2005 Financial Report - Capgemini

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36 ANNUAL THE GROUP Capgemini SHARE PRICE AND TRADING VOLUME The following table presents an analysis of trading in the company’s shares over the last 24 months: Month Number Share prices Trading volume of in euros Number of Shares Value Trading days high average low total average (daily) (millions of euros) April 04 20 32.76 30.06 28.40 38,648,631 1,932,432 1 167.4 May 04 21 32.61 29.77 26.98 36,949,265 1,759,489 1 099.2 June 04 22 33.85 31.31 30.00 31,086,128 1,413,006 979.9 July 04 22 33.80 28.90 26.54 31,340,171 1,424,553 914.8 August 04 22 27.49 24.12 21.50 41,820,263 1,900,921 1 008.4 September 04 22 23.68 21.14 18.80 64,414,638 2,927,938 1 358.3 October 04 21 20.60 19.05 17.40 46,076,642 2,194,126 880.4 November 04 22 25.53 22.88 19.63 55,569,130 2,525,870 1 283.1 December 04 23 26.31 24.59 23.26 34,707,411 1,509,018 855.1 January 05 21 24.95 24.13 22.13 33,176,891 1,579,852 793.1 February 05 20 28.57 26.54 24.67 42,221,975 2,111,099 1 126.7 March 05 21 28.42 27.13 25.83 36,411,491 1,733,881 981.1 April 05 21 27.37 25.31 23.11 44,743,799 2,130,657 1 122.8 May 05 22 26.53 25.59 23.90 31,636,386 1,438,018 803.6 June 05 22 27.28 26.49 25.80 32,958,407 1,498,109 871.2 July 05 21 29.50 27.78 25.67 42,437,888 2,020,852 1 181.3 August 05 23 28.14 27.20 26.31 20,904,698 908,900 570.9 September 05 22 32.75 29.56 26.42 47,188,345 2,144,925 1 406.1 October 05 21 33.55 31.17 29.25 39,399,725 1,876,177 1 232.0 November 05 22 34.20 32.31 30.25 24,787,634 1,126,711 799.5 December 05 21 35.34 34.48 33.67 24,092,654 1,147,269 821.6 January 06 22 38.97 36.76 33.71 30,799,276 1,399,967 1 137.4 February 06 20 43.22 38.41 35.82 28,173,136 1,408,657 1 106.8 March 06 Source : Euronext 23 45.16 43.05 40.31 30,925,749 1,344,598 1 299.4 DIVIDENDS PAID BY CAP GEMINI Year ended Distribution Number Dividend Tax Total December 31 of dividends of shares per share credit revenue Millions % of net income 2000 €149M 35% 124,305,544 1.20 euro 0.60 euro 1.80 euro 2001 €50M 33% 125,244,256 0.40 euro (a) 0.20 euro (b) 0.60 euro 2002 No dividend paid 2003 No dividend paid 2004 No dividend paid 2005 €66M* 47% 131,581,978 0.50 euro* (*) Recommended dividend submitted to the Annual Shareholders’ Meeting of May 11, 2006 (a) and (b) : the “avoir fiscal” tax credit represents 50% of the amounts distributed in relation to tax credits used by an individual or a company benefiting from the parent-subsidiary regime provided for under article 145 of the French Tax Code, or 10% for other entities using their “avoir fiscal” tax credit as from January 1, 2003. The 2004 Finance Act abolished the avoir fiscal tax credit with effect from January 1, 2005. REPORT 2005 Capgemini
MANAGEMENT REPORT PRESENTED BY THE BOARD OF DIRECTORS TO THE ORDINARY AND EXTRAORDINARY SHAREHOLDERS’ MEETING OF MAY 11, 2006 To the shareholders, We are here today both as an ordinary and extraordinary shareholders’ meeting during which the shareholders present will be called upon to discuss and decide on proposals falling within the scope of either the ordinary or the extraordinary shareholders’ meeting. The additional difficulty this year is that for technical, but nonetheless logical reasons, we will at several points have to alternate between the ordinary and extraordinary parts of the meeting. Moreover, in order to facilitate the reading of this management report, we have decided to structure it in the same manner as the agenda of this Ordinary and Extraordinary Shareholders’ meeting, presenting the various points for your consideration in a logical manner. The purpose of the first part of this report is therefore: • to inform you about Company and Group activities during the past year; • to comment on Capgemini Group’s consolidated financial statements; • to submit the accounts for the financial year ended and Cap Gemini SA’s results appropriation for your approval; • to provide information on share capital, stock options, the remuneration of the directors of Cap Gemini SA, the risks incurred by the company and the social and environmental impact of the Group’s activities; • and finally, to present a brief outline of the Group’s short-term outlook. Approval will subsequently be requested to revise the bylaws, in order to: • reduce the terms of office of directors from six to four years; and • reduce the terms of office of non-voting directors from six to two years. This revision will require meeting the requirements for a quorum and a majority applicable to an extraordinary meeting of shareholders. Returning to the ordinary part of the shareholders’ meeting, approval will then be requested to: • renew the terms of office of nine of the thirteen current directors; • renew the terms of office of the two outgoing non-voting directors; • revise the total amount of fees annually allocated to the members of the Board of Directors (an amount that has not been revised in six years); • renew the authorizations already given to the Company to buy back its own shares on the open market and to cancel all or part of the shares acquired thereby. In the final section, respecting the quorum and majority requirements for an extraordinary shareholders’ meeting, your approval will be requested to: • authorize the Board of Directors to raise funds on the financial markets and to undertake an employee share issue by offering shares for subscription by Group employees participating in a Company Savings Plan (PEE) to be set up at that time. • make a technical modification of the bylaws to permit the holding of Board of Directors meetings using videoconference or telecommunications facilities. I – GENERAL COMMENTS ON THE GROUP’S ACTIVITY OVER THE PAST YEAR After a drawn-out recession, 2005 witnessed the return of moderate growth in demand for Project & Consulting Services, thereby curbing the downward trend in prices over recent years. While this upturn had already begun in North America, 2005 saw it extend to Europe. a) Operations by region: Against this positive background, Capgemini Group’s growth significantly outperformed the market due to the coming onstream of several major Outsourcing contracts. Revenue in 2005 was up 11.5% on the previous year, representing an increase of 15% at current rate and perimeter. Growth was particularly robust in the first half, at 21.6%, and 9.7% in the second half. Business in the United Kingdom and Ireland grew 36.1% on a like-for-like basis, making it the top-performing region in terms of revenue and accounting for 25% of the Group total. This sharp increase is partly attributable to the Outsourcing contract with Her Majesty’s Revenue and Customs (HMRC, formerly the Inland Revenue), a prime example of the fact that in addition to their contribution to Group stability through their recurrent nature, these major Outsourcing contracts offer opportunities to develop the Group’s other businesses by providing add-on Consulting and Technology services. These other businesses also witnessed significant growth which resulted in enhanced staff ANNUAL REPORT 2005 Capgemini 37
Page 1 and 2: CONTENTS 02 Financial highlights 03
Page 3 and 4: THE CAPGEMINI GROUP I - HISTORY Fou
Page 5 and 6: gence of new players in the global
Page 7 and 8: tions and industry trends, and so o
Page 9 and 10: In fact, the requirement for banks
Page 11 and 12: Simplified organization chart for t
Page 13 and 14: and profitable growth, enabling a p
Page 15 and 16: Graduate Mobility scheme allowing g
Page 17 and 18: Chinese team members. The team is r
Page 19 and 20: Year Average headcount End of year
Page 21 and 22: In order to fine-tune its assessmen
Page 23 and 24: 6.3.5 Learning, a major priority Ge
Page 25 and 26: way dialog through its approach to
Page 27 and 28: In terms of women’s representatio
Page 29 and 30: • taking environmental impact int
Page 31 and 32: ties managed by leading financial i
Page 33 and 34: usiness interruption, arising from
Page 35: STOCK MARKET CAPITALIZATION From Ja
Page 39 and 40: - Consulting + 2.6% - Technology Se
Page 41 and 42: was more than offset by the investm
Page 43 and 44: fer of the special long-term capita
Page 45 and 46: i.e., 116% of his theoretical varia
Page 47 and 48: two convertible bonds mentioned abo
Page 49 and 50: XII - AUTHORIZATION TO BUY BACK THE
Page 51 and 52: Code, the Board of Directors inform
Page 53 and 54: some years the main corporate gover
Page 55 and 56: the list of the beneficiaries of th
Page 57 and 58: used in the Netherlands and the US,
Page 59 and 60: diarity and define three levels of
Page 61 and 62: forecasts for the next six months a
Page 63 and 64: GROUP CONSOLIDATED FINANCIAL STATEM
Page 65 and 66: CONSOLIDATED STATEMENTS OF INCOME F
Page 67 and 68: CONSOLIDATED STATEMENTS OF CASH FLO
Page 69 and 70: (1) See Note 1.K. (2) At December 3
Page 71 and 72: Intragroup transactions are elimina
Page 73 and 74: at the date of acquisition, which i
Page 75 and 76: Accounts and notes receivable Accou
Page 77 and 78: epresents a commitment to convert o
Page 79 and 80: NOTE 5~OTHER OPERATING INCOME AND E
Page 81 and 82: NOTE 8~INCOME TAX EXPENSE Income ta
Page 83 and 84: The Group has no contractual or imp
Page 85 and 86: NOTE 10~INTANGIBLE ASSETS Changes i
Page 87 and 88:
NOTE 11~PROPERTY, PLANT AND EQUIPME
Page 89 and 90:
Deferred tax assets over one year p
Page 91 and 92:
Deferred tax liabilities can be ana
Page 93 and 94:
NOTE 16~OTHER RECEIVABLES At Decemb
Page 95 and 96:
usiness day) at a price of €41.90
Page 97 and 98:
cisable by the TXU group during the
Page 99 and 100:
B) Fair values At December 31 (in m
Page 101 and 102:
NOTE 20~PROVISIONS FOR PENSIONS AND
Page 103 and 104:
The total relating to other employe
Page 105 and 106:
NOTE 23~ACCOUNTS AND NOTES PAYABLE
Page 107 and 108:
Under IFRS, the sale of carry-back
Page 109 and 110:
B) Analysis of depreciation, amorti
Page 111 and 112:
II. SEGMENT REPORTING BY BUSINESS S
Page 113 and 114:
NOTE 30~LIST OF CONSOLIDATED COMPAN
Page 115 and 116:
Country Consolidated % interest Con
Page 117 and 118:
III. RECONCILIATIONS BETWEEN THE FR
Page 119 and 120:
C) Reconciliation between French GA
Page 121 and 122:
E) Reconciliation between French GA
Page 123 and 124:
G) Reconciliation between French GA
Page 125 and 126:
I) Analysis of IFRS transition rela
Page 127 and 128:
equity in the IFRS balance sheet at
Page 129 and 130:
effective interest rate to the carr
Page 131 and 132:
SUBSIDIARIES AND INVESTMENTS in mil
Page 133 and 134:
STATUTORY AUDITORS’ SPECIAL REPOR
Page 135 and 136:
ment for contributions in kind and
Page 137 and 138:
TEXT OF THE DRAFT RESOLUTIONS PROPO
Page 139 and 140:
the date hereof, for a term of two
Page 141 and 142:
issuance costs against the related
Page 143 and 144:
the Statutory Auditors, the General
Page 145 and 146:
Appropriation and distribution of e
Page 147 and 148:
Proposed renewals to financial auth
Page 149 and 150:
exchange offer to acquire all of th
Page 151 and 152:
Current ownership structure The own
Page 153 and 154:
List of Directorships and other off
Page 155 and 156:
FIRST OFFICES HELD IN 2005 OTHER OF
Page 157 and 158:
DIRECTORS’ INTERESTS This informa
Page 159 and 160:
DECLARATION BY THE PERSON RESPONSIB
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2005 Financial Report - Capgemini

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