TELEPERFORMANCE_Registration_document_2017

CONSOLIDATED FINANCIAL STATEMENTS

7.6 Notes to the consolidated financial statements

Highlights of 2017 During the first half of 2017, the Group issued a bond of €600bmillion at a nominal interest rate of 1.50%, redeemable in 2024, in order to complete the refinancing of its acquisition of LanguageLine Solutions LLC. The US tax reform adopted at the end of December 2017bhas had the following two principal impacts on the financial statements (see notebE. Income tax for the related amounts): ■ the remeasurement of deferred taxes recognized by US subsidiaries using a federal tax rate of 21% compared with the previous rate of 35%;

■ the recognition of tax expense on the undistributed results of the foreign subsidiaries of US companies.

A. Principal accounting policies, judgements and estimates

NOTE A.1 Reporting entity Teleperformance (“the Company”) is a company domiciled in France. The Company’s consolidated financial statements for the year ended Decemberb 31 st , 2017b include the Company and its subsidiaries, together referred to as “the Group”. NOTE A.2 Basis of preparation The consolidated financial statements for the year ended Decemberb31 st , 2017bhave been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union as of the reporting date, and comply with the presentation requirements of revised IASb1bas amended. The following standards, amendments and interpretations: ■ amendments to IASb12, on the recognition of deferred tax assets for unrealized losses; ■ amendments to IASb7bconcerning the statement of cash flows; are required to be applied from Januaryb1 st , 2017bbut their adoption has not had a significant impact on the consolidated financial statements. The Group has not elected to early adopt the following standards: These standards are required to be applied from Januaryb1 st , 2018. The Group has completed its assessment of the impact of IFRSb15bon its revenues and does not expect a significant impact on its financial statements from its adoption in view of the nature of the Group’s business. The Group has also commenced its assessment of the impact of IFRSb9 “Financial instruments” and does not expect a significant impact on its financial statements following its adoption, in particular in respect of the presentation and recognition of credit risk. The Group uses foreign exchange hedging instruments on a regular basis and the adoption of IFRSb9bshould result in a reduction of the volatility it experiences in the related results of these operations. The assessment of the impact of the newstandard IFRSb16bon leases, which comes into effect on Januaryb1 st , 2019, is still in progress. Its impact is expected to be limited principally to the Group’s real estate lease contracts. On the basis of the current status of the initial analyses and of the lease portfolio as at Decemberb31 st , 2016, the impact on the amount of financial liabilities is expected to be an increase in the range of approximately €500b– €600bmillion. The ■ IFRSb15 “Revenue from contracts with customers”; ■ IFRSb9 “Financial instruments”.

The financial statements were approved by the Board of Directors on Februaryb28 th , 2018, and will be submitted to the shareholders’ meeting to be held on Aprilb20 th , 2018. All financial information presented in euro has been rounded to the nearest million.

Group intends to elect to apply the modified retrospective method in respect of its transitional application. The use of a practical solution to compute and manage the adjustments required under the standard is in course of implementation. The accounting policies applied by the Group in these consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended Decemberb31 st , 2016, with the exception of the new standards, amendments and interpretations set out above. The financial statements are prepared on the historical cost basis except for the following assets and liabilities measured at fair value: derivative financial instruments, financial instruments held for trading, financial instruments classified as available for sale. Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell. The accounting policies set out below have been applied consistently to all periods presented in the consolidated financial statements. Estimates The preparation of financial statements in conformity with IFRS requires making estimates and assumptions which affect the amounts reported in the financial statements, especially with respect to the following items: ■ impairment of intangible assets and goodwill; ■ the measurement of share-based payments expense; ■ the measurement of intangible assets acquired as part of a business combination; deferred taxation. The estimates are based on information available at the time of preparation of the financial statements, and may be revised, in a future period, if circumstances change, or if new information is available. Actual results may differ from these estimates. ■ ■ provisions for risks and expenses;

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Teleperformance bb - bb Registration documentbb 2017