PROVISIONS FOR TAXES The total amount of provisions for taxes recognised at 31 December 2018 was €33.690 million. A further €10.877 million was provisioned in the year following receipt of the proposed tax reassessment for the 2014, 2015 and 2016 financial statements. 4.4.3. PROVISIONS FOR PLANS TO AWARD EXISTING SHARES FREE OF CHARGE Since the Company had expressed its intention to fund long-term incentive (LTI) plans by acquiring existing shares in advance, it had to recognise a provision for contingencies in recognition of the probable outflow of resources. At 31 December 2018, the total amount of the provision in respect of the 2016, 2017 and 2018 LTI plans was €7.923 million. The characteristics of these plans are set out in Note 6.6. The first shares will be delivered in April 2019 when the 2016 LTI plan closes.

4.5. Liabilities

4.5.1. FINANCIAL DEBT

Amounts (beginning of period)

Amounts (end of period)

Notes

Increase

Decrease

(in thousands of euros)

208,921 210,600

597

24,281 53,600

185,237 157,000 99,000 212,011

Syndicated loan

4.5.1.a 4.5.1.b 4.5.1.c 4.5.1.d

NEU CP programme NEU MTN programme Other financial debt Employee profit-sharing

-

-

99,000 30,013

-

261,048

79,050

5,272

- -

2,992

2,280

Bonds

180,000

-

180,000

4.5.1.e

Accrued interest on financial debt

4,716

8,485

8,236

4,966

TOTAL

870,557

138,095

168,159

840,494

191

SOPRA STERIA REGISTRATION DOCUMENT 2018