All borrowings, including bank credit facilities and overdrafts, are initially recognized at the fair value of the amount received less directly attributable transaction costs. Subsequent to initial recognition, borrowings are measured at amortized cost using the effective interest method.
The effective interest rate is the rate that discounts estimated future cash payments or receipts through the expected life of a financial liability to the net carrying amount of that liability. The calculation includes the effects of transaction costs, and of differences between the issue proceeds (net of transaction costs) and reimbursement value.
Cash and cash equivalents comprise current bank account balances, cash on hand and short-term cash investments in money-market instruments. Money-market instruments correspond to authorized “short-term” or “standard” money-market funds under the new regulation adopted by the European Union (market funds that are eligible to the presumption as to classification as cash equivalents pursuant to the common AMF and ANC position issued in November 27, 2018) and have an initial maturity of less than three months at the moment of purchase or may be withdrawn at any time at a known cash value with no material risk of loss in value.
| (in millions of euro) | FISCAL 2021 | FISCAL 2020 |
|---|---|---|
| Gross borrowing cost(1) | Gross borrowing cost (1)FISCAL 2021(89) |
Gross borrowing cost (1)FISCAL 2020(121) |
| Interest income from short-term bank deposits and equivalent | Interest income from short-term bank deposits and equivalent FISCAL 20216 |
Interest income from short-term bank deposits and equivalent FISCAL 202018 |
| NET BORROWING COST | NET BORROWING COSTFISCAL 2021(83) | NET BORROWING COSTFISCAL 2020(103) |
| Interest on financial lease liabilities IFRS 16(2) | Interest on financial lease liabilities IFRS 16 (2)FISCAL 2021(20) |
Interest on financial lease liabilities IFRS 16 (2)FISCAL 2020(25) |
| Net foreign exchange gains/(losses) | Net foreign exchange gains/(losses) FISCAL 2021(2) |
Net foreign exchange gains/(losses) FISCAL 2020(7) |
| Net interest cost on net defined benefit plan obligation | Net interest cost on net defined benefit plan obligation FISCAL 2021(3) |
Net interest cost on net defined benefit plan obligation FISCAL 2020(4) |
| Interest income from loans and receivables at amortized cost | Interest income from loans and receivables at amortized cost FISCAL 20214 |
Interest income from loans and receivables at amortized cost FISCAL 20205 |
| Other financial income | Other financial income FISCAL 20218 |
Other financial income FISCAL 20205 |
| Other financial expense(3) | Other financial expense (3)FISCAL 2021(9) |
Other financial expense (3)FISCAL 2020(164) |
| NET FINANCIAL EXPENSE | NET FINANCIAL EXPENSEFISCAL 2021(106) | NET FINANCIAL EXPENSEFISCAL 2020(291) |
| Of which Financial income | Of which Financial incomeFISCAL 202118 | Of which Financial incomeFISCAL 202030 |
| Of which Financial expense | Of which Financial expenseFISCAL 2021(124) | Of which Financial expenseFISCAL 2020(321) |
(1) Gross borrowing cost represents interest expense on financial liabilities at amortized cost and interest expense on hedging instruments.
(2) Interests on lease liabilities recognized starting September 1, 2019 in accordance with IFRS 16.
(3) Including, in Fiscal 2020, a 150 million euro indemnity due to anticipated refund of USPP (note 12.4.3.3)
| (in millions of euro) | AUGUST 31, 2021 | AUGUST 31, 2020 |
|---|---|---|
| Marketable securities | Marketable securities AUGUST 31, 2021329 |
Marketable securities AUGUST 31, 2020354 |
| Cash* | Cash *AUGUST 31, 20213,211 |
Cash *AUGUST 31, 20201,673 |
| CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTSAUGUST 31, 20213,539 | CASH AND CASH EQUIVALENTSAUGUST 31, 20202,027 |
| Bank overdrafts | Bank overdrafts AUGUST 31, 2021(7) |
Bank overdrafts AUGUST 31, 2020(6) |
| CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTS | CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTSAUGUST 31, 20213,532 | CASH AND CASH EQUIVALENTS NET OF BANK OVERDRAFTSAUGUST 31, 20202,021 |
* Including 5 million euro allocated to the liquidity contract signed with an investment services provider, which complies with the Code of conduct drawn up by the French financial markets association Association française des marchés financiers – AMAFI) and approved by the French securities regulator (Autorité des marchés financiers – AMF), for the purpose of improving the liquidity of Sodexo shares and the regularity of the quotations.
