Sopra Steria - 2019 Universal registration document

6 2019 PARENT COMPANY FINANCIAL STATEMENTS Notes to the balance sheet

Foreign exchange hedge b. Sopra Steria Group is subject to three main types of risks linked to fluctuations in exchange rates: currency translation risk associated with the repatriation of p dividends of subsidiaries whose base currency is not the euro;

transactional risk associated with purchases and sales of services p in foreign currencies and internal foreign exchange contracts granted to subsidiaries in connection with the centralised management of foreign currency risk; financial foreign currency risk arising from foreign-currency p borrowings (risk arising from changes in the value of the financial debt denominated in pounds sterling).

Nominal value

Fair value

(in thousands of euros)

Foreign exchange hedge (1)

118,589 325,000

1,565 -1,166

Interest rate hedge

Including internal foreign exchange contracts. (1)

Transaction risk As part of the Group’s general risk management policy, Sopra Steria Group systematically hedges against foreign currency transaction risks that constitute material risks. In addition, centralised management of foreign exchange transaction risk is in place with the Group’s main entities (apart from India). Sopra Steria Group acts as the centralising entity, granting exchange rate guarantees to subsidiaries in pounds sterling, US dollars, Polish zlotys, Tunisian dinars and Norwegian krone. After netting internal exposures, Sopra Steria Group hedges the residual exposure through the use of derivatives. The remeasurement through profit or loss of these financial instruments hedging balance sheet items is offset by the revaluation of foreign currency receivables over the period.

At 31 December 2019, the fair value of foreign exchange instruments was €1.565 million. The portfolio’s sensitivity in the event of a change in interest rates is: an increase of €0.662 million in the event of a 5% fall in the p euro; a decrease of €672 million in the event of a 5% rise in the euro. p Foreign exchange risk: Sopra Steria Group SA grants loans in sterling to a UK subsidiary, the outstanding balance of which is £30 million, financed by an equivalent debt in sterling. At 31 December 2019, sterling-denominated debt providing partial coverage of the assets comprised of shares in UK subsidiaries amounted to €184.219 million, while cash and cash equivalents in Swedish krona providing partial coverage of the debt of subsidiaries in Sweden came to €18.531 million.

All of the foreign exchange and interest rate positions are taken using listed financial instruments traded over the counter or through organised markets with minimal counterparty risk. Gains and losses on financial instruments accounted for as hedges are recognised symmetrically with the items hedged. The fair value of financial instruments is estimated on the basis of quoted prices in active markets or values provided by banks. Gains or losses arising on derivatives used to hedge forecast transactions with separately identifiable risks are deferred and taken into account in the valuation of the transaction in question, which occurs when it is settled.

TRADE PAYABLES 5.5.3.

2019

2018

(in thousands of euros)

Non-Group suppliers and related accounts

34,450 59,916 50,925

42,034 56,044 39,260

Accrued expenses

Group suppliers (including accrued expenses)

TOTAL

145,291

137,338

244

SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019