CAPGEMINI_REGISTRATION_DOCUMENT_2017

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CORPORATE GOVERNANCE - RISKS{AND INTERNAL{CONTROL

2.5 Risks and internal control

Risk management systems The Cash surplus investment policy defined by the Group Finance Department and documented in the internal manual (TransFORM), prohibits all equity investments. The proper application of this policy is regularly controlled by internal and external auditors. With a few exceptions, the Group holds the entire share capital of its subsidiaries and does not hold any listed equity investments. Capgemini has a share buyback program authorized by its Shareholders' Meeting. In this context, the Board of Directors decides (with the power of sub-delegation) the implementation of the share buyback program. The value of these treasury shares is deducted directly from Group equity and fluctuations in the Capgemini share price do not impact its results. Risk analysis Capgemini Group is exposed to credit and counterparty risk in respect of its asset financial instruments, which depends particularly on the debtor’s ability to fulfill all or part of its commitments (see Note{19 and Note{21 to Capgemini's consolidated financial statements). Financial assets which could expose the Group to credit or counterparty risk mainly relate to financial investments and accounts receivable. The hedging agreements entered into with financial institutions pursuant to its policy for managing currency and interest rate risks also expose the Group to credit and counterparty risk (see Note{23 to Capgemini's consolidated financial statements). Risk management systems The investment policy authorizes the investment of cash surpluses in money market mutual funds (FCP and SICAV) satisfying the “monetary” classification criteria defined by the French Financial Markets Authority (AMF) and other types of investment (negotiable debt securities, term deposits, capitalization contracts) immediately available or with investment periods, potentially renewable, not exceeding 3 months, issued by companies or financial institutions with a good credit rating (minimum A2/P2 or equivalent). The Group also applies maximum concentration per counterparty rules. The Group abides by similar risk quality/minimum rating and diversification rules when selecting counterparties for foreign currency and interest rate management hedging contracts. Risk analysis Liquidity risk for the Group could correspond to a temporary or permanent inability to fulfill all or part of its commitments in respect of its financial liabilities (including in particular borrowings and accounts and notes payable) and the inability to find new sources of financing in order to maintain the balance between revenue and expenditure. Such a risk would also limit the Group's ability to finance its activities and the investment necessary for its development. Counterparty and credit risk Liquidity risk

In addition, a large number of our clients have been identified as Operators of Vital Importance by their national authorities. Certain clients will also be identified as Operators of Essential Services (OSE) under the Network and Information Security (NIS) Directive or by Europe. The security of their information systems will therefore have to be approved by these national or European authorities and our Group, as a major sub-contractor, will also have to comply with these regulations. Finally, during acquisitions or on the launch of a new business line, the Group performs a focused due diligence review of the target or an analysis of the activity as well as applicable regulations. Risk analysis Having developed a vast network of contractual relationships, the Group is not immune from litigation and legal action. Nonetheless, at the date of this report, there are no governmental, legal or arbitration proceedings, including any proceedings of which the Group is aware, that are pending or liable to arise, which are likely to have or have had in the last 12 months a material impact on the Group's financial position or profitability other than those that are recognized in the financial statements or disclosed in the notes thereto (see Note 25 to Capgemini's consolidated financial statements). Risk management systems A procedure has been implemented for reporting information to the Group Legal Department on actual and potential litigation and other disputes and government inquiries. The local Legal Departments also regularly inform the Group Legal Department of any threats of this nature. e. Financial risks The Group Finance Department is responsible for the control, monitoring and supervision of financial risks and is present in each country and each Business Unit. The variety of its activities and geographic locations exposes the Group to a number of financial risks, described below, which, depending on their materiality, can have a significant impact on the results and reputation of the Group. Risk analysis For the Group, equity risk would consist of unfavorable movements in the stock market value of listed companies in which the Group holds investments. However, the Group does not hold any shares for financial investment purposes and does not have any interests in listed companies. However, under its share buyback program, it may purchase, hold, sell or present its own shares or enter into derivatives in its own shares (see Note{12 to Capgemini’s consolidated financial statements). Litigation Equity risk

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REGISTRATION DOCUMENT 2017 — CAPGEMINI