Sopra Steria - 2019 Universal registration document

6 2019 PARENT COMPANY FINANCIAL STATEMENTS Notes to the income statement

Exceptional items 4.4.

Notes

2019

2018

(In thousands of euros)

Scrapping of fixed assets

-

-11

Disposal of financial investments

2,675

-

Gains or losses on treasury share transactions

639 580

-1,128 -10,877

5.4.2

Provisions for tax risks Reorganisation costs

-6,744

-235 -395

Provision for commercial disputes

-

Accelerated depreciation and amortisation

172

350 289

Other

3,324

EXCEPTIONAL ITEMS

647

-12,007

The main movements in exceptional income and expenses in 2019 were as follows: reorganisation costs: down €6.744 million; p proceeds from sale of financial assets: up €2.675 million; p a positive tax consolidation impact arising from certain p subsidiaries no longer being eligible for credits for withholdings on tax due to the parent company: up €3,172 million.

Exceptional items arising from ordinary activities are items that do not arise from the Company’s day-to-day operations, either because they are unusual in amount or impact or because they are abnormal, non-predictive and infrequent.

Corporate income tax 4.5.

TAX CONSOLIDATION 4.5.1. Sopra Steria Group and some of its subsidiaries have opted to file as a tax consolidation group. Each of the companies computes and recognises its own income tax charge as if it were taxed separately. The tax savings resulting from the application of the tax consolidation group – equal to the difference between the sum of tax paid to the parent company by consolidated companies, and tax calculated on Group earnings and actually payable to the French Treasury – will accrue to the parent company.

However, given the provisions laid down in agreements with subsidiaries, tax savings recognised by the parent company during the financial year, arising from the use of tax losses and net long-term capital losses reported by consolidated companies, are only temporary, since they will be taken into account by consolidated companies when they determine their taxes for subsequent financial years. Sopra Steria Group recognised a net tax expense of €1.195 million in 2019. It included €8.006 million in tax consolidation income.

TAX BREAKDOWN BETWEEN ORDINARY ACTIVITIES AND EXCEPTIONAL ITEMS 4.5.2.

CORPORATE INCOME TAX BROKE DOWN AS FOLLOWS: ❙

2019

2018

(in thousands of euros)

Tax on recurring operations Tax on exceptional operations Impact of tax consolidation

14,159

10,104 -1,110 -15,404 -17,971

-646

-12,317 -14,913

Research tax credit Other tax expenses Other tax credits

-226 -770

-913 -718

TOTAL

-14,713

-26,012

In 2019, Sopra Steria Group recognised an R&D tax credit of €14.800 million and a €113 thousand adjustment in respect of the financial year 2018.

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SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019