Sopra Steria - 2019 Universal registration document

5 2019 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

At 31 December 2019, Sopra Steria Group held a 32.57% stake in itself in the running of business or influence variable returns from the share capital of Axway Software, unchanged with respect to this subsidiary. As such, the Group exerts a significant influence and 31 December 2018. This stake does not give the Group a reviews this situation each financial year. In 2019, no events or controlling interest in this subsidiary and does not allow it to involve developments occurred that changed this situation. Their recoverable amount is estimated as follows:

31/12/2019

31/12/2018

Market value (Category 1)* Market value less costs to sell

85.7 84.0

85.9 84.1

Value in use

207.4

194.1

DCF calculation parameters: Discount rate p Perpetual growth rate p RECOVERABLE AMOUNT

9.5% 2.0%

10.3%

2.4%

207.4

194.1

Since Axway Software’s shares are listed, their fair (market) value less costs of disposal is equal to market price less costs to sell, which constitutes the Level 1 fair value under IFRS. (*)

Their value in use – the higher of the two values used to determine the recoverable amount – supports the carrying amount of the equity-accounted Axway Software shares at 31 December 2019. The Group tested 0.5-point changes in its assumptions, all other things being equal. A 0.5-point increase in the discount rate would lead to an impairment loss of €1.6 million; a 0.5-point decrease in the perpetual growth rate would be neutral; and the combination

of these two factors – a 0.5-point increase in the discount rate and a concurrent 0.5-point decrease in the perpetual growth rate – would lead to an impairment loss of €8.8 million. This test is based on the judgement of management and was developed within the context of uncertainties inherent in the transformation of Axway

Software’s business model.

SUMMARY FINANCIAL INFORMATION RELATING TO THE AXWAY SOFTWARE GROUP ❙

31/12/2019

31/12/2018

(in millions of euros)

Non-current assets

442.7 126.2 362.6

422.7 131.1 362.8

Current assets

Equity

Non-current liabilities excluding equity

75.7

53.2

Current liabilities

130.6 300.0

137.9 283.8

Revenue Net profit

5.4

11.0

Recognition and impairment of investments in associates Investments in associates are initially recognised at acquisition cost, and their value is then adjusted to reflect changes in the Group’s share of their net assets. The remainder of this share appears under Equity-accounted investments on the asset side of the balance sheet. Its change over the financial year is recognised in profit or loss within Net profit from associates. Equity-accounted shares in a company constitute a single asset and must be tested for impairment in accordance with IAS 36 "Impairment of Assets". Goodwill on associates is included in the value of equity-accounted investments, the value of which is measured inclusive of goodwill. As such, goodwill on associates must not be tested for impairment separately.

At each balance sheet date, where there is an indication of impairment of an investment in an associate, the parent company must carry out an impairment test consisting of comparing the carrying amount of the relevant equity-accounted investment with its recoverable amount. Under IAS 36, the recoverable amount of an investment in an associate is the higher of its value in use, calculated on the basis of future cash flows, and the fair value of the investment less costs of disposal. Where an associate’s shares are listed, fair value less costs of disposal is equal to market price less costs to sell: in the absence of any firm sale agreement, this is the price at which the shares are currently trading. Any impairment losses are charged to profit or loss as Other operating income and expenses. Where there is an improvement in the recoverable amount of an equity-accounted investment such that the impairment loss may be written back, the full amount of the impairment loss, including the portion relating to goodwill, must be written back.

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SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019