Cap Gemini - Registration Document 2016

FINANCIAL INFORMATION

4.2 Consolidated financial statements

Organic free cash flow Organic free cash flow calculated based on items in the Statement of Cash Flows is equal to cash flow from operations less acquisitions of property, plant, equipment and intangible assets (net of disposals) and adjusted for flows relating to the net interest cost.

At December 31 (in millions of euros)

2015

2016 1,319

Cash flows from operations

1,004

Acquisitions of property, plant and equipment and intangible assets

(198)

(197)

Proceeds from disposals of property, plant and equipment and intangible assets Acquisitions of property, plant, equipment and intangible assets (net of disposals)

19

21

(179)

(176) (115)

Interest paid

(38)

Interest received

28

43

Net interest cost

(10) 815

(72)

ORGANIC FREE CASH FLOW

1,071

Currency, interest rate and counterparty risk management Note 23 Currency risk management

4

Currency risk and hedging financial transactions b) The Group is exposed to the risk of exchange rate fluctuations in respect of: forward purchase and sale foreign exchange contracts); inter-company financing transactions, mainly within the parent ◗ company, these flows generally being hedged (in particular using functional currency is not the euro. fees paid to the parent company by subsidiaries whose ◗ Sensitivity of revenues and the operating margin* to c) fluctuations in the main currencies (*) A 10% fluctuation in the US dollar-euro exchange rate would trigger a corresponding 2.7% change in revenues and a 3.2% change in the operating margin* amount. Similarly, a 10% fluctuation in the pound sterling-euro exchange rate would trigger a corresponding 1.6% change in revenues and a 1.9% change in the operating margin* amount. company with respect to the centralized management of currency risk on operating transactions and inter-company financing transactions. Amounts hedged at December 31, 2016 using forward purchase and sale foreign exchange contracts, mainly concern the parent Hedging derivatives B)

Exposure to currency risk and currency risk A) management policy

Currency risk and hedging operating transactions a) The growing use of offshore production centers located in India, Poland and Latin America, exposes the Group to currency risk with respect to some of its production costs. managing these currency risks, due in the majority to internal flows with India. The definition of the hedging policy and the management of operational currency risk is centralized at parent company level. Currency risk is managed primarily based on periodic reporting by subsidiaries of their exposure to currency risk over the coming 1 to 3 years. On this basis, the parent company acting as an internal bank, grants internal currency guarantees to The Group implements a policy aimed at minimizing and subsidiaries and enters into currency hedges with its bank counterparties, primarily through forward purchase and sale foreign exchange contracts. These hedging transactions are generally recorded in accordance with cash flow hedge accounting rules.

Operating margin, an alternative performance measure monitored by the Group, is defined in Note 3, Alternative performance measures. (*)

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Registration Document 2016 — Capgemini