Cap Gemini - Registration Document 2016

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PRESENTATION OF THE GROUP AND ITS ACTIVITIES

1.7 Risk analysis

Clients

In addition, for existing clients, the Group is exposed to standard client risks which are closely monitored: the risk of excessive dependence on a single client or group of ◗ clients or a single market sector; the Group has several thousand clients, which to a certain extent enables it to resist market turbulence and reduce its exposure to volatility in certain sectors. The client portfolio consists of both a large number of entities from the public sector and a large number of entities from the private sector, from a wide spread of diversified markets. Exposure to risks of commercial dependency is clients, helps reduce credit risk; client insolvency; client solvency analysis upstream of the sales ◗ process helps minimize client credit risk. The solvency of these major clients, combined with the wide diversity of other smaller the risk of dissatisfaction; Capgemini pays particular attention to ◗ assessing client satisfaction and has implemented a rigorous client relationship management process that it carries out therefore limited; throughout the project, known as OTACE (On Time and Above Client Expectations). This is a key pillar of the Group’s client loyalty policy, particularly for major client accounts. Support Department, specialist teams of experts audit projects considered high-risk or facing performance difficulties. procedures. At the initiative of the Production/Methods and as “complex” subject to more specific controls. Internal Audit also verifies the application of project management and control Project performance monitoring satisfies the management and control procedures defined by the Group, with projects classified risks associated with the delivery of information systems projects ordered by clients, from pre-sale to acceptance and payment by the client of the last invoice for the project. In a simplified approach, this process differentiates between: The Group has devised a formal process to identify and control pre-sale risk controls; ◗ production and quality controls during the project performance ◗ phase; business control. ◗ existing contracts. This risk analysis is based in particular on: commitments, sometimes involving transfers of assets, staff and the related obligations). As a result, identifying and measuring the risks involved is essential at all stages of the selling process, not only for new contracts but also for extensions or renewals of Projects are increasingly complex, both in terms of size and technical specifications, especially in Outsourcing (long-term a reporting tool consolidating all commercial opportunities at ◗ Group level. Data concerning commercial opportunities is entered as and when identified, and updated throughout the sale process; 1. Pre-sale risk control

Risk factors

strategic information and is not communicated. Capgemini serves a large client base, in a wide variety of sectors and countries, limiting the risk of dependency on a given sector and/or market. The Group’s biggest clients are multinationals and public bodies. The detailed list of the Group’s biggest clients is The contribution of the Group’s main clients to Group revenues (as a percentage of total revenues) is as follows:

2016 11% 16%

Top five clients Top ten clients

Risk management systems

security in the conduct of business. The management of client risk is facilitated by the fact that the Group controls the international development of its activity by focusing on countries offering sufficient guarantees in terms of business ethics, the safety and security of individuals and legal

Operational risks 1.7.3 Project performance

Risk factors

contractual commitments given by the Group to its clients, suppliers and sub-contractors, difficulties with respect to project performance and/or project costs may be underestimated at the Despite the formal review and approval procedure for all is a commitment to provide a certain level of service. outset. This may result in cost overruns not covered by additional revenues, especially in the case of fixed-price contracts, or reduced revenues without any corresponding reduction in expense in the case of certain outsourcing contracts where there More generally, the Group could be unable to control changes in its cost base, materially impacting the overall profitability of its operations. Despite the stringent control procedures that the Group applies in the project performance phase, it is impossible to guarantee that all risks have been contained and controlled. In particular, human error, omissions, and infringement of internal or external regulations or legislation that are not, or cannot be identified in time, may cause damage for which the Company is held liable and/or may tarnish its reputation. external certification of its Business Units (CMM, ISO, etc.). high quality performance of client projects. Project managers receive specific training to develop their expertise and obtain certification levels consistent with the complexity of projects entrusted to them. The Group continues its active policy of The Group has developed a range of methods, organized and documented in its DELIVER methodology, in order to ensure the Risk management systems

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Registration Document 2016 — Capgemini