Sopra Steria - 2019 Universal registration document

8 ADDITIONAL INFORMATION

Disclosures arising from specific obligations – Other risks

1.3

Legal and tax risks

1.3.1

RISKS RELATED TO SIGNIFICANT CHANGES IN LAWS OR REGULATIONS

Risk description

Risk management

The Group’s business is an unregulated activity, and therefore requires no special legal, administrative or regulatory authorisation. Nevertheless, the Group operates on behalf of clients in a number of industry sectors that are themselves regulated (such as financial services). Moreover, the Group is a multinational company that operates in many countries, subject to various constantly changing laws and regulations. The Group’s activities and operating profit might be affected by significant changes in laws or regulations, or by decisions taken by authorities. The tax rules in the various countries in which the Group operates are continually evolving. The Group cannot guarantee that the existing tax arrangements, including those granting eligibility for tax credits, especially for research activities, will continue to apply. Furthermore, the Group cannot guarantee that the current interpretations of existing tax arrangements will not be challenged, potentially with adverse consequences for its financial position or results.

Developments in laws and regulations are monitored on a regular basis so as to plan ahead for any upcoming changes at the relevant departments (Legal Department, Finance Department) and make the corresponding adjustments to rules and procedures. The aim of the introduction of a cross-divisional Internal Control and Risk Management Department is to better manage compliance issues in a coherent manner across all geographies and entities. In order to reduce risks related to changes in tax rules, the Group is actively monitoring regulatory and case law developments in the countries where it operates, making sure that its tax practices are in compliance with local laws and regulations.

1.3.2

INTELLECTUAL PROPERTY RISKS

Risk description

Risk management

The protection of the Group’s intellectual property is essential for the protection of the Group’s assets, and especially for entities with activities in software development.

To protect its intellectual property, the Group relies on a combination of contracts, copyrights, trademarks, patents and confidentiality and trade secrecy obligations. In addition, due to their complexity, the technological fields covered by the Group involve an increasing number of issues linked to intellectual property, special attention is given to specific contractual clauses related to intellectual property, in particular during integration of third-party software, use of software company licences in connection with integration projects or infrastructure management services and/or for any issues regarding reuse of software modules in connection with integration projects. Operational staff regularly receive training on protecting intellectual property. Sopra Steria and its subsidiaries have protected the main trademarks used in each country concerned. The brand portfolio is managed by the Legal Department in conjunction with an intellectual property advisor. Sopra Steria and its subsidiaries own exclusive intellectual property rights to all their software, either through having developed it in-house or by having acquired if from third parties. Software packages developed by the Group, in particular by Sopra Banking Software or by Sopra HR Software, are generally marketed directly. However, there are a few distribution agreements with partners. Sopra Banking Software holds patents for the technical algorithms used by various technological and functional components of the Sopra Banking Platform software suite, designed for banks and financial institutions.

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SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019