Sopra Steria - 2020 Universal registration document

6 2020 PARENT COMPANY FINANCIAL STATEMENTS Notes to the balance sheet

%'$+ ( $#( $' ' ) ' " #) $#*( ( Sopra Steria Group recognises provisions for its employee benefit obligations in accordance with the terms of voluntary and compulsory retirement under the Syntec collective bargaining agreement, as amended in 2004 following the French pension reform act of 21 August 2003. Provisions for retirement bonuses are recognised on an actuarial basis as described below. Assumptions referring to mortality rates are based on published statistical data.

Turnover tables are based on five-year age brackets and are updated at each balance sheet date to reflect separation data for the last five years. The discount rate used to calculate the present obligation is the yield on high-quality corporate bonds (rated AA or higher) denominated in the payment currency and with a maturity close to the average estimated term of the retirement benefit obligation concerned. The Company uses the 15-year Bloomberg rate for the eurozone as the benchmark for discounting its retirement benefit obligations. At 31 December, this rate stood at 0.44%.

31/12/2020

31/12/2019

26 ;17<:*6-: 7/ .<97:

Present value of the obligation financed (with corridor)

91,529

80,944

Fair value of plan assets

- -

- -

Difference

Present value of the obligation financed Unrecognised actuarial losses (difference)

91,529 -13,866

80,944 -7,581

Unrecognised past service cost

-

-193

Net liabilities on the balance sheet (provision after charge for the year)

77,663

73,170

Balance sheet amounts

-

-

Liabilities

77,663

73,170

Assets

-

-

" ( # ( #" " ( " ' (

The total obligation in respect of retirement bonuses amounted to €77.663 million. Sopra Steria Group recognises provisions for all of its p commitments in respect of retirement bonuses in accordance with the retirement clauses of the Syntec collective bargaining agreement.

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

Sopra Steria Group’s obligation towards its employees is p determined on an actuarial basis, using the projected unit credit method: the employer’s present obligation is recognised in proportion to the probable length of service of the employees,

the plan.

%'$+ ( $#( $' ) - ' ( ( The total amount of provisions for taxes recognised at 31 December 2020 was €28.365 million. No new tax-related disputes arose during the period; changes during the financial year related to adjustments of provisions made in prior periods. Unused reversals from these provisions amounted to €4.745 million in respect of financial year 2020. These adjustments were mainly related to the French Council of State (Conseil d’Etat)’s “Takima” ruling of 9 September 2020 on the maximum amount of invoices, based on eligible expenses, to be deducted from the basis for the R&D tax credit by an approved subcontractor.

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 2017 LTI plan expired, the corresponding provision was reversed for €7.449 million.

%'$+ ( $#( $' %! #( )$ , ' - () # ' % ' $'" # ( ' (

The provision in respect of the 2018 LTI plan stood at €8.238 million at 31 December 2020. The characteristics of this plan are set out in Note 4.2.2. The next shares will be delivered in April 2021 when the 2018 LTI plan closes.

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SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2020