Sopra Steria - 2018 Registration document
ADDITIONAL INFORMATION Disclosures arising from specific obligations – Other risks
2.2.6 CLIENT CREDIT RISK
A large proportion of the Group’s revenue is generated by business with public authorities and European government entities. A very small proportion of revenue is generated by business with clients residing outside the OECD, and the largest proportion of revenue is generated by key accounts, in line with the Group’s business strategy, which reduces the risk of client insolvency. Nonetheless, the Groupmay be exposed to client credit risks. Days sales outstanding (DSO) stood at 61 days at 31 December 2018 (68 days at 31 December 2017). Provisions for doubtful debtors represented 0.4% of the Group’s consolidated revenue at 31 December 2018.
The Group monitors developments in trade receivables across its entire scope. Days sales outstanding (DSO) is a performance indicator considered as one of the Group’s key operating indicators. It is also included among the objectives for managers. Regular reviews are conducted to put in place actions to address specific issues, in particular the collection of receivables. For more information, see Note 7.2 to the consolidated financial statements in Chapter 4 of this document (page 141).
2.3. Legal and tax risks
2.3.1. RISKS RELATED TO SIGNIFICANT CHANGES IN LAWS OR REGULATIONS
Developments in laws and regulations aremonitored on a regular basis so as to plan ahead for any upcoming changes at the relevant departments (Legal Department, Finance Department) and make the corresponding adjustments to rules and procedures. The aim of the introduction of a cross-divisional Internal Control and Risk Management Department is to better manage compliance issues in a coherent manner across all geographies and entities. In order to reduce risks related to changes in tax rules, the Group is actively monitoring regulatory and case law developments in the countries where it operates, making sure that its tax practices are in compliance with local laws and regulations.
The Group’s business is an unregulated activity, and therefore requires no special legal, administrative or regulatory authorisation. Nevertheless, the Group operates on behalf of clients in a number of industry sectors that are themselves regulated (such as financial services). Moreover, the Group is a multinational company that operates in many countries, subject to various constantly changing laws and regulations. The Group’s activities and operating profit might be affected by significant changes in laws or regulations, or by decisions taken by authorities. The tax rules in the various countries in which the Group operates are continually evolving. The Group cannot guarantee that the existing tax arrangements, including those granting eligibility for tax credits, especially for research activities, will continue to apply. Furthermore, the Group cannot guarantee that the current interpretations of existing tax arrangements will not be challenged, potentially with adverse consequences for its financial position or results.
SOPRA STERIA REGISTRATION DOCUMENT 2018
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