CAPGEMINI_REGISTRATION_DOCUMENT_2017

FINANCIAL INFORMATION

4.2 Consolidated Financial Statements

Net debt/Net cash and cash equivalents and{liquidity risk

Net debt/Net cash and cash equivalents and{credit risk

The 2015{bonds issues and the 2016{bond issues are the main borrowings that could expose the Group to liquidity risk in the event of repayment. To manage the liquidity risk that could arise from these borrowings becoming due and payable, at the contractual due date or early, the Group has implemented a conservative financing policy mainly based on: prudent use of debt leveraging, coupled with limited use of X any clauses that could lead to early repayment of borrowings; maintaining a high level of available funds at all times; actively managing borrowing due dates in order to limit the X concentration of maturities; using diverse sources of financing, allowing the Group to X reduce its reliance on certain categories of lenders. The Consolidated Statement of Cash Flows analyzes the year-on-year change in cash flows from operating, investing and financing activities. Foreign currency cash flows are translated into euros at the average exchange rate for the year. Exchange gains or losses At December{31, 2017, cash and cash equivalents totaled €1,988{million (see Note{21 - Net debt/Net cash and cash equivalents), up €118{million on December{31, 2016 (€1,870{million). Excluding the impact of exchange rate fluctuations on cash and cash equivalents of negative €91{million, this increase is €209{million. Cash flow impacts are shown in the Consolidated Statement of Cash Flows. Cash flows

Financial assets which could expose the Group to a credit or counterparty risk mainly consist of financial investments: in accordance with Group policy, cash balances are not invested in equity-linked products, but in (i) negotiable debt securities (certificates of deposit), (ii) term deposits, (iii) capitalization contracts or (iv) short-term money market mutual funds, subject to minimum credit rating and diversification rules. At December{31, 2017, short-term investments totaled €1,497{million and comprise mainly (i) money market mutual fund units meeting the criteria defined by ESMA (European Securities and Markets Authority) for classification in the “monetary category”; and (ii) negotiable debt securities and term deposits maturing within three months or immediately available, issued by highly rated companies or financial institutions (minimum rating of A2/P2 or equivalent). Consequently, these short-term investments do not expose the Group to any material credit risk.

4

resulting from the translation of cash flows relating to foreign currency assets and liabilities at the year-end exchange rate are shown in “Effect of exchange rate movements on cash and cash equivalents” in the Statement of Cash Flows.

Net cash from operating activities In{2017, net cash from operating activities totaled €1,330{million (compared with €1,319{million in{2016) and resulted from: cash flows from operations before net finance costs and X income tax in the amount of €1,532{million; payment of current income taxes in the amount of X €139{million; an increase in working capital requirements, generating a X negative cash impact of €63{million.

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REGISTRATION DOCUMENT 2017 — CAPGEMINI