CAPGEMINI_REGISTRATION_DOCUMENT_2017

FINANCIAL INFORMATION

4.2 Consolidated Financial Statements

Fair value of hedging derivatives C) Hedging derivatives are recorded in the following accounts:

At December{31 (in millions of euros)

Note

2016

2017

Other non-current assets

18 20 26

120 149 (89)

53

Other current assets

121

Other current and non-current liabilities

(18)

Fair value of hedging derivatives, net

180

156

Relating to:

operating transactions

217

149

■

(37)

7

{

financial transactions

■

The main hedging derivatives notably comprise the fair value of the amount of €110{million, in “Other non-current liabilities” in derivative instruments contracted as part of the centralized the amount of €8{million and in “Other current liabilities” in the management of currency risk recorded in “Other non-current amount of €10{million. assets” in the amount of €53{million, in “Other current assets” in

The change in the period in derivative instruments hedging operating and financial transactions recorded in income and expense recognized in equity breaks down as follows:

4

2017

in{millions of euros

Hedging derivatives recorded in income and expense recognized in equity at January{1

203

Amounts reclassified to net profit in respect of transactions performed

(8)

Fair value of derivative instruments hedging future transactions

(88)

HEDGING DERIVATIVES RECORDED IN INCOME AND EXPENSE RECOGNIZED IN EQUITY AT DECEMBER{31

107

Interest rate risk management

Based on average levels of floating-rate short-term investments, cash management assets and borrowings at floating rates, a 100-basis point rise in interest rates would have had a positive impact of around €6{million on the Group’s net finance costs in{2017. Conversely, a 100-basis point fall in interest rates would have had an estimated €6{million negative impact on the Group’s net finance costs. Counterparty risk management In addition, in line with its policies for managing currency and interest rate risks as described above, the Group also enters into hedging agreements with leading financial institutions. Accordingly, counterparty risk can be deemed not material. At December{31, 2017, the Group’s main counterparties for managing currency and interest rate risk are Barclays, BNP{Paribas, CA{CIB, Citibank, Commerzbank, HSBC, ING, JP Morgan, Morgan Stanley, Natixis, Royal{Bank of Scotland, Santander, and Société{Générale.

Interest rate risk management policy A) The Group’s exposure to interest rate risk should be analyzed in light of its cash position: at December{31, 2017, the Group had €2,156{million in cash and cash equivalents, with short-term investments mainly at floating rates (or failing this, at fixed rates for periods of less than or equal to three{months), and €3,372{million in gross indebtedness principally at fixed rates (85%) (see Note{21 - Net debt/Net cash and cash equivalents). The high proportion of fixed-rate borrowings is due to the weight of fixed-rate bond issues in gross indebtedness. Exposure to Interest rate risk: sensitivity analysis B) As 85% of Group borrowings were at fixed rates in{2017, any increase or decrease in interest rates would have had a negligible impact on the Group’s net finance costs.

229

REGISTRATION DOCUMENT 2017 — CAPGEMINI