Sopra Steria - 2019 Universal registration document

6 2019 PARENT COMPANY FINANCIAL STATEMENTS Notes to the income statement

Principal/Agent distinction Should the analysis of a contract identify the resale of goods or p services as a separate performance obligation, it must be determined whether the Company is acting as an agent or a principal. It is acting as an agent if it is not responsible to the customer for satisfying the performance obligation and for the customer’s acceptance, if there is no transformation of the goods or services and there is no inventory risk. In this EXPENSES TRANSFERRED 4.1.2. Expenses transferred in financial year 2019 amounted to €47.512 million. They mainly consisted of transfers from one expense account to another, as well as intercompany rebilling of structural costs initially recognised by Sopra Steria as part of its management of certain contracts and Group employee share ownership plans.

situation, revenue is recognised for a net amount corresponding to the agent’s margin or a commission. Otherwise, where it obtains control of the good or service prior to its transfer to the end customer, it is acting as a principal. Revenue is recognised for the gross amount and external purchases are recorded in full as an operating expense.

FREE PERFORMANCE SHARE PLANS 4.2.2. AS A LONG-TERM INCENTIVE

At the Combined General Meeting of Sopra Steria Group on 12 June 2019, the shareholders authorised the Board of Directors to award free performance shares in the Company to employees and/or executive company officers, for up to a maximum of 3% of the Company’s share capital on the date on which the Board of Directors decides to make the award. At maturity, the Board of Directors may decide whether to issue new shares or buy back existing shares to fund these plans. Performance shares are delivered to recipients provided they meet the requisite attendance and performance conditions on conclusion of the vesting period. Performance conditions are measured by changes over three years in operating profit on business activity, consolidated revenue and consolidated free cash flow. In 2019, three multi-year free performance share plans – known as the 2016, 2017 and 2018 LTI (long-term incentive) plans – were in force. The 2016 LTI plan expired in March 2019.

Staff costs and employee 4.2. benefits

EMPLOYEE PROFIT-SHARING AND INCENTIVES 4.2.1. The amount of legally prescribed employee profit-sharing was nil in financial year 2019, since net taxable profit equated to less than 5% of equity. Incentives for 2019 were provisioned in the amount of €13.172 million. During the financial year, an additional €4.506 million expense was recognised for additional incentives in respect of 2018.

2016 LTI plan 2017 LTI plan 2018 LTI plan

Date of General Meeting

22/06/2016

22/06/2016 24/02/2017 25/10/2017

22/06/2016

Date granted by the Board of Directors

24/06/2016

16/02/2018

Total number of shares in awards granted subject to conditions

88,500

109,000

128,000

Number of shares originally granted to: Company officers p

3,000

3,000

3,000

Top ten employee grantees p

19,000

20,000

21,000

Vesting date France p

31/03/2019 31/03/2019

31/03/2020 31/03/2020

31/03/2021 31/03/2021

Other countries p

Number of potential shares that could have been granted as at 1 January 2019

52,618 52,287

67,432

97,999

Granted in 2019

-

-

Awards cancelled in 2019 Ownership at 31/12/2019

331

3,495

19,427

52,287

-

-

SHARES REMAINING AT 31 DECEMBER 2019

-

63,937

78,572

Plan with conditional grant depending on the recipient’s continued employment and performance requirements as measured by changes over three years in operating profit on business activity, consolidated revenue and consolidated free cash flow.

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SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019