TELEPERFORMANCE_Registration_document_2017

RISKS AND CONTROL

2.1 Risk factors

2.1.3 Financial risks

2.1.3.2 Liquidity risk

The Group is exposed to the following risks:

credit risk; liquidity risk; market risk;

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Risk identification Liquidity risk is the risk that the Group may not be able to meet its debts when they become due or to find new financing resources. Risk management The Group policy in respect of its financing is to maintain, at all times, sufficient liquidity to finance Group assets, short-term cash requirements and development, both in terms of amount and duration, and at the lowest possible cost. For several years now the Group has implemented a centralized cash management policy when permitted by local legislation. Companies included in the cash pooling represent just over 60% of Group revenues. In countries where cash pooling is not permitted, short-term cash management is provided by the subsidiaries’ operational management team, which generally has access to short-term bank facilities, plus, in some cases, confirmed credit line facilities from the parent company. All medium and long-term financing is authorized and overseen by the Group’s Finance Department. The Group obtains financing in the form of loans, credit lines and bond issues from top-tier credit and financial institutions, repayment of which falls due between 2018band 2026bas stated under notebG.4 Financial liabilities . The available balance of the EUR/USD multi-currency syndicated credit line at Decemberb31 st , 2017bamounted to €300bmillion. Net debt at Decemberb31 st , 2017bamounted to €1,326bmillion versus €1,667bmillion at Decemberb31 st , 2016. Given the timing of our borrowings and the Group’s ability to generate free cash flow, liquidity risk is low. Information relating to liquidity risk is provided in notebG.4 Financial liabilities of the consolidated financial statements ( Financial liabilities ). 2.1.3.3 Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and the cost of equity instruments, will affect the Group’s results or the value of its financial instruments. The objective of managing market risk is to manage and control the market risk exposure, keeping it within acceptable limits, while maximizing return.

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■ equity risk. This section provides information on the Group’s exposure to each of the above risks, its objectives, policy and procedures for measuring and managing risk, as well as its share capital and equity management. Quantitative disclosures appear elsewhere in the consolidated financial statements. All strategic decisions relating to the hedging policy for financial risks are the responsibility of the Group’s Finance Department. Risk identification Credit risk is the Group’s risk of financial loss in the event that a client or counterparty to a financial instrument fails to meet their contractual obligations. This risk primarily concerns customer receivables and short-term investments. The Group’s exposure to credit risk is mainly influenced by the individual characteristics of its clients. The Group’s largest client accounts for 8% of revenue, excluding LanguageLine Solutions. In addition, sales to telecommunications clients and Internet service and paid TV providers represent a total of 22% of revenue. No country accounts for more than 10% of trade receivables, with the exception of the United States which represented approximately 38% of total trade receivables at Decemberb31 st , 2017. Risk management Credit risk is continuously monitored by the Group Finance Department, through monthly reports and quarterly Executive Committee meetings. The Group does not require specific credit guarantees for its trade receivables and other current assets. The Group determines the level of its impairment losses by estimating losses incurred on trade receivables and other current assets. The Group provides performance guarantees on contracts when requested by certain clients. Guarantees are disclosed in note I.4 Guarantees and other contractual obligations to the financial statements. 2.1.3.1 Credit risk

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Teleperformance bb - bb Registration documentbb 2017