Atos - Registration Document 2016

E Financial E.4

Consolidated financial statements

Earnings per share

Related party transactions Related party transactions include in particular transactions with: persons or a close member of that person’s family if that • person is a key member of Group management, defined as persons who have the authority and responsibility for planning, directing and controlling the activities of the Group, including members of the Board of Directors, Supervisory Board and Management Board, as well as the Executive Senior Vice-Presidents; entities, if one of the following conditions apply: • the entity is a member of the Group, • the entity is a joint venture in which the Group is • participating, of employees of the Group, the entity is a post-employment benefit plan for the benefit • the entity is controlled or jointly controlled by a person • belonging to the key management. and, as such, future net income of the Group up to maturity of these assets. interest rates increase. a risk on floating-rate financial assets and liabilities should • The main objective of managing overall interest rate risk on the Group’s debt is to minimize the cost of debt and to protect the Group against fluctuations in interest rates by swapping to fixed contracts entered with leading financial institutions. rate a portion of the floating-rate financial debt. Authorized derivative instruments used to hedge the debt are swap throughout the life cycle of a project. Derivative counterparties and cash transactions are limited to high-credit quality financial institutions. The Group has no significant concentrations of credit risk. The client selection process and related credit risk analysis is fully integrated within the global risk assessment project conducted Currency risk fluctuations in exchange rate since a significant portion of the business takes place within the Eurozone and costs and The Group’s financial performance is not materially influenced by revenues are generally denominated in the same currency. The Group has established a policy for managing foreign exchange positions resulting from commercial and financial transactions denominated in currencies different from the local foreign currency swaps. currency of the relevant entity. According to this policy, any material exposure must be hedged as soon as it occurs. In order to hedge its foreign exchange rate exposure, the Group uses a variety of financial instruments, mainly forward contracts and Credit risk

number of ordinary shares outstanding during the period. Treasury shares deducted from consolidated equity are not taken into account in the calculation of basic or diluted earnings per share. Basic earnings per share is calculated by dividing the net income (attributable to owners of the parent) by the weighted average and convertible debt). weighted average number of ordinary shares outstanding during the period, plus the average number of shares which, according to the share buyback method, would have been outstanding had all the issued dilutive instruments been converted (stock options financial cost net of tax of dilutive debt instruments, by the Diluted earnings per share is calculated by dividing the net income attributable to owners of the parent, adjusted for the average price of Atos shares over the period. The dilutive impact of each convertible instrument is determined in order to maximize the dilution of basic earnings per share. The dilutive impact of stock options is assessed based on the

Financial riskmanagement E.4.7.3

risk. Financial risk management is carried out by the Group Treasury department and involves minimizing potential adverse effects on the Group’s financial performance. The Group’s activities expose it to a variety of financial risks including liquidity risk, interest rate risk, credit risk and currency

Liquidity risk

and marketable securities and the availability of funding through an adequate amount of committed credit facilities. Liquidity risk management involves maintaining sufficient cash the Group to finance its operations and expected developments. Atos’ policy is to cover in full its expected liquidity requirements by long-term committed loans or other appropriate long-term financial instruments. Terms and conditions of these loans include maturity and covenants leaving sufficient flexibility for Credit facilities are subject to financial covenants that are carefully followed by the Group Treasury department. Note 22. An analysis of the maturity of financial liabilities is disclosed in of exposure to interest rate risk encompasses two types: Interest rate risk arises mainly on borrowings. The management a price risk on fixed-rate financial assets and liabilities. For • example, by contracting a fixed-rate liability, the Group is exposed to potential opportunity losses should interest rates expenses as reported in the consolidated income statement fall. A change in interest rates would impact the market value of fixed-rate financial assets and liabilities. However, this loss of opportunity would not impact financial income and Interest rate risk

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