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FINANCIAL INFORMATION
4.2 Consolidated financial statements
4
215
Registration Document 2016 — Capgemini
Organic free cash flow
Organic free cash flow calculated based on items in the Statement of Cash Flows is equal to cash flow from operations less acquisitions
of property, plant, equipment and intangible assets (net of disposals) and adjusted for flows relating to the net interest cost.
At December 31
(in millions of euros)
2015
2016
Cash flows from operations
1,004
1,319
Acquisitions of property, plant and equipment and intangible assets
(198)
(197)
Proceeds from disposals of property, plant and equipment and intangible assets
19
21
Acquisitions of property, plant, equipment and intangible assets (net of
disposals)
(179)
(176)
Interest paid
(38)
(115)
Interest received
28
43
Net interest cost
(10)
(72)
ORGANIC FREE CASH FLOW
815
1,071
Currency, interest rate and counterparty risk management
Note 23
Currency risk management
Exposure to currency risk and currency risk
A)
management policy
Currency risk and hedging operating transactions
a)
The growing use of offshore production centers located in India,
Poland and Latin America, exposes the Group to currency risk
with respect to some of its production costs.
managing these currency risks, due in the majority to internal flows
with India. The definition of the hedging policy and the
management of operational currency risk is centralized at parent
subsidiaries and enters into currency hedges with its bank
counterparties, primarily through forward purchase and sale
foreign exchange contracts.
company level. Currency risk is managed primarily based on
periodic reporting by subsidiaries of their exposure to currency risk
over the coming 1 to 3 years. On this basis, the parent company
acting as an internal bank, grants internal currency guarantees to
The Group implements a policy aimed at minimizing and
These hedging transactions are generally recorded in accordance
with cash flow hedge accounting rules.
Currency risk and hedging financial transactions
b)
The Group is exposed to the risk of exchange rate fluctuations in
respect of:
forward purchase and sale foreign exchange contracts);
inter-company financing transactions, mainly within the parent
◗
company, these flows generally being hedged (in particular using
functional currency is not the euro.
fees paid to the parent company by subsidiaries whose
◗
Sensitivity of revenues and the operating margin* to
c)
fluctuations in the main currencies
(*)
A 10% fluctuation in the US dollar-euro exchange rate would
trigger a corresponding 2.7% change in revenues and a 3.2%
change in the operating margin* amount. Similarly, a 10%
fluctuation in the pound sterling-euro exchange rate would trigger
a corresponding 1.6% change in revenues and a 1.9% change in
the operating margin* amount.
Hedging derivatives
B)
company with respect to the centralized management of currency
risk on operating transactions and inter-company financing
transactions.
Amounts hedged at December 31, 2016 using forward purchase
and sale foreign exchange contracts, mainly concern the parent
Operating margin, an alternative performance measure monitored by the Group, is defined in Note 3, Alternative performance measures.
(*)