Cap Gemini - Registration Document 2016

FINANCIAL INFORMATION

4.2 Consolidated financial statements

Consolidation principles and Group structure Note 2

The Group does not control any special purpose entities that have not been consolidated. Foreign currency translation The consolidated accounts presented in these consolidated financial statements have been prepared in euros. The Consolidated Statements of Financial Position of subsidiaries denominated in foreign currencies are translated into euros at year-end rates of exchange with the exception of the Income Statement. year. However, for certain material transactions, it may be relevant to use a specific rate of exchange. Differences arising from translation at these different rates are recognized directly in equity under “Translation reserves” and have no impact on Income statements denominated in foreign currencies are translated into euros at the average rates of exchange for the equity accounts, which are carried at their historical values. Exchange differences arising on monetary items which form an integral part of the net investment in foreign subsidiaries are recognized in equity under “Translation reserves”. on the type of transaction concerned. Exchange differences on receivables and payables denominated in a foreign currency are recorded in operating income or expense or financial income or expense, depending

Consolidation methods The accounts of companies directly or indirectly controlled by the parent company are fully consolidated. The parent company is deemed to exercise control over an entity when it has the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities. company directly or indirectly exercises significant influence, without however exercising full or joint control, are accounted for by the equity method. This method consists of recording the Investments in associates over whose management the parent Group’s share in profit for the year of the associate in the Income Statement. The Group’s share in net assets of the associate is recorded under “Other non-current assets” in the Consolidated Statement of Financial Position. Details of the scope of consolidation are provided in Note 32, List of the main consolidated companies by country. adopted by the Group. All consolidated companies prepared their accounts to December 31, 2016 in accordance with the accounting policies well as inter-company profits. Inter-company transactions are eliminated on consolidation, as

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The exchange rates used to translate the financial statements of the Group’s main subsidiaries into euros are as follows:

Average rate

Closing rate

2015

2015

2016

2016

Australian dollar

0.67838 0.27480 0.70630 0.14349 0.01406 0.11200 0.23916 1.37806 0.10691 0.90166

0.67230 0.26057 0.68234 0.13609 0.01345 0.10765 0.22920 1.22455 0.10567 0.90404

0.67128 0.23193 0.66155 0.14163 0.01389 0.10413 0.23453 1.36249 0.10882 0.91853

0.68512 0.29150 0.70482 0.13661 0.01397 0.11006 0.22674 1.16798 0.10469 0.94868

Brazilian real

Canadian dollar

Chinese renminbi yuan

Indian rupee

Norwegian krona

Polish zloty

Pound sterling Swedish krona

US dollar

2015. N.B. the income statement of IGATE, purchased on July 1, 2015, was consolidated at average exchange rates for the second-half of Business combinations

arising on an inter-company monetary asset or liability ( e.g. an inter-company receivable denominated in a currency different from the functional currency of the subsidiary) operation ( e.g. a loan with no fixed maturity). cannot be eliminated. Such foreign exchange gains and losses are recognized in the Income statement or in Income and expense recognized directly in equity, if the underlying forms an integral part of the net investment in the foreign inter-company operating transactions performed as part of The fair values of hedging instruments relating to the centralized management of currency risk in the parent company are eliminated.

Business combinations are accounted for using the acquisition method. Under this method, the identifiable assets acquired and liabilities assumed are recognized at fair value at the acquisition date and may be adjusted during the 12 months following this date. Exchange gains and losses on inter-company transactions The results and financial position of a foreign subsidiary are included in the Group’s consolidated financial statements after the elimination of inter-company balances and transactions. However, a foreign exchange gain or loss

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Registration Document 2016 — Capgemini