Sopra Steria - 2019 Universal registration document

6 2019 PARENT COMPANY FINANCIAL STATEMENTS Notes to the balance sheet

The total obligation in respect of retirement bonuses amounted to €73.170 million. Sopra Steria Group recognises provisions for all of its commitments in respect of retirement bonuses in accordance with the retirement p clauses of the Syntec collective bargaining agreement. Sopra Steria Group’s obligation towards its employees is determined on an actuarial basis, using the projected unit credit method: the p employer’s present obligation is recognised in proportion to the probable length of service of the employees, taking into account actuarial assumptions such as the level of future compensation, life expectancy and staff turnover. Changes in actuarial assumptions that affect the valuation of the obligation are recognised as actuarial gains and losses. Actuarial gains and losses representing more than 10% of the amount of obligations are recognised and amortised over the expected average working lives of the employees participating in the plan.

PROVISIONS FOR TAX RISKS 5.4.2. The total amount of provisions for taxes recognised at 31 December 2019 was €33.110 million.

No new tax-related disputes arose during the period; changes during the financial year related to adjustments of provisions made in prior periods. The unused reversal of a €2.409 million provision made in 2019 arose in particular from the receipt of a tax rebate notice issued by the French tax authorities relating to tax audits of prior financial years.

PROVISIONS FOR PLANS TO AWARD EXISTING SHARES FREE OF CHARGE 5.4.3. 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. During the financial year, as the 2016 LTI plan expired, the corresponding provision was reversed for €7.090 million.

At 31 December 2019, the total amount of the provision in respect of the 2017 and 2018 LTI plans was €14.786 million. The characteristics of these plans are set out in Note 4.2.2. The next shares will be delivered in April 2020 when the 2017 LTI plan closes.

Other liabilities 5.5.

FINANCIAL DEBT 5.5.1.

Amounts (beginning of period)

Amounts (end of period)

Notes

Increase

Decrease

(in thousands of euros)

5.5.1.a 5.5.1.b 5.5.1.c 5.5.1.d

Syndicated loan

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

3,274

23,855 37,000

164,657 120,000 99,000 281,534

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

- -

- -

69,523

2,280

-

2,278

2

5.5.1.e

Bond

180,000

250,000

180,000

250,000

Accrued interest on financial debt

4,966

7,131

8,485

3,612

TOTAL

840,494

329,929

251,619

918,804

Syndicated loan a. As part of the Group’s funding policy, in 2014 the Company arranged a €1,200 million five-year borrowing facility with two options to extend the expiry date by one year. This facility comprised a €200 million amortising tranche, an £80 million amortising tranche and a €900 million multi-currency revolving credit line. In 2018, following the exercise of the second one-year extension option, the expiry date was postponed to 6 July 2023. At 31 December 2019, the outstanding amount drawn on the loan was from the two amortising tranches (€112 million and £44.8 million after contractual amortisations for the period). The €900 million multi-currency revolving credit facility is undrawn.

Details on the NEU CP programme b. In 2015, as part of the Group’s funding policy, the Company arranged an unrated multi-currency NEU CP programme of short-term negotiable securities that was not underwritten, with a maximum amount of €700 million. This programme is presented in documentation available on the Banque de France website, which was last updated on 30 June 2019. The average amount outstanding under the NEU CP programme was €268.2 million in 2019, compared with €295.5 million in 2018, and the programme was very active throughout 2019. The Company benefited from negative short-term euro rates as well as investor interest in maturities of 6 to 12 months. The outstanding amount under the NEU CP programme at 31 December 2019 was €120 million (€157 million at 31 December 2018).

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SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019