CAPGEMINI_REGISTRATION_DOCUMENT_2017

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CORPORATE GOVERNANCE - RISKS{AND INTERNAL{CONTROL

2.5 Risks and internal control

laws to copy or replace. Each of these impacts, as well as other impacts not anticipated by the Group, could have a negative impact on its activities, operating performance, financial position and cash flow generation. Risk management systems The Group monitors and anticipates, as far as possible, macroeconomic developments at global level, by closely monitoring company trends in the markets where it operates, as well as analyzing the potential impacts of these changes on its own businesses and those of its clients. While a substantial proportion of the Group's operations depends on its clients' investment capacity, the fact that the Group is organized around medium-sized Business Units close to their target market allows for rapid responsiveness to changes in the business environment. The Group regularly monitors Brexit developments and the Catalan crisis, so as to take appropriate measures to mitigate these risks based on decisions taken by the relevant countries and the European Union. Risk analysis Intense media coverage of any difficulties encountered, especially on major or sensitive projects requiring crisis management, could negatively impact the Group's image and credibility in the eyes of its clients and third parties generally, and by extension, its ability to maintain or develop certain activities. When dealing with third parties and clients, the behavior of an employee may be inconsistent with our principles, and particularly our values of honesty and trust and could present a danger to the Company if contrary to personal or professional ethics, compliance rules or legislation, even where this behavior is strictly forbidden by the Group. New social media players challenge the security of our internal IT systems and those of our clients and any cybersecurity failures could have an extremely negative impact on our reputation. Other incidents likely to damage Capgemini Group’s reputation include the voluntary or involuntary disclosure of confidential information or a breach of individual security within Capgemini Group. Finally, employees could make negative comments on social media (Twitter, Facebook, etc.) on Capgemini's performance, service offers or human resource policy, thereby tarnishing the Group's reputation. Risk management systems Compliance with clear principles of business ethics is firmly embedded in Capgemini's culture, honesty being one of the Group’s seven core values. From this point of view, the Code of Business Ethics distributed in 2010 represents the continuation and formal documentation of cultural reflexes already firmly embedded in Capgemini. A specific policy dealing with the prevention of corruption was distributed within the Group in 2011, followed by a second in 2012 covering anti-trust legislation. Reputation

The mechanisms for managing (i) climate risk and (ii) risks associated with the corporate duty of care: serious violations of human rights and fundamental freedoms, the health and safety of individuals and the environment are presented in Section 3.1.4 of this Registration Document. Furthermore, in accordance with the latest French Financial Markets Authority (AMF) recommendations on the specific nature and importance of risks reported by issuers, Capgemini no longer reports on competition and external growth risks, as they are not considered a priority at Group level and/or are not specific to its business sector at the time of preparation of this report. Nonetheless, it remains possible that changes in economic conditions or the legal environment could give rise to certain risks not currently identified as material that could impact the results of the Group, its objectives, reputation or the share price. b. Risks relating to operations and the strategy Capgemini is a service provider and consulting group, and as such, the main risks to which the Group is exposed are (i) failure to deliver the services to which it has committed; (ii) failure to deliver services within the contractual timeframe and to the required level of quality; or (iii) infringement, of a client or third party's obligations, notably through human error. In the course of its consulting activities, the Group has an obligation to provide information and could incur liability should it fail to do so. Furthermore, in a rapidly changing technology environment, the Group must constantly ensure it adapts to new client product and service expectations. Risk factors The Group's growth and financial results may be adversely affected by a general downturn in the IT services and related consulting sector or in one of Capgemini's other key business segments. A shake-up resulting in a change of ownership at one of Capgemini's clients or a decision not to renew a long-term contract may have a negative effect on revenue streams and require cost-cutting or headcount reduction measures in the Business Units affected. The general economic context and more precisely restrictions affecting public bodies in the various countries subject to budgetary efforts, may weigh on the Group’s revenues and operating margin. A continued slowdown in the activity of certain economic sectors in which our clients operate would also limit their ability to invest and accordingly impact the results of the Group. Finally, and more generally, a major crisis impacting the financial markets or unfavorable trends in macro-economic indicators could potentially restrict the Group's ability to attain its objectives and continue its development. In this respect, the situations in the United Kingdom and Spain following recent voting results, could have a negative impact on the European or global economy and market conditions. Brexit could contribute to instability in the financial markets and the international foreign exchange markets, with notably increased volatility in the pound sterling or euro. Brexit could, furthermore, generate legal uncertainties and potentially changes to UK laws and regulations, as the country decides which European Union Economic risks

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REGISTRATION DOCUMENT 2017 — CAPGEMINI