6-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of December 2022

Commission File Number 1-14858

CGI Inc.

(Translation of Registrant’s Name Into English)

1350 René-Lévesque Boulevard West

25th Floor

Montréal, Québec

Canada H3G 1T4

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F            Form 40-F   ✓  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):       

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):       

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Enclosures: 2022 Annual Report and Management Proxy Circular dated December 5, 2022.

This Form 6-K shall be deemed incorporated by reference in the Registrant’s Registration Statements on Form S-8, Reg. Nos. 333-197742, 333-220741, 333-261831 and 333-261832.

The following exhibits are filed herewith and incorporated herein:

Exhibit number    Description

99.1	2022 Annual Report
99.2	Management Proxy Circular dated December 5, 2022

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CGI INC.
		(Registrant)
	By:	/s/ Benoit Dubé
	Name:	Benoit Dubé
Date:    December 16, 2022	Title:	Executive Vice-President,   Legal and Economic Affairs, and   Corporate Secretary

EX-99.1

Exhibit 99.1

Management’s Discussion and Analysis

November 9, 2022

BASIS OF PRESENTATION

This Management’s Discussion and Analysis of the Financial Position and Results of Operations (MD&A) is a responsibility of management and has been reviewed and approved by the Board of Directors. This MD&A has been prepared in accordance with the requirements of the Canadian Securities Administrators. The Board of Directors is ultimately responsible for reviewing and approving the MD&A. The Board of Directors carries out this responsibility mainly through its Audit and Risk Management Committee, which is appointed by the Board of Directors and is comprised entirely of independent and financially literate directors.

Throughout this document, CGI Inc. is referred to as “CGI”, “we”, “us”, “our” or “Company”. This MD&A provides information management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company. This document should be read in conjunction with the audited consolidated financial statements and the notes thereto for the years ended September 30, 2022 and 2021. CGI’s accounting policies are in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). All dollar amounts are in Canadian dollars unless otherwise noted.

MATERIALITY OF DISCLOSURES

This MD&A includes information we believe is material to investors. We consider something to be material if it results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares, or if it is likely that a reasonable investor would consider the information to be important in making an investment decision.

FORWARD-LOOKING STATEMENTS

This MD&A contains “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbours. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbour provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include all information and statements regarding CGI’s intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as “believe”, “estimate”, “expect”, “intend”, “anticipate”, “foresee”, “plan”, “predict”, “project”, “aim”, “seek”, “strive”, “potential”, “continue”, “target”, “may”, “might”, “could”, “should”, and similar expressions and variations thereof. These information and statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of the Company, and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements. These risks and uncertainties include but are not restricted to: risks related to the market such as the level of business activity of our clients, which is affected by economic and political conditions, additional external risks (such as pandemics, armed conflict, climate-related issues and inflation) and our ability to negotiate new contracts; risks related to our industry such as competition and our ability to develop and expand our services, to penetrate new markets, and to protect our intellectual property rights; risks related to our business such as risks associated with our growth strategy, including the integration of new operations, financial and operational risks inherent in worldwide operations, foreign exchange risks, income tax laws and other tax programs, our ability to attract and retain qualified employees, to negotiate favourable contractual terms, to deliver our services and to collect receivables, to disclose, manage and implement environmental, social and governance (ESG) initiatives and standards, as well as the reputational and financial risks attendant to cybersecurity breaches and other incidents, and financial risks such as liquidity needs and requirements, maintenance of financial ratios, interest rate fluctuations and the discontinuation of major interest rate benchmarks and changes in creditworthiness and credit ratings; as well as other risks identified or incorporated by reference in this MD&A and in other documents that we make public, including our filings with the Canadian Securities

2 — MANAGEMENT’S DISCUSSION AND ANALYSIS

Administrators (on SEDAR at www.sedar.com) and the U.S. Securities and Exchange Commission (on EDGAR at www.sec.gov). For a discussion of risks in response to the coronavirus (COVID-19) pandemic, see Pandemic risks in section 10.1.1. of the present document. Unless otherwise stated, the forward-looking information and statements contained in this MD&A are made as of the date hereof and CGI disclaims any intention or obligation to publicly update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information and forward-looking statements are based were reasonable as at the date of this MD&A, readers are cautioned not to place undue reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in section 10 - Risk Environment, which is incorporated by reference in this cautionary statement. We also caution readers that the risks described in the previously mentioned section and in other sections of this MD&A are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

FISCAL 2022 RESULTS — 3

KEY PERFORMANCE MEASURES

The reader should note that the Company reports its financial results in accordance with IFRS. However, we use a combination of GAAP, non-GAAP and supplementary financial measures and ratios to assess the Company’s performance. The non-GAAP measures used in this MD&A do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS.

The table below summarizes our most relevant key performance measures:

Profitability	Revenue prior to foreign currency impact (non-GAAP) – is a measure of revenue before foreign currency translation impacts. This is calculated by translating current period results in local currency using the conversion rates in the equivalent period from the prior year. Management believes that it is helpful to adjust revenue to exclude the impact of currency fluctuations to facilitate period-to-period comparisons of business performance and that this measure is useful to investors for the same reason. A reconciliation of the revenue prior to foreign currency impact to its closest IFRS measure can be found in section 3.4. and 5.4. of the present document.
	Adjusted EBIT (non-GAAP) – is a measure of earnings excluding acquisition-related and integration costs, net finance costs and income tax expense. Management believes this measure is useful to investors as it best reflects the performance of the Company’s activities and allows for better comparability from period to period as well as to trend analysis. A reconciliation of the adjusted EBIT to its closest IFRS measure can be found in section 3.7. and 5.6. of the present document.
	Adjusted EBIT margin (non-GAAP) – is obtained by dividing our adjusted EBIT by our revenue. Management believes this measure is useful to investors as it best reflects the performance of its activities and allows for better comparability from period to period as well as to trend analysis. A reconciliation of the adjusted EBIT to its closest IFRS measure can be found in section 3.7. of the present document.
	Net earnings – is a measure of earnings generated for shareholders.
	Net earnings margin – is obtained by dividing our net earnings by our revenues. Management believes a percentage of revenue measure is meaningful for better comparability from period to period.
	Diluted earnings per share (diluted EPS) – is a measure of net earnings generated for shareholders on a per share basis, assuming all dilutive elements are exercised. Please refer to note 21 of our audited consolidated financial statements for additional information on earnings per share.
	Net earnings excluding specific items (non-GAAP) – is a measure of net earnings excluding acquisition-related and integration costs. Management believes this measure is useful to investors as it best reflects the Company’s performance and allows for better comparability from period to period. A reconciliation of the net earnings excluding specific items to its closest IFRS measure can be found in section 3.8.3. and 5.6.1. of the present document.
	Net earnings margin excluding specific items (non-GAAP) – is obtained by dividing our net earnings excluding acquisition-related and integration costs by our revenues. Management believes this measure is useful to investors as it best reflects the Company’s performance and allows for better comparability from period to period. A reconciliation of the net earnings excluding specific items to its closest IFRS measure can be found in section 3.8.3. and 5.6.1 of the present document.

4 — MANAGEMENT’S DISCUSSION AND ANALYSIS

	Diluted earnings per share excluding specific items (non-GAAP) – is defined as the net earnings excluding specific items on a per share basis. Management believes that this measure is useful to investors as it best reflects the Company’s performance on a per share basis and allows for better comparability from period to period. The diluted earnings per share reported in accordance with IFRS can be found in section 3.8. and 5.6. of the present document while the basic and diluted earnings per share excluding specific items can be found in section 3.8.3. and 5.6.1. of the present document.
	Effective tax rate excluding specific items (non-GAAP) - is obtained by dividing income tax expense, excluding tax deductions on acquisition-related and integration costs, by earnings before income taxes excluding specific items. Management believes that this measure allows for better comparability from period to period. A reconciliation of the effective tax rate excluding specific items to its closest IFRS measure can be found in section 3.8.3. and 5.6.1. of the present document.
Liquidity	Cash provided by operating activities – is a measure of cash generated from managing our day-to-day business operations. Management believes strong operating cash flow is indicative of financial flexibility, allowing us to execute the Company’s strategy.
	Days sales outstanding (DSO) – is the average number of days needed to convert our trade receivables and work in progress into cash. DSO is obtained by subtracting deferred revenue from trade accounts receivable and work in progress; the result is divided by our most recent quarter’s revenue over 90 days. Management tracks this metric closely to ensure timely collection and healthy liquidity. Management believes this measure is useful to investors as it demonstrates the Company’s ability to timely convert its trade receivables and work in progress into cash.
Growth	Constant currency growth (non-GAAP) – is a measure of revenue growth before foreign currency translation impacts. This growth is calculated by translating current period results in local currency using the conversion rates in the equivalent period from the prior year. Management believes that it is helpful to adjust revenue to exclude the impact of currency fluctuations to facilitate period-to-period comparisons of business performance and that this measure is useful to investors for the same reason.
	Backlog – includes new contract wins, extensions and renewals (bookings), backlog acquired through business acquisitions and adjusted for the backlog consumed during the period as a result of client work performed, cancellation and the impact of foreign currencies to our existing contracts. Bookings and backlog incorporate estimates from management that are subject to change. Management tracks this measure as it is a key indicator of our best estimate of contracted revenue to be realized in the future and believes that this measure is useful to investors for the same reason.
	Book-to-bill ratio – is a measure of the proportion of the value of our bookings to our revenue in the period. This metric allows management to monitor the Company’s business development efforts to ensure we grow our backlog and our business over time and management believes that this measure is useful to investors for the same reason. Management’s objective is to maintain a target ratio greater than 100% over a trailing twelve-month period. Management believes that monitoring the Company’s bookings over a longer period is a more representative measure as the services and contract type, size and timing of bookings could cause this measurement to fluctuate significantly if taken for only a three-month period.
Capital Structure	Net debt (non-GAAP) – is obtained by subtracting from our debt and lease liabilities, our cash and cash equivalents, short-term investments, long-term investments and adjusting for fair value of foreign currency derivative financial instruments related to debt. Management uses the net debt metric to monitor the Company’s financial leverage and believes that this metric is useful to investors as it provides insight into its financial strength. A reconciliation of net debt to its closest IFRS measure can be found in section 4.5. of the present document.

FISCAL 2022 RESULTS — 5

Net debt to capitalization ratio (non-GAAP) – is a measure of our level of financial leverage and is obtained by dividing the net debt by the sum of shareholder’s equity and net debt. Management uses the net debt to capitalization ratio to monitor the proportion of debt versus capital used to finance the Company’s operations and to assess its financial strength. Management believes that this metric is useful to investors for the same reasons.

Return on equity (ROE) – is a measure of the rate of return on the ownership interest of our shareholders and is calculated as the proportion of net earnings for the last twelve months over the last four quarters’ average shareholder’s equity. Management looks at ROE to measure its efficiency at generating net earnings for the Company’s shareholders and how well the Company uses the invested funds to generate net earnings growth and believes that this measure is useful to investors for the same reasons.

Return on invested capital (ROIC) (non-GAAP) – is a measure of the Company’s efficiency at allocating the capital under its control to profitable investments and is calculated as the proportion of the net earnings excluding net finance costs after-tax for the last twelve months, over the last four quarters’ average invested capital, which is defined as the sum of shareholder’s’ equity and net debt. Management examines this ratio to assess how well it is using its funds to generate returns and believes that this measure is useful to investors for the same reason.

REPORTING SEGMENTS

Effective April 1, 2022, the Company realigned its management structure, resulting in a reorganization and the creation of two new operating segments, namely Scandinavia and Central Europe (Germany, Sweden and Norway) and Northwest and Central-East Europe (primarily Netherlands, Denmark and Czech Republic) collectively formerly known as Scandinavia and Central and Eastern Europe in the prior fiscal year, and, less significantly, the transfer of our Belgium operations from Western and Southern Europe operating segment to the Northwest and Central-East Europe operating segment. As a result, the Company is managed through the following nine operating segments: Western and Southern Europe (primarily France, Spain and Portugal); United States (U.S.) Commercial and State Government; Canada; U.S. Federal; Scandinavia and Central Europe; United Kingdom (U.K.) and Australia; Finland, Poland and Baltics; Northwest and Central-East Europe; and Asia Pacific Global Delivery Centers of Excellence (mainly India and Philippines) (Asia Pacific).

The Company has restated the segmented information for the comparative periods to conform to the new segmented information structure. Please refer to sections 3.4, 3.6, 5.4 and 5.5 of the present document and to note 28 of our audited consolidated financial statements for additional information on our segments.

6 — MANAGEMENT’S DISCUSSION AND ANALYSIS

MD&A OBJECTIVES AND CONTENTS

In this document, we:

• Provide a narrative explanation of the audited consolidated financial statements through the eyes of management;

• Provide the context within which the audited consolidated financial statements should be analyzed, by giving enhanced disclosure about the dynamics and trends of the Company’s business; and

• Provide information to assist the reader in ascertaining the likelihood that past performance may be indicative of future performance.

In order to achieve these objectives, this MD&A is presented in the following main sections:

Section		Contents		Pages
1.	Corporate Overview	1.1.	About CGI	8
		1.2.	Vision and Strategy	9
		1.3.	Competitive Environment	11
2.	Yearly Overview	2.1.	Selected Yearly Information and Key Performance Measures	12
		2.2.	Stock Performance	13
		2.3.	COVID-19	14
		2.4.	Ukraine Conflict	14
		2.5.	Investments in Subsidiaries	15
3.	Financial Review	3.1.	Bookings and Book-to-Bill Ratio	16
		3.2.	Foreign Exchange	17
		3.3.	Revenue Distribution	18
		3.4.	Revenue by Segment	19
		3.5.	Operating Expenses	22
		3.6.	Adjusted EBIT by Segment	23
		3.7.	Earnings Before Income Taxes	25
		3.8.	Net Earnings and Earnings Per Share	26
4.	Liquidity	4.1.	Consolidated Statements of Cash Flows	28
		4.2.	Capital Resources	30
		4.3.	Contractual Obligations	31
		4.4.	Financial Instruments and Hedging Transactions	31
		4.5.	Selected Measures of Capital Resources and Liquidity	32
		4.6.	Guarantees	33
		4.7.	Capability to Deliver Results	33

FISCAL 2022 RESULTS — 7

Section		Contents		Pages
5.	Fourth Quarter	5.1.	Bookings and Book-to-Bill Ratio	34
	Results	5.2.	Foreign Exchange	35
		5.3.	Revenue Distribution	36
		5.4.	Revenue by Segment	37
		5.5.	Adjusted EBIT by Segment	40
		5.6.	Net Earnings and Earnings Per Share	42
		5.7.	Consolidated Statements of Cash Flows	44
6.	Eight Quarter Summary	A summary of the past eight quarters’ key performance measures and a discussion of the factors that could impact our quarterly results.		46
7.	Changes in Accounting Policies	A summary of the accounting standard changes including those proposed.		48
8.	Critical Accounting Estimates	A discussion of the critical accounting estimates made in the preparation of the audited consolidated financial statements.		50
9.	Integrity of Disclosure	A discussion of the existence of appropriate information systems, procedures and controls to ensure that information used internally and disclosed externally is complete and reliable.		53
10.	Risk	10.1.	Risks and Uncertainties	55
	Environment	10.2.	Legal Proceedings	69

8 — MANAGEMENT’S DISCUSSION AND ANALYSIS

1. Corporate Overview

1.1. ABOUT CGI

Founded in 1976 and headquartered in Montréal, Canada, CGI is a leading IT and business consulting services firm with approximately 90,000 consultants and professionals worldwide, whom are called members as they are also owners through our Share Purchase Plan. We use the power of technology to help clients accelerate their holistic digital transformation.

CGI has a people-centered culture, operating where our clients live and work to build trusted relationships and to advance our shared communities. Our consultants are committed to providing actionable insights that help clients achieve business outcomes. They leverage global delivery centers that deliver scale, innovation and delivery excellence for every engagement.

End-to-end services and solutions

CGI delivers end-to-end services that help clients achieve the digital transformation of their value chains. Together, our end-to-end services and solutions help clients design, implement, run and operate the technology critical to achieving their business strategies. Our portfolio encompasses:

i. Business and strategic IT consulting and systems integration services: CGI helps clients create a path for future growth and sustainable value through business and strategic IT consulting services such as business strategy, business and operating model design, human-centered experience, customer value and operational excellence, organizational change management, sustainability and digital transformation. In the area of systems integration, we help clients accelerate the enterprise modernization of their legacy systems and adopt new technologies to drive innovation and deliver real-time and insight-driven customer and citizen services.

ii. Managed IT and business process services: Working as an extension of our clients’ organizations, we take on full or partial responsibility for managing their IT functions, freeing them up to focus on their strategic business direction. Our services enable clients to reinvest, alongside CGI, in the successful execution of their digital transformation roadmaps. We help them increase agility, scalability and resilience; deliver operational efficiencies, innovations and reduced costs; and embed security and data privacy controls. Typical services include: application development, modernization and maintenance; holistic enterprise digitization, automation, hybrid and cloud management; and business process services.

iii. Intellectual property (IP): CGI’s portfolio of IP solutions are highly configurable “business platforms as a service” that are embedded within our end-to-end service offerings and utilize integrated security, data privacy practices and provider-neutral cloud approaches. We invest in, and deliver, market-leading IP to drive business outcomes within each of our target industries. We also collaborate with clients to build and evolve IP-based solutions while enabling a higher degree of flexibility and customization for their unique modernization and digitization needs.

Deep industry and technology expertise

CGI has long-standing and focused practices in all of its core industries, providing clients with a partner that is not only an expert in IT, but also an expert in their respective industries. This combination of business knowledge and digital technology expertise allows us to help our clients navigate complex challenges and focus on value creation. In the process, we evolve the services and solutions we deliver within our targeted industries and provide thought leadership, blueprints, frameworks and technical accelerators that help client evolve their ecosystems.

Our targeted industries include financial services (including banking and insurance), government (including space), manufacturing, retail and distribution (including consumer services, transportation and logistics), communications and utilities (including energy and media), and health (including life sciences). To help orchestrate our global posture across these industries, our leaders regularly participate in cabinet meetings and councils to advance the strategies, services and solutions we deliver to our clients.

FISCAL 2022 RESULTS — 9

Helping clients leverage technology to its fullest

Macro trends such as supply chain reconfiguration, climate change and energy transition, and demographic shifts including aging populations and talent shortages require new business models and ways of working. At the same time, technology is reshaping our future and creating new opportunities.

Accelerating digitization provides the inclusive, economically vibrant, and sustainable future our clients’ customers and citizens demand. Leveraging technology to its fullest helps clients to lead within their industries. Our end-to-end digital services, industry and technology expertise, and operational excellence combine to help clients advance their holistic digital transformation.

Through our proprietary Voice of Our Clients research, we analyzed the characteristics of leading digital organizations and found three common attributes:

• They have highly agile business models and are better at operating as aligned teams between business and IT.

• They have been faster in modernizing the entire IT environment—including through automation—while assuring security and data privacy.

• They are addressing business transformation holistically, including culture change, ecosystem touchpoints, and the integration of sustainability objectives.

Digital leaders across industries seek new ways to evolve their strategy and operational models and use technology and information to improve how they operate, deliver products and services, and create value.

CGI helps clients adopt leading digital attributes and design, manage, protect and evolve their digital value chains to accelerate business outcomes.

Quality processes

Our clients expect consistent service wherever and whenever they engage us. We have an outstanding track record of on-time, within-budget delivery as a result of our commitment to excellence and our robust governance model—CGI’s Management Foundation.

Our Management Foundation provides a common business language, frameworks and practices for managing operations consistently across the globe, driving continuous improvement. We also invest in rigorous quality and service delivery standards including the International Organization for Standardization (ISO) and Capability Maturity Model Integration (CMMI) certification programs, as well as a comprehensive Client Satisfaction Assessment Program, with signed client assessments, to ensure high satisfaction on an ongoing basis.

1.2. VISION AND STRATEGY

CGI is unique compared to most companies, as our vision is based on a dream: “To create an environment in which we enjoy working together and, as owners, contribute to building a company we can be proud of.” This dream has motivated us since our founding in 1976 and drives our vision: “To be a global, world-class end-to-end IT and business consulting services leader helping our clients succeed.”

In pursuing our dream and vision, CGI has been highly disciplined throughout its history in executing a Build and Buy profitable growth strategy comprised of four pillars that combine profitable organic growth (Build) and accretive acquisitions (Buy):

    Pillar 1: Win, renew and extend contracts

    Pillar 2: New large managed IT and business process services contracts

These first two pillars relate to driving profitable organic growth through the pursuit of contracts with new and existing clients in our targeted industries. As such, CGI engages with new and existing clients on four levers in our portfolio of end-to-end services and solutions: Business and Strategic IT Consulting, Systems Integration, Managed Services and IP-based

10 — MANAGEMENT’S DISCUSSION AND ANALYSIS

services. Successes in these pillars reflect the strength of our end-to-end portfolio of capabilities, the depth of expertise of our consultants in business and IT, client satisfaction in our delivery excellence, and the appreciation of the proximity model by our clients, both existing and potential.

    Pillar 3: Metro market acquisitions

    Pillar 4: Large, transformational acquisitions

The third and fourth pillars focus on growth through accretive acquisitions. The third pillar for metro market acquisitions complements the proximity model, and helps to provide a fuller range of end-to-end services. The fourth pillar for large transformational acquisitions helps to further expand our geographic footprint and reach the critical mass required to compete for large managed IT and business process services contracts and broaden our client relationships. Both the third and fourth pillars are supported by three levers. First, our range of end-to-end services which allows us to consider a broad range of acquisitions. A second lever is CGI’s industry sector mix, which helps us mirror the IT spend of each metro market over time. A final lever across pillars three and four focuses on IP-based services firms which offer consulting services and managed services that leverage their solutions.

CGI will continue to be a consolidator in the IT and business consulting services industry by being active across these four pillars.

Executing our strategy

CGI’s strategy is executed through a business model that combines client proximity with an extensive global delivery network to deliver the following benefits:

• Local relationships and accountability: We live and work near our clients to provide a high level of responsiveness, partnership, and innovation. Our local CGI members speak our clients’ language, understand their business and industries, and collaborate to meet their goals and advance their business.

• Global reach: Our local presence is complemented by an expansive global delivery network that ensures our clients have 24/7 access to best-fit digital capabilities and resources to meet their end-to-end needs. In addition, clients benefit from our unique combination of industry domain and technology expertise within our global delivery model.

• Committed experts: One of our key strategic goals is to be our clients’ partner and expert of choice. To achieve this, we invest in developing and recruiting professionals with extensive industry, business and in-demand technology expertise. In addition, a majority of CGI consultants and professionals are also owners through our Share Purchase Plan, which, combined with the Profit Participation Plan, provide an added level of commitment to the success of our clients.

• Comprehensive quality processes: CGI’s investment in quality frameworks and rigorous client satisfaction assessments has resulted in a consistent track record of on-time and within-budget project delivery. With regular reviews of engagements and transparency at all levels, the Company ensures that client objectives and its own quality objectives are consistently followed at all times. This thorough process enables CGI to generate continuous improvements for all stakeholders by applying corrective measures as soon as they are required.

• Environmental, Social and Governance (ESG) strategy: At CGI, our ESG strategy is key to contributing to our strategic goal to be recognized by our stakeholders as an engaged, ethical and responsible corporate citizen within our communities. Our commitments align with the United Nations (UN) Global Compact’s 10 principles and we are recognized by leading international indices, including EcoVadis, Carbon Disclosure Project (CDP) and Dow Jones Sustainability Indices (DJSI). We prioritize partnerships with clients, while also collaborating with educational institutions and local organizations, on three global priorities: people, communities and climate. We demonstrate our commitment to a sustainable world through projects delivered in collaboration with clients and through operating practices, supply chain management, and community service activities.

FISCAL 2022 RESULTS — 11

1.3. COMPETITIVE ENVIRONMENT

As the market dynamics and industry trends continue to increase client demand for digitization, CGI is well-positioned to serve as a digital partner and expert of choice. We work with clients across the globe to implement digital strategies, roadmaps and solutions that help clients transform the customer/citizen experience, drive the launch of new products and services, and deliver efficiencies and cost savings.

CGI’s competition is comprised of a variety of firms, from local companies providing specialized services and software, government pure-plays to global business consulting and IT services providers. All of these players are competing to deliver some or all of the services we provide.

Many factors distinguish the industry leaders, including the following:

• Depth and breadth of industry and technology expertise;

• Local presence and strength of client relationships;

• Extensive and flexible global delivery network, including onshore, nearshore and offshore options;

• Breadth of digital IP solutions;

• Total cost of services and value delivered;

• Ability to deliver practical innovation for measurable results; and

• Consistent, on-time, within-budget delivery everywhere the client operates.

CGI is one of the leaders in the industry with respect to the combination of these factors. CGI is one of few firms with the scale, reach, and capabilities to meet clients’ enterprise business and technology needs.

12 — MANAGEMENT’S DISCUSSION AND ANALYSIS

2. Highlights and Key Performance Measures

2.1. SELECTED YEARLY INFORMATION & KEY PERFORMANCE MEASURES

As at and for the years ended September 30,	2022	2021	2020	Change     2022 / 2021	Change      2021 / 2020
In millions of CAD unless otherwise noted
Growth
Revenue	12,867.2	12,126.8	12,164.1	740.4	(37.3)
Year-over-year revenue growth	6.1%	(0.3%)	0.4%	6.4%	(0.7%)
Constant currency year-over-year revenue growth	10.5%	1.1%	(0.1%)	9.4%	1.2%
Backlog	24,055	23,059	22,673	996	386
Bookings	13,966	13,843	11,848	123	1,995
Book-to-bill ratio	108.5%	114.2%	97.4%	(5.7%)	16.8%
Profitability
Adjusted EBIT1	2,086.6	1,952.2	1,862.9	134.4	89.3
Adjusted EBIT margin	16.2%	16.1%	15.3%	0.1%	0.8%
Net earnings	1,466.1	1,369.1	1,117.9	97.0	251.2
Net earnings margin	11.4%	11.3%	9.2%	0.1%	2.1%
Diluted EPS (in dollars)	6.04	5.41	4.20	0.63	1.21
Net earnings excluding specific items1	1,487.9	1,374.9	1,300.1	113.0	74.8
Net earnings margin excluding specific items	11.6%	11.3%	10.7%	0.3%	0.6%
Diluted EPS excluding specific items (in dollars)1	6.13	5.43	4.89	0.70	0.54
Liquidity
Cash provided by operating activities	1,865.0	2,115.9	1,938.6	(250.9)	177.3
As a % of revenue	14.5%	17.4%	15.9%	(2.9%)	1.5%
Days sales outstanding	49	45	47	4	(2)
Capital structure
Net debt	2,946.9	2,535.9	2,777.9	411.0	(242.0)
Net debt to capitalization ratio	28.8%	26.6%	27.7%	2.2%	(1.1%)
Return on equity	20.9%	19.8%	16.0%	1.1%	3.8%
Return on invested capital	15.7%	14.9%	12.1%	0.8%	2.8%
Balance sheet
Cash and cash equivalents, and short-term investments	972.6	1,700.2	1,709.5	(727.6)	(9.3)
Total assets	15,175.4	15,021.0	15,550.4	154.4	(529.4)
Long-term financial liabilities2	3,731.3	3,659.8	4,030.6	71.5	(370.8)

¹  Please refer to sections 3.7. and 3.8.3. of the respective Fiscal years’ MD&A for the reconciliation of non-GAAP financial measures.

²  Long-term financial liabilities include the long-term portion of the debt, long-term portion of lease liabilities and the long-term derivative financial instruments.

FISCAL 2022 RESULTS — 13

2.2. STOCK PERFORMANCE

CGI Stock Price (TSX) for the Last Twelve Months

2.2.1. Fiscal 2022 Trading Summary

CGI’s shares are listed on the Toronto Stock Exchange (TSX) (stock quote – GIB.A) and the New York Stock Exchange (NYSE) (stock quote – GIB) and are included in key indices such as the S&P/TSX 60 Index.

TSX	(CAD)
Open:	108.21
High:	116.00
Low:	95.45
Close:	103.99
CDN average daily trading volumes1:	653,488

NYSE	(USD)
Open:	85.14
High:	93.93
Low:	73.76
Close:	75.24
NYSE average daily trading volumes:	171,679

¹  Includes the average daily volumes of both the TSX and alternative trading systems.

14 — MANAGEMENT’S DISCUSSION AND ANALYSIS

2.2.2. Normal Course Issuer Bid (NCIB)

On February 1, 2022, the Company’s Board of Directors authorized and subsequently received regulatory approval from the TSX for the renewal of CGI’s NCIB which allows for the purchase for cancellation of up to 18,781,981 Class A subordinate voting shares (Class A Shares) representing 10% of the Company’s public float as of the close of business on January 24, 2022. Class A Shares may be purchased for cancellation under the NCIB commencing on February 6, 2022 until no later than February 5, 2023, or on such earlier date when the Company has either acquired the maximum number of Class A Shares allowable under the NCIB or elects to terminate the bid.

During the year ended September 30, 2022, the Company purchased for cancellation 8,773,244 Class A Shares for $908.7 million at a weighted average price of $103.57 under the previous and current NCIB. The purchased shares included 3,968,159 and 938,914 Class A Shares purchased for cancellation on March 1, 2022, and August 1, 2022 respectively, each from Caisse de dépôt et de placement du Québec, for total aggregate cash consideration of $500.0 million. The purchases were made pursuant to two exemption orders issued by the Autorité des marchés financiers and are considered within the annual aggregate limit that the Company is entitled to purchase under its current NCIB.

As at September 30, 2022, of the 8,773,244 Class A Shares purchased for cancellation, 113,405 Class A Shares remain unpaid for $11.7 million.

As at September 30, 2022, the Company could purchase up to 12,319,503 Class A Shares for cancellation under the current NCIB.

2.2.3. Capital Stock and Options Outstanding

The following table provides a summary of the Capital Stock and Options Outstanding as at November 4, 2022:

Capital Stock and Options Outstanding	As at November 4,  2022
Class A subordinate voting shares	211,383,087
Class B multiple voting shares	26,445,706
Options to purchase Class A subordinate voting shares	6,697,421

2.3. COVID-19

At the onset of the COVID-19 pandemic, we established an executive crisis management team and a network of local crisis management teams to closely monitor the evolving COVID-19 pandemic, and to ensure that we were executing on our business continuity plan and working collaboratively with our clients. We established key guidelines and procedures to ensure that our workplace practices are in line with local government recommendations and requirements and are compliant with workplace readiness certifications.

Our executive crisis management team and our network of local crisis management teams have downgraded our pandemic posture, but we continue monitoring of World Health Organization COVID-19 alerts and changes to local health and government COVID-19 guidance/rules that may impact CGI members or CGI’s business. We have defined triggers to reestablish our active crisis management governance if the situation changes.

2.4. UKRAINE CONFLICT

We are closely monitoring the evolving conflict in Ukraine. CGI does not have any established operations in Ukraine, Russia or Belarus. All of our operations in countries in geographic proximity to Ukraine or Russia are being closely monitored. None of the entities in CGI group are subject to any sanctions or related restrictions. After internal review, it is our belief that we do not have any material supply chain, customer base and/or business reliance in Russia or Belarus. Additionally, none of our directors, officers or our principal shareholders are based out of Russia or Belarus.

FISCAL 2022 RESULTS — 15

2.5. INVESTMENT IN SUBSIDIARIES

On October 1, 2021, the Company acquired Array Holding Company, Inc. (Array) a leading digital services provider that optimizes mission performance for the U.S. Department of Defense and other government organizations, based in the United States and headquartered in Greenbelt, Maryland. The acquisition added approximately 275 professionals to the Company.

On October 28, 2021, the Company acquired Cognicase Management Consulting (CMC), a leading provider of technology and management consulting services and solutions, headquartered in Madrid, Spain. The acquisition added approximately 1,500 professionals to the Company.

On February 28, 2022, the Company acquired Unico Computer Systems Pty Ltd (Unico), a technology consultancy and systems integrator, headquartered in Melbourne, Australia. The acquisition added approximately 130 professionals to the Company.

On May 25, 2022, the Company acquired all of the outstanding shares of Harwell Management (Harwell). Based in France, Harwell is a management consulting firm specializing in the financial services industry, headquartered in Paris, France. The acquisition added approximately 150 professionals to the Company.

The Company completed these acquisitions for a total purchase price of $238.4 million.

On March 11, 2022, the Company announced that it had entered into an agreement for the acquisition of all of the shares of Umanis SA (Umanis), a digital company specializing in data, digital and business solutions, headquartered in Paris, France. On May 31, 2022, the Company announced that it had acquired control of Umanis by completing a block purchase representing 72.4% of Umanis’ share capital (excluding treasury shares) and that it had filed with the French financial markets authority (Autorité des Marchés Financiers) the draft mandatory tender offer to purchase the remaining outstanding shares. By July 18, 2022, the Company acquired an aggregate total interest of more than 90.0% of the outstanding shares (excluding treasury shares) and launched a statutory squeeze-out process through which the remaining shares were acquired on July 29, 2022. The transaction values the entire share capital of Umanis at $420.3 million, on a fully diluted basis. This acquisition added approximately 3,000 professionals to the Company.

16 — MANAGEMENT’S DISCUSSION AND ANALYSIS

3. Financial Review

3.1. BOOKINGS AND BOOK-TO-BILL RATIO

Bookings for the year were $14.0 billion representing a book-to-bill ratio of 108.5%. The breakdown of the new bookings signed during the year is as follows:

	Extensions,			Managed IT			U.S. Commercial and			Government	38%
	renewals			and Business			State Government	19%
	and add-ons	67%		Process Services	50%					Financial Services	24%
							Western and
	New business	33%		Business and			Southern Europe	15%		MRD	20%
				and strategic systems IT consulting integration services	50%		Canada U.K. and Australia	14% 14%		Communications and utilities Health	13%   5%
							U.S. Federal	12%
							Scandinavia and
							Central Europe	12%
							Finland, Poland
							and Baltics	9%
							Northwest and
							Central-East Europe	5%

Information regarding our bookings is a key indicator of the volume of our business over time. However, due to the timing and transition period associated with managed IT and business process services contracts, the realization of revenue related to these bookings may fluctuate from period to period. The values initially booked may change over time due to their variable attributes, including demand-driven usage, modifications in the scope of work to be performed caused by changes in client requirements as well as termination clauses at the option of the client. As such, information regarding our bookings is not comparable to, nor should it be substituted for, an analysis of our revenue. Management however believes that it is a key indicator of potential future revenue.

The following table provides a summary of the bookings and book-to-bill ratio by segment:

In thousands of CAD except for percentages	Bookings for the year ended    September 30, 2022		Book-to-bill ratio for the year   ended September 30, 2022
Total CGI		13,966,006		108.5%
U.S. Commercial and State Government		2,616,594		117.4%
Western and Southern Europe		2,061,984		97.5%
Canada		2,059,809		95.4%
U.K. and Australia		1,936,503		131.8%
U.S. Federal		1,660,086		94.3%
Scandinavia and Central Europe		1,636,137		99.5%
Finland, Poland and Baltics		1,265,038		165.9%
Northwest and Central-East Europe		729,855		100.4%

FISCAL 2022 RESULTS — 17

3.2. FOREIGN EXCHANGE

The Company operates globally and is exposed to changes in foreign currency rates. Accordingly, as prescribed by IFRS, we value assets, liabilities and transactions that are measured in foreign currencies using various exchange rates. We report all dollar amounts in Canadian dollars.

    Closing foreign exchange rates

As at September 30,	2022		2021		Change
U.S. dollar		1.3756		1.2676		8.5%
Euro		1.3454		1.4678		(8.3%)
Indian rupee		0.0169		0.0171		(1.2%)
British pound		1.5310		1.7075		(10.3%)
Swedish krona		0.1236		0.1447		(14.6%)

    Average foreign exchange rates

For the year ended September 30,	2022		2021		Change
U.S. dollar		1.2777		1.2643		1.1%
Euro		1.3833		1.5110		(8.5%)
Indian rupee		0.0166		0.0172		(3.5%)
British pound		1.6333		1.7302		(5.6%)
Swedish krona		0.1328		0.1484		(10.5%)

18 — MANAGEMENT’S DISCUSSION AND ANALYSIS

3.3. REVENUE DISTRIBUTION

The following charts provide additional information regarding our revenue mix for the year:

	Managed IT and Business Process Services	54%		U.S. Canada	31%       17%		Government Financial Services	35% 23%
	Business and strategic IT consulting and systems integration services	46%		France U.K. Germany	14%       11%       6%		MRD Communications and utilities Health	23% 13% 6%
				Finland	6%
				Sweden	5%
				Rest of the world	10%

3.3.1. Client Concentration

IFRS guidance on segment disclosures defines a single customer as a group of entities that are known to the reporting entity to be under common control. As a consequence, our work for the U.S. federal government including its various agencies represented 13.3% of our revenue for Fiscal 2022 as compared to 12.8% for Fiscal 2021.

FISCAL 2022 RESULTS — 19

3.4. REVENUE BY SEGMENT

Our segments are reported based on where the client’s work is delivered from within our geographic delivery model.

The table below provides a summary of the year-over-year changes in our revenue, in total and by segment before eliminations, separately showing the impacts of foreign currency exchange rate variations between Fiscal 2022 and Fiscal 2021. The Fiscal 2021 revenue by segment was recorded reflecting the actual foreign exchange rates for that period. The foreign exchange impact is the difference between the current period’s actual results and the same period’s results converted with the prior year’s foreign exchange rates.

						Change
For the year ended September 30,	2022			2021		$			%
In thousands of CAD except for percentages
Total CGI revenue		12,867,201			12,126,793		740,408			6.1 %
Variation prior to foreign currency impact		10.5%
Foreign currency impact		(4.4%	)
Variation over previous period		6.1%
Western and Southern Europe
Revenue prior to foreign currency impact		2,351,622			1,917,760		433,862			22.6%
Foreign currency impact		(199,509)
Western and Southern Europe revenue		2,152,113			1,917,760		234,353			12.2%
U.S. Commercial and State Government
Revenue prior to foreign currency impact		2,053,480			1,800,747		252,733			14.0%
Foreign currency impact		21,841
U.S. Commercial and State Government revenue		2,075,321			1,800,747		274,574			15.2%
Canada
Revenue prior to foreign currency impact		1,981,617			1,755,804		225,813			12.9%
Foreign currency impact		(237)
Canada revenue		1,981,380			1,755,804		225,576			12.8%
U.S. Federal
Revenue prior to foreign currency impact		1,732,272			1,607,431		124,841			7.8%
Foreign currency impact		18,630
U.S. Federal revenue		1,750,902			1,607,431		143,471			8.9%
Scandinavia and Central Europe
Revenue prior to foreign currency impact		1,728,366			1,663,470		64,896			3.9%
Foreign currency impact		(157,248)
Scandinavia and Central Europe revenue		1,571,118			1,663,470		(92,352	)		(5.6%	)
U.K. and Australia revenue
Revenue prior to foreign currency impact		1,370,299			1,355,603		14,696			1.1%
Foreign currency impact		(79,174)
U.K. and Australia revenue		1,291,125			1,355,603		(64,478	)		(4.8%	)
Finland, Poland and Baltics
Revenue prior to foreign currency impact		796,991			768,994		27,997			3.6%
Foreign currency impact		(67,967)
Finland, Poland and Baltics revenue		729,024			768,994		(39,970	)		(5.2%	)

20 — MANAGEMENT’S DISCUSSION AND ANALYSIS

						Change
For the year ended September 30,
	2022		2021			$			%
In thousands of CAD except for percentages
Northwest and Central-East Europe
Revenue prior to foreign currency impact		752,266		716,183			36,083			5.0%
Foreign currency impact		(59,407)
Northwest and Central-East Europe revenue		692,859		716,183			(23,324	)		(3.3%	)
Asia Pacific
Revenue prior to foreign currency impact		826,603		680,554			146,049			21.5%
Foreign currency impact		(26,942)
Asia Pacific revenue		799,661		680,554			119,107			17.5%
Eliminations		(176,302)		(139,753	)		(36,549	)		26.2%

For the year ended September 30, 2022, revenue was $12,867.2 million, an increase of $740.4 million or 6.1% over the same period last year. On a constant currency basis, revenue increased by $1,276.7 million or 10.5%. The increase was mainly due to organic growth across all vertical markets, as well as recent business acquisitions.

3.4.1. Western and Southern Europe

For the year ended September 30, 2022, revenue in our Western and Southern Europe segment was $2,152.1 million, an increase of $234.4 million or 12.2% over the same period last year. On a constant currency basis, revenue increased by $433.9 million or 22.6%. The increase in revenue was mainly due to recent business acquisitions, as well as the result of organic growth across all vertical markets, predominantly within the MRD vertical market.

On a client geographic basis, the top two Western and Southern Europe vertical markets were MRD and financial services, generating combined revenues of approximately $1,319 million for the year ended September 30, 2022.

3.4.2. U.S. Commercial and State Government

For the year ended September 30, 2022, revenue in our U.S. Commercial and State Government segment was $2,075.3 million, an increase of $274.6 million or 15.2% over the same period last year. On a constant currency basis, revenue increased by $252.7 million or 14.0%. The increase in revenue was mainly the result of organic growth across all vertical markets, predominantly within financial services with additional IP solutions, and business acquisitions.

On a client geographic basis, the top two U.S. Commercial and State Government vertical markets were financial services and government, generating combined revenues of approximately $1,306 million for the year ended September 30, 2022.

3.4.3. Canada

For the year ended September 30, 2022, revenue in our Canada segment was $1,981.4 million, an increase of $225.6 million or 12.8% compared to the same period last year. On a constant currency basis, revenue increased by $225.8 million or 12.9%. The increase was due to organic growth across all vertical markets, mainly in financial services including an increase in IP services and solutions.

On a client geographic basis, the top two Canada vertical markets were financial services, and communications and utilities, generating combined revenues of approximately $1,382 million for the year ended September 30, 2022.

3.4.4. U.S. Federal

For the year ended September 30, 2022, revenue in our U.S. Federal segment was $1,750.9 million, an increase of $143.5 million or 8.9% over the same period last year. On a constant currency basis, revenue increased by $124.8 million or 7.8%. The increase in revenue was mainly due to managed services expansion, higher transaction volumes related to our IP business process services, and the Array acquisition. This was partially offset by the completion of contracts and an adjustment due to a reevaluation of cost to complete on a project.

For the year ended September 30, 2022, 88% of revenues within the U.S. Federal segment were federal civilian based.

FISCAL 2022 RESULTS — 21

3.4.5. Scandinavia and Central Europe

For the year ended September 30, 2022, revenue in our Scandinavia and Central Europe segment was $1,571.1 million, a decrease of $92.4 million or 5.6% over the same period last year. On a constant currency basis, revenue increased by $64.9 million or 3.9%. The increase was largely driven by the organic growth in government and MRD vertical markets, and a favourable contract settlement.

On a client geographic basis, the top two Scandinavia and Central Europe vertical markets were MRD and government, generating combined revenues of approximately $1,135 million for the year ended September 30, 2022.

3.4.6. U.K. and Australia

For the year ended September 30, 2022, revenue in our U.K. and Australia segment was $1,291.1 million, a decrease of $64.5 million or 4.8% over the same period last year. On a constant currency basis, revenue increased by $14.7 million or 1.1%. The increase in revenue was due to the Unico acquisition, organic growth within the government, and communications and utilities vertical markets. This was in part offset by the successful completion and related ramp down of projects within the MRD vertical market.

On a client geographic basis, the top two U.K. and Australia vertical markets were government and communications and utilities, generating combined revenues of $1,051 million for the year ended September 30, 2022.

3.4.7. Finland, Poland and Baltics

For the year ended September 30, 2022, revenue in our Finland, Poland and Baltics segment was $729.0 million, a decrease of $40.0 million or 5.2% over the same period last year. On a constant currency basis, revenue increased by $28.0 million or 3.6%. The increase was driven by organic growth across most vertical markets, largely within government including higher transaction volumes and related IP services.

On a client geographic basis, the top two Finland, Poland and Baltics vertical markets were government and financial services, generating combined revenues of approximately $442 million for the year ended September 30, 2022.

3.4.8. Northwest and Central-East Europe

For the year ended September 30, 2022, revenue in our Northwest and Central-East Europe segment was $692.9 million, a decrease of $23.3 million or 3.3% over the same period last year. On a constant currency basis, revenue increased by $36.1 million or 5.0%. The increase in revenue was primarily due to the organic growth within financial services, including higher IP service and solutions, government and MRD vertical markets. This was in part offset by successful projects completion within the health vertical market.

On a client geographic basis, the top two Northwest and Central-East Europe vertical markets were MRD and government, generating combined revenues of approximately $450 million for the year ended September 30, 2022.

3.4.9. Asia Pacific

For the year ended September 30, 2022, revenue in our Asia Pacific segment was $799.7 million, an increase of $119.1 million or 17.5% over the same period last year. On a constant currency basis, revenue increased by $146.0 million or 21.5%. This growth was mainly driven by the increasing demand for our offshore delivery centers, predominantly within the financial services, communications and utilities, and MRD vertical markets.

22 — MANAGEMENT’S DISCUSSION AND ANALYSIS

3.5. OPERATING EXPENSES

For the year ended September 30,										Change
	2022		% of     Revenue		2021			% of       Revenue		$		%
In thousands of CAD except for percentages
Costs of services, selling and administrative		10,776,564		83.8%		10,178,164			83.9%		598,400		(0.1%)
Foreign exchange loss (gain)		4,001		0.0%		(3,532	)		0.0%		7,533		0.0%

3.5.1. Costs of Services, Selling and Administrative

For the year ended September 30, 2022, costs of services, selling and administrative expenses amounted to $10,776.6 million, an increase of $598.4 million over the same period last year. As a percentage of revenue, costs of services, selling and administrative expenses decreased to 83.8% from 83.9%. As a percentage of revenue, costs of services decreased compared to the same period last year primarily due to IP services and solutions and the growth in managed services in Asia Pacific. As a percentage of revenue, selling and administrative expenses increased compared to the same period last year mainly due to the Umanis acquisition, which is in the process of being integrated to achieve planned synergies, and the expected increase of travel costs in support of business development.

During the year ended September 30, 2022, the translation of the results of our foreign operations from their local currencies to the Canadian dollar favourably impacted costs by $465.6 million, which was offset by the unfavourable translation impact of $536.3 million on our revenue.

3.5.2. Foreign Exchange Loss

During the year ended September 30, 2022, CGI incurred $4.0 million of foreign exchange losses, mainly driven by the timing of payments combined with the volatility of foreign exchange rates. The Company, in addition to its natural hedges, uses derivatives as a strategy to manage its exposure, to the extent possible.

FISCAL 2022 RESULTS — 23

3.6. ADJUSTED EBIT BY SEGMENT

For the year ended September 30,					Change
	2022		2021		$			%
In thousands of CAD except for percentages
Western and Southern Europe		289,730		269,350		20,380			7.6	%
As a percentage of segment revenue		13.5 %		14.0 %
U.S. Commercial and State Government		304,767		281,217		23,550			8.4	%
As a percentage of segment revenue		14.7 %		15.6 %
Canada		463,289		390,370		72,919			18.7	%
As a percentage of segment revenue		23.4 %		22.2 %
U.S. Federal		276,395		252,657		23,738			9.4	%
As a percentage of segment revenue		15.8 %		15.7 %
Scandinavia and Central Europe		125,728		138,191		(12,463	)		(9.0	%)
As a percentage of segment revenue		8.0 %		8.3 %
U.K. and Australia		200,117		218,624		(18,507	)		(8.5	%)
As a percentage of segment revenue		15.5 %		16.1 %
Finland, Poland and Baltics		96,651		114,358		(17,707	)		(15.5	%)
As a percentage of segment revenue		13.3  %		14.9 %
Northwest and Central East-Europe		88,287		79,898		8,389			10.5	%
As a percentage of segment revenue		12.7 %		11.2 %
Asia Pacific		241,672		207,496		34,176			16.5	%
As a percentage of segment revenue		30.2 %		30.5 %
Adjusted EBIT		2,086,636		1,952,161		134,475			6.9	%
Adjusted EBIT margin		16.2 %		16.1 %

Adjusted EBIT for the year was $2,086.6 million, an increase of $134.5 million from 2021. The adjusted EBIT margin increased to 16.2% from 16.1% for the same period last year. The increase in adjusted EBIT margin was primarily due to organic growth in all vertical markets and in IP services and solutions. This was partially offset by costs of assimilating new hires, the dilutive impacts of the recent acquisitions, which are in the process of being integrated to achieve its planned synergies and the expected increase of travel costs in support of business development.

3.6.1. Western and Southern Europe

For the year ended September 30, 2022, adjusted EBIT in the Western and Southern Europe segment was $289.7 million, an increase of $20.4 million when compared to the same period last year. Adjusted EBIT margin decreased to 13.5% from 14.0%. The change in adjusted EBIT margin was primarily due to the temporary dilutive impact of the recent business acquisitions which are in the process of being integrated to achieve planned synergies, as well as additional tax credits in the prior year. This was partially offset by the organic growth across all vertical markets.

3.6.2. U.S. Commercial and State Government

For the year ended September 30, 2022, adjusted EBIT in the U.S. Commercial and State Government segment was $304.8 million, an increase of $23.6 million when compared to the same period last year. Adjusted EBIT margin decreased to 14.7% from 15.6%. The change in adjusted EBIT was mainly due to additional R&D tax credits in the prior year, combined with costs of assimilating new hires in response to high demand. This was partially offset by organic growth within the financial services vertical market including IP solutions.

24 — MANAGEMENT’S DISCUSSION AND ANALYSIS

3.6.3. Canada

For the year ended September 30, 2022, adjusted EBIT in the Canada segment was $463.3 million, an increase of $72.9 million when compared to the same period last year. Adjusted EBIT margin increased to 23.4% from 22.2%. The increase was primarily due to organic growth across most vertical markets mainly in MRD vertical market, an impact of a favourable supplier contract adjustment, and an increase in IP services and solutions. This was offset in part by costs of assimilating new hires in response to high demand, mainly within the financial services vertical market.

3.6.4. U.S. Federal

For the year ended September 30, 2022, adjusted EBIT in the U.S. Federal segment was $276.4 million, an increase of $23.7 million when compared to the same period last year. Adjusted EBIT margin increased to 15.8% from 15.7%. The increase was primarily due to the same factors as revenue offset by higher performance based compensation and additional tax credits in the prior year.

3.6.5. Scandinavia and Central Europe

For the year ended September 30, 2022, adjusted EBIT in the Scandinavia and Central Europe segment was $125.7 million, a decrease of $12.5 million when compared to the same period last year. Adjusted EBIT margin decreased to 8.0% from 8.3%. The change was primarily due to the optimization of our infrastructure business, partially offset by a favourable contract settlement.

3.6.6. U.K. and Australia

For the year ended September 30, 2022, adjusted EBIT in the U.K. and Australia segment was $200.1 million, a decrease of $18.5 million when compared to the same period last year. Adjusted EBIT margin decreased to 15.5% from 16.1%. This change was mainly due to the successful completion of projects within the MRD vertical market, and the temporary dilutive impact of the Unico acquisition, which is in the process of being integrated to achieve its planned synergies.

3.6.7. Finland, Poland and Baltics

For the year ended September 30, 2022 adjusted EBIT in our Finland, Poland and Baltics segment was $96.7 million, a decrease of $17.7 million, when compared to the same period last year. Adjusted EBIT margin decreased to 13.3% from 14.9%. The decrease in adjusted EBIT margin was mainly due to the costs associated with the start up of a large new managed IT services contract and the prior year payroll tax relief. This was partially offset by a prior year asset impairment.

3.6.8. Northwest and Central-East Europe

For the year ended September 30, 2022, adjusted EBIT in the Northwest and Central-East Europe segment was $88.3 million, an increase of $8.4 million when compared to the same period last year. Adjusted EBIT margin increased to 12.7% from 11.2%. The increase in adjusted EBIT margin was primarily due to the same factors as revenue.

3.6.9. Asia Pacific

For the year ended September 30, 2022, adjusted EBIT in the Asia Pacific segment was $241.7 million, an increase of $34.2 million when compared to the same period last year. Adjusted EBIT margin decreased to 30.2% from 30.5%. The change in adjusted EBIT margin was mostly due to temporary lower billable utilization, related to the costs of assimilating new hires in response to high demand. This was partially offset by increasing demand for our offshore delivery centers, predominantly within the financial services, communications and utilities, and MRD vertical markets, and facility optimization.

FISCAL 2022 RESULTS — 25

3.7. EARNINGS BEFORE INCOME TAXES

The following table provides a reconciliation between our adjusted EBIT and earnings before income taxes, which is reported in accordance with IFRS:

									Change
For the years ended September 30,			% of				% of
	2022		Revenue		2021		Revenue		$			%
In thousands of CAD except for percentage
Adjusted EBIT		2,086,636		16.2 %		1,952,161		16.1%		134,475			0.1	%
Minus the following items:
Acquisition-related and integration costs		27,654		0.2 %		7,371		0.1%		20,283			0.1	%
Net finance costs		92,023		0.7 %		106,798		0.9%		(14,775	)		(0.2	%)
Earnings before income taxes		1,966,959		15.3 %		1,837,992		15.2%		128,967			0.1	%

3.7.1. Acquisition-Related and Integration Costs

For the years ended September 30, 2022 and 2021, the Company incurred $27.7 million and $7.4 million, respectively, of acquisition-related and integration costs for the integration towards the CGI operating model. These costs are mainly related to professional fees incurred for the acquisitions, terminations of employment, leases of vacated premises, training and integration costs.

3.7.2. Net Finance Costs

Net finance costs mainly include interest on our long-term debt and lease liabilities. For the year ended September 30, 2022, the net finance costs decreased by $14.8 million, mainly due to lower interest charges related to our unsecured notes, primarily as a result of the scheduled repayments.

26 — MANAGEMENT’S DISCUSSION AND ANALYSIS

3.8. NET EARNINGS AND EARNINGS PER SHARE

The following table sets out the information supporting the earnings per share calculations:

For the year ended September 30,							Change
	2022			2021			$			%
In thousands of CAD except for percentage and shares data
Earnings before income taxes		1,966,959			1,837,992			128,967			7.0	%
Income tax expense		500,817			468,920			31,897			6.8	%
Effective tax rate		25.5	%		25.5	%
Net earnings		1,466,142			1,369,072			97,070			7.1	%
Net earnings margin		11.4	%		11.3	%
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B multiple voting shares (basic)		239,262,004			249,119,219			(9,857,215	)		(4.0	%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)		242,867,445			253,088,880			(10,221,435	)		(4.0	%)
Earnings per share (in dollars)
Basic		6.13			5.50			0.63			11.5	%
Diluted		6.04			5.41			0.63			11.6	%

3.8.1. Income Tax Expense

For the year ended September 30, 2022, income tax expense was $500.8 million compared to $468.9 million over the same period last year, while our effective tax rate remained at 25.5%.

When excluding tax effects from acquisition-related and integration costs, the effective tax rate decreased from 25.5% to 25.4% for the year ended September 30, 2022 compared to the year ended September 30, 2021. The decrease is mainly attributable to a tax rate decrease in France, partly offset by a different profitability mix in certain geographies.

The table in section 3.8.3. shows the year-over-year comparison of the tax rate with the impact of specific items removed.

Based on the enacted rates at the end of Fiscal 2022 and our current profitability mix, we expect our effective tax rate before specific items to be in the range of 24.5% to 26.5% in subsequent periods.

3.8.2. Weighted Average Number of Shares

For Fiscal 2022, CGI’s basic and diluted weighted average number of shares decreased compared to Fiscal 2021 due to the impact of the purchase for cancellation of Class A Shares, partly offset by the grant and the exercise of stock options. Please refer to notes 19, 20 and 21 of our audited consolidated financial statements for additional information.

FISCAL 2022 RESULTS — 27

3.8.3. Net Earnings and Earnings per Share Excluding Specific Items

Below is a table showing the year-over-year comparison excluding specific items namely, acquisition-related and integration costs.

For the year ended September 30,							Change
	2022			2021			$		%
In thousands of CAD except for percentages and shares data
Earnings before income taxes		1,966,959			1,837,992			128,967		7.0%
Add back:
Acquisition-related and integration costs		27,654			7,371			20,283		275.2%
Earnings before income taxes excluding specific items		1,994,613			1,845,363			149,250		8.1%
Income tax expense		500,817			468,920			31,897		6.8%
Effective tax rate		25.5	%		25.5	%
Add back:
Tax deduction on acquisition-related and integration costs		5,942			1,570			4,372		278.5%
Impact on effective tax rate		(0.1	%)		—	%
Income tax expense excluding specific items		506,759			470,490			36,269		7.7%
Effective tax rate excluding specific items		25.4	%		25.5	%
Net earnings excluding specific items		1,487,854			1,374,873			112,981		8.2%
Net earnings margin excluding specific items		11.6	%		11.3	%
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B multiple voting shares (basic)		239,262,004			249,119,219					(4.0%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)		242,867,445			253,088,880					(4.0%)
Earnings per share excluding specific items (in dollars)
Basic		6.22			5.52			0.70		12.7%
Diluted		6.13			5.43			0.70		12.9%

28 — MANAGEMENT’S DISCUSSION AND ANALYSIS

4. Liquidity

4.1. CONSOLIDATED STATEMENTS OF CASH FLOWS

CGI’s growth is financed through a combination of cash flow from operations, drawing on our unsecured committed revolving credit facility, the issuance of long-term debt, and the issuance of equity. One of our financial priorities is to maintain an optimal level of liquidity through the active management of our assets and liabilities as well as our cash flows.

As at September 30, 2022, cash and cash equivalents were $966.5 million. Cash included in funds held for clients was $504.7 million. The following table provides a summary of the generation and use of cash for the years ended September 30, 2022 and 2021.

For the year ended September 30,	2022			2021			Change
In thousands of CAD
Cash provided by operating activities		1,864,998			2,115,928			(250,930	)
Cash used in investing activities		(911,947	)		(388,507	)		(523,440	)
Cash used in financing activities		(1,591,098	)		(1,782,497	)		191,399
Effect of foreign exchange rate changes on cash and cash equivalents		(46,500	)		(73,884	)		27,384
Net decrease in cash, cash equivalents and cash included in funds held for clients		(684,547	)		(128,960	)		(555,587	)

4.1.1. Cash Provided by Operating Activities

For the year ended September 30, 2022, cash provided by operating activities was $1,865.0 million or 14.5% of revenue compared to $2,115.9 million or 17.4% of revenues for the same period last year. The following table provides a summary of the generation and use of cash from operating activities:

For the year ended September 30,	2022		2021		Change
In thousands of CAD
Net earnings		1,466,142		1,369,072		97,070
Amortization, depreciation and impairment		474,622		510,570		(35,948)
Other adjustments1		35,127		21,422		13,705
Cash flow from operating activities before net change in non-cash working capital items		1,975,891		1,901,064		74,827
Net change in non-cash working capital items:
Accounts receivable, work in progress and deferred revenue		(120,393)		7,617		(128,010)
Accounts payable and accrued liabilities, accrued compensation and employee-related liabilities, provisions and long-term liabilities		(4,876)		190,735		(195,611)
Other2		14,376		16,512		(2,136)
Net change in non-cash working capital items		(110,893)		214,864		(325,757)
Cash provided by operating activities		1,864,998		2,115,928		(250,930)

¹  Comprised of deferred income tax recovery, foreign exchange (gain) loss, share-based payment costs and gain on lease terminations and sale of property, plant and equipment.

²  Comprised of prepaid expenses and other assets, long-term financial assets, income taxes, derivative financial instruments and retirement benefits obligations.

For the year ended September 30, 2022, cash provided by operating activities was $1,865.0 million, down $250.9 million for the same period last year, mainly due to the net change in non-cash working capital items. The net change in non-cash working capital items of $110.9 million for the year ended September 30, 2022 was mostly due to the increase in our DSO.

The timing of our working capital inflows and outflows will always have an impact on the cash flow from operations.

FISCAL 2022 RESULTS — 29

4.1.2. Cash Used in Investing Activities

For the year ended September 30, 2022, $911.9 million was used in investing activities, while $388.5 million was used over the same period last year.

The following table provides a summary of the use of cash from investing activities:

For the year ended September 30,	2022			2021			Change
In thousands of CAD
Business acquisitions		(571,911	)		(98,926	)		(472,985	)
Purchase of property, plant and equipment		(156,136	)		(121,806	)		(34,330	)
Proceeds from sale of property, plant and equipment		3,790			—			3,790
Additions to contract costs		(84,283	)		(65,001	)		(19,282	)
Additions to intangible assets		(137,621	)		(113,934	)		(23,687	)
Net change in short-term investments and purchase of long-term investments		34,214			11,160			23,054
Cash used in investing activities		(911,947	)		(388,507)			(523,440)

The increase of $523.4 million in cash used in investing activities during the year ended September 30, 2022 was mainly due to business acquisitions, as well as more investments in computer equipment to support our growth and in our business solutions.

4.1.3. Cash Used in Financing Activities

For the year ended September 30, 2022, $1,591.1 million was used in financing activities while $1,782.5 million was used over the same period last year.

The following table provides a summary of the use of cash from financing activities:

For the year ended September 30,	2022			2021			Change
In thousands of CAD
Increase of long-term debt		—			1,885,262			(1,885,262	)
Repayment of long-term debt		(401,654	)		(1,888,777	)		1,487,123
Settlement of derivative financial instruments		6,258			(6,992	)		13,250
Payment of lease liabilities		(153,996	)		(169,674	)		15,678
Repayment of debt assumed from business acquisitions		(113,036	)		—			(113,036	)
Purchase of Class A subordinate voting shares held in trusts		(70,303	)		(31,404	)		(38,899	)
Purchase and cancellation of Class A subordinate voting shares		(913,388	)		(1,502,824	)		589,436
Issuance of Class A subordinate voting shares		41,691			61,133			(19,442	)
Net change in client’s funds obligation		13,330			(129,221	)		142,551
Cash used in financing activities		(1,591,098	)		(1,782,497	)		191,399

For the year ended September 30, 2022, we repaid $401.7 million of our long-term debt, mainly driven by the scheduled repayments of senior unsecured notes in the amount of $384.6 million (US$300.0 million). In addition, we paid $154.0 million of lease liabilities and used $113.0 million to repay debt assumed from business acquisitions. For the year ended September 30, 2021, we increased our long-term debt by $1,885.3 million, mainly driven by the issuance of senior unsecured notes for the amount of $1,847.3 million and repaid $1,888.8 million of our long-term debt mainly driven by the repayment in full of the 2020 Term Loan in the amount of $1,583.5 million (US$1,250.0 million), and the scheduled repayments of senior unsecured notes in the amount of $259.7 million. We also paid $169.7 million of lease liabilities.

For the year ended September 30, 2022, $70.3 million was used to purchase Class A Shares in connection with the Performance Share Unit Plans (PSU Plans) compared to $31.4 million during the year ended September 30, 2021. More

30 — MANAGEMENT’S DISCUSSION AND ANALYSIS

information concerning the PSU Plans can be found in note 20 of the Company’s audited consolidated financial statements for the year ended September 30, 2022 and 2021.

For the year ended September 30, 2022, $913.4 million was used for the purchase for cancellation of 8,809,839 Class A Shares, compared to $1,502.8 million for the purchase for cancellation of 15,310,465 Class A Shares over the same period last year.

For the year ended September 30, 2022, we received $41.7 million in proceeds from the exercise of stock options, compared to $61.1 million during the year ended September 30, 2021.

In addition, for the year ended September 30, 2022, the increase in net change in client’s funds obligation of $13.0 million and the decrease of $129.2 million for the year ended September 30, 2021 was due to the timing of inflows from our clients and related payments to our clients’ employees and other payees.

4.1.4. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents

For the year ended September 30, 2022, the effect of foreign exchange rate changes on cash and cash equivalents had an unfavourable impact of $46.5 million. This amount had no effect on net earnings as it was recorded in other comprehensive income.

4.2. CAPITAL RESOURCES

As at September 30, 2022	Available
In thousands of CAD
Cash and cash equivalents		966,458
Short-term investments		6,184
Long-term investments		16,826
Unsecured committed revolving credit facility1		1,495,730
Total2		2,485,198

¹  As at September 30, 2022, letters of credit in the amount of $4.3 million were outstanding against the $1.5 billion unsecured committed revolving credit facility.

²  Excludes cash and long-term bonds included in funds held for clients for $504.7 million and $94.1 million, respectively.

As at September 30, 2022, cash and cash equivalents and investments represented $989.5 million.

Cash equivalents include term deposits, all with maturities of 90 days or less. Short-term and long-term investments include corporate bonds with maturities ranging from 91 days to five years, with a credit rating of A- or higher.

As at September 30, 2022, the aggregate amount of the capital resources available to the Company was $2,485.2 million. Certain long-term debt agreements contain covenants, which require us to maintain certain financial ratios. As at September 30, 2022, CGI was in compliance with these covenants.

Total debt decreased by $134.7 million to $3,267.0 million as at September 30, 2022 compared to $3,401.7 million as at September 30, 2021. The variance was mainly due to the scheduled repayments of senior unsecured notes in the amount of $384.6 million (US$300.0 million), partially offset by a foreign exchange translation impact of $207.6 million and debt assumed from business acquisitions for $36.0 million. On November 1, 2022, the unsecured committed revolving credit facility was extended by one year to November 2027 and can be further extended. There were no material changes in the terms and conditions including interest rates and banking covenants.

As at September 30, 2022, CGI was showing a positive working capital (total current assets minus total current liabilities) of $699.7 million. The Company also had $1,495.7 million available under its unsecured committed revolving credit facility and is generating a significant level of cash, which CGI’s management currently considers will allow the Company to fund its operations while maintaining adequate levels of liquidity.

The tax implications and impact related to the repatriation of cash will not materially affect the Company’s liquidity.

FISCAL 2022 RESULTS — 31

4.3. CONTRACTUAL OBLIGATIONS

We are committed under the terms of contractual obligations which have various expiration dates, primarily related to long-term debt and the rental of premises, computer equipment used in outsourcing contracts and long-term service agreements.

Commitment type	Total		Less than 1 year		1 - 3  years		3 - 5  years		More than 5 years
In thousands of CAD
Long-term debt		3,267,034		93,447		1,178,103		863,125		1,132,359
Estimated interest on long-term debt		313,496		87,287		100,508		62,479		63,222
Lease liabilities		709,201		157,944		254,219		146,694		150,344
Estimated interest on lease liabilities		99,244		24,871		40,798		20,154		13,421
Long-term service agreements		250,049		146,662		83,065		20,322		—
Total1		4,639,024		510,211		1,656,693		1,112,774		1,359,346

¹  Excludes Clients’ funds obligations for an amount of $604.4 million payable in less than 1 year.

4.4. FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS

We use various financial instruments to help us manage our exposure to fluctuations of foreign currency exchange rates and interest rates. Please refer to note 31 of our audited consolidated financial statements for additional information on our financial instruments and hedging transactions.

32 — MANAGEMENT’S DISCUSSION AND ANALYSIS

4.5. SELECTED MEASURES OF CAPITAL RESOURCES AND LIQUIDITY

As at September 30,	2022			2021
In thousands of CAD except for percentages
Reconciliation between net debt and long-term debt and lease liabilities1:
Net debt		2,946,908			2,535,861
Add back:
Cash and cash equivalents		966,458			1,699,206
Short-term investments		6,184			1,027
Long-term investments		16,826			19,354
Fair value of foreign currency derivative financial instruments related to debt		39,859			(76,852	)
Long-term debt and lease liabilities 1		3,976,235			4,178,596
Net debt to capitalization ratio		28.8	%		26.6	%
Return on equity		20.9	%		19.8	%
Return on invested capital		15.7	%		14.9	%
Days sales outstanding		49			45

¹  As at September 30, 2022, long-term debt and lease liabilities were $3,267.0 million ($3,401.7 million as at September 30, 2021) and $709.2 million ($776.9 million as at September 30, 2021), respectively, including their current portions.

We use the net debt to capitalization ratio as an indication of our financial leverage in order to realize our Build and Buy strategy (please refer to section 1.2. of the present document for additional information on our Build and Buy strategy). The net debt to capitalization ratio increased to 28.8% in Fiscal 2022 from 26.6% in Fiscal 2021 mostly due by the repurchase of shares and investments in our business acquisitions, partially offset by our cash generation during the last four quarters.

ROE is a measure of the return we are generating for our shareholders. ROE increased to 20.9% in Fiscal 2022 from 19.8% in Fiscal 2021. The increase was mainly due to higher net earnings and, to a lesser extent, the impact of repurchased shares and the impact of translating financial statements of our foreign operations over the last four quarters.

ROIC is a measure of the Company’s efficiency in allocating the capital under our control to profitable investments. The return on invested capital ratio increased to 15.7% in Fiscal 2022 from 14.9% in Fiscal 2021. The increase in ROIC was mainly the result of higher net earnings excluding net finance costs after-tax over the last four quarters.

DSO increased to 49 days at the end of Fiscal 2022 when compared to 45 days in Fiscal 2021. This increase is mainly due to the impacts from recent acquisitions which are in the process of being integrated and foreign exchange fluctuations. The Company maintains a target DSO of 45 days.

FISCAL 2022 RESULTS — 33

4.6. GUARANTEES

In the normal course of operations, we may enter into agreements to provide financial or performance assurances to third parties on the sale of assets, business divestitures and guarantees on government and commercial contracts.

In connection with sales of assets and business divestitures, the Company may be required to pay counterparties for costs and losses incurred as a result of breaches in our contractual obligations, representations and warranties, intellectual property right infringement and litigation against counterparties, among others. While some of the agreements specify a maximum potential exposure, others do not specify a maximum amount or a maturity date. It is not possible to reasonably estimate the maximum amount that may have to be paid under such guarantees. The amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. No amount has been accrued in the consolidated balance sheets relating to this type of indemnification as at September 30, 2022. The Company does not expect to incur any potential payment in connection with these guarantees that could have a materially adverse effect on its audited consolidated financial statements.

In the normal course of business, we may provide certain clients, principally governmental entities, with bid and performance bonds. In general, we would only be liable for the amount of the bid bonds if we refuse to perform the project once we are awarded the bid. We would also be liable for the performance bonds in the event of a default in the performance of our obligations. As at September 30, 2022, we had committed a total of $19.3 million for these bonds. To the best of our knowledge, we complied with our performance obligations under all service contracts for which there was a bid or performance bond, and the ultimate liability, if any, incurred in connection with these guarantees would not have a material adverse effect on our consolidated results of operations or financial condition.

4.7. CAPABILITY TO DELIVER RESULTS

CGI’s management believes that the Company has sufficient capital resources to support ongoing business operations and execute our Build and Buy growth strategy. Our principal and most accretive uses of cash are: to invest in our business (procuring new large managed IT and business process services contracts and developing business and IP solutions); to pursue accretive acquisitions; to purchase for cancellation Class A Shares and pay down debt. In terms of financing, we are well positioned to continue executing our four-pillar growth strategy in Fiscal 2023.

To successfully implement the Company’s strategy, CGI relies on a strong leadership team, supported by highly knowledgeable members with relevant relationships and significant experience in both IT and our targeted industries. CGI fosters leadership development through the CGI Leadership Institute ensuring continuity and knowledge transfer across the organization. For key positions, a detailed succession plan is established and revised frequently.

As a Company built on human capital, our professionals and their knowledge are critical to delivering quality service to our clients. Our human resources program allows us to attract and retain the best talent as it provides competitive compensation and benefits, a favourable working environment, training programs and career development opportunities. Employee satisfaction is monitored annually through a Company-wide survey. In addition, a majority of our professionals are owners of CGI through our Share Purchase Plan, which, along with our Profit Participation Plan, allows them to share in the Company’s success, further aligning stakeholder interests.

In addition to capital resources and talent, CGI has established the Management Foundation, which encompasses governance policies, organizational models and sophisticated management frameworks for our business units and corporate processes. This robust governance model provides a common business language for managing all operations consistently across the globe, driving a focus on continuous improvement. CGI’s operations maintain appropriate certifications in accordance with service requirements such as ISO and CMMI certification programs.

34 — MANAGEMENT’S DISCUSSION AND ANALYSIS

5. Fourth Quarter Results

5.1. BOOKINGS AND BOOK-TO-BILL RATIO

Bookings for the quarter ended September 30, 2022 were $3.6 billion representing a book-to-bill ratio of 112.0%. The breakdown of the new bookings signed during the quarter is as follows:

	Extensions, renewals and add-ons	63%		Managed IT and Business Process Services	52	%		U.S. Commercial and State Government	21	%		Government	34	%
	New business	37%		Business and strategic IT				Canada	16	%		Financial Services	28	%
				consulting and systems integration services	48	%		U.S. Federal	15	%		MRD	21	%
								U.K. and Australia	14	%		Communication & Utilities	12	%
								Western and Southern Europe	14	%		Health	5	%
								Scandinavia and Central Europe	9	%
								Finland, Poland and Baltics	6	%
								Northwest and Central-East Europe	5	%

The following table provides a summary of the bookings and book-to-bill ratio by segment:

In thousands of CAD except for percentages	Bookings for the three months ended September 30, 2022		Bookings for the year ended September 30, 2022		Book-to-bill ratio for the year ended September 30, 2022
Total CGI		3,636,495		13,966,006		108.5	%
U.S. Commercial and State Government		754,996		2,616,594		117.4	%
Canada		569,124		2,059,809		95.4	%
U.S. Federal		561,208		1,660,086		94.3	%
U.K. and Australia		522,645		1,936,503		131.8	%
Western and Southern Europe		515,637		2,061,984		97.5	%
Scandinavia and Central Europe		340,914		1,636,137		99.5	%
Finland, Poland and Baltics		201,967		1,265,038		165.9	%
Northwest and Central-East Europe		170,004		729,855		100.4	%

FISCAL 2022 RESULTS — 35

5.2. FOREIGN EXCHANGE

The Company operates globally and is exposed to changes in foreign currency rates. Accordingly, as prescribed by IFRS, we value assets, liabilities and transactions that are measured in foreign currencies using various exchange rates. We report all dollar amounts in Canadian dollars.

Closing foreign exchange rates

As at September 30,	2022		2021		Change
U.S. dollar		1.3756		1.2676	8.5%
Euro		1.3454		1.4678	(8.3%)
Indian rupee		0.0169		0.0171	(1.2%)
British pound		1.5310		1.7075	(10.3%)
Swedish krona		0.1236		0.1447	(14.6%)

Average foreign exchange rates

For the three months ended September 30,	2022		2021		Change
U.S. dollar		1.3061		1.2598	3.7%
Euro		1.3147		1.4848	(11.5%)
Indian rupee		0.0164		0.0170	(3.5%)
British pound		1.5360		1.7360	(11.5%)
Swedish krona		0.1238		0.1457	(15.0%)

36 — MANAGEMENT’S DISCUSSION AND ANALYSIS

5.3. REVENUE DISTRIBUTION

The following charts provide additional information regarding our revenue mix for the quarter ended September 30, 2022:

	Managed IT and Business				U.S.	33%		Government	35%
	Process Services	54	%
	Business and strategic IT				Canada	17%		Financial services	24%
	consulting and systems integration services	46	%		France	15%		MRD	22%
					U.K.	11%		Communications & utilities	13%
					Germany	6%		Health	6%
					Finland	5%
					Sweden	4%
					Rest of the world	9%

5.3.1. Client Concentration

IFRS guidance on segment disclosures defines a single customer as a group of entities that are known to the reporting entity to be under common control. As a consequence, our work for the U.S. federal government including its various agencies represented 14.1% of our revenue for Q4 2022 as compared to 13.1% for Q4 2021.

FISCAL 2022 RESULTS — 37

5.4. REVENUE BY SEGMENT

The following table provides a summary of the year-over-year changes in our revenue, in total and by segment, separately showing the impacts of foreign currency exchange rate variations between the Q4 2022 and Q4 2021 periods. The Q4 2021 revenue by segment was recorded reflecting the actual average foreign exchange rates for that period. The foreign exchange impact is the difference between the current period’s actual results and the current period’s results converted with the prior year’s average foreign exchange rates.

For the three months ended September 30,					Change
	2022		2021		$		%
In thousands of CAD except for percentages
Total CGI revenue		3,247,221		3,007,458		239,763		8.0 %
Variation prior to foreign currency impact		13.9%
Foreign currency impact		(5.9%)
Variation over previous period		8.0%
Western and Southern Europe
Revenue prior to foreign currency impact		618,905		458,617		160,288		35.0 %
Foreign currency impact		(71,389)
Western and Southern Europe revenue		547,516		458,617		88,899		19.4 %
U.S. Commercial and State Government
Revenue prior to foreign currency impact		538,660		485,748		52,912		10.9 %
Foreign currency impact		18,501
U.S. Commercial and State Government revenue		557,161		485,748		71,413		14.7 %
Canada
Revenue prior to foreign currency impact		496,429		438,619		57,810		13.2 %
Foreign currency impact		(380)
Canada revenue		496,049		438,619		57,430		13.1 %
U.S. Federal
Revenue prior to foreign currency impact		446,750		407,704		39,046		9.6 %
Foreign currency impact		16,344
U.S. Federal revenue		463,094		407,704		55,390		13.6 %
Scandinavia and Central Europe
Revenue prior to foreign currency impact		419,546		382,838		36,708		9.6 %
Foreign currency impact		(54,143)
Scandinavia and Central Europe revenue		365,403		382,838		(17,435)		(4.6%)
U.K. and Australia
Revenue prior to foreign currency impact		373,978		353,005		20,973		5.9 %
Foreign currency impact		(42,535)
U.K. and Australia revenue		331,443		353,005		(21,562)		(6.1)%
Finland, Poland and Baltics
Revenue prior to foreign currency impact		186,363		174,471		11,892		6.8 %
Foreign currency impact		(21,887)
Finland, Poland and Baltics revenue		164,476		174,471		(9,995)		(5.7%)
Northwest and Central-East Europe
Revenue prior to foreign currency impact		175,331		171,546		3,785		2.2%
Foreign currency impact		(19,577)
Northwest and Central-East Europe revenue		155,754		171,546		(15,792)		(9.2)%

38 — MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three months ended September 30,					Change
	2022		2021		$		%
In thousands of CAD except for percentages
Asia Pacific
Revenue prior to foreign currency impact		223,362		182,007		41,355		22.7%
Foreign currency impact		(9,049)
Asia Pacific revenue		214,313		182,007		32,306		17.7%
Eliminations		(47,988)		(47,097)		(891)		1.9%

We ended the fourth quarter of Fiscal 2022 with revenue of $3,247.2 million, an increase of $239.8 million, or 8.0% when compared to the same period of Fiscal 2021. On a constant currency basis, revenue increased by $417.7 million or 13.9%. Foreign currency rate fluctuations unfavourably impacted our revenue by $177.9 million or 5.9%. The increase was mainly due to organic growth across all vertical markets, as well as the business acquisitions.

5.4.1. Western and Southern Europe

Revenue in our Western and Southern Europe segment was $547.5 million in Q4 2022, an increase of $88.9 million or 19.4% over the same period last year. On a constant currency basis, revenue increased by $160.3 million or 35.0%. The increase in revenue was mainly due to the recent business acquisitions, as well as the result of organic growth across all vertical markets, predominantly within MRD.

On a client geographic basis, the top two Western and Southern Europe vertical markets were MRD and financial services, generating combined revenues of approximately $342 million for the three months ended September 30, 2022.

5.4.2. U.S. Commercial and State Government

Revenue from our U.S. Commercial and State Government segment was $557.2 million in Q4 2022, an increase of $71.4 million or 14.7% compared to the same period last year. On a constant currency basis, revenue increased by $52.9 million or 10.9%. The increase in revenue was mainly the result of organic growth across all vertical markets, predominantly within financial services with additional IP solutions, government and health.

On a client geographic basis, the top two U.S. Commercial and State Government vertical markets were financial services and government, generating combined revenues of approximately $357 million for the three months ended September 30, 2022.

5.4.3. Canada

Revenue in our Canada segment was $496.0 million in Q4 2022, an increase of $57.4 million or 13.1% over the same period last year. On a constant currency basis, revenue increased by $57.8 million or 13.2%. The increase was due to organic growth across all vertical markets, mainly in financial services including an increase in IP services.

On a client geographic basis, the top two Canada vertical markets were financial services and communications and utilities, generating combined revenues of approximately $355 million for the three months ended September 30, 2022.

5.4.4. U.S. Federal

Revenue in our U.S. Federal segment was $463.1 million in Q4 2022, an increase of $55.4 million or 13.6% over the same period last year. On a constant currency basis, revenue increased by $39.0 million or 9.6%. The increase in revenue was mainly due to managed services expansion, higher transaction volumes related to our IP business process services, and the Array acquisition. This was partially offset by the successful completion of projects and an adjustment due to a reevaluation of cost to complete on a project.

For the three months ended September 30, 2022, 90% of revenues within the U.S. Federal segment were federal civilian based.

FISCAL 2022 RESULTS — 39

5.4.5. Scandinavia and Central Europe

Revenue in our Scandinavia and Central Europe segment was $365.4 million, a decrease of $17.4 million or 4.6% over the same period last year. On a constant currency basis, revenue increased by $36.7 million or 9.6%. The increase was mainly driven by the organic growth within the MRD and government vertical markets.

On a client geographic basis, the top two Scandinavia and Central Europe vertical markets were MRD and government, generating combined revenues of approximately $268 million for the three months ended September 30, 2022.

5.4.6. U.K. and Australia

Revenue in our U.K. and Australia segment was $331.4 million in Q4 2022, a decrease of $21.6 million or 6.1% over the same period last year. On a constant currency basis, revenue increased by $21.0 million or 5.9%. The increase in revenue was due to organic growth within the communications and utilities and government vertical markets and the Unico acquisition. This was in part offset by the successful completion and related ramp down of projects within the MRD vertical market.

On a client geographic basis, the top two U.K. and Australia vertical markets were government and communications and utilities, generating combined revenues of approximately $264 million for the three months ended September 30, 2022.

5.4.7. Finland, Poland and Baltics

Revenue in our Finland, Poland and Baltics segment was $164.5 million in Q4 2022, a decrease of $10.0 million or 5.7% over the same period last year. On a constant currency basis, revenue increased by $11.9 million or 6.8%. The increase was mainly due to higher transaction volumes and related IP services in the government vertical market.

On a client geographic basis, the top two Finland, Poland and Baltics vertical markets were government and financial services, generating combined revenues of approximately $104 million for the three months ended September 30, 2022.

5.4.8. Northwest and Central-East Europe

Revenue in our Northwest and Central-East Europe segment was $155.8 million in Q4 2022, a decrease of $15.8 million or 9.2% over the same period last year. On a constant currency basis, revenue increased by $3.8 million or 2.2%. The increase in revenue was primarily due to the organic growth mainly within the MRD, financial services, including IP services, and government vertical markets. This was in part offset by successful projects completion within the health vertical market.

On a client geographic basis, the top two Northwest and Central-East Europe vertical markets were MRD and government, generating combined revenues of approximately $107 million for the three months ended September 30, 2022.

5.4.9. Asia Pacific

Revenue in our Asia Pacific segment was $214.3 million, an increase of $32.3 million or 17.7% over the same period last year. On a constant currency basis, revenue increased by $41.4 million or 22.7%. The increase was mainly driven by the continued demand for our offshore delivery centers, predominantly within the financial services, communications and utilities, and MRD vertical markets.

40 — MANAGEMENT’S DISCUSSION AND ANALYSIS

5.5. ADJUSTED EBIT BY SEGMENT

					Change
For the three months ended September 30,
	2022		2021		$		%
In thousands of CAD except for percentages
Western and Southern Europe		55,913		64,170		(8,257)		(12.9%)
As a percentage of segment revenue		10.2 %		14.0 %
U.S. Commercial and State Government		85,376		78,323		7,053		9.0%
As a percentage of segment revenue		15.3 %		16.1 %
Canada		122,088		91,654		30,434		33.2%
As a percentage of segment revenue		24.6 %		20.9 %
U.S. Federal		67,999		69,365		(1,366)		(2.0%)
As a percentage of segment revenue		14.7 %		17.0 %
Scandinavia and Central Europe		30,729		33,920		(3,191)		(9.4%)
As a percentage of segment revenue		8.4 %		8.9 %
U.K. and Australia		53,163		55,090		(1,927)		(3.5%)
As a percentage of segment revenue		16.0 %		15.6 %
Finland, Poland and Baltics		26,136		29,310		(3,174)		(10.8%)
As a percentage of segment revenue		15.9 %		16.8 %
Northwest and Central-East Europe		19,095		20,441		(1,346)		(6.6%)
As a percentage of segment revenue		12.3 %		11.9 %
Asia Pacific		61,197		51,067		10,130		19.8%
As a percentage of segment revenue		28.6 %		28.1 %
Adjusted EBIT		521,696		493,340		28,356		5.7%
Adjusted EBIT margin		16.1 %		16.4 %

Adjusted EBIT for the quarter was $521.7 million, an increase of $28.4 million from Q4 2021. The adjusted EBIT margin decreased to 16.1% from 16.4% for the same period last year. The decrease was mainly due to the temporary dilutive impact of the recent acquisitions, the costs of assimilating new hires and the expected increase of travel costs in support of business development. This was partly offset by growth primarily in the government and financial services vertical markets.

5.5.1. Western and Southern Europe

Adjusted EBIT in the Western and Southern Europe segment was $55.9 million in Q4 2022, a decrease of $8.3 million when compared to Q4 2021. Adjusted EBIT margin decreased to 10.2% from 14.0% in Q4 2021. The change in adjusted EBIT margin was primarily due to the temporary dilutive impact of the recent business acquisitions which are in the process of being integrated to achieve planned synergies, one less billable day, and additional tax credits in the prior year.

5.5.2. U.S. Commercial and State Government

Adjusted EBIT in the U.S. Commercial and State Government segment was $85.4 million in Q4 2022, an increase of $7.1 million when compared to Q4 2021. Adjusted EBIT margin decreased to 15.3% from 16.1% in Q4 2021. The change in adjusted EBIT was mainly due to costs of assimilating new hires in response to high demand.

5.5.3. Canada

Adjusted EBIT in the Canada segment was $122.1 million in Q4 2022, an increase of $30.4 million when compared to Q4 2021. Adjusted EBIT margin increased to 24.6% from 20.9% in Q4 2021. The increase was mainly due to organic growth across all vertical markets, mainly in financial services, including an increase in IP services and lower tax credits in the prior year.

FISCAL 2022 RESULTS — 41

5.5.4. U.S. Federal

Adjusted EBIT in the U.S. Federal segment was $68.0 million in Q4 2022, a decrease of $1.4 million when compared to Q4 2021. Adjusted EBIT margin decreased to 14.7% from 17.0% in Q4 2021. The decrease in adjusted EBIT margin was primarily due to higher performance based compensation, which was in part offset by higher transaction volumes related to our IP business process services and managed services expansion.

5.5.5. Scandinavia and Central Europe

Adjusted EBIT in the Scandinavia and Central Europe segment was $30.7 million in Q4 2022, a decrease of $3.2 million when compared to Q4 2021. Adjusted EBIT margin decreased to 8.4% from 8.9% in Q4 2021. The decrease was mainly due to the optimization of our infrastructure business, partly offset by the organic growth primarily in MRD and government vertical markets.

5.5.6. U.K. and Australia

Adjusted EBIT in the U.K. and Australia segment was $53.2 million in Q4 2022, a decrease of $1.9 million when compared to Q4 2021. Adjusted EBIT margin increased to 16.0% from 15.6% in Q4 2021. The increase in adjusted EBIT margin was driven by the favourable impact of a client resolution in the prior year and to higher billable utilization within the government and communications and utilities vertical markets. This was in part offset by the successful completion of projects within the MRD vertical market and a dilutive impact of the Unico acquisition, which is in the process of being integrated to achieve its planned synergies.

5.5.7. Finland, Poland and Baltics

Adjusted EBIT in our Finland, Poland and Baltics segment was $26.1 million Q4 2022, a decrease of $3.2 million, when compared to the same period last year. Adjusted EBIT margin decreased to 15.9% from 16.8% mainly due to temporary lower billable utilization related to the onboarding of new hires primarily associated with the start up of a large new managed IT services. This was partially offset to higher transaction volumes and related IP services in the government vertical market.

5.5.8. Northwest and Central-East Europe

Adjusted EBIT in the Northwest and Central-East Europe segment was $19.1 million in Q4 2022, a decrease of $1.3 million when compared to Q4 2021. Adjusted EBIT margin increased to 12.3% from 11.9% in Q4 2021 due to the same factors as revenue.

5.5.9. Asia Pacific

Adjusted EBIT in the Asia Pacific segment was $61.2 million in Q4 2022, an increase of $10.1 million when compared to Q4 2021. Adjusted EBIT margin increased to 28.6% from 28.1% Q4 2021. The increase was mainly due to higher demand for our offshore delivery centers, predominantly within the financial services, communications and utilities, and MRD vertical markets, partially offset by the costs of assimilating new hires.

42 — MANAGEMENT’S DISCUSSION AND ANALYSIS

5.6. NET EARNINGS AND EARNINGS PER SHARE

The following table sets out the information supporting the earnings per share calculations:

For the three months ended September 30,					Change
	2022		2021		$		%
In thousands of CAD except for percentage and shares data
Adjusted EBIT		521,696		493,340		28,356		5.7%
Minus the following items:
Acquisition-related and integration costs		14,775		1,169		13,606		1,163.9%
Net finance costs		21,019		27,733		(6,714)		(24.2%)
Earnings before income taxes		485,902		464,438		21,464		4.6 %
Income tax expense		123,540		118,504		5,036		4.2%
Effective tax rate		25.4 %		25.5 %
Net earnings		362,362		345,934		16,428		4.7 %
Margin		11.2 %		11.5 %
Weighted average number of shares
Class A subordinate voting shares and Class B multiple voting shares (basic)		236,360,510		244,068,210				(3.2%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)		239,891,696		248,208,258				(3.4%)
Earnings per share (in dollars)
Basic EPS		1.53		1.42		0.11		7.7 %
Diluted EPS		1.51		1.39		0.12		8.6 %

For the three months ended September 30, 2022, the income tax expense was $123.5 million compared to $118.5 million over the same period last year, while our effective tax rate decreased to 25.4% from 25.5%. The decrease in the income tax rate was mainly attributable to the tax rate decrease in France, partly offset by a different profitability mix in certain geographies.

For Q4 2022, CGI’s basic and diluted weighted average number of shares decreased compared to Q4 2021 due to the impact of the purchase for cancellation of Class A Shares during the year. This was partly offset by the exercise of stock options during the year.

FISCAL 2022 RESULTS — 43

5.6.1. Net Earnings and Earnings per Share Excluding Specific Items

Below is a table showing the year-over-year comparison excluding specific items, namely acquisition-related and integration costs :

For the three months ended September 30,							Change
	2022			2021			$		%
In thousands of CAD except for percentage and shares data
Earnings before income taxes		485,902			464,438			21,464		4.6 %
Add back:
Acquisition-related and integration costs		14,775			1,169			13,606		1,163.9%
Earnings before income taxes excluding specific items		500,677			465,607			35,070		7.5 %
Income tax expense		123,540			118,504			5,036		4.2%
Effective tax rate		25.4	%		25.5	%
Add back:
Tax deduction on acquisition-related and integration costs		4,082			240			3,842		1,600.8%
Impact on effective tax rate		0.1	%		—	%
Income tax expense excluding specific items		127,622			118,744			8,878		7.5%
Effective tax rate excluding specific items		25.5	%		25.5	%
Net earnings excluding specific items		373,055			346,863			26,192		7.6%
Net earnings excluding specific items margin		11.5	%		11.5	%
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B multiple voting shares (basic)		236,360,510			244,068,210					(3.2%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)		239,891,696			248,208,258					(3.4%)
Earnings per share excluding specific items (in dollars)
Basic EPS		1.58			1.42			0.16		11.3 %
Diluted EPS		1.56			1.40			0.16		11.4 %

44 — MANAGEMENT’S DISCUSSION AND ANALYSIS

5.7. CONSOLIDATED STATEMENTS OF CASH FLOWS

As at September 30, 2022, cash and cash equivalents were $966.5 million. Cash included in funds held for clients was $504.7 million. The following table provides a summary of the generation and use of cash and cash equivalents for the quarters ended September 30, 2022 and 2021.

For the three months ended September 30,	2022			2021			Change
In thousands of CAD
Cash provided by operating activities		488,861			526,934			(38,073	)
Cash used in investing activities		(87,111	)		(80,448	)		(6,663	)
Cash used in financing activities		(314,995	)		(69,132	)		(245,863	)
Effect of foreign exchange rate changes on cash and cash equivalents		29,151			15,468			13,683
Net increase in cash, cash equivalents and cash included in funds held for clients		115,906			392,822			(276,916	)

5.7.1. Cash Provided by Operating Activities

For Q4 2022, cash provided by operating activities was $488.9 million compared to $526.9 million in Q4 2021, or 15.1% of revenue compared to 17.5% last year.

The following table provides a summary of the generation and use of cash from operating activities.

For the three months ended September 30,	2022			2021			Change
In thousands of CAD
Net earnings		362,362			345,934			16,428
Amortization, depreciation and impairment		121,020			127,619			(6,599	)
Other adjustments 1		12,472			23,620			(11,148	)
Cash flow from operating activities before net change in non-cash working capital items		495,854			497,173			(1,319	)
Net change in non-cash working capital items:
Accounts receivable, work in progress and deferred revenue		16,151			(22,756	)		38,907
Accounts payable and accrued liabilities, accrued compensation and employee-related liabilities, provisions and long-term liabilities		(12,985	)		24,921			(37,906	)
Other 2		(10,159	)		27,596			(37,755	)
Net change in non-cash working capital items		(6,993	)		29,761			(36,754	)
Cash provided by operating activities		488,861			526,934			(38,073	)

¹  Comprised of deferred income taxes (recovery) expense, foreign exchange loss, gain on lease terminations and sale of property, plant and equipment, share-based payment costs.

²  Comprised of prepaid expenses and other assets, long-term financial assets, retirement benefits obligations, derivative financial instruments and income taxes.

For the three months ended September 30, 2022, cash provided by operating activities was $488.9 million, down $38.1 million for the same period last year due mainly from the net change in non-cash working capital items. The net change in non-cash working capital items of $7.0 million for fiscal 2022 was mostly due to the decrease related to accrued vacation and income tax payments. This was partially offset by the performance-based compensation to our members.

The timing of our working capital inflows and outflows will always have an impact on the cash flow from operations.

FISCAL 2022 RESULTS — 45

5.7.2. Cash Used in Investing Activities

For Q4 2022, $87.1 million was used in investing activities while $80.4 million was used in the prior year.

The following table provides a summary of the generation and use of cash from investing activities:

For the three months ended September 30,	2022			2021			Change
In thousands of CAD
Business acquisitions		496			(4,496	)		4,992
Purchase of property, plant and equipment		(38,243	)		(31,992	)		(6,251	)
Additions to contract costs		(23,990	)		(15,201	)		(8,789	)
Additions to intangible assets		(40,750	)		(28,636	)		(12,114	)
Net change in short-term investments and purchase of long-term investments		15,376			(123	)		15,499
Cash used in investing activities		(87,111	)		(80,448	)		(6,663	)

The increase of $6.7 million in cash used in investing activities during the three months ended September 30, 2022 was mainly due to higher investment in our business solutions, contract costs as well as computer equipment to support our growth.

5.7.3. Cash Used in Financing Activities

For the three months ended September 30,	2022			2021			Change
In thousands of CAD
Increase of long-term debt		—			1,851,997			(1,851,997	)
Repayment of long-term debt		(67,467	)		(1,845,702	)		1,778,235
Settlement of derivative financial instruments		6,258			(6,992	)		13,250
Payment of lease liabilities		(41,074	)		(38,845	)		(2,229	)
Repayment of debt assumed in a business acquisition		(4,120	)		—			(4,120	)
Purchase and cancellation of Class A subordinate voting shares		(132,923	)		—			(132,923	)
Issuance of Class A subordinate voting shares		11,775			9,498			2,277
Net change in client’s funds obligation		(87,444	)		(39,088	)		(48,356	)
Cash used in financing activities		(314,995	)		(69,132	)		(245,863	)

During Q4 2022, we repaid $67.5 million of our long-term debt mainly due to scheduled repayment of the senior unsecured notes in the amount of $64.9 million (US$50.0 million). In addition, we paid $41.1 million of lease liabilities. During Q4 2021, we increased by $1,852.0 million our long-term debt mainly driven by the issuance of senior unsecured notes for an amount of $1,847.3 million and repaid $1,845.7 million of our long-term debt mainly due by the repayment in full of the 2020 Term Loan in the amount of $1,583.5 million (US$1,250.0 million), and the scheduled repayments of senior unsecured notes in the amount of $259.7 million. We also paid $38.8 million of lease liabilities.

During Q4 2022, $132.9 million was used for the purchase for cancellation of 1,260,114 Class A Shares while for the same period last year, we did not purchase Class A Shares for cancellation.

In Q4 2022, we received $11.8 million in proceeds from the exercise of stock options, compared to $9.5 million during the same period last year.

In addition, during Q4 2022, the decrease in net change in client’s funds obligation of $87.4 million and $39.1 million was due to the timing of inflows from our clients and related payments to our clients’ employees and other payees.

46 — MANAGEMENT’S DISCUSSION AND ANALYSIS

6. Eight Quarter Summary

As at and for the three months ended	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020
In millions of CAD unless otherwise noted
Growth
Revenue	3,247.2	3,258.6	3,268.9	3,092.4	3,007.5	3,021.4	3,078.5	3,019.4
Year-over-year revenue growth	8.0%	7.9%	6.2%	2.4%	2.8%	(1.0%)	(1.7%)	(1.2%)
Constant currency year-over-year revenue growth	13.9%	11.5%	10.0%	6.8%	6.4%	3.5%	(1.7%)	(3.6%)
Backlog	24,055	23,238	23,144	23,577	23,059	23,345	23,094	22,769
Bookings	3,636	3,410	3,316	3,604	2,921	3,634	3,892	3,397
Book-to-bill ratio	112.0%	104.7%	101.4%	116.5%	97.1%	120.3%	126.4%	112.5%
Book-to-bill ratio trailing twelve months	108.5%	104.9%	108.7%	115.2%	114.2%	119.5%	112.6%	103.0%
Profitability
Adjusted EBIT1	521.7	519.9	523.6	521.5	493.3	476.8	486.3	495.7
Adjusted EBIT margin	16.1%	16.0%	16.0%	16.9%	16.4%	15.8%	15.8%	16.4%
Net earnings	362.4	364.3	372.0	367.4	345.9	338.5	341.2	343.5
Net earnings margin	11.2%	11.2%	11.4%	11.9%	11.5%	11.2%	11.1%	11.4%
Diluted EPS (in dollars)	1.51	1.51	1.53	1.49	1.39	1.36	1.34	1.32
Net earnings excluding specific items1	373.1	371.2	374.1	369.4	346.9	339.0	341.9	347.2
Net earnings margin excluding specific items	11.5%	11.4%	11.4%	11.9%	11.5%	11.2%	11.1%	11.5%
Diluted EPS excluding specific items (in dollars)1	1.56	1.54	1.53	1.50	1.40	1.36	1.35	1.33
Liquidity
Cash provided by operating activities	488.9	419.2	472.6	484.3	526.9	418.9	572.6	597.5
As a % of revenue	15.1%	12.9%	14.5%	15.7%	17.5%	13.9%	18.6%	19.8%
Days sales outstanding	49	48	42	45	45	44	39	44
Capital structure
Net debt	2,946.9	3,073.0	2,729.7	2,687.9	2,535.9	2,956.6	2,938.7	2,672.5
Net debt to capitalization ratio	28.8%	30.6%	28.7%	27.8%	26.6 %	30.9 %	30.9 %	27.1 %
Return on equity	20.9%	21.1%	21.0%	20.3%	19.8 %	18.4 %	17.2 %	16.6 %
Return on invested capital	15.7%	15.8%	15.7%	15.3%	14.9 %	13.8 %	12.8 %	12.4 %
Balance sheet
Cash and cash equivalents, and short-term investments	972.6	784.1	1,059.4	1,185.7	1,700.2	1,267.1	1,339.8	1,675.1
Total assets	15,175.4	14,916.4	14,475.7	14.704.9	15,021.0	14,599.3	14,719.9	15,271.0
Long-term financial liabilities2	3,731.3	3,581.8	3,523.5	3,608.2	3,659.8	3,453.0	3,508.1	3,598.1

¹  Please refer to sections 3.7. and 3.8.3. of each quarter’s respective MD&A for the reconciliation of non-GAAP financial measures for the quarterly periods of 2021 and 2022. For Fiscal 2021 year ending period, please refer to sections 5.6. and 5.6.1.

²  Long-term financial liabilities include the long-term portion of the debt, long-term portion of lease liabilities and the long-term derivative financial instruments.

There are factors causing quarterly variances which may not be reflective of the Company’s future performance. There is seasonality in system integration and consulting work, and the quarterly performance of these operations is impacted by occurrences such as vacations and the number of statutory holidays in any given quarter. Managed IT and business process services contracts are affected to a lesser extent by seasonality. Also, the workflow from some clients may fluctuate from quarter to quarter based on their business cycle and the seasonality of their own operations. Further, the savings that we generate for a client on a given managed IT and business process services contract may temporarily reduce our revenue stream from this client, as these savings may not be immediately offset by additional work performed for this client.

Cash flow from operating activities could vary significantly from quarter to quarter depending on the timing of monthly payments received from clients, cash requirements associated with large acquisitions, managed IT and business process

FISCAL 2022 RESULTS — 47

services contracts and projects, the timing of the reimbursements for various tax credits, profit sharing payments to members as well as the timing of severance payments related to the integration of our acquisitions.

Foreign exchange fluctuations can also contribute to quarterly variances as our percentage of operations in foreign countries evolves. The effect from these variances is primarily on our revenue and to a much lesser extent, on our margin as we benefit, as much as possible, from natural hedges.

48 — MANAGEMENT’S DISCUSSION AND ANALYSIS

7. Changes in Accounting Policies

The audited consolidated financial statements for the years ended September 30, 2022 and 2021 include all adjustments that CGI’s management considers necessary for the fair presentation of its financial position, results of operations, and cash flows.

CHANGE IN ACCOUNTING POLICY- IAS 7 STATEMENT OF CASH FLOWS

In 2022, the IFRS Interpretations Committee finalized its agenda decision that restrictions on the use of demand deposits arising from a contract with a third party do not result in those deposits no longer being cash and cash equivalents when they are available to an entity on demand. Therefore, they should be included in cash and cash equivalents in the statements of cash flows, with disclosure provided on significant cash and cash equivalents balances with restrictions on use.

The Company has retrospectively applied this guidance and included the cash component of funds held for clients as part of cash, cash equivalents and cash included in funds held for clients in its consolidated Statements of Cash Flows, with the 2021 comparative figures adjusted consequently. The Company determined that as it had access to these funds on demand, despite being held solely for the purpose of satisfying the clients’ funds obligations. The cash balance under funds held for clients represents $504.7 millions at September 30, 2022 ($456.5 millions at September 30, 2021). The net changes in the client funds obligations are presented within financing activities, while the purchase and proceeds from the sale of long-term investments are presented within investing activities. This retrospective change in accounting policy does not impact the consolidated balance sheets, statement of earnings, comprehensive income, or changes in equity.

ADOPTION OF ACCOUNTING STANDARD

The following standard amendments have been adopted by the Company on October 1, 2021:

IBOR reform with amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16

In August, 2020, the IASB issued Interest Rate Benchmark Reform-Phase 2, which amends IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures and IFRS 16 Leases. The standard amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform.

For financial instruments at amortized cost, the standard amendments introduce a practical expedient such that if a change to contractual cash flow occurs as a direct consequence of the interbank offered rates (IBORs) reform and on economically equivalent terms to the previous basis, it will not result in an immediate gain or loss recognition. As for hedge accounting, the practical expedient allows hedge instrument relationships directly affected by the reform to continue. However, additional ineffectiveness might need to be recorded.

The Company has financial instruments exposed to the 1 month USD Libor rate, which is planned to expire in June 2023. As at September 30, 2022, the only instruments with a maturity date subsequent to June 2023 directly impacted by the IBORs reform are the unsecured committed term loan credit facility and the related cross-currency interest rate swaps (the hedging instruments) expiring in December 2023.

The Company is currently managing the process to transition the existing impacted agreements to an alternative rate.

The implementation of these standard amendments resulted in no impact on the Company’s audited consolidated financial statements.

FUTURE ACCOUNTING STANDARD CHANGES

The following standard amendments are effective as of October 1, 2022 for the Company.

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Onerous contracts – Cost of Fulfilling a Contract - Amendments to IAS 37

In May, 2020, the IASB amended IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The standard amendments clarify that for assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental cost of fulfilling that contract and an allocation of other costs that relates directly to fulfilling the contract.

The implementation of these standard amendments will result in no significant impact on the Company’s audited consolidated financial statements.

The following standards amendments have been issued and will be effective as of October 1, 2023 for the Company, with earlier application permitted. The Company is currently evaluating the impact of these standard amendments on its audited consolidated financial statements.

Classification of Liabilities as Current or Non-current – Amendments to IAS 1

In January, 2020, the IASB amended IAS 1 Presentation of Financial Statements. The standard amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period which only impacts the presentation of liabilities in the balance sheet. The classification is unaffected by expectations about whether the Company will exercise its right to defer settlement of a liability.

Disclosure of Accounting Policy Information – Amendments to IAS 1 and IFRS Practice Statement 2

In February, 2021, the IASB amended IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements to require the Company to disclose its material accounting policy information rather than its significant accounting policies.

Definition of Accounting Estimates – Amendments to IAS 8

In February, 2021, the IASB amended IAS 8 Accounting Policies, Changes in Accounting estimates and Errors to introduce a definition of accounting estimates and to help entities distinguish changes in accounting policies from changes in accounting estimates. This distinction is important because changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

In May, 2021, the IASB amended IAS 12 Income Taxes, to narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.

The following standard amendments have been issued and will be effective as of October 1, 2024 for the Company, with earlier application permitted. The Company is currently evaluating the impact of these standard amendments on its consolidated financial statements.

Information about long-term debt with covenants – Amendments to IAS 1

In October, 2022, the IASB has issued standard amendments to IAS 1 Presentation of Financial Statements that aim to improve the information companies provide about long-term debt with covenants.The standard amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, these standard amendments require a company to disclose information about these covenants in the notes to the financial statements.

50 — MANAGEMENT’S DISCUSSION AND ANALYSIS

8. Critical Accounting Estimates

The Company’s significant accounting policies are described in note 3 of the audited consolidated financial statements for the years ended September 30, 2022 and 2021. Certain of these accounting policies, listed below, require management to make accounting estimates and judgements that affect the reported amounts of assets, liabilities and equity and the accompanying disclosures at the date of the audited consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting period. These accounting estimates are considered critical because they require management to make subjective and/or complex judgements that are inherently uncertain and because they could have a material impact on the presentation of our financial condition, changes in financial condition or results of operations.

The uncertainties around the COVID-19 pandemic required the use of judgements and estimates which resulted in no material impact for the period ended September 30, 2022. The Company will continue to monitor the impact of the development of the COVID-19 pandemic in future reporting periods.

Areas impacted by  estimates	Consolidated balance sheets	Consolidated statements of earnings
		Revenue	Cost of services, selling and administrative	Amortization and depreciation	Net finance costs	Income taxes
Revenue recognition1	✓	✓	✓
Goodwill impairment	✓			✓
Right-of-use assets	✓			✓	✓
Business combinations	✓	✓	✓	✓		✓
Income taxes	✓					✓
Litigation and claims	✓	✓	✓

¹  Affects the balance sheet through accounts receivable, work in progress, provision on revenue-generating contracts and deferred revenue.

Revenue recognition

Relative stand-alone selling price

If an arrangement involves the provision of multiple performance obligations, the total arrangement value is allocated to each performance obligation based on its relative stand-alone selling price. At least on a yearly basis, the Company reviews its best estimate of the stand-alone selling price which is established by using a reasonable range of prices for the various services and solutions offered by the Company based on local market information available. Information used in determining the range is mainly based on recent contracts signed and the economic environment. A change in the range could have a material impact on the allocation of total arrangement value, and therefore on the amount and timing of revenue recognition.

Business and strategic IT consulting and systems integration services under fixed fee arrangements

Revenue from business and strategic IT consulting and systems integration services under fixed-fee arrangements is recognized using the percentage-of-completion method over time, as the Company has no alternative use for the asset created and has an enforceable right to payment for performance completed to date. The Company primarily uses labour costs to measure the progress towards completion. Project managers monitor and re-evaluate project forecasts on a monthly basis. Forecasts are reviewed to consider factors such as: changes to the scope of the contracts, delays in reaching milestones and complexities in the project delivery. Forecasts can also be affected by market risks such as the availability and retention of qualified IT professionals and/or the ability of the subcontractors to perform their obligations within agreed budget and time frames. To the extent that actual labour costs could vary from estimates, adjustments to

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revenue following the review of the costs to complete on projects are reflected in the period in which the facts that give rise to the revision occur. Whenever the total costs are forecasted to be higher than the total revenue, a provision on revenue-generating contract is recorded.

Goodwill impairment

The carrying value of goodwill is tested for impairment annually or if events or changes in circumstances indicate that the carrying value may be impaired. In order to determine if a goodwill impairment test is required, management reviews different factors on a quarterly basis, such as changes in technological or market environment, changes in assumptions used to derive the weighted average cost of capital and actual financial performance compared to planned performance.

The recoverable amount of each segment has been determined based on its value in use calculation, which includes estimates about their future financial performance based on cash flows approved by management. However, factors such as our ability to continue developing and expanding services offered to address emerging business demands and technology trends, a lengthened sales cycle and our ability to hire and retain qualified IT professionals affect future cash flows, and actual results might differ from future cash flows used in the goodwill impairment test. Key assumptions used in goodwill impairment testing are presented in note 12 of the audited consolidated financial statements for the years ended September 30, 2022 and 2021. Historically, the Company has not recorded an impairment charge on goodwill.

Right-of-use assets

Estimates of the lease term

The Company estimates the lease term in order to calculate the value of the lease liability at the initial date of the lease. Management uses judgement to determine the appropriate lease term based on the conditions of each lease. The Company considers all facts that create incentive to exercise an extension option or not to take a termination option including leasehold improvements, significant modification of the underlying asset or a business decision. The extension or termination options are only included in the lease term if it is reasonably certain of being exercised.

Discount rate for leases

The discount rate is used to determine the initial carrying amount of the lease liabilities and the right-of-use assets. The Company estimates the incremental borrowing rate for each lease or portfolio of leased assets, as most of the implicit interest rates in the leases are not readily determinable. To calculate the incremental borrowing rate, the Company considers its credit worthiness, the term of the arrangement, any collateral received and the economic environment at the lease date. Lease liabilities are remeasured (along with the corresponding adjustment to the right-of-use asset), whenever the following situations occur:

– a modification in the lease term or a change in the assessment of an option to purchase or terminate the lease, for which the lease liability is remeasured by discounting the revised lease payments using a revised discount rate; and

– a modification in the residual guarantees or in future lease payments due to a change of an index or rate tied to the payments, for which the lease liability is remeasured by discounting the revised lease payments using the initial discount rate determined when setting up the liability.

In addition, upon partial or full termination of a lease, the difference between the carrying amounts of the lease liability and the right-of-use asset is recorded in the consolidated statements of earnings.

Business combinations

Management makes assumptions when determining the acquisition-date fair value of the identifiable tangible and intangible assets acquired and liabilities assumed which involve estimates, such as the forecasting of future cash flows, discount rates and the useful lives of the assets acquired.

Additionally, management’s judgement is required in determining whether an intangible asset is identifiable and should be recorded separately from goodwill.

Changes in the above assumptions, estimates and judgements could affect our acquisition-date fair values and therefore could have material impacts on our audited consolidated financial statements. These changes are recorded as part of the

52 — MANAGEMENT’S DISCUSSION AND ANALYSIS

purchase price allocation and therefore result in corresponding goodwill adjustments if they occurred during the measurement period, which does not exceed one year. All other subsequent changes are recorded in our consolidated statement of earnings.

Income taxes

Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be available for their utilization. The Company considers the analysis of forecast and future tax planning strategies. Estimates of taxable profit are made based on the forecast by jurisdiction which are aligned with goodwill impairment testing assumptions, on an undiscounted basis. In addition, management considers factors such as substantively enacted tax rates, the history of the taxable profits and availability of tax strategies. Due to the uncertainty and the variability of the factors mentioned above, deferred tax assets are subject to change. Management reviews its assumptions on a quarterly basis and adjusts the deferred tax assets when appropriate.

The Company is subject to income tax laws in numerous jurisdictions. Judgement is required in determining the worldwide provision for income taxes as the determination of tax liabilities and assets involves uncertainties in the interpretation of complex tax regulations and requires estimates and assumptions considering the existing facts and circumstances. The Company provides for potential tax liabilities based on the most likely amount of the possible outcomes. Estimates are reviewed each reporting period and updated, based on new information available, and could result in changes to the income tax liabilities and deferred tax liabilities in the period in which such determinations are made.

Litigation and claims

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The accrued litigation and legal claim provisions are based on historical experience, current trends and other assumptions that are believed to be reasonable under the circumstances. Estimates include the period in which the underlying cause of the claim occurred and the degree of probability of an unfavourable outcome. Management reviews assumptions and facts surrounding outstanding litigation and claims on a quarterly basis, involves external counsel when necessary and adjusts such provisions accordingly. The Company has to be compliant with applicable law in many jurisdictions which increases the complexity of determining the adequate provision following a litigation review. Since the outcome of such litigation and claims is not predictable with assurance, those provisions are subject to change. Adjustments to litigation and claims provisions are reflected in the period when the facts that give rise to an adjustment occur.

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9. Integrity of Disclosure

The Board of Directors has the responsibility under its charter and under the securities laws that govern CGI’s continuous disclosure obligations to oversee CGI’s compliance with its continuous and timely disclosure obligations, as well as the integrity of the Company’s internal controls and management information systems. The Board of Directors carries out this responsibility mainly through its Audit and Risk Management Committee.

CGI’s Audit and Risk Management Committee is composed entirely of independent directors who meet the independence and experience requirements of National Instrument 52-110 adopted by the Canadian Securities Administrators as well as those of the New York Stock Exchange (NYSE) and the U.S. Securities and Exchange Commission (SEC). The role and responsibilities of the Audit and Risk Management Committee include: (i) reviewing public disclosure documents containing financial information concerning CGI; (ii) identifying and examining material financial and operating risks to which the Company is exposed, reviewing the various policies and practices of the Company that are intended to manage those risks, and reporting on a regular basis to the Board of Directors concerning risk management; (iii) reviewing and assessing the effectiveness of CGI’s accounting policies and practices concerning financial reporting; (iv) reviewing and monitoring CGI’s internal control procedures, programs and policies and assessing their adequacy and effectiveness; (v) reviewing the adequacy of CGI’s internal audit resources including the mandate and objectives of the internal auditor; (vi) recommending to the Board of Directors the appointment of the external auditor, assessing the external auditor’s independence, reviewing the terms of their engagement, conducting an annual auditor’s performance assessment, and pursuing ongoing discussions with them; (vii) reviewing related party transactions in accordance with the rules of the NYSE and other applicable laws and regulations; (viii) reviewing the audit procedures including the proposed scope of the external auditor’s examinations; and (ix) performing such other functions as are usually attributed to audit committees or as directed by the Board of Directors. In making its recommendation to the Board of Directors in relation to the annual appointment of the external auditor, the Audit and Risk Management Committee conducts an annual assessment of the external auditor’s performance following the recommendations of the Chartered Professional Accountants of Canada. The formal assessment is concluded in advance of the Annual General Meeting of Shareholders and is conducted with the assistance of key CGI personnel.

The Company has established and maintains disclosure controls and procedures designed to provide reasonable assurance that material information relating to the Company is made known to the Chief Executive Officer and the Chief Financial Officer by others, particularly during the period in which annual and interim filings are prepared, and that information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by the Company under Canadian and U.S. securities laws is recorded, processed, summarized and reported within the time periods specified under those laws and the related rules. As at September 30, 2022, management evaluated, under the supervision of and with the participation of the Chief Executive Officer and the Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures as defined under National Instrument 52-109 adopted by the Canadian Securities Administrators and in Rule 13(a)-15(e) under the U.S. Securities Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as at September 30, 2022.

The Company has also established and maintains internal control over financial reporting, as defined under National Instrument 52-109 and in Rule 13(a)-15(f) under the U.S. Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is a process designed under the supervision of the Chief Executive Officer and the Chief Financial Officer, and effected by management and other key CGI personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Management evaluated, under the supervision of and with the participation of the Chief Executive Officer and the Chief Financial Officer, the effectiveness of the Company’s internal controls over financial reporting as at September 30, 2022, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013). Based on that evaluation, management, under the supervision of and with the participation of the Chief Executive Officer as well as the

54 — MANAGEMENT’S DISCUSSION AND ANALYSIS

Chief Financial Officer concluded that the Company’s internal controls over financial reporting was effective as at September 30, 2022.

The Company’s assessment and conclusion on the effectiveness of disclosure controls and procedures and internal controls over financial reporting excludes the controls, policies and procedures of Umanis, the control of which was acquired on May 31, 2022. The scope limitation is in accordance with section 3.3(1)(b) of National Instrument 52- 109, which allows an issuer to limit the design of disclosure controls and procedures and internal control over financial reporting to exclude controls, policies, and procedures of a business that the issuer acquired not more than 365 days before the end of the financial period in question. Umanis’ results since the acquisition date represented 0.9% of revenue for the year ended September 30, 2022 and constituted 3.9% of total assets as at September 30, 2022.

FISCAL 2022 RESULTS — 55

10. Risk Environment

10.1. RISKS AND UNCERTAINTIES

While we are confident about our long-term prospects, a number of risks and uncertainties could affect our ability to achieve our strategic vision and objectives for growth. The following risks and uncertainties should be considered when evaluating our potential as an investment.

10.1.1. External Risks

We may be adversely affected by volatile, negative or uncertain economic and political conditions and the effects of these conditions on our clients’ businesses and levels of activity.

Economic and political conditions in the markets in which we operate have a bearing upon the results of our operations, directly and through their effect on the level of business activity of our clients. We can neither predict the impact that current economic and political conditions will have on our future revenue, nor predict changes in economic conditions or future political uncertainty. The level of activity of our clients and potential clients may be affected by an economic downturn or political uncertainty. Clients may cancel, reduce or defer existing contracts and delay entering into new engagements and may decide to undertake fewer IT systems projects resulting in limited implementation of new technology and smaller engagements. Since there may be fewer engagements, competition may increase and pricing for services may decline as competitors may decrease rates to maintain or increase their market share in our industry and this may trigger pricing adjustments related to the benchmarking obligations within our contracts. Economic downturns and political uncertainty make it more difficult to meet business objectives and may divert management’s attention and time from operating and growing our business. Our business, results of operations and financial condition could be negatively affected as a result of these factors.

We may be adversely affected by additional external risks, such as terrorism, armed conflict, labour or social unrest, inflation, rising energy and commodity costs, recession, criminal activity, hostilities, disease, illness or health emergencies, natural disasters and climate change and the effects of these conditions on our clients, our business and on market volatility.

Additional external risks that could adversely impact the markets in which we operate, our industry and our business include terrorism, armed conflict, labour or social unrest, inflation, recession, criminal activity, regional and international hostilities and international responses to these hostilities, and disease, illness or health emergencies that affect local, national or international economies. Additionally, the potential impacts of climate change are unpredictable and natural disasters, sea-level rise, floods, droughts or other weather-related events present additional external risks, as they could disrupt our internal operations or the operations of our clients, impact our employee’s health and safety and increase insurance and other operating costs. Climate change risks can arise from physical risks (risks related to the physical effects of climate change), transition risks (risks related to regulatory, legal, technological and market changes from a transition to a low-carbon economy), as well as reputational risks related to our management of climate-related issues and our level of disclosure related to such matters (see Our inability to meet regulatory requirements and/or stakeholders expectations of disclosure, management and implementation of ESG initiatives and standards, could have a material adverse effect on our business). Climate change risk, and/or any of these additional external risks, may affect us or affect the financial viability of our clients leading to a reduction of demand and loss of business from such clients. Each of these risks could negatively impact our business, results of operation and financial condition.

As a result of external risks, such as the current armed conflict in the Ukraine, inflation, and rising energy and commodity costs, global equity and capital markets may experience significant volatility and weakness. The duration and impact of these events are unknown at this time, nor is the impact on our operations and the market for our securities.

Prolonged periods of inflation could increase our costs and impact our profitability, which could have a material adverse effect on our business and financial condition.

56 — MANAGEMENT’S DISCUSSION AND ANALYSIS

High levels of inflation may subject us to significant cost pressures and lead to market volatility. As a result, governments may adopt initiatives to combat inflation (for example, raising benchmark interest rate), thus increasing our cost of borrowing and decreasing the liquidity of capital markets. Our clients may have difficulty budgeting for external IT services or delay their payment for services provided. High inflation can lead to increased costs of labor and our employee compensation expenses. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases, and there is no assurance that our revenues will increase at the same rate to maintain the same level of profitability. Our inability or failure to do so could harm our business and financial condition.

Pandemics, including the COVID-19 pandemic, have caused, and may in the future cause disruptions in our operations and the operations of our clients (which may lead to increased risk and frequency of cybersecurity incidents), market volatility and economic disruption, which could adversely affect us.

A pandemic, including the COVID-19 pandemic, can create significant volatility and uncertainty and economic disruption.

A pandemic poses the risk that our members, clients, contractors and business partners may be prevented from, or restricted in, conducting business activities for an indefinite period, including due to the transmission of the disease or to emergency measures or restrictions that may be requested or mandated by governmental authorities. The COVID-19 pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including the implementation of border closures, travel bans or restrictions, lock-downs, quarantine periods, vaccine mandates or passports, social distancing, testing requirements, stay-at-home and work-from-home policies and the temporary closure of non-essential businesses. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. These emergency measures and restrictions, and future measures and restrictions taken in response to the COVID-19 pandemic or other pandemics, have caused and may continue to cause material disruptions to businesses globally and are likely to have an adverse impact on global economic conditions and consumer confidence and spending, which could materially adversely affect our business. While emergency measures and restrictions in response to the COVID-19 pandemic have been eased or, in certain cases, eliminated, resurgence in new COVID-19 cases, or the emergence and progression of new variants, may cause governmental authorities or companies to strengthen or re-introduce additional emergency measures and restrictions, which could materially adversely affect our business.

A pandemic, including the COVID-19 pandemic, may affect the financial viability of our clients, and could cause them to exit certain business lines, or change the terms on which they are willing to purchase services and solutions. Clients may also slow down decision-making, delay planned work, seek to terminate existing agreements, not renew existing agreements or be unable to pay us in accordance with the terms of existing agreements. As a result of increased remote working arrangements due to a pandemic, the exposure to, and reliance on, networked systems and the internet can increase. This can lead to increased risk and frequency of cybersecurity incidents. Cybersecurity incidents can result from unintentional events or deliberate attacks by insiders or third parties, including cybercriminals, competitors, nation-states, and hacktivists. Any of these events could cause or contribute to risk and uncertainty and could adversely affect our business, results of operations and financial condition.

As a result of the COVID-19 pandemic, global equity and capital markets have experienced and may continue to experience significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 pandemic are unknown at this time, as is the efficacy and duration of government and central bank interventions. The extent to which the COVID-19 pandemic impacts our future business, including our operations and the market for our securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak, the availability and effectiveness of vaccines and the speed of their distribution, the actions taken to contain the COVID-19 pandemic, and the actions taken to prevent and treat the COVID-19 pandemic. It is not possible to reliably estimate the length and severity of these developments or the negative impact on our financial results, share price and financial condition in future periods. Many of the risks, uncertainties and other risk factors identified are, and will be, amplified by the COVID-19 pandemic. While we have implemented business continuity plans and taken additional steps

FISCAL 2022 RESULTS — 57

and measures, there can be no assurance that these actions, in response to the COVID-19 pandemic, will succeed in preventing or mitigating the negative impacts of the COVID-19 pandemic on our Company, members, clients, contractors and business partners, which may continue post COVID-19 pandemic.

As a foreign private issuer, we are subject to different U.S. securities laws and rules, which could limit our level of disclosure to investors.

We are a “foreign private issuer” for purposes of U.S. securities laws and, as a result, are not subject to the same requirements that are imposed upon U.S. domestic issuers by the SEC. In particular, we are exempt from the rules and regulations under the U.S. securities laws related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”). We also are exempt from the provisions of Regulation FD under the Exchange Act, which in certain circumstances prohibits the selective disclosure of material non-public information, although we generally attempt to comply with Regulation FD. These exemptions and leniencies may reduce the frequency and scope of information that we disclose relative to the information generally provided by U.S. domestic companies.

It may be difficult to enforce civil liabilities under U.S. securities laws.

The Company is governed by the Business Corporations Act (Quebec) and with its principal place of business in Canada. The enforcement by investors of civil liabilities under the U.S. securities laws may be affected adversely by the fact that we are organized under the laws of Canada, that some or all of our officers and directors may be residents of a foreign country, and that a substantial portion of our assets and those of said persons may be located outside the United States.

10.1.2. Risks Related to our Industry

The markets in which we operate are highly competitive, and we might not be able to compete effectively.

CGI operates in a global marketplace in which competition among providers of IT services is vigorous. Some of our competitors possess greater financial, marketing and sales resources, and larger geographic scope in certain parts of the world than we do, which, in turn, provides them with additional leverage in the competition for contracts. In certain niche, regional or metropolitan markets, we face smaller competitors with specialized capabilities who may be able to provide competing services with greater economic efficiency. Some of our competitors have more significant operations than we do in lower cost countries that can serve as a platform from which to provide services worldwide on terms that may be more favourable. Increased competition among IT services firms often results in corresponding pressure on prices. There can be no assurance that we will succeed in providing competitively priced services at levels of service and quality that will enable us to maintain and grow our market share.

We derive significant revenue from contracts awarded through competitive bidding processes, which limit the Company’s ability to negotiate certain contractual terms and conditions. Risks related to competitive bidding processes also involve substantial cost and managerial time and effort spent by the Company to prepare bids and proposals for contracts that may or may not be awarded to the Company, as well as expenses and delays that may arise if the Company’s competitors protest or challenge awards made to the Company pursuant to competitive bidding processes.

Even when a contract is awarded to the Company following a competitive bidding process, we may fail to accurately estimate the resources and costs required to fulfill the contract.

We may not be able to continue developing and expanding service offerings to address emerging business demands and technology trends.

The rapid pace of change in all aspects of IT and the continually declining costs of acquiring and maintaining IT infrastructure mean that we must anticipate changes in our clients’ needs. To do so, we must adapt our services and our solutions so that we maintain and improve our competitive advantage and remain able to provide cost effective services and solutions. The markets in which we operate are extremely competitive and there can be no assurance that we will succeed in developing and adapting our business in a timely manner nor that we will be able to penetrate new markets successfully. If we do not keep pace, our ability to retain existing clients and gain new business may be adversely affected.

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As we expand our services and solutions into new markets, we may be exposed to operational, legal, regulatory, ethical, technological and other risks specific to such new markets. These factors may result in pressure on our revenue, net earnings and resulting cash flow from operations.

We may infringe on the intellectual property rights of others.

Despite our efforts, the steps we take to ensure that our services and offerings do not infringe on the intellectual property rights of third parties may not be adequate to prevent infringement and, as a result, claims may be asserted against us or our clients. We enter into licensing agreements for the right to use intellectual property and may otherwise offer indemnities against liability and damages arising from third-party claims of patent, copyright, trademark or trade secret infringement in respect of our own intellectual property or software or other solutions developed for our clients. In some instances, the amount of these indemnity claims could be greater than the revenue we receive from the client (see Indemnity provisions and guarantees in various agreements to which we are party may require us to compensate our counterparties). Intellectual property claims or litigation could be time-consuming and costly, harm our reputation, require us to enter into additional royalty or licensing arrangements, or prevent us from providing some solutions or services. Any limitation on our ability to sell or use solutions or services that incorporate software or technologies that are the subject of a claim could cause us to lose revenue-generating opportunities or require us to incur additional expenses to modify solutions for future projects.

We may be unable to protect our intellectual property rights.

Our success depends, in part, on our ability to protect our proprietary methodologies, processes, know-how, tools, techniques and other intellectual property that we use to provide our services. Although CGI takes reasonable steps (e.g. available copyright protection and, in some cases, patent protection) to protect and enforce its intellectual property rights, there is no assurance that such measures will be enforceable or adequate. The cost of enforcing our rights, or our inability to protect against infringement or unauthorized copying or use, can be substantial and, in certain cases, may prove to be uneconomic. In addition, the laws of some countries in which we conduct business may offer only limited intellectual property rights protection. Despite our efforts, the steps taken to protect our intellectual property may not be adequate to prevent or deter infringement or other misappropriation of intellectual property, and we may not be able to detect unauthorized use of our intellectual property, or take appropriate steps to enforce our intellectual property rights.

We face risks associated with benchmarking provisions within certain contracts.

Some of our managed IT and business process services contracts contain clauses allowing our clients to externally benchmark the pricing of agreed upon services against those offered by other providers in a peer comparison group. The uniqueness of the client environment should be factored in and, if results indicate a difference outside the agreed upon tolerance, we may be required to work with clients to reset the pricing for their services. There can be no assurance that benchmarks will produce accurate or reliable data, including pricing data. This may result in pressure on our revenue, net earnings and resulting cash flow from operations.

10.1.3. Risks Related to our Business

We may experience fluctuations in our financial results, making it difficult to predict future results.

Our ability to maintain and increase our revenue is affected not only by our success in implementing our Build and Buy growth strategy, but also by a number of other factors, which could cause the Company’s financial results to fluctuate. These factors include: (i) our ability to introduce and deliver new services and business solutions; (ii) our potential exposure to a lengthened sales cycle; (iii) the cyclicality of the purchases of our technology services and solutions; (iv) the nature of our client’s business (for example, if a client encounters financial difficulty (including as a result of external risks such as climate change or a pandemic), it may be forced to cancel, reduce or defer existing contracts with us); and (v) the structure of our agreements with clients (for example, some of CGI’s agreements with clients contain clauses allowing the clients to benchmark the pricing of services provided by CGI against the prices offered by other providers). These, and other factors, make it difficult to predict financial results for any given period.

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Our revenues may be exposed to fluctuations based on our business mix.

The proportion of revenue that we generate from shorter-term system integration and consulting projects (SI&C), versus revenue from long-term managed IT and business process services contracts, will fluctuate at times, affected by acquisitions or other transactions. An increased exposure to revenue from SI&C projects may result in greater quarterly revenue variations, as the revenue from SI&C projects does not provide long-term consistency in revenue.

Our current operations are international in scope, subjecting us to a variety of financial, regulatory, cultural, political and social challenges.

We manage operations in numerous countries around the world including offshore delivery centers. The scope of our operations (including our offshore delivery centers) subjects us to issues that can negatively impact our operations, including: (i) currency fluctuations (see We may be adversely affected by currency fluctuations); (ii) the burden of complying with a wide variety of national and local laws (see Changes in the laws and regulations within the jurisdictions in which we operate may have a material adverse effect on our global business operations and profitability); (iii) the differences in and uncertainties arising from local business culture and practices; (iv) and political, social and economic instability. Any or all of these risks could impact our global business operations and cause our revenue and/or profitability to decline.

We may not be able to successfully implement and manage our growth strategy.

CGI’s Build and Buy growth strategy is founded on four pillars of growth: first, profitable organic growth through contract wins, renewals and extensions with new and existing clients in our targeted industries; second, the pursuit of new large long-term managed IT and business process services contracts; third, metro market acquisitions; and fourth, large transformational acquisitions.

Our ability to achieve organic growth is affected by a number of factors outside of our control, including a lengthening of our sales cycle for major managed IT and business process services contracts.

Our ability to grow through metro market and transformational acquisitions requires that we identify suitable acquisition targets that we correctly evaluate their potential as transactions that will meet our financial and operational objectives, and that we successfully integrate them into our business. There can, however, be no assurance that we will be able to identify suitable acquisition targets and consummate additional acquisitions that meet our economic thresholds, or that future acquisitions will be successfully integrated into our operations and yield the tangible accretive value that had been expected. If we are unable to implement our Build and Buy growth strategy, we will likely be unable to maintain our historic or expected growth rates.

We may be unable to integrate new operations, which could impact our ability to achieve our growth and profitability objectives.

The realization of anticipated benefits from mergers, acquisitions and related activities depends, in part, upon our ability to integrate the acquired business, the realization of synergies, efficient consolidation of the operations of the acquired businesses into our existing operations, cost management to avoid duplication, information systems integration, staff reorganization, establishment of controls, procedures and policies, performance of the management team and other personnel of the acquired operations as well as cultural alignment.

The successful integration of new operations arising from our acquisition strategy or from large managed IT and business process services contracts requires that a substantial amount of management time and attention be focused on integration tasks. Management time that is devoted to integration activities may detract from management’s normal operations focus with resulting pressure on the revenues and earnings from our existing operations. In addition, we may face complex and potentially time-consuming challenges in implementing uniform standards, controls, procedures and policies across new operations when harmonizing their activities with those of our existing business units. Integration activities can result in unanticipated operational problems, expenses and liabilities.

Following an acquisition closing date, we may remain reliant on a target’s personnel, good faith, expertise, historical performance, technical resources and information systems, proprietary information and judgment in providing any

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transitional services. Accordingly, we may continue to be exposed to adverse developments in the business and affairs of parties with whom we contract.

If we are not successful in executing our integration strategies in a timely and cost-effective manner, we will have difficulty achieving our growth and profitability objectives.

If we are unable to manage the organizational challenges associated with our size, we may not be able to achieve our growth and profitability objectives.

Our culture, standards, core values, internal controls and our policies need to be instilled across newly acquired businesses as well as maintained within our existing operations. To effectively communicate and manage these standards throughout a large global organization is both challenging and time consuming. Newly acquired businesses may be resistant to change and may remain attached to past methods, standards and practices which may compromise our business agility in pursuing opportunities. Cultural differences in various countries may also present barriers to introducing new ideas or aligning our vision and strategy with the rest of the organization. If we cannot overcome these obstacles in maintaining a strategic bond throughout the Company worldwide, we may not be able to achieve our growth and profitability objectives.

Material developments regarding our major commercial clients resulting from mergers or business acquisitions could impair our future prospects and growth strategy.

Consolidation among our clients resulting from mergers and acquisitions may result in loss or reduction of business when the successor business’ IT needs are served by another service provider or are provided by the successor company’s own personnel. Growth in a client’s IT needs resulting from acquisitions or operations may mean that we no longer have a sufficient geographic scope or the critical mass to serve the client’s needs efficiently, resulting in the loss of the client’s business and impairing our future prospects. There can be no assurance that we will be able to achieve the objectives of our growth strategy in order to maintain and increase our geographic scope and critical mass in our targeted markets.

Legal proceedings could have a material adverse effect on our business, financial performance and reputation.

During the ordinary course of conducting our business, we may be threatened with, and/or become subject or a party to, a variety of litigation or other claims and suits that arise from time to time. These legal proceedings may involve current and former employees, clients, partners, subcontractors, suppliers, competitors, shareholders, government agencies or others through private actions, class actions, whistleblower claims, administrative proceedings, regulatory actions or other litigation. Regardless of the merits of the claims, the cost to defend current and future litigation may be significant, and such matters can be time-consuming and divert management’s attention and resources. The results of litigation, claims and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some or all of these legal disputes may result in materially adverse monetary damages, fines, penalties or injunctive relief against us. While we maintain insurance for certain liabilities, there is no assurance that such insurance coverage will be sufficient in type or amount to cover the costs, damages, liabilities or losses that can result from these litigations or claims.

Changes in our tax levels, as well as reviews, audits, investigations and tax proceedings or changes in tax laws or in their interpretation or enforcement, could have a material adverse effect on our net income or cash flow.

In estimating our income tax payable, management uses accounting principles to determine income tax positions that are likely to be sustained by applicable tax authorities. However, there is no assurance that our tax benefits or tax liability will not materially differ from our estimates or expectations. The tax legislation, regulation and interpretation that apply to our operations are continually changing. In addition, future tax benefits and liabilities are dependent on factors that are inherently uncertain and subject to change, including future earnings, future tax rates, and anticipated business mix in the various jurisdictions in which we operate. Moreover, our tax returns are continually subject to review by applicable tax authorities and we are subject to ongoing audits, investigations and tax proceedings in various jurisdictions. These tax authorities determine the actual amounts of taxes payable or receivable, of any future tax benefits or liabilities and of income tax expense that we may ultimately recognize. Tax authorities have disagreed and may in the future disagree with our income tax positions and are taking increasingly aggressive positions in respect of income tax positions, including with respect to intercompany transactions.

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Our effective tax rate in the future could be adversely affected by challenges to intercompany transactions, changes in the value of deferred tax assets and liabilities, changes in tax law or in their interpretation or enforcement, changes in the mix of earnings in countries with differing statutory tax rates, the expiration of tax benefits and changes in accounting principles. Tax rates in the jurisdictions in which we operate may change as a result of shifting economic conditions and tax policies.

A number of countries in which the Company does business have implemented, or are considering implementing, changes in relevant tax, accounting and other laws, regulations and interpretations and the overall tax environment has made it increasingly challenging for multinational corporations to operate with certainty about taxation in many jurisdictions.

Any of the above factors could have a material adverse effect on our net income or cash flow by affecting our operations and profitability, our effective tax rate, the availability of tax credits, the cost of the services we provide, and the availability of deductions for operating losses.

Reductions, eliminations or amendments to government sponsored programs from which we currently benefit may have a material adverse effect on our net earnings or cash flow.

We benefit from government sponsored programs designed to support research and development, labour and economic growth in jurisdictions where we operate. Government programs reflect government policy and depend on various political and economic factors. There can be no assurance that such government programs will continue to be available to the Company in the future, or will not be reduced, amended or eliminated. Any future government program reductions or eliminations or other amendments to the tax credit programs could increase operating or capital expenditures incurred by the Company and have a material adverse effect on its net earnings or cash flow.

We are exposed to credit risks with respect to accounts receivable and work in progress.

In order to sustain our cash flow from operations, we must invoice and collect the amounts owed to us in an efficient and timely manner. Although we maintain provisions to account for anticipated shortfalls in amounts collected from clients, the provisions we take are based on management estimates and on our assessment of our clients’ creditworthiness which may prove to be inadequate in the light of actual results. To the extent that we fail to perform our services in accordance with our contracts and our clients’ reasonable expectations, and to the extent that we fail to invoice clients and to collect the amounts owed to the Company for our services correctly in a timely manner, our collections could suffer, which could materially adversely affect our revenue, net earnings and cash flow. In addition, a prolonged economic downturn may cause clients to curtail or defer projects, impair their ability to pay for services already provided, and ultimately cause them to default on existing contracts, in each case, causing a shortfall in revenue and impairing our future prospects.

We face risks associated with early termination of our contractual agreements.

If we should fail to deliver our services according to contractual agreements, some of our clients could elect to terminate contracts before their agreed expiry date, which would result in a reduction of our revenues and/or earnings and cash flow and may impact the value of our backlog of orders. In addition, a number of our managed IT and business process services contractual agreements have termination for convenience and change of control clauses according to which a change in the client’s intentions or a change in control of CGI could lead to a termination of these agreements. Early contract termination can also result from the exercise of a legal right or when circumstances that are beyond our control or beyond the control of our client prevent the contract from continuing. In cases of early termination, we may not be able to recover capitalized contract costs and we may not be able to eliminate ongoing costs incurred to support the contract.

We may not be able to successfully estimate the cost, timing and resources required to fulfill our contracts, which could have a material adverse effect on our net earnings.

In order to generate acceptable margins, our pricing for services is dependent on our ability to accurately estimate the costs and timing for completing projects or long-term managed IT and business process services contracts, which can be based on a client’s bid specification, sometimes in advance of the final determination of the full scope and design of the contract. In addition, a significant portion of our project-oriented contracts are performed on a fixed-price basis. Billing for fixed-price engagements is carried out in accordance with the contract terms agreed upon with our client, and revenue is

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recognized based on the percentage of effort incurred to date in relation to the total estimated efforts to be incurred over the duration of the respective contract. These estimates reflect our best judgement regarding the efficiencies of our methodologies and professionals as we plan to apply them to the contracts in accordance with the CGI Client Partnership Management Framework (CPMF), a framework that contains high standards of contract management to be applied throughout the Company. If we fail to apply the CPMF correctly or if we are unsuccessful in accurately estimating the time or resources required to fulfill our obligations under a contract, or if unexpected factors, including those outside of our control (such as labour shortages, supply chain or manufacturing disruptions, inflation, and other external risk factors), arise, there may be an impact on costs or the delivery schedule which could have a material adverse effect on our expected net earnings.

We rely on relationships with other providers in order to generate business and fulfill certain of our contracts; if we fail to maintain our relationships with these providers, our business, prospects, financial condition and operating results could be materially adversely affected.

We derive revenue from contracts where we enter into teaming agreements with other providers. In some teaming agreements we are the prime contractor whereas in others we act as a subcontractor. In both cases, we rely on our relationships with other providers to generate business and we expect to continue to do so in the foreseeable future. Where we act as prime contractor, if we fail to maintain our relationships with other providers, we may have difficulty attracting suitable participants in our teaming agreements. Similarly, where we act as subcontractor, if our relationships are impaired, other providers might reduce the work they award to us, award that work to our competitors, or choose to offer the services directly to the client in order to compete with our business. In either case, if we fail to maintain our relationship with these providers or if our relationship with these providers is otherwise impaired, our business, prospects, financial condition and operating results could be materially adversely affected.

Our profitability may be adversely affected if our partners are unable to deliver on their commitments.

Increasingly large and complex contracts may require that we rely on third party subcontractors including software and hardware vendors to help us fulfill our commitments. Under such circumstances, our success depends on the ability of the third parties to perform their obligations within agreed upon budgets and timeframes. If our partners fail to deliver, our ability to complete the contract may be adversely affected, which could have an unfavourable impact on our profitability.

Indemnity provisions and guarantees in various agreements to which we are party may require us to compensate our counterparties.

In the normal course of business, we enter into agreements that may provide for indemnification and guarantees to counterparties in transactions such as consulting and managed IT and business process services, business divestitures, lease agreements and financial obligations. These indemnification undertakings and guarantees may require us to compensate counterparties for costs and losses incurred as a result of various events, including breaches of representations and warranties, intellectual property right infringement, claims that may arise while providing services or as a result of litigation that may be suffered by counterparties. If we are required to compensate counterparties due to such arrangements and our insurance does not provide adequate coverage, our business, prospects, financial condition and results of operations could be materially adversely affected.

We may not be able to hire or retain enough qualified IT professionals to support our operations.

There is strong demand for qualified individuals in the IT industry. Hiring and retaining a sufficient number of individuals with the desired knowledge and skill set may be difficult. Therefore, it is important that we remain able to successfully attract and retain highly qualified professionals and establish an effective succession plan. If our comprehensive programs aimed at attracting and retaining qualified and dedicated professionals do not ensure that we have staff in sufficient numbers and with the appropriate training, expertise and suitable government security clearances required to serve the needs of our clients, we may have to rely on subcontractors or transfers of staff to fill resulting gaps. If our succession plan fails to identify those with potential or to develop these key individuals, we may be unable to replace key members who

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retire or leave the Company and may be required to recruit and/or train new employees. This might result in lost revenue or increased costs, thereby putting pressure on our net earnings.

If we fail to retain our key personnel and management, our business could be adversely affected.

The success of our business, in part, depends on the continued employment of certain key personnel and senior management. This dependence is important to our business being that personal relationships are fundamental in obtaining and maintaining client engagements. While our Board of Directors annually reviews our succession plan, if we fail to establish an effective succession plan, or if key personnel or senior management were unable or unwilling to continue employment, our business could be adversely affected until qualified replacements are retained.

We may be unable to maintain our human resources utilization rates.

In order to maintain our net earnings, it is important that we maintain the appropriate availability of professional resources in each of our geographies by having a high utilization rate while still being able to assign additional resources to new work. Maintaining an efficient utilization rate requires us to forecast our need for professional resources accurately and to manage recruitment activities, professional training programs, attrition rates and restructuring programs appropriately. To the extent that we fail to do so, or to the extent that laws and regulations restrict our ability to do so, our utilization rates may be reduced; thereby having an impact on our revenue and profitability. Conversely, we may find that we do not have sufficient resources to deploy against new business opportunities in which case our ability to grow our revenue would suffer.

If the business awarded to us by various U.S. federal government departments and agencies is limited, reduced or eliminated, our business, prospects, financial condition and operating results could be materially and adversely affected.

We derive a significant portion of our revenue from the services we provide to various U.S. federal government departments and agencies. We expect that this will continue for the foreseeable future. There can be, however, no assurance that each such U.S. federal government department and agency will continue to utilize our services to the same extent, or at all in the future. In the event that a major U.S. federal government department or agency were to limit, reduce, or eliminate the business it awards to us, we might be unable to recover the lost revenue with work from other U.S. federal government departments or agencies or other clients, and our business, prospects, financial condition and operating results could be materially and adversely affected. Although IFRS considers a national government and its departments and agencies as a single client, our client base in the U.S. government economic sector is in fact diversified with contracts from many different departments and agencies.

Changes in government spending policies or budget priorities could directly affect our financial performance. Among the factors that could harm our government contracting business are: the curtailment of governments’ use of consulting and IT services firms; a significant decline in spending by governments in general, or by specific departments or agencies in particular; the adoption of new legislation and/or actions affecting companies that provide services to governments; delays in the payment of our invoices by government; and general economic and political conditions. These or other factors could cause government agencies and departments to reduce their purchases under contracts, to exercise their right to terminate contracts, to issue temporary stop work orders, or not to exercise options to renew contracts, any of which would cause us to lose future revenue. Government spending reductions or budget cutbacks at these departments or agencies could materially harm our continued performance under these contracts, or limit the awarding of additional contracts from these agencies.

Changes in the laws and regulations within the jurisdictions in which we operate may have a material adverse effect on our global business operations and profitability.

Our global operations require us to be compliant with laws and regulations in many jurisdictions on matters such as: anti-corruption, trade restrictions, immigration, taxation, securities, antitrust, data privacy, labour relations, and the environment, amongst others. Complying with these diverse requirements worldwide is a challenge and consumes significant resources. The laws and regulations frequently change and some may impose conflicting requirements which may expose us to penalties for non-compliance and harm our reputation. Furthermore, in some jurisdictions, we may face the absence of

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effective laws and regulations to protect our intellectual property rights and there may be restrictions on the movement of cash and other assets, on the import and export of certain technologies, and on the repatriation of earnings. Any or all of these risks could impact our global business operations and cause our profitability to decline.

Our business with the U.S. federal government departments and agencies also requires that we comply with complex laws and regulations relating to government contracts. These laws and regulations relate to the integrity of the procurement process, impose disclosure requirements, and address national security concerns, among other matters. For instance, we are routinely subject to audits by U.S. government departments and agencies with respect to compliance with these rules. If we fail to comply with these requirements we may incur penalties and sanctions, including contract termination, suspension of payments, suspension or debarment from doing business with the federal government, and fines.

There can be no assurance that our ethics and compliance practices will be sufficient to prevent violations of legal and ethical standards.

Our employees, officers, directors, suppliers and other business partners are expected to comply with applicable legal and ethical standards including, without limitation, anti-bribery laws, as well as with our governance policies and contractual obligations. Failure to comply with such laws, policies and contractual obligations could expose us to litigation and significant fines and penalties, and result in reputational harm or being disqualified from bidding on contracts. While we have developed and implemented strong ethics and compliance practices, including through our Code of Ethics, which must be observed by all of our members, our Third Party Code of Ethics as well as ethics and compliance trainings, there can be no assurance that such practices and measures will be sufficient to prevent violations of legal and ethical standards. Any such failure or violation could have an adverse effect on our business, financial performance and reputation. This risk of improper conduct may increase as we continue to expand globally, with greater opportunities and demands to do more business with local and new partners.

Changes to, and delays or defects in, our client projects and solutions may subject us to legal liability, which could materially adversely affect our business, operating results and financial condition and may negatively affect our professional reputation.

We create, implement and maintain IT solutions that are often critical to the operations of our clients’ business. Our ability to complete large projects as expected could be adversely affected by unanticipated delays, renegotiations, and changing client requirements. Also, our solutions may suffer from defects that adversely affect their performance; they may not meet our clients’ requirements or may fail to perform in accordance with applicable service levels. Such problems could subject us to legal liability, which could materially adversely affect our business, operating results and financial condition, and may negatively affect our professional reputation. While we typically use reasonable efforts to include provisions in our contracts which are designed to limit our exposure to legal claims relating to our services and the applications we develop, we may not always be able to include such provisions and, where we are successful, such provisions may not protect us adequately or may not be enforceable under some circumstances or under the laws of some jurisdictions.

We are subject to stringent and changing privacy laws, regulations and standards, information security policies and contractual obligations related to data privacy and security. Our actual or perceived failure to comply with such obligations could expose us to government sanctions and cause damage to our brand and reputation.

Our business often requires that our clients’ applications and information, which may include their proprietary information and personal information they manage, be processed and stored on our networks and systems, and in data centers that we manage. We also process and store proprietary information relating to our business, and personal information relating to our members. The Company is subject to numerous laws and regulations designed to protect information, such as the European Union’s General Data Protection Regulation (GDPR), various laws and regulations in Canada, the U.S. and other countries in which the Company operates governing the protection of health or other personally identifiable information and data privacy. These laws and regulations are increasing in number and complexity and are being adopted and amended with greater frequency, which results in greater compliance risk and cost. The potential financial penalties for non-compliance with these laws and regulations have significantly increased with the adoption of the GDPR. The Company’s Chief Data Protection Officer oversees the Company’s compliance with the laws that protect the privacy of personal

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information. The Company faces risks inherent in protecting the security of such personal data which have grown in complexity, magnitude and frequency in recent years. Digital information and equipment are subject to loss, theft or destruction, and services that we provide may become temporarily unavailable as a result of those risks, or upon an equipment or system malfunction. The causes of such failures include human error in the course of normal operations (including from advertent or inadvertent actions or inactions by our members), maintenance and upgrading activities, as well as hacking, vandalism (including denial of service attacks and computer viruses), theft, and unauthorized access, as well as power outages or surges, floods, fires, natural disasters and many other causes. The measures that we take to protect against all information infrastructure risks, including both physical and logical controls on access to premises and information may prove in some circumstances to be inadequate to prevent the improper disclosure, loss, theft, misappropriation of, unauthorized access to, or destruction of client information, or service interruptions. Such events may expose the Company to financial loss arising from the costs of remediation and those arising from litigation from our clients and third parties (including under the laws that protect the privacy of personal information), claims and damages, as well as expose the Company to government sanctions and damage to our brand and reputation.

We could face legal, reputational and financial risks if we fail to protect our and/or client data from security incidents or cyberattacks.

The volume, velocity and sophistication of security threats and cyber-attacks continue to grow. This includes criminal hackers, hacktivists, state-sponsored organizations, industrial espionage, employee misconduct, and human or technological errors. The current geopolitical instability has exacerbated these threats, which could lead to increased risk and frequency of security and cybersecurity incidents.

As a global IT and business consulting firm providing services to private and public sectors, we process and store increasingly large amounts of data for our clients, including proprietary information and personal information. Consequently, our business could be negatively impacted by physical and cyber threats, which could affect our future sales and financial position or increase our costs.

An unauthorized disclosure of sensitive or confidential client or member information, including cyber-attacks or other security breaches, could cause a loss of data, give rise to remediation or other expenses, expose us to liability under federal and state laws, and subject us to litigation and investigations, which could have an adverse effect on our business, cash flows, financial condition and results of operations. These security risks to the Company include potential attacks not only of our own solutions, services and systems, but also those of our clients, contractors, business partners, vendors and other third parties.

The Company’s Chief Security Officer is responsible for overseeing the security of the Company. Any local issue in a business unit could have a global impact on the entire Company, thus visibility and timely escalation on potential issues are key. We seek to detect and investigate all security incidents and to prevent their occurrence or recurrence, by: (i) developing and regularly reviewing policies and standards related to information security, data privacy, physical security and business continuity; (ii) monitoring the Company’s performance against these policies and standards; (iii) developing strategies intended to seek to mitigate the Company’s risks, including through security trainings for all members to increase awareness of potential cyber threats; (iv) implementing security measures to ensure an appropriate level of control based on the nature of the information and the inherent risks attached thereto, including through access management, security monitoring and testing to mitigate and help detect and respond to attempts to gain unauthorized access to information systems and networks; and (v) working with the industry and governments against cyber threats. However, because of the evolving nature and sophistication of these security threats, there can be no assurance that our safeguards will detect or prevent the occurrence of material cyber breaches, intrusions or attacks.

We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security and reputational impact. If security protection does not evolve at the same pace as threats, a growing gap on our level of protection will be created. Technology evolution and global trends like digital transformation, cloud and mobile computing amongst others are disrupting the security operating model, thus security should evolve to address new relevant security requirements and build new capabilities to address the

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changes. Increasing detection and automated response capabilities are key to improve visibility and contain any negative potential impact. Automating security processes and integrating with IT, business and security solutions could address shortage of technical security staff and avoid introducing human intervention and errors.

Insider or employee cyber and security threats are increasingly a concern for all large companies, including ours. CGI is continuously working to install new, and upgrade its existing, information technology systems and provide member awareness training around phishing, malware, and other cyber risks to ensure that the Company is protected, to the greatest extent possible, against cyber risks and security breaches. While CGI selects third-party vendors carefully, it does not control their actions. Any problems caused by these third parties, including those resulting from breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breaches at a vendor could adversely affect our ability to deliver solutions and services to our clients and otherwise conduct business.

The Company and certain of its clients, contractors, business partners, vendors and other third parties use open-source services, which can entail risk to end-user security. These open source projects are often created and maintained by volunteers, who do not always have adequate resources and personnel for incident response and proactive maintenance even as their projects are critical to the internet economy. Vulnerabilities discovered in these open source services can be exploited by attackers, which could compromise our system infrastructure and/or lead to a loss or breach of personal and/ or proprietary information, financial loss, and other irreversible harm.

While our liability insurance policy covers cyber risks, there is no assurance that such insurance coverage will be sufficient in type or amount to cover the costs, damages, liabilities or losses that can result from security breaches, cyber-attacks and other related breaches. As the cyber threat landscape evolves, and CGI and our clients increase our digital footprint, we may find it necessary to make additional significant investments to protect data and infrastructure. Occurrence of any of the aforementioned security threats could expose the Company, our clients or other third parties to potential liability, litigation, and regulatory action, in addition to loss of client confidence, loss of existing or potential clients, loss of sensitive government contracts, damage to brand and reputation, and other financial loss.

Damage to our reputation may harm our ability to obtain new clients and retain our existing clients.

CGI’s reputation as a capable and trustworthy service provider and long-term business partner is key to our ability to compete effectively in the market for IT services. The nature of our operations exposes us to the potential loss, unauthorized access to, or destruction of our clients’ information, as well as temporary service interruptions. Depending on the nature of the information or services, such events may have a negative impact on how the Company is perceived in the marketplace. Under such circumstances, our ability to obtain new clients and retain existing clients could suffer with a resulting impact on our revenue and net earnings.

Our inability to meet regulatory requirements and/or stakeholders expectations of disclosure, management and implementation of ESG initiatives and standards, could have an adverse effect on our business.

Perceptions with respect to environmental, social and governance approaches have changed and certain shareholders, investors, clients, members and other stakeholders agree that these issues have become a current and imminent concern. As such, perceptions of our operations held by our stakeholders may depend, in part, on the environmental, social and governance (“ESG”) initiatives and standards that we have chosen to implement, and whether or not we meet them. Although we actively manage a broad range of ESG matters, including the potential social and environmental impact of our business, there can be no certainty that we will manage such issues effectively, or that we will successfully meet evolving regulation and/or stakeholder expectations, which in turn could affect the Company’s market outlook, brand, reputation, competitiveness and financial outlook. Increased public awareness, regulatory expectations, continuing reforms pertaining to mandatory ESG-related disclosure, and growing concerns about climate change and the global transition to a low carbon economy, create a new and evolving set of compliance risks.

We have set a number of ambitious ESG targets to monitor our ESG performance and align our strategic imperatives. Effective management of these ESG targets is a component of good ESG practices, which are an important measure of

FISCAL 2022 RESULTS — 67

corporate performance and value creation. However, our ability to achieve these targets depends on many factors and is subject to many risks that could cause our assumptions or estimates to be inaccurate and cause actual results or events to differ materially from those expressed in, or implied by, these targets. Failure to effectively manage and sufficiently report ESG matters could lead to negative business, financial, legal and regulatory consequences for the Company.

Our revenue and profitability may decline and the accuracy of our financial reporting may be impaired if we fail to design, implement, monitor and maintain effective internal controls.

Due to the inherent limitations of internal controls including the circumvention or overriding of controls, or fraud, there can only be reasonable assurance that the Company’s internal controls will detect and prevent a misstatement. If the Company is unable to design, implement, monitor and maintain effective internal controls throughout its different business environments, the efficiency of our operations might suffer, resulting in a decline in revenue and profitability, and the accuracy of our financial reporting could be impaired.

Future funding requirements may affect our business and growth opportunities and we may not have access to favourable financing opportunities in the future.

The Company’s future growth is contingent on the execution of its business strategy, which, in turn, is dependent on its ability to grow the business organically as well as through business acquisitions. In the event we would need to raise additional funds through equity or debt financing to fund any currently unidentified or unplanned future acquisitions and other growth opportunities, there can be no assurance that such financing will be available in amounts and on terms acceptable to us. Factors such as capital market disruptions, inflation, recession, political, economic and financial market instability, government policies, central bank monetary policies, and changes to bank regulations, could reduce the availability of capital or increase the cost of such capital. Our ability to raise the required funding depends on prevailing market conditions, the capacity of the capital markets to meet our equity and/or debt financing needs in a timely fashion and on the basis of interest rates and/or share prices that are reasonable in the context of our commercial objectives. Increasing interest rates, volatility in our share price, rising inflation, and the capacity of our current lenders to meet our additional liquidity requirements are all factors that may have a material adverse effect on any acquisitions or growth activities that we may, in the future, identify or plan. If we are unable to obtain the necessary funding, we may be unable to achieve our growth objectives.

The inability to service our debt and other financial obligations, or our inability to fulfill our financial covenants, could have a material adverse effect on our business, financial condition and results of operations.

The Company has a substantial amount of debt and significant interest payment requirements. A portion of cash flows from operations goes to the payment of interest on the Company’s indebtedness. The Company’s ability to service its debt and other financial obligations is affected by prevailing economic conditions in the markets that we serve and financial, business and other factors, many of which are beyond our control. We may be unable to generate sufficient cash flow from operations and future borrowings or other financing may be unavailable in an amount sufficient to enable us to fund our future financial obligations or our other liquidity needs. In addition, we are party to a number of financing agreements, including our credit facilities, and the indentures governing our senior unsecured notes, which agreements, indentures and instruments contain financial and other covenants, including covenants that require us to maintain financial ratios and/or other financial or other covenants. If we were to breach the covenants contained in our financing agreements, we may be required to redeem, repay, repurchase or refinance our existing debt obligations prior to their scheduled maturity and our ability to do so may be restricted or limited by the prevailing conditions in the capital markets, available liquidity and other factors. Our inability to service our debt and other financial obligations, or our inability to fulfill our financial or other covenants in our financing agreements, could have an adverse effect on our business, financial condition and results of operations.

We may be adversely affected by interest rate fluctuations.

Although a significant portion of the Company’s indebtedness bears interest at fixed rates, the Company remains exposed to interest rate risk under certain of its credit facilities. If interest rates increase, debt service obligations on the variable rate

68 — MANAGEMENT’S DISCUSSION AND ANALYSIS

indebtedness would increase even though the amount borrowed remained the same, and net income and cash flows would decrease, which could materially adversely affect the Company’s financial condition and operating results.

We may be adversely affected by the discontinuation of U.S. LIBOR.

Global reform of major interest rate benchmarks is currently underway, including the discontinuation and replacement of the London Interbank Offered Rate (“LIBOR”). The interest rates on U.S. dollar loans under various financing agreements are subject to change when relevant U.S. LIBOR benchmark rates cease to exist. We have certain obligations that are indexed to U.S. LIBOR. As such, we have amended our financing agreements to allow us to reference the Secured Overnight Financing Rate (“SOFR”) as the primary benchmark rate as a fallback in anticipation of the discontinuation of U.S. LIBOR. Because SOFR is fundamentally different from U.S. LIBOR, it is unknown whether SOFR will attain market acceptance as a replacement for U.S. LIBOR and there is no assurance as to how SOFR may perform or that it is a comparable substitute for U.S. LIBOR. As a result, we cannot reasonably predict the potential effect of the establishment of SOFR or other alternative reference rates on our business, financial condition or results of operations.

Changes in the Company’s creditworthiness or credit ratings could affect the cost at which the Company can access capital or credit markets.

The Company and each of the U.S. dollar denominated and Canadian dollar denominated senior unsecured notes received credit ratings. Credit ratings are generally evaluated and determined by independent third parties and may be impacted by events outside of the Company’s control, as well as other material decisions made by the Company. Credit rating agencies perform independent analysis when assigning credit ratings and such analysis includes a number of criteria. Such criteria are reviewed on an on-going basis and are therefore subject to change. Any rating assigned to the Company or to our debt securities may be revised or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. Real or anticipated changes in the perceived creditworthiness of the Company and/or in the credit rating of its debt obligations could affect the market value of such debt obligations and the ability of the Company to access capital or credit markets, and/or the cost at which it can do so.

We may be adversely affected by currency fluctuations.

The majority of our revenue and costs are denominated in currencies other than the Canadian dollar. Foreign exchange fluctuations impact the results of our operations as they are reported in Canadian dollars. This risk is partially mitigated by a natural hedge in matching our costs with revenue denominated in the same currency and through the use of derivatives in our global hedging strategy. However, as we continue our global expansion, natural hedges may begin to diminish and the use of hedging contracts exposes us to the risk that financial institutions could fail to perform their obligations under our hedging instruments. Furthermore, there can be no assurance that our hedging strategy and arrangements will offset the impact of fluctuations in currency exchange rates, which could materially adversely affect our business revenues, results of operations, financial condition or prospects. Other than the use of financial products to deliver on our hedging strategy, we do not trade derivative financial instruments.

Our functional and reporting currency is the Canadian dollar. As such, our European, U.S., U.K., Asian and Australian investments, operations and assets are exposed to net change in currency exchange rates. Volatility in exchange rates could have an adverse effect on our business, financial condition and results of operations.

FISCAL 2022 RESULTS — 69

10.2. LEGAL PROCEEDINGS

The Company is involved in legal proceedings, audits, claims and litigation arising in the ordinary course of its business. Certain of these matters seek damages in significant amounts. Although the outcome of such matters is not predictable with assurance, the Company has no reason to believe that the disposition of any such current matter could reasonably be expected to have a material adverse effect on the Company’s financial position, results of operations or the ability to carry on any of its business activities.

Transfer Agent

Computershare Investor Services Inc.

+1(800) 564-6253

Investor Relations

Kevin Linder

Senior Vice-President, Investor Relations

Telephone: +1(905) 973-8363

kevin.linder@cgi.com

1350 René-Lévesque Boulevard West

25^th Floor

Montréal, Quebec

H3G 1T4

Canada

cgi.com

70 — CONSOLIDATED FINANCIAL STATEMENTS

Management’s and Auditors’ Reports

MANAGEMENT’S STATEMENT OF RESPONSIBILITY FOR FINANCIAL REPORTING

The management of CGI Inc. (the Company) is responsible for the preparation and integrity of the consolidated financial statements and the Management’s Discussion and Analysis (MD&A). The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and necessarily include some amounts that are based on management’s best estimates and judgement. Financial and operating data elsewhere in the MD&A are consistent with that contained in the accompanying consolidated financial statements.

To fulfill its responsibility, management has developed, and continues to maintain, systems of internal controls reinforced by the Company’s standards of conduct and ethics, as set out in written policies to ensure the reliability of the financial information and to safeguard its assets. The Company’s consolidated financial statements and the effectiveness of internal control over financial reporting are subject to audit by an Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP, whose report follows. PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm appointed by our shareholders upon the recommendation of the Audit and Risk Management Committee of the Board of Directors, has performed an independent audit of the consolidated balance sheets as at September 30, 2022 and 2021 and the related consolidated statements of earnings, comprehensive income, changes in equity and cash flows for the years ended September 30, 2022 and 2021 and the effectiveness of our internal control over financial reporting as at September 30, 2022.

Members of the Audit and Risk Management Committee of the Board of Directors, all of whom are independent of the Company, meet regularly with PricewaterhouseCoopers LLP and with management to discuss internal controls in the financial reporting process, auditing matters and financial reporting issues and formulate the appropriate recommendations to the Board of Directors. PricewaterhouseCoopers LLP has full and unrestricted access to the Audit and Risk Management Committee. The consolidated financial statements and MD&A have been reviewed and approved by the Board of Directors.

George D. Schindler	Steve Perron
President and Chief Executive Officer	Executive Vice-President and Chief Financial Officer
November 8, 2022

FISCAL 2022 RESULTS — 71

Management’s and Auditors’ Reports

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed, under the supervision of and with the participation of the President and Chief Executive Officer as well as the Executive Vice-President and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s consolidated financial statements for external reporting purposes in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The Company’s internal control over financial reporting includes policies and procedures that:

- Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the Company;

- Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with IFRS as issued by the IASB, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and,

- Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements.

All internal control systems have inherent limitations; therefore, even where internal control over financial reporting is determined to be effective, it can provide only reasonable assurance. Projections of any evaluation of effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company’s assessment and conclusion on the effectiveness of disclosure controls and procedures and internal controls over financial reporting excludes the controls, policies and procedures of Umanis, the control of which was acquired on May 31, 2022. Umanis’ results since the acquisition date represented 0.9% of revenue for the year ended September 30, 2022 and constituted 3.9% of total assets as at September 30, 2022.

Management, under the supervision of and with the participation of the President and Chief Executive Officer as well as the Executive Vice-President and Chief Financial Officer, conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has determined the Company’s internal control over financial reporting as at September 30, 2022 was effective.

The effectiveness of the Company’s internal control over financial reporting as of September 30, 2022 has been audited by PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm, as stated in their report which appears herein.

George D. Schindler	Steve Perron
President and Chief Executive Officer	Executive Vice-President and Chief Financial Officer
November 8, 2022

72 — CONSOLIDATED FINANCIAL STATEMENTS

Management’s and Auditors’ Reports

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of CGI Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of CGI Inc. and its subsidiaries (together, the Company) as of September 30, 2022 and 2021, and the related consolidated statements of earnings, comprehensive income, changes in equity and cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2022 and 2021, and its financial performance and its cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for its funds held for clients and clients’ funds obligations within the consolidated statement of cash flows in 2022.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in the Management’s Report on Internal Control over Financial Reporting, management has excluded Umanis SA (Umanis) from its assessment of internal control over financial reporting as of September 30, 2022, because it was acquired by the Company in a purchase business combination during the year ended September 30, 2022. We have also excluded Umanis from our audit of internal control over financial reporting. Umanis is a wholly owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 3.9% and 0.9%, respectively, of the related consolidated financial statement amounts as of and for the year ended September 30, 2022.

FISCAL 2022 RESULTS — 73

Management’s and Auditors’ Reports

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued)

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the Audit and Risk Management Committee of the Board of Directors and that (i) relates to accounts or disclosures that are material to the consolidated financial statements; and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Estimates of total expected labour costs for business and strategic information technology (IT) consulting and systems integration services under fixed-fee arrangements

As described in notes 3 and 28 to the consolidated financial statements, the Company recognizes revenue for business and strategic IT consulting and systems integration services under fixed-fee arrangements using the percentage-of-completion method over time. For the year ended September 30, 2022, revenue from business and strategic IT consulting and systems integration services under fixed-fee arrangements makes up a portion of the Company’s total revenues of $12,867,201,000. The selection of the measure of progress towards completion requires management’s judgment and is based on the nature of the services to be provided. As disclosed by management, the Company relies on estimates of total expected labour costs, which are compared to labour costs incurred to date, to arrive at an estimate of the progress to completion which determines the percentage of revenue earned to date. Management regularly reviews underlying estimates of total expected labour costs. Management has disclosed that there are many factors that can affect the estimates of total expected labour costs, including, but not limited to, changes in scope of the contracts, delays in reaching milestones, or new complexities in the project’s delivery.

The principal considerations for our determination that performing procedures relating to Revenue Recognition – Estimates of total expected labour costs for business and strategic IT consulting and systems integration services under fixed-fee arrangements is a critical audit matter are (i) there was significant judgment by management when developing the estimates of total expected labour costs; and (ii) there was significant auditor judgment and effort in performing procedures to evaluate the estimates of total expected labour costs, including the assessment of management’s judgment about the Company’s ability to properly assess the factors that can affect the estimates of total expected labour costs.

74 — CONSOLIDATED FINANCIAL STATEMENTS

Management’s and Auditors’ Reports

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued)

Critical Audit Matters (continued)

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the determination of estimates of total expected labour costs. These procedures also included, among others, evaluating and testing management’s process, on a sample basis, for determining the estimates of total expected labour costs determined by management by (i) testing total labour costs incurred to supporting evidence; (ii) performing a comparison of the sum of total labour costs incurred and the total expected labour costs to complete to the originally estimated costs; and (iii) evaluating the process of the timely identification of factors that can affect the total expected labour costs including, but not limited to, changes to the scope of the contracts, delays in reaching milestones or new complexities in the project’s delivery.

/s/ PricewaterhouseCoopers LLP

Montréal, Canada

November 8, 2022

We have served as the Company’s auditor since 2019.

FISCAL 2022 RESULTS — 75

Consolidated Statements of Earnings

For the years ended September 30

(in thousands of Canadian dollars, except per share data)

	Notes	2022		2021
			$		$
Revenue	28		12,867,201		12,126,793
Operating expenses
Costs of services, selling and administrative	23		10,776,564		10,178,164
Acquisition-related and integration costs	26c		27,654		7,371
Net finance costs	25		92,023		106,798
Foreign exchange loss (gain)			4,001		(3,532	)
			10,900,242		10,288,801
Earnings before income taxes			1,966,959		1,837,992
Income tax expense	16		500,817		468,920
Net earnings			1,466,142		1,369,072
Earnings per share
Basic earnings per share	21		6.13		5.50
Diluted earnings per share	21		6.04		5.41

See Notes to the Consolidated Financial Statements.

76 — CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Comprehensive Income

For the years ended September 30

(in thousands of Canadian dollars)

	2022			2021
		$			$
Net earnings		1,466,142			1,369,072
Items that will be reclassified subsequently to net earnings (net of income taxes):
Net unrealized losses on translating financial statements of foreign operations		(319,698	)		(391,574	)
Net (losses) gains on cross-currency swaps and on translating long-term debt designated as hedges of net investments in foreign operations		(4,541	)		150,313
Deferred gains (costs) of hedging on cross-currency swaps		21,705			(7,484	)
Net unrealized gains on cash flow hedges		25,245			10,964
Net unrealized losses on financial assets at fair value through other comprehensive income		(6,263	)		(2,149	)
Items that will not be reclassified subsequently to net earnings (net of income taxes):
Net remeasurement (losses) gains on defined benefit plans		(8,282	)		25,800
Other comprehensive loss		(291,834	)		(214,130	)
Comprehensive income		1,174,308			1,154,942

See Notes to the Consolidated Financial Statements.

FISCAL 2022 RESULTS — 77

Consolidated Balance Sheets

As at September 30

(in thousands of Canadian dollars)

	Notes	2022		2021
			$		$
Assets
Current assets
Cash and cash equivalents	27e and 31		966,458		1,699,206
Accounts receivable	4 and 31		1,363,545		1,231,452
Work in progress			1,191,844		1,045,058
Current financial assets	31		33,858		18,961
Prepaid expenses and other current assets			189,366		172,371
Income taxes			5,137		4,936
Total current assets before funds held for clients			3,750,208		4,171,984
Funds held for clients	5		598,839		593,154
Total current assets			4,349,047		4,765,138
Property, plant and equipment	6		369,608		352,092
Right-of-use assets	7		535,121		586,207
Contract costs	8		261,612		230,562
Intangible assets	9		615,959		506,793
Other long-term assets	10		139,666		191,512
Long-term financial assets	11		337,156		152,658
Deferred tax assets	16		85,795		96,358
Goodwill	12		8,481,456		8,139,701
			15,175,420		15,021,021
Liabilities
Current liabilities
Accounts payable and accrued liabilities			1,016,407		891,374
Accrued compensation and employee-related liabilities			1,130,726		1,084,014
Deferred revenue			453,579		445,740
Income taxes			153,984		160,651
Current portion of long-term debt	14		93,447		392,727
Current portion of lease liabilities			157,944		167,819
Provisions	13		33,103		63,549
Current derivative financial instruments	31		5,710		6,497
Total current liabilities before clients’ funds obligations			3,044,900		3,212,371
Clients’ funds obligations			604,431		591,101
Total current liabilities			3,649,331		3,803,472
Long-term debt	14		3,173,587		3,008,929
Long-term lease liabilities			551,257		609,121
Long-term provisions	13		17,482		26,576
Other long-term liabilities	15		192,108		202,662
Long-term derivative financial instruments	31		6,480		41,784
Long-term income taxes			—		5,719
Deferred tax liabilities	16		157,406		132,038
Retirement benefits obligations	17		155,045		204,488
			7,902,696		8,034,789
Equity
Retained earnings			5,425,005		4,732,229
Accumulated other comprehensive income	18		39,746		331,580
Capital stock	19		1,493,169		1,632,705
Contributed surplus			314,804		289,718
			7,272,724		6,986,232
			15,175,420		15,021,021

See Notes to the Consolidated Financial Statements.

Approved by the Board of Directors	George D. Schindler	Serge Godin
	Director	Director

78 — CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Equity

For the years ended September 30

(in thousands of Canadian dollars)

	Notes	Retained earnings			Accumulated other comprehensive income			Capital stock			Contributed surplus			Total equity
			$			$`			$			$			$
Balance as at September 30, 2021			4,732,229			331,580			1,632,705			289,718			6,986,232
Net earnings			1,466,142			—			—			—			1,466,142
Other comprehensive loss			—			(291,834	)		—			—			(291,834	)
Comprehensive income (loss)			1,466,142			(291,834	)		—			—			1,174,308
Share-based payment costs			—			—			—			48,996			48,996
Income tax impact associated with stock options			—			—			—			460			460
Exercise of stock options	19		—			—			50,236			(8,549	)		41,687
Exercise of performance share units	19		—			—			15,821			(15,821	)		—
Purchase for cancellation of Class A subordinate voting shares	19		(773,366	)		—			(135,290	)		—			(908,656	)
Purchase of Class A subordinate voting shares held in trusts	19		—			—			(70,303	)		—			(70,303	)
Balance as at September 30, 2022			5,425,005			39,746			1,493,169			314,804			7,272,724
	Notes	Retained earnings			Accumulated other comprehensive income			Capital stock			Contributed surplus			Total equity
			$			$			$			$			$
Balance as at September 30, 2020			4,703,642			545,710			1,761,873			252,935			7,264,160
Net earnings			1,369,072			—			—			—			1,369,072
Other comprehensive loss			—			(214,130	)		—			—			(214,130	)
Comprehensive income (loss)			1,369,072			(214,130	)		—			—			1,154,942
Share-based payment costs			—			—			—			45,592			45,592
Income tax impact associated with stock options			—			—			—			11,114			11,114
Exercise of stock options	19		—			—			73,827			(12,773	)		61,054
Exercise of performance share units	19		—			—			7,150			(7,150	)		—
Purchase for cancellation of Class A subordinate voting shares	19		(1,340,485	)		—			(178,741	)		—			(1,519,226	)
Purchase of Class A subordinate voting shares held in trusts	19		—			—			(31,404	)		—			(31,404	)
Balance as at September 30, 2021			4,732,229			331,580			1,632,705			289,718			6,986,232

See Notes to the Consolidated Financial Statements.

FISCAL 2022 RESULTS — 79

Consolidated Statements of Cash Flows

For the years ended September 30

(in thousands of Canadian dollars)

	Notes	2022			2021
			$			$
Operating activities
Net earnings			1,466,142			1,369,072
Adjustments for:
Amortization, depreciation and impairment	24		474,622			510,570
Deferred income tax recovery	16		(7,496	)		(25,934	)
Foreign exchange (gain) loss			(254	)		3,950
Share-based payment costs			48,996			45,592
Gain on lease terminations and sale of property, plant and equipment			(6,119	)		(2,186	)
Net change in non-cash working capital items	27a		(110,893	)		214,864
Cash provided by operating activities			1,864,998			2,115,928
Investing activities
Net change in short-term investments			(4,881	)		446
Business acquisitions (considering bank overdraft assumed and cash acquired)	26		(571,911	)		(98,926	)
Purchase of property, plant and equipment			(156,136	)		(121,806	)
Proceeds from sale of property, plant and equipment			3,790			—
Additions to contract costs			(84,283	)		(65,001	)
Additions to intangible assets			(137,621	)		(113,934	)
Purchase of long-term investments			(11,905	)		(43,465	)
Proceeds from sale of long-term investments			51,000			54,179
Cash used in investing activities			(911,947	)		(388,507	)
Financing activities
Increase of long-term debt	27c		—			1,885,262
Repayment of long-term debt	27c		(401,654	)		(1,888,777	)
Payment of lease liabilities	27c		(153,996	)		(169,674	)
Repayment of debt assumed in business acquisitions	27c		(113,036	)		—
Settlement of derivative financial instruments	27c and 31		6,258			(6,992	)
Purchase of Class A subordinate voting shares held in trusts	19		(70,303	)		(31,404	)
Purchase and cancellation of Class A subordinate voting shares	19		(913,388	)		(1,502,824	)
Issuance of Class A subordinate voting shares			41,691			61,133
Net change in client funds obligations			13,330			(129,221	)
Cash used in financing activities			(1,591,098	)		(1,782,497	)
Effect of foreign exchange rate changes on cash and cash equivalents			(46,500	)		(73,884	)
Net decrease in cash, cash equivalents and cash included in funds held for clients			(684,547	)		(128,960	)
Cash, cash equivalents and cash included in funds held for clients, beginning of year			2,155,731			2,284,691
Cash, cash equivalents and cash included in funds held for clients, end of year			1,471,184			2,155,731
Cash composition:
Cash and cash equivalents			966,458			1,699,206
Cash included in funds held for clients	5		504,726			456,525

Supplementary cash flow information (Note 27).

See Notes to the Consolidated Financial Statements.

80 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

1. Description of business

CGI Inc. (the Company), directly or through its subsidiaries, provides managed information technology (IT) and business process services, business and strategic IT consulting and systems integration services, as well as the sale of software solutions to help clients effectively realize their strategies and create added value. The Company was incorporated under Part IA of the Companies Act (Québec), predecessor to the Business Corporations Act (Québec) which came into force on February 14, 2011 and its Class A subordinate voting shares are publicly traded. The executive and registered office of the Company is situated at 1350 René-Lévesque Blvd. West, Montréal, Québec, Canada, H3G 1T4.

2. Basis of preparation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The Company’s consolidated financial statements for the years ended September 30, 2022 and 2021 were authorized for issue by the Board of Directors on November 8, 2022.

3. Summary of significant accounting policies

CHANGE IN ACCOUNTING POLICY- IAS 7 STATEMENT OF CASH FLOWS

In 2022, the IFRS Interpretations Committee finalized its agenda decision that restrictions on the use of demand deposits arising from a contract with a third party do not result in those deposits no longer being cash and cash equivalents when they are available to an entity on demand. Therefore, they should be included in cash and cash equivalents in the statements of cash flows, with disclosure provided on significant cash and cash equivalents balances with restrictions on use.

The Company has retrospectively applied this guidance and included the cash component of funds held for clients as part of cash, cash equivalents and cash included in funds held for clients in its consolidated Statements of Cash Flows, with the 2021 comparative figures adjusted consequently. The Company determined that as it had access to these funds on demand, despite being held solely for the purpose of satisfying the clients’ funds obligations. The cash balance under funds held for clients represents $504,726,000 at September 30, 2022 ($456,525,000 at September 30, 2021). The net changes in the client funds obligations are presented within financing activities, while the purchase and proceeds from the sale of long-term investments are presented within investing activities. This retrospective change in accounting policy does not impact the consolidated balance sheets, statement of earnings, comprehensive income, or changes in equity.

BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated on consolidation.

Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed or has right to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the relevant activities of the entity. Subsidiaries are fully consolidated from the date of acquisition and continue to be consolidated until the date control over the subsidiaries ceases.

BASIS OF MEASUREMENT

The consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, which have been measured at fair value as described below.

FISCAL 2022 RESULTS — 81

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

USE OF JUDGEMENTS AND ESTIMATES

The preparation of the consolidated financial statements requires management to make judgements and estimates that affect the reported amounts of assets, liabilities, equity and the accompanying disclosures at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Because the use of judgements and estimates is inherent in the financial reporting process, actual results could differ.

Significant judgements and estimates about the future and other major sources of estimation uncertainty at the end of the reporting period could have a significant risk of causing a material adjustment to the carrying amounts of the following within the next financial year: revenue recognition, deferred tax assets, estimated losses on revenue-generating contracts, goodwill impairment, right-of-use assets, business combinations, provisions for uncertain tax treatments and litigation and claims.

The judgements, apart from those involving estimations, that have the most significant effect on the amounts recognized in the consolidated financial statements are:

Revenue recognition of multiple deliverable arrangements

Assessing whether the deliverables within an arrangement are separate performance obligations requires judgement by management. A deliverable is identified as a separate performance obligation if the customer benefits from it on its own or together with resources that are readily available to the customer and if it is separately identifiable from the other deliverables in the contract. The Company assesses if the deliverables are separately identifiable in the context of the contract by determining if it is highly interrelated with other deliverables in the contract. If these criteria are not met, the deliverables are accounted for as a combined performance obligation.

Deferred tax assets

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable income will be available against which the losses can be utilized. Management judgement is required concerning uncertainties that exist with respect to the timing of future taxable income required to recognize a deferred tax asset. The Company recognizes an income tax benefit only when it is probable that the tax benefit will be realized in the future. In making this judgement, the Company relies on forecasts and the availability of future tax planning strategies.

A description of estimates is included in the respective sections within the Notes to the Consolidated Financial Statements.

COVID-19 pandemic

For the year ended September 30, 2022, the Company assessed the impact of the uncertainties around the COVID-19 pandemic on its balance sheet carrying amounts. This review required the use of judgements and estimates and resulted in no material impact.

In line with the phase down of the pandemic, the Company will continue to monitor the impact of the development of the COVID-19 pandemic in future reporting periods.

REVENUE RECOGNITION, WORK IN PROGRESS AND DEFERRED REVENUE

The Company generates revenue through the provision of managed IT and business process services, business and strategic IT consulting and systems integration services, as well as the sale of software solutions as described in Note 1, Description of business.

The Company provides services and products under arrangements that contain various pricing mechanisms. The Company accounts for a contract or a group of contracts when the following criteria are met: the parties to the contract have approved the contract in which their rights, their obligations and the payment terms have been identified, the contract has commercial substance, and the collectability of the consideration is probable.

A contract modification is a change in the scope or price of an existing revenue-generating customer contract. The Company accounts for a contract modification as a separate contract when the scope of the contract increases because of the addition of promised performance obligations and the price of the contract increases by an amount of consideration that reflects its stand-alone selling prices. When the contract is not accounted for as a separate contract, the Company recognizes an adjustment to revenue on the existing contract on a cumulative catch-up basis as at the date of the contract modification or, if the remaining goods and services are distinct performance obligations, the Company recognizes the remaining consideration prospectively.

82 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

REVENUE RECOGNITION, WORK IN PROGRESS AND DEFERRED REVENUE (CONTINUED)

Revenue is recognized when or as the Company satisfies a performance obligation by transferring a promise of good or service to the customer and are measured at the amount of consideration the Company expects to be entitled to receive, including variable consideration, such as, discounts, volume rebates, service-level penalties, and incentives. Variable consideration is estimated using either the expected value method or most likely amount method and is included only to the extent it is highly probable that a significant reversal of cumulative revenue recognized will not occur. In making this judgement, management will mostly consider all information available at the time (historical, current and forecasted), the Company’s knowledge of the client or the industry, the type of services to be delivered and the specific contractual terms of each arrangement.

Revenue from sales of third party vendor’s products, such as software licenses, hardware or services is recorded on a gross basis when the Company is a principal to the transaction and is recorded net of costs when the Company is acting as an agent between the client and vendor. To determine whether the Company is a principal or an agent, it evaluates whether control is obtained of the goods or services before they are transferred to the client. This is often demonstrated when the Company provides significant integration of the goods and services from a third party vendor into the Company’s goods and services delivered to the client. Other factors considered include whether the Company has the primary responsibility for providing the product or service, has inventory risk before the specified good or service has been transferred to a client, or after transfer of control to a client, and has discretion establishing the price.

Relative stand-alone selling price

The Company’s arrangements often include a mix of the services and products as described below. If an arrangement involves the provision of multiple performance obligations, the total arrangement value is allocated to each performance obligations based on its relative stand-alone selling price. When estimating the stand-alone selling price of each performance obligations, the Company maximizes the use of observable prices which are established using the Company’s prices for same or similar deliverables. When observable prices are not available, the Company estimates stand-alone selling prices based on its best estimate. The best estimate of the stand-alone selling price is the price at which the Company would normally expect to offer the services or products and is established by considering a number of internal and external factors including, but not limited to, geographies, the Company’s pricing policies, internal costs and margins. Additionally, in certain circumstances, the Company may apply the residual approach when estimating the stand-alone selling price of software license products, for which the Company has not yet established the price or has not previously sold on a stand-alone basis.

The appropriate revenue recognition method is applied for each performance obligation as described below.

Managed IT and business process services

Revenue from managed IT and business process services arrangements is generally recognized over time as the services are provided at the contractual billings, which corresponds with the value provided to the client, unless there is a better measure of performance or delivery.

Business and strategic IT consulting and systems integration services

Revenue from business and strategic IT consulting and systems integration services under time and material arrangements is recognized over time as the services are rendered, and revenue under cost-based arrangements is recognized over time as reimbursable costs are incurred. Contractual billings of such arrangements correspond with the value provided to the client, and therefore revenues are generally recognized when amounts become billable.

Revenue from business and strategic IT consulting and systems integration services under fixed-fee arrangements is recognized using the percentage-of-completion method over time, as the Company has no alternative use for the asset created and has an enforceable right to payment for performance completed to date. The Company primarily uses labour costs to measure the progress towards completion. This method relies on estimates of total expected labour costs, which are compared to labour costs incurred to date, to arrive at an estimate of the progress to completion which determines the percentage of revenue earned to date. Factors considered in the estimates include: changes in scope of the contracts, delays in reaching milestones, complexities in project delivery, availability and retention of qualified IT professionals and/or the ability of the subcontractors to perform their obligation within agreed upon budget and timeframes. Management regularly reviews underlying estimates of total expected labour costs.

FISCAL 2022 RESULTS — 83

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

REVENUE RECOGNITION, WORK IN PROGRESS AND DEFERRED REVENUE (CONTINUED)

Software licenses

Most of the Company’s software license arrangements include other services such as implementation, customization and maintenance. For these types of arrangements, revenue from a software license, when identified as a performance obligation, is recognized at a point in time upon delivery. Otherwise when the software is significantly customized, integrated or modified, it is combined with the implementation and customization services and is accounted for as described in the business and strategic IT consulting and systems integration services section above. Revenue from maintenance services for software licenses sold is recognized straight-line over the term of the maintenance period.

Work in progress and deferred revenue

Amounts recognized as revenue in excess of billings are classified as work in progress. Amounts received in advance of the performance of services or delivery of products are classified as deferred revenue. Work in progress and deferred revenue are presented net on a contract by-contract basis. During the year ended September 30, 2022, the revenues recognized from the short-term deferred revenue was not significantly different than what was presented as at September 30, 2021.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of unrestricted cash and short-term investments having a maturity of three months or less from the date of purchase.

SHORT-TERM INVESTMENTS

Short-term investments, comprise generally of term deposits, have remaining maturities over three months, but not more than one year, at the date of purchase.

FUNDS HELD FOR CLIENTS AND CLIENTS’ FUNDS OBLIGATIONS

In connection with the Company’s payroll, tax filing and claims services, the Company collects funds for payment of payroll, taxes and claims, temporarily holds such funds until payment is due, remits the funds to the clients’ employees, appropriate tax authorities or claims holders, files tax returns and handles related regulatory correspondence and amendments. The funds held for clients include cash and long-term bonds. The Company presents the funds held for clients and related obligations separately. Funds held for clients are classified as current assets since, based upon management’s expectations, these funds are held solely for the purpose of satisfying the clients’ funds obligations, which will be repaid within one year of the consolidated balance sheet date. The market fluctuations affect the fair value of the long-term bonds. Due to those fluctuations, funds held for clients might not equal to the clients’ funds obligations.

Interest income earned and realized gains and losses on the disposal of bonds are recorded in revenue in the period that the income is earned, as the collecting, holding and remitting of these funds are critical components of providing these services.

PROPERTY, PLANT AND EQUIPMENT (PP&E)

PP&E are recorded at cost and are depreciated over their estimated useful lives using the straight-line method.

Buildings	10 to 40 years
Leasehold improvements	Lesser of the useful life or lease term
Furniture, fixtures and equipment	3 to 20 years
Computer equipment	3 to 5 years

84 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

LEASES

When the Company enters into contractual agreements, an assessment is performed to determine if the contract contains a lease. The Company identified lease agreements under the following categories: Properties, Motor vehicles and others as well as Computer equipment.

The Company identifies a lease if it conveys the right to control the use of an identified asset for a specific period in exchange for a determined consideration. At inception, a right-of-use asset for the underlying asset and corresponding lease liability are presented in the consolidated balance sheet measured on a present value basis except for short-term leases (expected term of 12 months or less) and leases with low value underlying asset for which payments are recorded as an expense on a straight-line basis over the lease term.

The right-of-use assets are measured at initial lease liabilities adjusted by lease payments made before the commencement date, indirect costs and cash incentives received. The right-of-use assets are depreciated on a straight-line basis over the expected lease term of the underlying asset.

Lease liabilities are measured at present value of non-cancellable payments of the expected lease term, which are mostly made of fixed payments of rent (excluding maintenance fees); variable payments that are based on an index or a rate; amounts expected to be payable as residual value guaranties and extension or termination option if reasonably certain to be exercised.

The Company estimates the lease term in order to calculate the value of the lease liability at the initial date of the lease. Management uses judgement to determine the appropriate lease term based on the conditions of each lease. The Company considers all facts that create incentive to exercise an extension option or not to take a termination option including leasehold improvements, significant modification of the underlying asset or a business decision. The extension or termination options are only included in the lease term if it is reasonably certain of being exercised.

Discount rate used in the present value calculation is the incremental borrowing rate unless the implicit interest rate in the lease can be readily determined. The Company estimates the incremental borrowing rate for each lease or portfolio of leased assets, as most of the implicit interest rates in the leases are not readily determinable. To calculate the incremental borrowing rate, the Company considers its credit worthiness, the term of the arrangement, any collateral received and the economic environment at the lease date.

Lease liabilities are remeasured (along with the corresponding adjustment to the right-of-use asset), whenever the following situations occur:

– a modification in the lease term or a change in the assessment of an option to purchase or terminate the lease, for which the lease liability is remeasured by discounting the revised lease payments using a revised discount rate; and

– a modification in the residual guarantees or in future lease payments due to a change of an index or rate tied to the payments, for which the lease liability is remeasured by discounting the revised lease payments using the initial discount rate determined when setting up the liability.

In addition, upon partial or full termination of a lease, the difference between the carrying amounts of the lease liability and the right-of-use asset is recorded in the consolidated statements of earnings.

FISCAL 2022 RESULTS — 85

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

CONTRACT COSTS

Contract costs are comprised primarily of transition costs incurred to implement long-term managed IT and business process services contracts and incentives.

Transition costs

Transition costs consist mostly of costs associated with the installation of systems and processes, as well as conversion of the client’s applications to the Company’s platforms incurred after the award of managed IT and business process services contracts. Transition costs are comprised essentially of labour costs consisting of employee compensation and related fringe benefits. Labour costs also include subcontractor costs.

Incentives

Occasionally, incentives are granted to clients upon the signing of managed IT and business process services contracts. These incentives are granted in the form of cash payments.

Amortization of contract costs

Contract costs are amortized using the straight-line method over the period services are provided. Amortization of transition costs is included in costs of services, selling and administrative and amortization of incentives is recorded as a reduction of revenue.

Impairment of contract costs

When a contract is not expected to be profitable, the estimated loss is first applied to impair the related capitalized contract costs. The excess of the expected loss over the capitalized contract costs is recorded as onerous revenue-generating contracts in provisions. If at a future date the contract returns to profitability, the previously recognized impairment loss must be reversed. First the estimated losses on revenue-generating contracts must be reversed, and if there is still additional projected profitability then any capitalized contract costs that were impaired must be reversed. The reversal of the impairment loss is limited so that the carrying amount does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of amortization, had no impairment loss been recognized for the contract costs in prior years.

INTANGIBLE ASSETS

Intangible assets consist of internal-use software, business solutions, software licenses and client relationships. Internal-use software, business solutions and software licenses are recorded at cost. Internal-use software developed internally is capitalized when it meets specific capitalization criteria related to technical and financial feasibility and when the Company demonstrates its ability and intention to use it. Business solutions developed internally and marketed are capitalized when they meet specific capitalization criteria related to technical, market and financial feasibility. Internal-use software, business solutions, software licenses and client relationships acquired through business combinations are initially recorded at their fair value based on the present value of expected future cash flows, which involves estimates, such as the forecasting of future cash flows and discount rates.

Amortization of intangible assets

The Company amortizes its intangible assets using the straight-line method over their estimated useful lives.

Internal-use software	2 to 7 years
Business solutions	3 to 10 years
Software licenses	3 to 8 years
Client relationships	5 to 7 years

86 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

IMPAIRMENT OF PP&E, RIGHT-OF-USE ASSETS, INTANGIBLE ASSETS AND GOODWILL

Timing of impairment testing

The carrying values of PP&E, right-of-use assets, intangible assets and goodwill are reviewed for impairment when events or changes in circumstances indicate that the carrying value may be impaired. The Company assesses at each reporting date whether any such events or changes in circumstances exist. The carrying values of intangible assets not available for use are tested for impairment annually as at September 30. Goodwill is tested for impairment annually during the fourth quarter of each fiscal year.

Impairment testing

If any indication of impairment exists or when annual impairment testing for an asset is required, the Company estimates the recoverable amount of the asset or cash-generating unit (CGU) to which the asset relates to determine the extent of any impairment loss. The recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use (VIU) to the Company. The Company mainly uses the VIU. In assessing the VIU, estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In determining fair value less costs of disposal, recent market transactions are taken into account, if available. If the recoverable amount of an asset or a CGU is estimated to be less than its carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statements of earnings.

Goodwill acquired through business combinations is allocated to the CGU or group of CGUs that are expected to benefit from acquired work force and synergies of the related business combination. The group of CGUs that benefit from the acquired work force and synergies correspond to the Company’s operating segments. For goodwill impairment testing purposes, the group of CGUs that represents the lowest level within the Company at which management monitors goodwill is the operating segment level.

The recoverable amount of each operating segment has been determined based on the VIU calculation which includes estimates about their future financial performance based on cash flows approved by management covering a period of five years. Key assumptions used in the VIU calculations are the pre-tax discount rate applied and the long-term growth rate of net operating cash flows. In determining these assumptions, management has taken into consideration the current economic environment and its resulting impact on expected growth and discount rates. The cash flow projections reflect management’s expectations of the operating segment’s operating performance and growth prospects in the operating segment’s market. The pre-tax discount rate applied to an operating segment is derived from the weighted average cost of capital (WACC).

Management considers factors such as country risk premium, risk-free rate, size premium and cost of debt to derive the WACC. Impairment losses relating to goodwill cannot be reversed in future periods.

For impaired assets, other than goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the recoverable amount of the asset. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the recoverable amount of the asset since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of amortization, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statements of earnings.

LONG-TERM FINANCIAL ASSETS

Long-term investments presented in long-term financial assets are comprised of bonds which are presented as long-term based on management’s intentions.

FISCAL 2022 RESULTS — 87

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

BUSINESS COMBINATIONS

The Company accounts for its business combinations using the acquisition method. Under this method, the consideration transferred is measured at fair value. Acquisition-related and integration costs associated with the business combination are expensed as incurred or when a present legal or constructive obligation exists. The Company recognizes goodwill as the excess of the cost of the acquisition over the net identifiable tangible and intangible assets acquired and liabilities assumed at their acquisition-date fair values. The goodwill recognized is composed of the future economic value associated to acquired work force and synergies with the Company’s operations which are primarily due to reduction of costs and new business opportunities. Management makes assumptions when determining the acquisition-date fair values of the identifiable tangible and intangible assets acquired and liabilities assumed which involve estimates, such as the forecasting of future cash flows, discount rates and the useful lives of the assets acquired. Subsequent changes in fair values are recorded as part of the purchase price allocation and therefore result in corresponding goodwill adjustments if they qualify as measurement period adjustments. The measurement period is the period between the date of acquisition and the date where all significant information necessary to determine the fair values is available, not to exceed 12 months. All other subsequent changes in judgements and estimates are recognized in the consolidated statements of earnings.

EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of shares outstanding during the period. Diluted earnings per share is determined using the treasury stock method to evaluate the dilutive effect of stock options and performance share units (PSUs).

RESEARCH AND SOFTWARE DEVELOPMENT COSTS

Research costs are charged to earnings in the period in which they are incurred, net of related tax credits. Software development costs related to internal-use software and business solutions are charged to earnings in the year they are incurred, net of related tax credits, unless they meet specific capitalization criteria related to technical, market and financial feasibility as described in the Intangible assets section above.

TAX CREDITS

The Company follows the income approach to account for research and development (R&D) and other tax credits, whereby tax credits are recorded when there is a reasonable assurance that the assistance will be received and that the Company will comply with all relevant conditions. Under this method, tax credits related to operating expenditures are recorded as a reduction of the related expenses and recognized in the period in which the related expenditures are charged to earnings. Tax credits related to capital expenditures are recorded as a reduction of the cost of the related assets. The tax credits recorded are based on management’s best estimates of amounts expected to be received and are subject to audit by the taxation authorities.

INCOME TAXES

Income taxes are accounted for using the liability method of accounting.

Current income taxes are recognized with respect to the amounts expected to be paid or recovered under the tax rates and laws that have been enacted or substantively enacted at the balance sheets date.

Deferred tax assets and liabilities are determined based on deductible or taxable temporary differences between the amounts reported for consolidated financial statement purposes and tax values of the assets and liabilities using enacted or substantively enacted tax rates that will be in effect for the year in which the differences are expected to be recovered or settled. Deferred tax assets and liabilities are recognized in earnings, in other comprehensive income or in equity based on the classification of the item to which they relate.

Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Once this assessment is made, the Company considers the analysis of forecasts and future tax planning strategies. Estimates of taxable profit are made based on the forecast by jurisdiction on an undiscounted basis. In addition, management considers factors such as substantively enacted tax rates, the history of the taxable profits and availability of tax strategies.

88 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

INCOME TAXES (CONTINUED)

The Company is subject to income tax laws in numerous jurisdictions. Judgement is required in determining the worldwide provision for income taxes as the determination of tax liabilities and assets involves uncertainties in the interpretation of complex tax regulations and requires estimates and assumptions considering the existing facts and circumstances. The Company provides for potential tax liabilities based on the most likely amount of the possible outcomes. Estimates are reviewed each reporting period and updated, based on new information available, and could result in changes to the income tax liabilities and deferred tax liabilities in the period in which such determinations are made.

PROVISIONS

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The Company’s provisions consist of liabilities for litigation and claims provisions arising in the ordinary course of business, decommissioning liabilities for leases of office buildings, onerous revenue-generating contracts and onerous supplier contracts. The Company also records restructuring provisions for termination of employment costs related to specific initiatives and to the integration of its business acquisitions.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Provisions are discounted using a current pre-tax rate when the impact of the time value of money is material. The increase in the provisions due to the passage of time is recognized as finance costs.

The accrued litigation and legal claims provisions are based on historical experience, current trends and other assumptions that are believed to be reasonable under the circumstances. Estimates include the period in which the underlying cause of the claim occurred and the degree of probability of an unfavourable outcome.

Decommissioning liabilities pertain to leases of buildings where certain arrangements require premises to be returned to their original state at the end of the lease term. The provision is determined using the present value of the estimated future cash outflows.

Provisions for onerous revenue-generating contracts are recorded when unavoidable costs of fulfilling the contract exceed the estimated total revenue from the contract. Management regularly reviews arrangement profitability and the underlying estimates.

Provisions for onerous supplier contracts are recorded when the unavoidable net cash flows from honoring the contract are negative. The provision represents the lowest of the costs to fulfill the contract and the penalties to exit the contract.

Restructuring provisions are recognized when a detailed formal plan identifies the business or part of the business concerned, the location and number of employees affected, a detailed estimate of the associated costs, appropriate timelines and has been communicated to those affected by it.

TRANSLATION OF FOREIGN CURRENCIES

The Company’s consolidated financial statements are presented in Canadian dollars, which is also the parent company’s functional currency. Each entity in the Company determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Functional currency is the currency of the primary economic environment in which the entity operates.

Foreign currency transactions and balances

Revenue, expenses and non-monetary assets and liabilities denominated in foreign currencies are recorded at the rate of exchange prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at exchange rates prevailing at the balance sheets date. Unrealized and realized translation gains and losses are reflected in the consolidated statements of earnings.

FISCAL 2022 RESULTS — 89

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

TRANSLATION OF FOREIGN CURRENCIES (CONTINUED)

Foreign operations

For foreign operations that have functional currencies different from the Company, assets and liabilities denominated in a foreign currency are translated at exchange rates in effect at the balance sheets date. Revenue and expenses are translated at average exchange rates prevailing during the period. Resulting unrealized gains or losses on translating financial statements of foreign operations are reported in other comprehensive income.

For foreign operations with the same functional currency as the Company, monetary assets and liabilities are translated at the exchange rates in effect at the balance sheets date and non-monetary assets and liabilities are translated at historical exchange rates. Revenue and expenses are translated at average exchange rates during the period. Translation exchange gains or losses of such operations are reflected in the consolidated statements of earnings.

SHARE-BASED PAYMENTS

Equity-settled plans

The Company operates PSU and equity-settled stock option plans under which the Company receives services from employees, officers and directors as consideration for equity instruments.

The fair value of those share-based payments is established on the closing price of Class A subordinate voting shares of the Company on the Toronto Stock Exchange (TSX) for the PSUs and the grant date using the Black-Scholes option pricing model for the stock options. The number of PSUs and stock options expected to vest are estimated on the grant date and subsequently revised on each reporting date. For stock options, the estimation of fair value requires making assumptions for the most appropriate inputs to the valuation model including the expected life of the option and expected stock price volatility. The fair value of share-based payments, adjusted for expectations related to performance conditions and forfeitures, are recognized as share-based payment costs over the vesting period in earnings with a corresponding credit to contributed surplus on a graded-vesting basis if they vest annually or on a straight-line basis if they vest at the end of the vesting period.

When PSUs are exercised, the recorded fair value of PSUs is removed from contributed surplus and credited to capital stock. When stock options are exercised, any consideration paid is credited to capital stock and the recorded fair value of the stock options is removed from contributed surplus and credited to capital stock.

Share purchase plan

The Company operates a share purchase plan for eligible employees. Under this plan, the Company matches the contributions made by employees up to a maximum percentage of the employee’s salary. The Company’s contributions to the plan are recognized in salaries and other member costs within costs of services, selling and administrative.

Cash-settled deferred share units

The Company operates a deferred share unit (DSU) plan to compensate the external members of the Board of Directors. The expense is recognized within costs of services, selling and administrative for each DSU granted equal to the closing price of Class A subordinate voting shares of the Company on the TSX at the date on which DSUs are awarded and a corresponding liability is recorded in accrued compensation and employee-related liabilities. After the grant date, the DSU liability is remeasured for subsequent changes in the fair value of the Company’s shares.

FINANCIAL INSTRUMENTS

All financial instruments are initially measured at their fair value and are subsequently classified either at amortized cost, at fair value through earnings (FVTE) or at fair value through other comprehensive income (FVOCI). Financial assets are classified based on the Company’s management model of such instruments and their contractual cash flows they generate. Financial liabilities are classified and measured at amortized cost, unless they are held for trading and classified as FVTE.

The Company has made the following classifications:

FVTE

Cash and cash equivalents, cash included in funds held for clients, derivative financial instruments and deferred compensation plan assets within long-term financial assets are measured at fair value at the end of each reporting period and the resulting gains or losses are recorded in the consolidated statements of earnings.

90 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

FINANCIAL INSTRUMENTS (CONTINUED)

Amortized Cost

Trade accounts receivable, long-term receivables within long-term financial assets, accounts payable and accrued liabilities, accrued compensation and employee-related liabilities, long-term debt and clients’ funds obligations are measured at amortized cost using the effective interest method. Financial assets classified at amortized cost are subject to impairment. For trade accounts receivable and work in progress, the Company applies the simplified approach to measure expected credit losses, which requires lifetime expected loss allowance to be recorded upon initial recognition of the financial assets.

FVOCI

Short-term investments included in current financial assets, long-term bonds included in funds held for clients and long-term investments within long-term financial assets are measured at fair value through other comprehensive income and are subject to impairment for which the Company uses the low credit risk exemption.

The unrealized gains and losses, net of applicable income taxes, are recorded in other comprehensive income. Interest income measured using the effective interest method and realized gains and losses on derecognition are recorded in the consolidated statements of earnings.

Transaction costs are comprised primarily of legal, accounting and other costs directly attributable to the acquisition or issuance of financial instruments. Transaction costs related to financial instruments other than FVTE are included in the initial recognition of the corresponding asset or liability and are amortized using effective interest method. Transaction costs related to the unsecured committed revolving credit facility are included in other long-term assets and are amortized using the straight-line method over the expected life of the underlying agreement.

Financial assets are derecognized if the contractual rights to the cash flows from the financial asset expire or the asset is transferred and the transfer qualifies for derecognition as substantially all the risks and rewards of ownership of the financial asset have been transferred.

Fair value hierarchy

Fair value measurements recognized on the balance sheets are classified in accordance with the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included in Level 1, but that are observable for the asset or liability, either directly or indirectly; and

Level 3: inputs for the asset or liability that are not based on observable market data.

FISCAL 2022 RESULTS — 91

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency exchange risks.

Derivative financial instruments are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting date. The resulting gain or loss is recognized in the consolidated statements of earnings, unless the derivative is designated and is effective as a hedging instrument, in which event the timing of the recognition in the consolidated statements of earnings depends on the nature of the hedge relationship. The cash flows of the hedging instruments are classified in the same manner as the cash flows of the item being hedged.

At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management’s objective and strategy for undertaking the hedge. The documentation includes the identification of the nature of the risk being hedged, the economic relationship between the hedged item and the hedging instruments which should not be dominated by credit risk, the hedge ratio consistent with the risk management strategy pursued and how the Company will assess the effectiveness of the hedging relationship on an ongoing basis.

Management evaluates hedge effectiveness at inception of the hedge instrument and quarterly thereafter generally based on a managed hedge ratio of 1 for 1. Hedge effectiveness is measured prospectively as the extent to which changes in the fair value or cash flows of the derivative offsets the changes in the fair value or cash flows of the underlying hedged instrument or risk when there is a significant mismatch between the terms of the hedging instrument and the hedged item. Any meaningful imbalance is considered ineffectiveness in the hedge and accounted for accordingly in the consolidated statements of earnings.

Hedges of net investments in foreign operations

The Company uses cross-currency swaps and foreign currency denominated long-term debt to hedge portions of the Company’s net investments in its U.S. and European operations. Foreign exchange translation gains or losses on the net investments and the effective portions of gains or losses on instruments hedging the net investments are recorded in other comprehensive income. Gains or losses relating to the ineffective portion are recognized in consolidated statements of earnings. When the hedged net investment is disposed of, the relevant amount in other comprehensive income is transferred to earnings as part of the gain or loss on disposal.

Cash flow hedges of future revenue and long-term debt

The majority of the Company’s revenue and costs are denominated in a currency other than the Canadian dollar. The risk of foreign exchange fluctuations impacting the results is substantially mitigated by matching the Company’s costs with revenue denominated in the same currency. In certain cases where there is a substantial imbalance for a specific currency, the Company enters into foreign currency forward contracts to hedge the variability in the foreign currency exchange rates.

The Company also uses interest rate and cross-currency swaps to hedge either the cash flow exposure or the foreign exchange exposure of the long-term debt.

The effective portion of the change in fair value of the derivative financial instruments is recognized in other comprehensive income and the ineffective portion, if any, in the consolidated statements of earnings. The effective portion of the change in fair value of the derivatives is reclassified out of other comprehensive income into the consolidated statements of earnings when the hedged item is recognized in the consolidated statements of earnings.

92 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS (CONTINUED)

Fair value hedges of Senior U.S. unsecured notes

The Company entered into interest rate swaps to hedge the fair value exposure of the issued fixed rate Senior U.S. unsecured notes repaid in December 2021. Under the interest rate swaps, the Company received a fixed rate of interest and paid interest at a variable rate on the notional amount.

The changes in the fair value of the interest rate swaps are recognized in the consolidated statements of earnings as finance costs. The changes in the fair value of the hedged items attributable to the risk hedged is recorded as part of the carrying value of the Senior U.S. unsecured notes and are also recognized in the consolidated statements of earnings as finance costs. If the hedged items are derecognized, the unamortized fair value is recognized immediately in the consolidated statements of earnings.

Cost of hedging

The Company has elected to account for forward element and foreign currency basis spread of forward contracts and cross-currency swaps as costs of hedging. In such cases, the deferred costs (gains) of hedging, net of applicable income taxes, are recognized as a separate component of the accumulated other comprehensive income and reclassified in the consolidated statements of earnings when the hedged item is recognized.

EMPLOYEE BENEFITS

The Company operates both defined benefit and defined contribution post-employment benefit plans.

The cost of defined contribution plans is charged to the consolidated statements of earnings on the basis of contributions payable by the Company during the year.

For defined benefit plans, the defined benefit obligations are calculated by independent actuaries using the projected unit credit method. The retirement benefits obligations in the consolidated balance sheets represent the present value of the defined benefit obligations as reduced by the fair value of plan assets. The retirement benefits assets are recognized to the extent that the Company can benefit from refunds or a reduction in future contributions. Retirement benefits plans that are funded by the payment of insurance premiums are treated as defined contribution plans unless the Company has an obligation either to pay the benefits directly when they fall due or to pay further amounts if assets accumulated with the insurer do not cover all future employee benefits. In such circumstances, the plan is treated as a defined benefit plan.

Insurance policies are treated as plan assets of a defined benefit plan if the proceeds of the policy:

- Can only be used to fund employee benefits;

- Are not available to the Company’s creditors; and

- Either cannot be paid to the Company unless the proceeds represent surplus assets not needed to meet all the benefit obligations or are a reimbursement for benefits already paid by the Company.

Insurance policies that do not meet the above criteria are treated as non-current investments and are held at fair value as long-term financial assets in the consolidated balance sheets.

The actuarial valuations used to determine the cost of defined benefit pension plans and their present value involve making assumptions about discount rates, future salary and pension increases, inflation rates and mortality. Any changes in these assumptions will impact the carrying amount of pension obligations. In determining the appropriate discount rate, management considers the interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

FISCAL 2022 RESULTS — 93

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

EMPLOYEE BENEFITS (CONTINUED)

The current service cost is recognized in the consolidated statements of earnings under costs of services, selling and administrative. The net interest cost calculated by applying the discount rate to the net defined benefit liabilities or assets is recognized as net finance cost or income. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefits that relates to past services or the gains or losses on curtailment is recognized immediately in the consolidated statements of earnings. The gains or losses on the settlement of a defined benefit plan are recognized when the settlement occurs.

Remeasurements on defined benefit plans include actuarial gains and losses, changes in the effect of the asset ceiling and the return on plan assets, excluding the amount included in net interest on the net defined liabilities or assets. Remeasurements are charged or credited to other comprehensive income in the period in which they arise.

ADOPTION OF ACCOUNTING STANDARD

The following standard amendments have been adopted by the Company on October 1, 2021:

IBOR reform with amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16

In August, 2020, the IASB issued Interest Rate Benchmark Reform-Phase 2, which amends IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures and IFRS 16 Leases. The standard amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform.

For financial instruments at amortized cost, the standard amendments introduce a practical expedient such that if a change to contractual cash flow occurs as a direct consequence of the interbank offered rates (IBORs) reform and on economically equivalent terms to the previous basis, it will not result in an immediate gain or loss recognition. As for hedge accounting, the practical expedient allows hedge instrument relationships directly affected by the reform to continue. However, additional ineffectiveness might need to be recorded.

The Company has financial instruments exposed to the 1 month USD Libor rate, which is planned to expire in June 2023. As at September 30, 2022, the only instruments with a maturity date subsequent to June 2023 directly impacted by the IBORs reform are the unsecured committed term loan credit facility and the related cross-currency interest rate swaps (the hedging instruments) expiring in December 2023.

The Company is currently managing the process to transition the existing impacted agreements to an alternative rate.

The implementation of these standard amendments resulted in no impact on the Company’s consolidated financial statements.

FUTURE ACCOUNTING STANDARD CHANGES

The following standard amendments are effective as of October 1, 2022 for the Company.

Onerous contracts – Cost of Fulfilling a Contract - Amendments to IAS 37

In May, 2020, the IASB amended IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The standard amendments clarify that for assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental cost of fulfilling that contract and an allocation of other costs that relates directly to fulfilling the contract.

The implementation of these standard amendments will result in no significant impact on the Company’s consolidated financial statements.

The following standard amendments have been issued and will be effective on October 1, 2023 for the Company, with earlier application permitted. The Company is currently evaluating the impact of these standard amendments on its consolidated financial statements.

Classification of Liabilities as Current or Non-current – Amendments to IAS 1

In January, 2020, the IASB amended IAS 1 Presentation of Financial Statements. The standard amendments clarify that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period which only impacts the presentation of liabilities in the balance sheet. The classification is unaffected by expectations about whether the Company will exercise its right to defer settlement of a liability.

94 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3. Summary of significant accounting policies (continued)

FUTURE ACCOUNTING STANDARD CHANGES (CONTINUED)

Disclosure of Accounting Policy Information – Amendments to IAS 1 and IFRS Practice Statement 2

In February, 2021, the IASB amended IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements to require the Company to disclose its material accounting policy information rather than its significant accounting policies.

Definition of Accounting Estimates – Amendments to IAS 8

In February, 2021, the IASB amended IAS 8 Accounting Policies, Changes in Accounting estimates and Errors to introduce a definition of accounting estimates and to help entities distinguish changes in accounting policies from changes in accounting estimates. This distinction is important because changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

In May, 2021, the IASB amended IAS 12 Income Taxes, to narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.

The following standard amendments have been issued and will be effective as of October 1, 2024 for the Company, with earlier application permitted. The Company is currently evaluating the impact of these standard amendments on its consolidated financial statements.

Information about long-term debt with covenants – Amendments to IAS 1

In October, 2022, the IASB has issued standard amendments to IAS 1 Presentation of Financial Statements that aim to improve the information companies provide about long-term debt with covenants. These standard amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or non-current at the reporting date. Instead, these standard amendments require a company to disclose information about these covenants in the notes to the financial statements.

4. Accounts receivable

	As at September 30, 2022	As at          September 30, 2021
	$	$
Trade (Note 31)	1,106,187	938,417
R&D and other tax credits1	163,608	187,347
Other	93,750	105,688
	1,363,545	1,231,452

¹  R&D and other tax credits were related to government programs mainly in Canada, the United States, and France.

5. Funds held for clients

	As at September 30, 2022	As at          September 30, 2021
	$	$
Cash (Note 31)	504,726	456,525
Long-term bonds (Note 31)	94,113	136,629
	598,839	593,154

FISCAL 2022 RESULTS — 95

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

6. Property, plant and equipment

	Land and buildings			Leasehold improvements			Furniture,   fixtures and equipment			Computer     equipment			Total
	$			$			$			$			$
Cost
As at September 30, 2021		78,907			244,824			150,617			592,892			1,067,240
Additions		5,202			24,040			9,344			117,196			155,782
Additions - business acquisitions (Note 26a)		—			4,776			984			2,404			8,164
Disposals/retirements		(4,116	)		(6,997	)		(6,466	)		(88,261	)		(105,840	)
Foreign currency translation adjustment		(2,622	)		(3,671	)		(2,396	)		(25,506	)		(34,195	)
As at September 30, 2022		77,371			262,972			152,083			598,725			1,091,151
Accumulated depreciation
As at September 30, 2021		21,961			156,012			97,693			439,482			715,148
Depreciation expense (Note 24)		2,888			24,127			11,815			94,821			133,651
Impairment (Note 24)		—			858			—			—			858
Disposals/retirements		(893	)		(6,958	)		(6,424	)		(88,261	)		(102,536	)
Foreign currency translation adjustment		(489	)		(3,392	)		(1,782	)		(19,915	)		(25,578	)
As at September 30, 2022		23,467			170,647			101,302			426,127			721,543
Net carrying amount as at September 30, 2022		53,904			92,325			50,781			172,598			369,608
	Land and buildings			Leasehold improvements			Furniture, fixtures and equipment			Computer equipment			Total
	$			$			$			$			$
Cost
As at September 30, 2020		79,281			241,542			165,219			661,891			1,147,933
Additions		2,000			26,349			10,956			96,418			135,723
Additions - business acquisitions (Note 26b)		—			1,200			208			414			1,822
Disposals/retirements		—			(15,284	)		(20,238	)		(142,724	)		(178,246	)
Foreign currency translation adjustment		(2,374	)		(8,983	)		(5,528	)		(23,107	)		(39,992	)
As at September 30, 2021		78,907			244,824			150,617			592,892			1,067,240
Accumulated depreciation
As at September 30, 2020		20,124			150,572			108,060			496,231			774,987
Depreciation expense (Note 24)		2,590			25,512			13,547			102,774			144,423
Impairment (Note 24)		—			612			50			451			1,113
Disposals/retirements		—			(15,284	)		(20,238	)		(142,724	)		(178,246	)
Foreign currency translation adjustment		(753	)		(5,400	)		(3,726	)		(17,250	)		(27,129	)
As at September 30, 2021		21,961			156,012			97,693			439,482			715,148
Net carrying amount as at September 30, 2021		56,946			88,812			52,924			153,410			352,092

96 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

7. Right-of-use assets

	Properties			Motor vehicles and others			Computer           equipment			Total
	$			$			$			$
Cost
As at September 30, 2021		1,080,867			174,354			39,093			1,294,314
Additions		90,830			25,554			3,683			120,067
Additions - business acquisitions (Note 26a)		21,622			492			—			22,114
Change in estimates and lease modifications		(7,946	)		—			—			(7,946	)
Disposals/retirements		(88,546	)		(11,704	)		—			(100,250	)
Foreign currency translation adjustment		(47,382	)		(8,532	)		(2,087	)		(58,001	)
As at September 30, 2022		1,049,445			180,164			40,689			1,270,298
Accumulated depreciation
As at September 30, 2021		606,558			67,975			33,574			708,107
Depreciation expense (Note 24)		103,489			33,260			4,546			141,295
Impairment (Note 24)		3,858			—			—			3,858
Disposals/retirements		(74,973	)		(7,749	)		—			(82,722	)
Foreign currency translation adjustment		(28,925	)		(4,563	)		(1,873	)		(35,361	)
As at September 30, 2022		610,007			88,923			36,247			735,177
Net carrying amount as at September 30, 2022		439,438			91,241			4,442			535,121
	Properties			Motor vehicles and others			Computer equipment			Total
	$			$			$			$
Cost
As at September 30, 2020		1,124,258			233,976			40,965			1,399,199
Additions		60,318			21,955			828			83,101
Additions - business acquisitions (Note 26b)		4,982			—			—			4,982
Change in estimates and lease modifications		33,774			—			—			33,774
Disposals/retirements		(99,373	)		(73,190	)		(2,183	)		(174,746	)
Foreign currency translation adjustment		(43,092	)		(8,387	)		(517	)		(51,996	)
As at September 30, 2021		1,080,867			174,354			39,093			1,294,314
Accumulated depreciation
As at September 30, 2020		605,155			97,573			29,606			732,334
Depreciation expense (Note 24)		111,899			41,766			6,575			160,240
Impairment (Note 24)		1,467			—			—			1,467
Disposals/retirements		(87,557	)		(67,464	)		(2,183	)		(157,204	)
Foreign currency translation adjustment		(24,406	)		(3,900	)		(424	)		(28,730	)
As at September 30, 2021		606,558			67,975			33,574			708,107
Net carrying amount as at September 30, 2021		474,309			106,379			5,519			586,207

FISCAL 2022 RESULTS — 97

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

8. Contract costs

			As at September 30, 2022						As at September 30, 2021
	Cost		Accumulated amortization and impairment		Net carrying amount		Cost		Accumulated amortization and impairment		Net carrying amount
	$		$		$		$		$		$
Transition costs		481,836		225,468		256,368		487,106		262,311		224,795
Incentives		50,331		45,087		5,244		52,200		46,433		5,767
		532,167		270,555		261,612		539,306		308,744		230,562

9. Intangible assets

	Internal-use software acquired			Internal-use software internally developed			Business   solutions acquired			Business solutions internally developed			Software licenses			Client relationships			Total
	$			$			$			$			$			$			$
Cost
As at September 30, 2021		79,210			98,891			78,641			624,850			167,374			1,154,620			2,203,586
Additions		1,385			10,111			1,160			103,309			22,015			—			137,980
Additions - business acquisitions (Note 26a)		3,176			—			1,630			—			303			105,538			110,647
Disposals/retirements		(6,399	)		(2,647	)		(2,007	)		(28,932	)		(23,020	)		—			(63,005	)
Foreign currency translation adjustment		(1,410	)		(1,869	)		(844	)		34,794			(3,694	)		(28,765	)		(1,788	)
As at September 30, 2022		75,962			104,486			78,580			734,021			162,978			1,231,393			2,387,420
Accumulated amortization and impairment
As at September 30, 2021		72,303			53,834			72,731			365,597			124,201			1,008,127			1,696,793
Amortization expense (Note 24)		4,948			14,711			3,201			48,211			21,655			47,214			139,940
Impairment (Note 24)		—			519			—			2,840			—			—			3,359
Disposals/retirements		(6,399	)		(2,647	)		(2,007	)		(28,932	)		(23,020	)		—			(63,005	)
Foreign currency translation adjustment		(1,230	)		(1,094	)		(831	)		20,582			(2,819	)		(20,234	)		(5,626	)
As at September 30, 2022		69,622			65,323			73,094			408,298			120,017			1,035,107			1,771,461
Net carrying amount as at September 30, 2022		6,340			39,163			5,486			325,723			42,961			196,286			615,959
	Internal-use software acquired			Internal-use software internally developed			Business solutions acquired			Business solutions internally developed			Software licenses			Client relationships			Total
	$			$			$			$			$			$			$
Cost
As at September 30, 2020		96,900			131,298			76,278			571,015			190,372			1,187,862			2,253,725
Additions		107			7,712			—			85,572			21,086			—			114,477
Additions - business acquisitions (Note 26b)		—			—			8,081			—			—			14,026			22,107
Disposals/retirements		(16,427	)		(39,284	)		(3,242	)		(9,041	)		(39,656	)		—			(107,650	)
Foreign currency translation adjustment		(1,370	)		(835	)		(2,476	)		(22,696	)		(4,428	)		(47,268	)		(79,073	)
As at September 30, 2021		79,210			98,891			78,641			624,850			167,374			1,154,620			2,203,586
Accumulated amortization and impairment
As at September 30, 2020		84,431			79,745			75,170			338,122			142,456			1,012,339			1,732,263
Amortization expense (Note 24)		5,464			13,882			3,043			44,439			24,963			38,070			129,861
Impairment (Note 24)		—			—			—			4,121			—			—			4,121
Disposals/retirements		(16,427	)		(39,284	)		(3,242	)		(9,041	)		(39,656	)		—			(107,650	)
Foreign currency translation adjustment		(1,165	)		(509	)		(2,240	)		(12,044	)		(3,562	)		(42,282	)		(61,802	)
As at September 30, 2021		72,303			53,834			72,731			365,597			124,201			1,008,127			1,696,793
Net carrying amount as at September 30, 2021		6,907			45,057			5,910			259,253			43,173			146,493			506,793

98 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

10. Other long-term assets

	As at September 30, 2022		As at       September 30, 2021
		$		$
Prepaid long-term maintenance agreements		28,720		32,019
Insurance contracts held to fund defined benefit pension and life assurance arrangements - reimbursement rights (Note 17)		18,877		21,250
Retirement benefits assets (Note 17)		47,071		106,228
Deposits		22,595		15,641
Deferred financing fees		2,827		2,533
Other		19,576		13,841
		139,666		191,512

11. Long-term financial assets

	As at September 30, 2022		As at       September 30, 2021
		$		$
Deferred compensation plan assets (Notes 17 and 31)		71,863		81,633
Long-term investments (Note 31)		16,826		19,354
Long-term receivables		10,590		18,093
Long-term derivative financial instruments (Note 31)		237,877		33,578
		337,156		152,658

FISCAL 2022 RESULTS — 99

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

12. Goodwill

Effective April 1, 2022, the Company realigned its management structure, resulting in a reorganization and the creation of two new operating segments, namely Scandinavia and Central Europe (Germany, Sweden and Norway) and Northwest and Central-East Europe (primarily Netherlands, Denmark and Czech Republic), collectively formerly known as Scandinavia and Central and Eastern Europe in the prior fiscal year, and, less significantly, the transfer of our Belgium operations from Western and Southern Europe operating segment to the Northwest and Central-East Europe operating segment. As a result, the Company is managed through the following nine operating segments: Western and Southern Europe (primarily France, Spain and Portugal); United States (U.S.) Commercial and State Government; Canada; U.S. Federal; Scandinavia and Central Europe; United Kingdom (U.K.) and Australia; Finland, Poland and Baltics; Northwest and Central-East Europe; and Asia Pacific Global Delivery Centers of Excellence (mainly India and Philippines) (Asia Pacific).

Due to the changes in operating segments and that CGUs correspond to the operating segments, the Company reallocated goodwill to the revised CGUs using their relative fair value. There were no triggering events for an early impairment test before the reclassification.

The operating segments reflect the fiscal year 2022 revised management structure and the way that the chief operating decision-maker, who is the President and Chief Executive Officer of the Company, evaluates the business.

The Company completed the annual impairment test during the fourth quarter of the fiscal year 2022 and did not identify any impairment.

The movements in goodwill were as follows:

	Western and Southern Europe			U.S. Commercial and State Government		Canada		U.S. Federal		Scandinavia and Central Europe			U.K. and Australia			Finland, Poland and Baltics			Northwest and Central- East Europe			Asia Pacific			Total
		$			$		$		$		$			$			$			$			$			$
As at September 30, 2021		1,022,350			1,169,772		1,142,148		947,782		1,140,573			895,921			619,990			931,361			269,804			8,139,701
Business acquisitions (Note 26)		516,204			9,970		—		73,375		—			31,299			—			—			—			630,848
Goodwill reallocation		(3,236	)		—		—		—		367,907			—			—			(364,671	)		—			—
Foreign currency translation adjustment		(95,299	)		98,434		—		87,110		(163,134	)		(92,260	)		(52,362	)		(65,383	)		(6,199	)		(289,093	)
As at September 30, 2022		1,440,019			1,278,176		1,142,148		1,108,267		1,345,346			834,960			567,628			501,307			263,605			8,481,456

Key assumptions in goodwill impairment testing

The key assumptions for the CGUs are disclosed in the following tables for the years ended September 30:

2022	Western and Southern Europe		U.S. Commercial and State Government		Canada		U.S. Federal		Scandinavia and Central Europe		U.K. and Australia		Finland, Poland and Baltics		Northwest and Central- East Europe		Asia Pacific
		%		%		%		%		%		%		%		%		%
Pre-tax WACC		10.0		10.6		10.7		9.2		10.5		10.6		10.7		10.7		19.2
Long-term growth rate of net operating cash flows1		1.8		2.0		2.0		2.0		2.0		1.9		2.0		1.9		2.0
2021	Western and Southern Europe		U.S. Commercial and State Government		Canada		U.S. Federal		Scandinavia		U.K. and Australia		Finland, Poland and Baltics		Central and Eastern Europe		Asia Pacific
		%		%		%		%		%		%		%		%		%
Pre-tax WACC		10.0		8.5		9.1		8.1		9.3		8.8		9.5		9.4		18.5
Long-term growth rate of net operating cash flows1		1.6		2.0		2.0		2.0		1.8		1.9		1.7		1.8		2.0

¹  The long-term growth rate is based on the lower of published industry research growth and 2.0%.

100 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

13. Provisions

	Restructuring1			Decommissioning liabilities2			Others3			Total
		$			$			$			$
As at September 30, 2021		19,648			24,852			45,625			90,125
Additional provisions		10,948			1,374			13,875			26,197
Business acquisitions		—			1,935			4,308			6,243
Utilized amounts		(19,140	)		(1,222	)		(27,096	)		(47,458	)
Reversals of unused amounts		—			(2,201	)		(18,008	)		(20,209	)
Discount rate adjustment and imputed interest		—			168			—			168
Foreign currency translation adjustment		(812	)		(1,976	)		(1,693	)		(4,481	)
As at September 30, 2022		10,644			22,930			17,011			50,585
Current portion		10,561			6,256			16,286			33,103
Non-current portion		83			16,674			725			17,482

¹  Restructuring provisions include integration costs for terminations of employment.

²  As at September 30, 2022, the decommissioning liabilities were based on the expected cash flows of $23,641,000 and were discounted at a weighted average rate of 0.62%. The timing of settlements of these obligations ranges between one and eleven years as at September 30, 2022. The reversals of unused amounts are mostly due to favourable settlements.

³  As at September 30, 2022, others included litigation and claims, provisions on revenue-generating contracts and onerous supplier contracts.

FISCAL 2022 RESULTS — 101

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

14. Long-term debt

	As at September 30, 2022		As at September 30, 2021
		$		$
2011 U.S. Senior unsecured note of $319,663 (U.S.$250,000)1		—		318,009
2014 U.S. Senior unsecured notes repayable in September by tranches of $412,680 (U.S.$300,000) in 2024 and $137,560 (U.S.$100,000) in two yearly repayments of U.S. $50,000 in 2023 and 20242		550,177		570,298
2021 U.S. Senior unsecured notes repayable of $825,360 (U.S.$600,000) in September 2026 and $550,240 (U.S.$400,000) in September 20313		1,361,974		1,253,226
2021 CAD Senior unsecured notes repayable of $600,000 in September 20284		595,900		595,331
Unsecured committed term loan credit facility5		687,705		633,623
Other long-term debt		71,278		31,169
		3,267,034		3,401,656
Current portion		93,447		392,727
		3,173,587		3,008,929

¹  In December 2021, the Company repaid the last tranche of the Senior U.S. unsecured note issued in 2011 of U.S. $250,000,000 (2011 U.S. Senior Note), for a total amount of $319,663,000, and settled the related interest rate swaps (Note 31).

²  As at September 30, 2022, an amount of $550,240,000 was borrowed, less financing fees. The private placement is comprised of two tranches of Senior U.S. unsecured notes with a weighted average maturity of 1.8 years and a weighted average interest rate of 3.98% (3.95% in 2021) (2014 U.S. Senior Notes). In September 2022, the Company repaid the fifth of the seven yearly scheduled repayments of U.S.$50,000,000 on a tranche of the Senior U.S. unsecured notes for a total amount of $64,880,000 and settled the related cross-currency swaps (Note 31). The Senior unsecured notes contain covenants that require the Company to maintain certain financial ratios (Note 32). As at September 30, 2022, the Company was in compliance with these covenants.

³  As at September 30, 2022, an amount of $1,375,600,000 was borrowed less financing fees. The 2021 U.S. Senior Notes are comprised of two series of Senior U.S. unsecured notes with a weighted average maturity of 6 years and a weighted average interest rate of 1.79%. During the year ended September 30, 2022, the Company completed an offer to exchange all of its outstanding U.S.$1,000,000,000 in aggregate principal amount of senior unsecured notes, originally issued in September 2021 for an equivalent amount of notes registered with the U.S. Securities and Exchange Commission (2021 U.S. Senior Notes).

⁴  As at September 30, 2022, an amount of $600,000,000 was borrowed, less financing fees. The 2021 CAD Senior Notes are due in September 2028, with an interest rate of 2.10%.

⁵  As at September 30, 2022, an amount of $687,800,000 was borrowed, less financing fees. This facility bears interest based on the 1 month USD LIBOR rate, plus a variable margin that is determined based on the Company’s leverage ratio. The unsecured committed term loan credit facility is due in December 2023, with a weighted average interest rate of 4.00%. The unsecured committed term loan credit facility contains covenants that require the Company to maintain certain financial ratios (Note 32). As at September 30, 2022, the Company was in compliance with these covenants.

The Company has an unsecured committed revolving credit facility available for an amount of $1,500,000,000 that expires in October 2026. This facility bears interest at bankers’ acceptance, LIBOR or Canadian prime, plus a variable margin that is determined based on the Company’s leverage ratio. As at September 30, 2022, there was no amount drawn upon this facility. An amount of $4,270,000 has been committed against this facility to cover various letters of credit issued for clients and other parties. On November 1, 2022, the unsecured committed revolving credit facility was extended by one year to November 1, 2027 and can be further extended. There were no material changes in the terms and conditions including interest rates and banking covenants. The unsecured committed revolving credit facility contains covenants that require the Company to maintain certain financial ratios (Note 32). As at September 30, 2022, the Company was in compliance with these covenants.

102 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

15. Other long-term liabilities

	As at September 30, 2022		As at     September 30, 2021
		$		$
Deferred revenue		90,371		59,349
Deferred compensation plan liabilities (Note 17)		81,452		91,943
Other1		20,285		51,370
		192,108		202,662

¹  As at September 30, 2021, other is mainly composed of $33,686,000 in relation with the deferral of the employer side social security payments under the U.S. Government Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The amount related to CARES Act was nil as at September 30, 2022.

16. Income taxes

	Year ended September 30
		2022		2021
		$		$
Current income tax expense
Current income tax expense in respect of the current year		506,608		475,833
Adjustments recognized in the current year in relation to the income tax expense of prior years		1,705		19,021
Total current income tax expense		508,313		494,854
Deferred income tax recovery
Deferred income tax expense (recovery) relating to the origination and reversal of temporary differences		359		(6,165	)
Deferred income tax recovery relating to changes in tax rates		—		(460	)
Adjustments recognized in the current year in relation to the deferred income tax recovery of prior years		(7,855	)	(19,309	)
Total deferred income tax recovery		(7,496	)	(25,934	)
Total income tax expense		500,817		468,920

The Company’s effective income tax rate differs from the combined Federal and Provincial Canadian statutory tax rate as follows:

	Year ended September 30
		2022		2021
		%		%
Company’s statutory tax rate		26.5		26.5
Effect of foreign tax rate differences		(1.0	)	(1.0	)
Final determination from agreements with tax authorities and expirations of statutes of limitations		(0.4	)	0.2
Non-deductible and tax exempt items		—		(0.4	)
Recognition of previously unrecognized temporary differences		—		(0.2	)
Minimum income tax charge		0.4		0.4
Effective income tax rate		25.5		25.5

FISCAL 2022 RESULTS — 103

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

16. Income taxes (continued)

The continuity schedule of deferred tax balances is as follows:

	As at September 30, 2021			Additions from business     acquisitions			Recognized in earnings			Recognized in other comprehensive income			Recognized in equity			Foreign currency translation adjustment and other			As at         September 30, 2022
	$			$			$			$			$			$			$
Accounts payable and accrued liabilities, provisions and other long-term liabilities		51,156			6,986			(20,232	)		—			—			2,304			40,214
Tax benefits on losses carried forward		43,181			1,489			9,450			—			—			(2,157	)		51,963
Accrued compensation and employee-related liabilities		40,108			141			17,724			—			(7,194	)		357			51,136
Retirement benefits obligations		17,561			2,425			(2,082	)		1,011			—			602			19,517
Lease liabilities		179,318			1,577			252			—			—			(10,075	)		171,072
PP&E, contract costs, intangible assets and other long-term assets		(121,309	)		(27,347	)		5,912			—			—			(8,310	)		(151,054	)
Right-of-use assets		(134,808	)		(1,405	)		(6,179	)		—			—			9,635			(132,757	)
Work in progress		(22,190	)		—			9,018			—			—			344			(12,828	)
Goodwill		(70,845	)		—			(5,619	)		—			—			(5,153	)		(81,617	)
Refundable tax credits on salaries		(19,673	)		—			(376	)		—			—			—			(20,049	)
Cash flow hedges		(5,626	)		—			4,333			(9,146	)		—			41			(10,398	)
Other		7,447			180			(4,705	)		(223	)		—			491			3,190
Deferred taxes, net		(35,680	)		(15,954	)		7,496			(8,358	)		(7,194	)		(11,921	)		(71,611	)
	As at September 30, 2020			Additions from business acquisitions			Recognized in earnings			Recognized in other comprehensive income			Recognized in equity			Foreign currency translation adjustment and other			As at September 30, 2021
	$			$			$			$			$			$			$
Accounts payable and accrued liabilities, provisions and other long-term liabilities		64,208			(2,427	)		(7,553	)		(1	)		—			(3,071	)		51,156
Tax benefits on losses carried forward		46,228			4,654			(6,284	)		—			—			(1,417	)		43,181
Accrued compensation and employee-related liabilities		27,420			—			7,811			—			6,137			(1,260	)		40,108
Retirement benefits obligations		23,166			—			2,573			(5,919	)		—			(2,259	)		17,561
Lease liabilities		222,997			—			(36,103	)		—			—			(7,576	)		179,318
PP&E, contract costs, intangible assets and other long-term assets		(136,460	)		(3,905	)		14,280			—			—			4,776			(121,309	)
Right-of-use assets		(171,835	)		—			31,255			—			—			5,772			(134,808	)
Work in progress		(34,277	)		—			11,139			—			—			948			(22,190	)
Goodwill		(64,209	)		—			(10,493	)		—			—			3,857			(70,845	)
Refundable tax credits on salaries		(22,724	)		—			3,051			—			—			—			(19,673	)
Cash flow hedges		(475	)		—			675			(6,157	)		—			331			(5,626	)
Other		1,104			—			15,583			(8,542	)		—			(698	)		7,447
Deferred taxes, net		(44,857	)		(1,678	)		25,934			(20,619	)		6,137			(597	)		(35,680	)

The deferred tax balances are presented as follows in the consolidated balance sheets:

	As at September 30, 2022			As at     September 30, 2021
		$			$
Deferred tax assets		85,795			96,358
Deferred tax liabilities		(157,406	)		(132,038	)
		(71,611	)		(35,680	)

104 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

16. Income taxes (continued)

As at September 30, 2022, the Company had $258,244,000 ($225,002,000 as at September 30, 2021) in operating tax losses carried forward, of which $110,918,000 ($82,548,000 as at September 30, 2021) expire at various dates from 2029 to 2042 and $147,326,000 ($142,454,000 as at September 30, 2021) have no expiry dates. As at September 30, 2022, a deferred income tax asset of $46,893,000 ($38,371,000 as at September 30, 2021) has been recognized on $179,329,000 ($162,693,000 as at September 30, 2021) of these losses. The deferred income tax assets are recognized only to the extent that it is probable that taxable income will be available against which the unused tax losses can be utilized. As at September 30, 2022, the Company had $12,450,000 ($25,325,000 as at September 30, 2021) of unrecognized operating tax losses that will expire at various dates from 2029 to 2042 and $66,466,000 ($36,984,000 as at September 30, 2021) that have no expiry date.

As at September 30, 2022, the Company had $421,218,000 ($469,097,000 as at September 30, 2021) in non-operating tax losses carried forward that have no expiry dates. As at September 30, 2022, a deferred income tax asset of $5,070,000 ($4,810,000 as at September 30, 2021) has been recognized on $20,295,000 ($20,534,000 as at September 30, 2021) of these losses. As at September 30, 2022, the Company had $400,923,000 ($448,563,000 as at September 30, 2021) of unrecognized non-operating tax losses.

As at September 30, 2022, the Company had $907,577,702 ($1,420,634,000 as at September 30, 2021) of cash and cash equivalents held by foreign subsidiaries. The tax implications of the repatriation of cash and cash equivalents not considered indefinitely reinvested have been accounted for and will not materially affect the Company’s liquidity. In addition, the Company has not recorded deferred tax liabilities on undistributed earnings of $7,100,148,000 ($6,290,351,000 as at September 30, 2021) coming from its foreign subsidiaries as they are considered indefinitely reinvested. Upon distribution of these earnings in the form of dividends or otherwise, the Company may be subject to taxation.

FISCAL 2022 RESULTS — 105

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17. Employee benefits

The Company operates various post-employment plans, including defined benefit and defined contribution pension plans as well as other benefit plans for its employees.

DEFINED BENEFIT PLANS

The Company operates defined benefit pension plans primarily for the benefit of employees in the U.K., Germany and France, with smaller plans in other countries. The benefits are based on pensionable salary and years of service and are funded with assets held in separate funds.

The defined benefit plans expose the Company to interest risk, inflation risk, longevity risk, currency risk and market investment risk.

The following description focuses mainly on plans registered in the U.K., France and Germany:

U.K.

In the U.K., the Company has three defined benefit pension plans, the CMG U.K. Pension Scheme, the Logica U.K. Pension & Life Assurance Scheme and the Logica Defined Benefit Pension Plan.

The CMG U.K. Pension Scheme is closed to new members and is closed to further accrual of rights for existing members. The Logica U.K. Pension & Life Assurance Scheme is still open but only for employees who come from the civil service with protected pensions. The Logica Defined Benefit Pension Plan was created to mirror the Electricity Supply Pension Scheme and was created for employees that worked for National Grid and Welsh Water with protected benefits.

Both the Logica U.K. Pension & Life Assurance Scheme and the Logica Defined Benefit Pension Plan are employer and employee based contribution plans.

The trustees are the custodians of the defined benefit pension plans and are responsible for the plan administration, including investment strategies. The trustees review periodically the investment and the asset allocation policies. As such, the CMG U.K. Pension Scheme policy is to target an allocation up to a maximum of 45% to return-seeking assets such as equities; the Logica U.K. Pension & Life Assurance Scheme policy is to invest 15% of the scheme assets in equities and 85% in bonds; and the Logica Defined Benefit Pension Plan policy is to invest 15% of the plan assets in equities and 85% in bonds.

The U.K. Pensions Act 2004 requires that full formal actuarial valuations are carried out at least every three years to determine the contributions that the Company should pay in order for the plan to meet its statutory objective, taking into account the assets already held. In the interim years, the trustees need to obtain estimated funding updates unless the scheme has less than 100 members in total.

The latest funding actuarial valuations of the three defined benefit pension plans described above were being performed as at September 30, 2021 and the results were finalized during the year ended September 30, 2022 with the following recommendations:

– The actuarial valuation of the CMG U.K. Pension Scheme reported a surplus of $34,707,000. It specified that no supplementary contributions were required in order to reach the plan funding objectives. During fiscal 2022, the Company contributed an amount of $693,000 to cover administration expenses; and

– The actuarial valuation of the Logica U.K. Pension & Life Assurance Scheme reported a surplus of $85,000. It specified that no supplementary contributions were required in order to reach the plan funding objectives. During fiscal 2022, the Company contributed an amount of $314,000 to cover service costs; and

– The actuarial valuation of the Logica Defined Benefit Pension Plan reported a surplus of $17,819,000. It specified that no supplementary contributions were required in order to reach the plan funding objectives. Since November 30, 2019, the Company did not contribute to the plan.

106 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17. Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

France

In France, the retirement indemnities are provided in accordance with the Labour Code. Upon retirement, employees receive an indemnity, depending on the salary and seniority in the Company, in the form of a lump-sum payment.

Germany

In Germany, the Company has numerous defined benefit pension plans which are all closed to new members. In the majority of the plans, upon retirement of employees, the benefits are in the form of a monthly pension and in a few plans, the employees receive an indemnity in the form of a lump-sum payment. There are no mandatory funding requirements. The plans are funded by the contributions made by the Company. In some plans, insurance policies are taken out to fund retirement benefit plans. These do not qualify as plan assets and are presented as reimbursement rights, unless they are part of a reinsured support fund or are pledged to the employees.

The following tables present amounts for post-employment benefits plans included in the consolidated balance sheets:

As at September 30, 2022	U.K.		France		Germany		Other		Total
	$		$		$		$		$
Defined benefit obligations	(525,262	)	(77,477	)	(61,420	)	(60,368	)	(724,527	)
Fair value of plan assets	571,909		—		11,028		33,616		616,553
	46,647		(77,477	)	(50,392	)	(26,752	)	(107,974	)
Fair value of reimbursement rights	—		—		18,495		382		18,877
Net asset (liability) recognized in the balance sheet	46,647		(77,477	)	(31,897	)	(26,370	)	(89,097	)
Presented as:
Other long-term assets (Note 10)
Insurance contracts held to fund defined benefit pension and life assurance arrangements - reimbursement rights	—		—		18,495		382		18,877
Retirement benefits assets	46,647		—		—		424		47,071
Retirement benefits obligations	—		(77,477	)	(50,392	)	(27,176	)	(155,045	)
	46,647		(77,477	)	(31,897	)	(26,370	)	(89,097	)
As at September 30, 2021	U.K.		France		Germany		Other		Total
	$		$		$		$		$
Defined benefit obligations	(881,008	)	(77,006	)	(94,381	)	(82,159	)	(1,134,554	)
Fair value of plan assets	986,359		661		12,234		37,040		1,036,294
	105,351		(76,345	)	(82,147	)	(45,119	)	(98,260	)
Fair value of reimbursement rights	—		—		20,823		427		21,250
Net asset (liability) recognized in the balance sheet	105,351		(76,345	)	(61,324	)	(44,692	)	(77,010	)
Presented as:
Other long-term assets (Note 10)
Insurance contracts held to fund defined benefit pension and life assurance arrangements - reimbursement rights	—		—		20,823		427		21,250
Retirement benefits assets	105,351		—		—		877		106,228
Retirement benefits obligations	—		(76,345	)	(82,147	)	(45,996	)	(204,488	)
	105,351		(76,345	)	(61,324	)	(44,692	)	(77,010	)

FISCAL 2022 RESULTS — 107

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17. Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Defined benefit obligations	U.K.		France		Germany		Other		Total
	$		$		$		$		$
As at September 30, 2021	881,008		77,006		94,381		82,159		1,134,554
Current service cost	1,114		5,673		531		5,735		13,053
Interest cost	16,877		740		768		2,748		21,133
Business acquisitions (Note 26a)	—		10,192		—		—		10,192
Actuarial gains due to change in financial assumptions1	(285,653	)	(20,586	)	(25,735	)	(10,104	)	(342,078	)
Actuarial losses (gains) due to change in demographic assumptions1	7,882		921		—		(520	)	8,283
Actuarial losses due to experience1	4,081		12,112		2,214		3,848		22,255
Plan participant contributions	80		—		—		—		80
Benefits paid from the plan	(24,018	)	(622	)	(647	)	(6,421	)	(31,708	)
Benefits paid directly by employer	—		(1,318	)	(2,848	)	(866	)	(5,032	)
Foreign currency translation adjustment1	(76,109	)	(6,641	)	(7,244	)	(4,217	)	(94,211	)
Other	—		—		—		(11,994	)	(11,994	)
As at September 30, 2022	525,262		77,477		61,420		60,368		724,527
Defined benefit obligations of unfunded plans	—		77,477		—		18,829		96,306
Defined benefit obligations of funded plans	525,262		—		61,420		41,539		628,221
As at September 30, 2022	525,262		77,477		61,420		60,368		724,527
Defined benefit obligations	U.K.		France		Germany		Other		Total
	$		$		$		$		$
As at September 30, 2020	891,628		84,442		104,090		83,584		1,163,744
Current service cost	1,114		6,004		665		8,095		15,878
Interest cost	13,490		529		642		2,867		17,528
Past service cost	346		—		—		—		346
Actuarial losses (gains) due to change in financial assumptions1	21,722		(2,922	)	(1,201	)	(1,125	)	16,474
Actuarial (gains) losses due to experience1	(9,994	)	(3,498	)	521		(559	)	(13,530	)
Plan participant contributions	92		—		—		—		92
Benefits paid from the plan	(29,936	)	—		(1,053	)	(3,521	)	(34,510	)
Benefits paid directly by employer	—		(2,492	)	(2,954	)	(2,242	)	(7,688	)
Foreign currency translation adjustment1	(7,454	)	(5,057	)	(6,329	)	(4,940	)	(23,780	)
As at September 30, 2021	881,008		77,006		94,381		82,159		1,134,554
Defined benefit obligations of unfunded plans	—		77,006		—		40,491		117,497
Defined benefit obligations of funded plans	881,008		—		94,381		41,668		1,017,057
As at September 30, 2021	881,008		77,006		94,381		82,159		1,134,554

¹ Amounts recognized in other comprehensive income.

108 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17. Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Plan assets and reimbursement rights	U.K.		France		Germany		Other		Total
	$		$		$		$		$
As at September 30, 2021	986,359		661		33,057		37,467		1,057,544
Interest income on plan assets	18,901		—		274		1,907		21,082
Employer contributions	1,007		1,318		2,638		4,449		9,412
Return on assets excluding interest income1	(324,003	)	—		(214	)	(1,836	)	(326,053	)
Plan participant contributions	80		—		—		393		473
Benefits paid from the plan	(24,018	)	(622	)	(647	)	(6,421	)	(31,708	)
Benefits paid directly by employer	—		(1,318	)	(2,848	)	(866	)	(5,032	)
Administration expenses paid from the plan	(1,568	)	—		—		(7	)	(1,575	)
Foreign currency translation adjustment1	(84,849	)	(39	)	(2,737	)	(1,088	)	(88,713	)
As at September 30, 2022	571,909		—		29,523		33,998		635,430
Plan assets	571,909		—		11,028		33,616		616,553
Reimbursement rights	—		—		18,495		382		18,877
As at September 30, 2022	571,909		—		29,523		33,998		635,430
Plan assets and reimbursement rights	U.K.		France		Germany		Other		Total
	$		$		$		$		$
As at September 30, 2020	977,137		692		35,271		35,357		1,048,457
Interest income on plan assets	14,795		5		216		1,507		16,523
Employer contributions	1,640		2,492		3,462		7,649		15,243
Return on assets excluding interest income1	32,252		7		384		1,836		34,479
Plan participant contributions	92		—		—		393		485
Benefits paid from the plan	(29,936	)	—		(1,053	)	(3,521	)	(34,510	)
Benefits paid directly by employer	—		(2,492	)	(2,954	)	(2,242	)	(7,688	)
Administration expenses paid from the plan	(1,400	)	—		—		(8	)	(1,408	)
Foreign currency translation adjustment1	(8,221	)	(43	)	(2,269	)	(3,504	)	(14,037	)
As at September 30, 2021	986,359		661		33,057		37,467		1,057,544
Plan assets	986,359		661		12,234		37,040		1,036,294
Reimbursement rights	—		—		20,823		427		21,250
As at September 30, 2021	986,359		661		33,057		37,467		1,057,544

¹  Amounts recognized in other comprehensive income.

FISCAL 2022 RESULTS — 109

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17. Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

The plan assets at the end of the years consist of:

As at September 30, 2022	U.K.	France	Germany	Other	Total
	$	$	$	$	$
Quoted equities	196,611	—	—	—	196,611
Quoted bonds	102,658	—	—	—	102,658
Cash	143,312	—	—	65	143,377
Other1	129,328	—	11,028	33,551	173,907
	571,909	—	11,028	33,616	616,553
As at September 30, 2021	U.K.	France	Germany	Other	Total
	$	$	$	$	$
Quoted equities	426,066	—	—	—	426,066
Quoted bonds	109,787	—	—	—	109,787
Cash	36,974	—	—	64	37,038
Other1	413,532	661	12,234	36,976	463,403
	986,359	661	12,234	37,040	1,036,294

¹ Other is mainly composed of quoted investment funds and various insurance policies to cover some of the defined benefit obligations.

Plan assets do not include any shares of the Company, property occupied by the Company or any other assets used by the Company.

The following table summarizes the expense¹ recognized in the consolidated statements of earnings:

	Year ended September 30
	2022	2021
	$	$
Current service cost	13,053	15,878
Past service cost	—	346
Net interest on net defined benefit obligations or assets	51	1,005
Administration expenses	1,575	1,408
	14,679	18,637

¹  The expense was presented as costs of services, selling and administrative for an amount of $13,053,000 and as net finance costs for an amount of $1,626,000 (Note 25) ($16,224,000 and $2,413,000, respectively for the year ended September 30, 2021).

110 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17. Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Actuarial assumptions

The following are the principal actuarial assumptions calculated as weighted averages of the defined benefit obligations. The assumed discount rates, future salary and pension increases, inflation rates and mortality all have a significant effect on the accounting valuation.

As at September 30, 2022	U.K	France	Germany	Other
	%	%	%	%
Discount rate	4.95	3.75	4.07	6.02
Future salary increases	0.35	3.77	2.50	2.51
Future pension increases	3.30	—	2.10	0.60
Inflation rate	3.60	2.20	2.00	4.06
As at September 30, 2021	U.K.	France	Germany	Other
	%	%	%	%
Discount rate	2.03	0.90	0.88	4.22
Future salary increases	0.35	3.75	2.50	2.36
Future pension increases	3.38	—	1.80	0.10
Inflation rate	3.45	1.50	2.00	3.75

The average longevity over 65 of a member presently at age 45 and 65 are as follows:

As at September 30, 2022	U.K.			Germany
		(in years	)
Longevity at age 65 for current members
Males	22.0			21.0
Females	23.8			24.0
Longevity at age 45 for current members
Males	23.3			23.0
Females	25.3			26.0
As at September 30, 2021	U.K.			Germany
		(in years	)
Longevity at age 65 for current members
Males	21.9			21.0
Females	23.8			24.0
Longevity at age 45 for current members
Males	23.3			23.0
Females	25.4			26.0

FISCAL 2022 RESULTS — 111

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17. Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Actuarial assumptions (continued)

Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in each country. Mortality assumptions for the most significant countries are based on the following post-retirement mortality tables for the year ended September 30, 2022: (1) U.K.: 100% S2PxA (year of birth) plus CMI_2020 projections with 1.25% p.a. minimum long term improvement rate, (2) Germany: Heubeck RT2018G and (3) France: INSEE TVTD 2016-2018.

The following tables show the sensitivity of the defined benefit obligations to changes in the principal actuarial assumptions:

As at September 30, 2022	U.K.		France		Germany
	$		$		$
Increase of 0.25% in the discount rate	(19,249	)	(2,294	)	(1,512	)
Decrease of 0.25% in the discount rate	20,234		2,500		1,578
Salary increase of 0.25%	193		2,584		20
Salary decrease of 0.25%	(188	)	(2,388	)	(19	)
Pension increase of 0.25%	13,324		—		774
Pension decrease of 0.25%	(12,614	)	—		(747	)
Increase of 0.25% in inflation rate	21,301		2,584		774
Decrease of 0.25% in inflation rate	(16,005	)	(2,388	)	(747	)
Increase of one year in life expectancy	12,957		281		1,511
Decrease of one year in life expectancy	(13,093	)	(320	)	(1,360	)
As at September 30, 2021	U.K.		France		Germany
	$		$		$
Increase of 0.25% in the discount rate	(36,571	)	(2,716	)	(2,986	)
Decrease of 0.25% in the discount rate	38,221		2,851		3,144
Salary increase of 0.25%	480		2,870		35
Salary decrease of 0.25%	(471	)	(2,746	)	(34	)
Pension increase of 0.25%	25,254		—		1,440
Pension decrease of 0.25%	(24,480	)	—		(1,381	)
Increase of 0.25% in inflation rate	36,172		2,870		1,440
Decrease of 0.25% in inflation rate	(34,478	)	(2,746	)	(1,381	)
Increase of one year in life expectancy	27,907		555		3,131
Decrease of one year in life expectancy	(27,556	)	(585	)	(2,761	)

The sensitivity analysis above has been based on a method that extrapolates the impact on the defined benefit obligations as a result of reasonable changes in key assumptions occurring at the end of the year.

The weighted average duration of the defined benefit obligations are as follows:

	Year ended September 30
	2022	2021
	(in years)
U.K.	17	18
France	13	15
Germany	11	13
Other	8	9

112 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17. Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

The Company expects to contribute $7,257,000 to defined benefit plans during the next year, of which $329,000 relates to the U.K. plans, and $6,928,000 relates to the other plans. The contributions will include new benefit accruals.

DEFINED CONTRIBUTION PLANS

The Company also operates defined contribution pension plans. In some countries, contributions are made into the state pension plans. The pension cost for defined contribution plans amounted to $226,079,000 in 2022 ($224,010,000 in 2021).

In addition, in Sweden, the Company contributes to a multi-employer plan, Alecta SE (Alecta) pension plan, which is a defined benefit pension plan. This pension plan is classified as a defined contribution plan as sufficient information is not available to use defined benefit accounting. Alecta lacks the possibility of establishing an exact distribution of assets and provisions to the respective employers. The Company’s proportion of the total contributions to the plan is 0.48% and the Company’s proportion of the total number of active members in the plan is 0.47%.

Alecta uses a collective funding ratio to determine the surplus or deficit in the pension plan. Any surplus or deficit in the plan will affect the amount of future contributions payable. The collective funding is the difference between Alecta’s assets and the commitments to the policy holders and insured individuals. The collective funding ratio is normally allowed to vary between 125% and 175%. As at September 30, 2022, Alecta collective funding ratio was 189% (169% in 2021). The plan expense was $29,539,000 in 2022 ($31,807,000 in 2021). The Company expects to contribute $20,131,000 to the plan during the next year.

OTHER BENEFIT PLANS

As at September 30, 2022, the deferred compensation liability totaled $81,452,000 ($91,943,000 as at September 30, 2021) (Note 15) and the deferred compensation assets totaled $71,863,000 ($81,633,000 as at September 30, 2021) (Note 11). The deferred compensation liability is mainly related to plans covering some of its U.S. and German management. Some of the plans include assets that will be used to fund the liabilities.

For the deferred compensation plan in the U.S., a trust was established so that the plan assets could be segregated; however, the assets are subject to the Company’s general creditors in the case of bankruptcy. The assets composed of investments vary with employees’ contributions and changes in the value of the investments. The change in liabilities associated with the plan is equal to the change of the assets. The assets in the trust and the associated liabilities totaled $71,863,000 as at September 30, 2022 ($81,245,000 as at September 30, 2021).

FISCAL 2022 RESULTS — 113

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

18. Accumulated other comprehensive income

	As at September 30, 2022		As at September 30, 2021
	$		$
Items that will be reclassified subsequently to net earnings:
Net unrealized gains on translating financial statements of foreign operations, net of accumulated income tax expense of $45,419 ($43,208 as at September 30, 2021)	291,532		611,230
Net losses on cross-currency swaps and on translating long-term debt designated as hedges of net investments in foreign operations, net of accumulated income tax recovery of $43,936 ($41,611 as at September 30, 2021)	(271,690	)	(267,149	)
Deferred gains of hedging on cross-currency swaps, net of accumulated income tax expense of $4,664 ($2,369 as at September 30, 2021)	28,274		6,569
Net unrealized gains on cash flow hedges, net of accumulated income tax expense of $10,398 ($1,252 as at September 30, 2021)	30,274		5,029
Net unrealized (losses) gains on financial assets at fair value through other comprehensive income, net of accumulated income tax recovery of $1,367 (net of accumulated income tax expense of $592 as at September 30, 2021)	(4,072	)	2,191
Items that will not be reclassified subsequently to net earnings:
Net remeasurement losses on defined benefit plans, net of accumulated income tax recovery of $12,095 ($11,084 as at September 30, 2021)	(34,572	)	(26,290	)
	39,746		331,580

For the year ended September 30, 2022, $4,151,000 of the net unrealized gains on cash flow hedges, net of income tax expense of $998,000, previously recognized in other comprehensive income were reclassified in the consolidated statements of earnings ($412,000 of net unrealized loss on cash flow hedges, net of income tax recovery of $623,000, were reclassified for the year ended September 30, 2021).

For the year ended September 30, 2022, $10,746,000 of the deferred gains of hedging on cross-currency swaps, net of income tax expense of 3,876,000, were also reclassified in the consolidated statements of earnings ($10,317,000 and $3,719,000, respectively for the year ended September 30, 2021).

19. Capital stock

The Company’s authorized share capital is comprised of an unlimited number, all without par value, of:

– First preferred shares, issuable in series, carrying one vote per share, each series ranking equal with other series, but prior to second preferred shares, Class A subordinate voting shares and Class B multiple voting shares with respect to the payment of dividends;

– Second preferred shares, issuable in series, non-voting, each series ranking equal with other series, but prior to Class A subordinate voting shares and Class B multiple voting shares with respect to the payment of dividends;

– Class A subordinate voting shares, carrying one vote per share, participating equally with Class B multiple voting shares with respect to the payment of dividends and convertible into Class B multiple voting shares under certain conditions in the event of certain takeover bids on Class B multiple voting shares; and

– Class B multiple voting shares, carrying ten votes per share, participating equally with Class A subordinate voting shares with respect to the payment of dividends and convertible at any time at the option of the holder into Class A subordinate voting shares.

114 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

19. Capital stock (continued)

For the fiscal years 2022 and 2021, the number of issued and outstanding Class A subordinate voting shares and Class B multiple voting shares varied as follows:

	Class A subordinate voting shares				Class B multiple voting shares						Total
	Number		Carrying value		Number		Carrying value		Number		Carrying value
			$				$				$
As at September 30, 2020	230,690,875		1,721,491		28,945,706		40,382		259,636,581		1,761,873
Release of shares held in trusts1	—		7,150		—		—		—		7,150
Issued upon exercise of stock options2	1,290,919		73,827		—		—		1,290,919		73,827
Purchased and cancelled3	(15,310,465	)	(177,560	)	—		—		(15,310,465	)	(177,560	)
Purchased and not cancelled3	—		(1,181	)	—		—		—		(1,181	)
Purchased and held in trusts4	—		(31,404	)	—		—		—		(31,404	)
Conversion of shares5	2,500,000		3,488		(2,500,000	)	(3,488	)	—		—
As at September 30, 2021	219,171,329		1,595,811		26,445,706		36,894		245,617,035		1,632,705
Release of shares held in trusts1	—		15,821		—		—		—		15,821
Issued upon exercise of stock options2	941,059		50,236		—		—		941,059		50,236
Purchased and cancelled3	(8,809,839	)	(134,409	)	—		—		(8,809,839	)	(134,409	)
Purchased and not cancelled3	—		(881	)	—		—		—		(881	)
Purchased and held in trusts4	—		(70,303	)	—		—		—		(70,303	)
As at September 30, 2022	211,302,549		1,456,275		26,445,706		36,894		237,748,255		1,493,169

¹  During the year ended September 30, 2022, 235,441 shares held in trust were released (119,108 during the year ended September 30, 2021) with a recorded value of $15,821,000 ($7,150,000 during the year ended September 30, 2021) that was removed from contributed surplus. As at September 30, 2022, 1,841,709 Class A subordinate voting shares were held in trusts under the PSU plans (1,433,521 as at September 30, 2021).

²  The carrying value of Class A subordinate voting shares includes $8,549,000 ($12,773,000 during the year ended September 30, 2021), which corresponds to a reduction in contributed surplus representing the value of accumulated compensation costs associated with the stock options exercised during the year ended September 30, 2022.

³  On February 1, 2022, the Company’s Board of Directors authorized and subsequently received the regulatory approval from the Toronto Stock Exchange (TSX), for the renewal of the Normal Course Issuer Bid (NCIB) for the purchase for cancellation of up to 18,781,981 Class A subordinate voting shares on the open market through the TSX, the New York Stock Exchange (NYSE) and/or alternative trading systems or otherwise pursuant to exemption orders issued by securities regulators. The Class A subordinate voting shares are available for purchase for cancellation commencing on February 6, 2022 until no later than February 5, 2023, or on such earlier date when the Company has either acquired the maximum number of Class A subordinate voting shares allowable under the NCIB or elects to terminate the bid.

During the year ended September 30, 2022, the Company purchased for cancellation 4,907,073 Class A subordinate voting shares from the Caisse de dépôt et placement du Québec, in two separate transactions on March 1, 2022 and August 1, 2022, for total aggregate cash consideration of $500,000,000 (4,204,865 and $400,000,000, respectively during the year ended September 30, 2021). The excess of the purchase price over the carrying value in the amount of $395,026,000 was charged to retained earnings ($310,048,000 during the year ended September 30, 2021). The purchases were made pursuant to two exemption orders issued by the Autorité des marchés financiers and are considered within the annual aggregate limit that the Company is entitled to purchase under its current NCIB.

In addition, during the year ended September 30, 2022, the Company purchased for cancellation 3,866,171 Class A subordinate voting shares (11,255,600 during the year ended September 30, 2021) under its previous and current NCIB for a cash consideration of $408,656,000 ($1,119,226,000 during the year ended September 30, 2021) and the excess of the purchase price over the carrying value in the amount of $378,340,000 ($1,030,437,000 during the year ended September 30, 2021) was charged to retained earnings. Of the purchased Class A subordinate voting shares, 113,405 shares with a carrying value of $881,000 and a purchase value of $11,670,000 were held by the Company and were paid and cancelled subsequent to September 30, 2022.

As of September 30, 2021, 150,000 Class A subordinate voting shares purchased for cancellation, for a cash consideration of $16,402,000 and with a carrying value of $1,181,000, were held by the Company and were paid and cancelled during the year ended September 30, 2022.

⁴  During the year ended September 30, 2022, the trustees, in accordance with the terms of the PSU plans and Trust Agreements, purchased 643,629 Class A subordinate voting shares of the Company on the open market (309,606 during the year ended September 30, 2021) for a cash consideration of $70,303,000 ($31,404,000 during the year ended September 30, 2021).

⁵  On March 1, 2021, the Co-founder and Advisor to the Executive Chairman of the Board of the Company, also a related party of the Company, converted a total of 2,500,000 Class B multiple voting shares into 2,500,000 Class A subordinate voting shares.

FISCAL 2022 RESULTS — 115

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

20. Share-based payments

a) Performance share units

The Company operates two PSU plans with similar terms and conditions. Under both plans, the Board of Directors may grant PSUs to certain employees and officers which entitle them to receive one Class A subordinate voting share for each PSU. The vesting performance conditions are determined by the Board of Directors at the time of each grant. PSUs expire on the business day preceding December 31 of the third calendar year following the end of the fiscal year during which the PSU award was made, except in the event of retirement, termination of employment or death. Conditionally upon achievement of performance objectives, granted PSUs under the second plan vest at the end of the four-year period while granted PSUs under the first plan vest annually over a period of four years from the date of the grant.

Class A subordinate voting shares purchased in connection with the PSU plans are held in trusts for the benefit of the participants. The trusts, considered as structured entities, are consolidated in the Company’s consolidated financial statements with the cost of the purchased shares recorded as a reduction of capital stock (Note 19).

The following table presents information concerning the number of outstanding PSUs granted by the Company:

Outstanding as at September 30, 2020	1,231,470
Granted1	669,252
Exercised (Note 19)	(119,108	)
Forfeited	(365,411	)
Outstanding as at September 30, 2021	1,416,203
Granted1	805,699
Exercised (Note 19)	(237,294	)
Forfeited	(175,017	)
Outstanding as at September 30, 2022	1,809,591

  ¹ The PSUs granted in 2022 had a grant date fair value of $109.07 per unit ($94.00 in 2021).

b) Stock options

Under the Company’s stock option plan, the Board of Directors may grant, at its discretion, stock options to purchase Class A subordinate voting shares to certain employees, officers and directors of the Company and its subsidiaries. The exercise price is established by the Board of Directors and is equal to the closing price of the Class A subordinate voting shares on the TSX on the day preceding the date of the grant. Stock options generally vest over four years from the date of grant conditionally upon achievement of performance objectives and must be exercised within a ten-year period, except in the event of retirement, termination of employment or death. As at September 30, 2022, 15,327,686 Class A subordinate voting shares were reserved for issuance under the stock option plan.

The following table presents information concerning the outstanding stock options granted by the Company:

				2022					2021
	Number of options			Weighted average exercise price per share		Number of options			Weighted average exercise price per share
				$					$
Outstanding, beginning of year		8,012,077			64.49		8,934,097			61.33
Granted		11,940			110.10		995,160			97.86
Exercised (Note 19)		(941,059	)		44.30		(1,290,919	)		47.29
Forfeited		(188,130	)		97.55		(622,940	)		107.82
Expired		(11,983	)		104.36		(3,321	)		108.44
Outstanding, end of year		6,882,845			66.36		8,012,077			64.49
Exercisable, end of year		5,837,921			61.02		5,781,579			54.76

The weighted average share price at the date of exercise for stock options exercised in 2022 was $107.09 ($104.75 in 2021).

116 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

20. Share-based payments (continued)

b) Stock options (continued)

The following table summarizes information about the outstanding stock options granted by the Company as at September 30, 2022:

				Options outstanding				Options exercisable
Range of exercise price		Number of options		Weighted average remaining contractual life		Weighted average exercise price		Number of options		Weighted average exercise price
$				(in years)		$				$
	23.65 to 38.79		982,507		1.06		33.01		982,507		33.01
	39.47 to 50.94		970,493		2.71		45.46		970,493		45.46
	52.63 to 63.72		2,532,301		4.45		63.04		2,532,301		63.04
	67.04 to 87.65		1,311,981		5.92		84.05		1,005,535		83.60
	97.84 to 115.01		1,085,563		7.91		101.61		347,085		103.69
			6,882,845		4.54		66.36		5,837,921		61.02

The weighted average fair value of stock options granted in the year and the weighted average assumptions used in the calculation of their fair value on the date of grant using the Black-Scholes option pricing model were as follows:

	Year ended September 30
	2022		2021
Grant date fair value ($)		20.94		16.76
Dividend yield (%)		0.00		0.00
Expected volatility (%)1		21.27		20.76
Risk-free interest rate (%)		1.28		0.40
Expected life (years)		4.00		4.00
Exercise price ($)		110.10		97.86
Share price ($)		110.10		97.86

¹  Expected volatility was determined using statistical formulas and based on the weekly historical average of closing daily share prices over the period of the expected life of stock options.

c) Share purchase plan

Under the share purchase plan, the Company contributes an amount equal to a percentage of the employee’s basic contribution, up to a maximum of 3.50%. An employee may make additional contributions in excess of the basic contribution. However, the Company does not match contributions in the case of such additional contributions. The employee and Company’s contributions are remitted to an independent plan administrator who purchases Class A subordinate voting shares on the open market on behalf of the employee through either the TSX or NYSE.

d) Deferred share unit plan

External members of the Board of Directors (participants) are entitled to receive part or their entire retainer fee in DSUs. DSUs are granted with immediate vesting and must be exercised no later than December 15 of the calendar year immediately following the calendar year during which the participant ceases to act as a director. Each DSU entitles the holder to receive a cash payment equal to the closing price of Class A subordinate voting shares on the TSX on the payment date. As at September 30, 2022, the number of outstanding DSUs was 119,090 (101,578 DSUs as at September 30, 2021).

FISCAL 2022 RESULTS — 117

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

20. Share-based payments (continued)

e) Share-based payment costs

The share-based payment expense recorded in costs of services, selling and administrative is as follows:

	Year ended September 30
	2022		2021
	$		$
PSUs		42,148		32,484
Stock options		6,848		13,108
Share purchase plan		136,275		128,662
DSUs		1,455		2,876
		186,726		177,130

21. Earnings per share

The following table sets forth the computation of basic and diluted earnings per share for the years ended September 30:

					2022						2021
	Net earnings		Weighted average number of shares outstanding1		Earnings per share		Net earnings		Weighted average number of shares outstanding1		Earnings per share
	$				$		$				$
Basic		1,466,142		239,262,004		6.13		1,369,072		249,119,219		5.50
Net effect of dilutive stock options and PSUs2				3,605,441						3,969,661
Diluted		1,466,142		242,867,445		6.04		1,369,072		253,088,880		5.41

¹  During the year ended September 30, 2022, 8,839,439 Class A subordinate voting shares purchased for cancellation and 1,841,709 Class A subordinate voting shares held in trust were excluded from the calculation of weighted average number of shares outstanding as of the date of transaction (15,460,465 and 1,433,521, respectively during the year ended September 30, 2021).

²  The calculation of the diluted earnings per share excluded 307,272 stock options for the year ended September 30, 2022 (1,276,809 for the year ended September 30, 2021), as they were anti-dilutive.

22. Remaining performance obligations

Remaining performance obligations relates to Company’s performance obligations that are partially or fully unsatisfied under fixed-fee arrangements.

The amount of the selling price allocated to remaining performance obligations as at September 30, 2022 is $919,664,000

($939,499,000 as at September 30, 2021) and is expected to be recognized as revenue within a weighted average of 1.9 years (1.8 years as at September 30, 2021).

118 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

23. Costs of services, selling and administrative

	Year ended September 30
	2022		2021
	$		$
Salaries and other member costs1		7,798,407		7,317,113
Professional fees and other contracted labour		1,459,295		1,262,659
Hardware, software and data center related costs		790,447		830,199
Property costs		214,430		216,506
Amortization, depreciation and impairment (Note 24)		468,334		505,562
Other operating expenses		45,651		46,125
		10,776,564		10,178,164

¹  Net of R&D and other tax credits of $155,856,000 in 2022 ($167,198,000 in 2021).

24. Amortization, depreciation and impairment

	Year ended September 30
	2022		2021
	$		$
Depreciation of PP&E (Note 6)		133,651		144,423
Depreciation of right-of-use assets (Note 7)		141,295		160,240
Impairment of right-of-use assets (Note 7)		1,495		956
Amortization of contract costs related to transition costs		48,594		61,369
Impairment of contract costs related to transition costs		—		4,592
Amortization of intangible assets (Note 9)		139,940		129,861
Impairment of intangible assets (Note 9)		3,359		4,121
Included in costs of services, selling and administrative (Note 23)		468,334		505,562
Amortization of contract costs related to incentives (presented as a reduction of revenue)		2,201		2,611
Amortization of deferred financing fees (presented in finance costs)		829		875
Amortization of premiums and discounts on investments related to funds held for clients (presented net as a reduction (increase) of revenue)		37		(102	)
Impairment of PP&E (presented in integration costs) (Note 6)		858		1,113
Impairment of right-of-use assets (presented in integration costs) (Note 7)		2,363		511
		474,622		510,570

25. Net finance costs

	Year ended September 30
	2022			2021
	$			$
Interest on long-term debt		57,752			67,467
Interest on lease liabilities		27,426			33,255
Net interest costs on net defined benefit obligations or assets (Note 17)		1,626			2,413
Other finance costs		8,413			6,774
Finance costs		95,217			109,909
Finance income		(3,194	)		(3,111	)
		92,023			106,798

FISCAL 2022 RESULTS — 119

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

26. Investments in subsidiaries

a) Business acquisitions realized in current fiscal year

The Company made the following acquisitions during the year ended September 30, 2022:

– On October 1, 2021, the Company acquired all of the outstanding shares of Array Holding Company, Inc. (Array), for a purchase price of $60,337,000. Based in the United States, Array is a digital services provider that optimizes mission performance for the U.S. Department of Defense and other government organizations and is headquartered in Greenbelt, Maryland.

– On October 28, 2021, the Company acquired all of the outstanding shares of Cognicase Management Consulting (CMC), for a purchase price of $90,900,000. Based in Spain, CMC is a provider of technology and management consulting services and solutions, headquartered in Madrid.

– On February 28, 2022, the Company acquired all of the outstanding shares of Unico Computer Systems Pty Ltd (Unico), for a purchase price of $39,814,000. Based in Australia, Unico is a technology consultancy and systems integrator, headquartered in Melbourne.

– On May 25, 2022, the Company acquired all of the outstanding shares of Harwell Management (Harwell), for a purchase price of $47,309,000. Based in France, Harwell is a management consulting firm specializing in the financial services industry, headquartered in Paris.

– On May 31, 2022, the Company acquired control of Umanis SA (Umanis) through the acquisition of 72.4% of its outstanding shares (excluding treasury shares), for a purchase price of $303,896,000, and filed with the French financial markets authority (Autorité des Marchés Financiers) the draft mandatory tender offer to purchase all remaining outstanding shares.

By July 18, 2022, the Company acquired an aggregate total interest of more than 90.0% of the outstanding shares (excluding treasury shares) and launched a statutory squeeze-out process through which the remaining shares were acquired on July 29, 2022, for a total cash consideration of $116,362,000. Based in France, Umanis is a digital company specializing in data, digital and business solutions, headquartered in Paris.

These acquisitions were made to further expand CGI’s footprint in their respective regions and to complement CGI’s proximity model.

120 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

26. Investments in subsidiaries (continued)

a) Business acquisitions realized in current fiscal year (continued)

The following table presents the fair value of assets acquired and liabilities assumed for all acquisitions based on the acquisition-date fair values of the identifiable tangible and intangible assets acquired and liabilities assumed:

	CMC			Umanis			Others			Total
	$			$			$			$
Current assets		46,900			106,102			18,267			171,269
PP&E (Note 6)		1,556			5,179			1,429			8,164
Right-of-use assets (Note 7)		3,353			12,855			5,906			22,114
Contract costs		979			—			—			979
Intangible assets1 (Note 9)		20,657			62,337			27,653			110,647
Other long-term assets		2,336			16,362			—			18,698
Goodwill2 (Note 12)		93,638			391,026			146,184			630,848
Current liabilities		(41,055	)		(96,141	)		(26,904	)		(164,100	)
Long-term debt		(37,937	)		(77,973	)		(46,730	)		(162,640	)
Lease liabilities		(3,920	)		(12,919	)		(6,342	)		(23,181	)
Deferred tax liabilities		(2,706	)		(12,688	)		(560	)		(15,954	)
Retirement benefits obligations (Note 17)		—			(9,743	)		(449	)		(10,192	)
		83,801			384,397			118,454			586,652
Cash acquired		7,099			35,861			29,006			71,966
Net assets acquired		90,900			420,258			147,460			658,618
Consideration paid		79,291			420,258			139,643			639,192
Consideration payable		11,609			—			7,817			19,426

 ¹ Intangible assets are mainly composed of client relationships.

 ² The goodwill arising from the acquisitions mainly represents the future economic value associated to acquired work force and synergies with the Company’s operations. The goodwill is not deductible for tax purposes.

During the year ended September 30, 2022, the Company finalized the fair value of assets acquired and liabilities assumed for Array and CMC.

The fair value of all assets acquired and liabilities assumed for Unico, Harwell and Umanis are preliminary and are expected to be completed as soon as management will have gathered all the information available and considered necessary in order to finalize this allocation.

The following pro-forma figures are estimated based on the historical financial performance of the acquired businesses prior to the business combinations and do not include any financial synergies and adjustments to the fair value of assets acquired and liabilities assumed.

For the year ended September 30, 2022, on a pro-forma basis, the above acquisitions would have contributed approximately $600,000,000 of revenues and $43,000,000 of earnings before income taxes to the financial results of the Company had the acquisition dates been October 1, 2021.

Since their respective date of acquisition, on a pro-forma basis, the Umanis and CMC acquisitions generated approximately $113,000,000 and $112,000,000, respectively, in revenues and contributed approximately $9,000,000 and $5,000,000, respectively, to the earnings before income taxes to the financial results of the Company.

FISCAL 2022 RESULTS — 121

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

26. Investments in subsidiaries (continued)

b) Business acquisitions realized in the prior fiscal year

The Company made the following acquisitions during the year ended September 30, 2021:

– On December 31, 2020, the Company acquired the assets of Harris, Mackessy & Brennan, Inc.’s Professional Services Division (HMB), for a purchase price of $30,340,000. Based in the United States, the division focused on high-end technology consulting and services for commercial and government clients and is headquartered in Columbus, Ohio.

– On May 3, 2021, the Company acquired all of the outstanding shares of Sense Corp, for a purchase price of $81,173,000. Based in the United States, the professional services firm focused on digital systems integration and consulting for state and local government and commercial clients and is headquartered in Saint-Louis, Missouri.

These acquisitions were made to further expand CGI’s footprint in the region and to complement CGI’s proximity model.

The following table presents the fair value of assets acquired and liabilities assumed for all acquisitions based on the acquisition-date fair values of the identifiable tangible and intangible assets acquired and liabilities assumed:

	2021
	$
Current assets		17,746
PP&E (Note 6)		1,869
Right-of-use assets (Note 7)		4,982
Intangible assets (Note 9)		22,107
Deferred tax assets		749
Goodwill1		75,697
Current liabilities		(11,859	)
Lease liabilities		(5,733	)
	105,558
Cash acquired		5,955
Net assets acquired		111,513
Consideration paid		104,148
Consideration payable		7,365

   ¹ The goodwill arising from the acquisitions mainly represents the future economic value associated to acquired work force and synergies with the Company’s operations. As at September 30, 2021, $75,697,000 of the goodwill is included in the U.S. Commercial and State Government operating segment. An amount of goodwill of $23,985,000 is deductible for tax purposes.

In addition, during the year ended September 30, 2022, the Company paid $4,700,000 related to acquisitions realized in prior fiscal years.

122 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

26. Investments in subsidiaries (continued)

c) Acquisition-related and integration costs

During the year ended September 30, 2022, the Company expensed $27,654,000, for acquisition-related and integration costs. This amount includes acquisition-related costs of $3,094,000, and integration costs of $24,560,000. The acquisition-related costs consist mainly of professional fees incurred for the acquisitions. The integration costs include terminations of employment of $10,948,000, accounted for in restructuring provisions (note 13), and other integration costs of $13,612,000, mainly related to lease of vacated premises.

During the year ended September 30, 2021, the Company expensed $7,371,000, for acquisition-related and integration costs. This amount included acquisition-related costs of $293,000, and integration costs of $7,078,000. The acquisition-related costs consisted mainly of professional fees incurred for the acquisitions. The integration costs included terminations of employment of $1,008,000, accounted for in restructuring provisions, and other integration costs of $6,070,000.

d) Disposal

There was no significant disposal during the years ended September 30, 2022 and 2021.

27. Supplementary cash flow information

a) Net change in non-cash working capital items is as follows for the years ended September 30:

	2022			2021
	$			$
Accounts receivable		(47,789	)		(42,336	)
Work in progress		(116,260	)		(12,354	)
Prepaid expenses and other assets		(10,907	)		(33,631	)
Long-term financial assets		22,929			(10,241	)
Accounts payable and accrued liabilities		108,188			60,822
Accrued compensation and employee-related liabilities		(43,429	)		233,670
Deferred revenue		43,656			62,307
Income taxes		(2,626	)		59,620
Provisions		(41,561	)		(105,292	)
Long-term liabilities		(28,074	)		1,535
Derivative financial instruments		(70	)		(249	)
Retirement benefits obligations		5,050			1,013
		(110,893	)		214,864

b) Non-cash operating and investing activities related to operations are as follows for the years ended September 30:

	2022			2021
	$			$
Operating activities
Accounts payable and accrued liabilities		7,720			18,707
Provisions		262			805
		7,982			19,512
Investing activities
Purchase of PP&E		(16,732	)		(18,162	)
Additions, disposals/retirements, change in estimates and lease modifications of right-of-use assets		(101,180	)		(104,467	)
Additions to intangible assets		(1,127	)		(1,350	)
		(119,039	)		(123,979	)

FISCAL 2022 RESULTS — 123

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

27. Supplementary cash flow information (continued)

c) Changes arising from financing activities are as follows for the years ended September 30:

							2022									2021
	Long-term debt			Derivative financial instruments to hedge long-term debt			Lease liabilities			Long-term debt			Derivative financial instruments to hedge long-term debt			Lease liabilities
		$			$			$			$			$			$
Balance, beginning of year		3,401,656			17,187			776,940			3,587,095			32,234			876,370
Cash used in financing activities excluding equity
Increase of long-term debt		—			—			—			1,885,262			—			—
Repayment of long-term debt and lease liabilities		(401,654	)		—			(160,583	)		(1,888,777	)		—			(174,808	)
Repayment of debt assumed in business acquisitions		(113,036	)		—			—			—			—			—
Settlement of derivative financial instruments (Note 31)		—			6,258			—			—			(6,992	)		—
Non-cash financing activities
Additions, disposals/retirements and change in estimates and lease modifications of right-of-use assets		—			—			95,547			—			—			102,281
Additions through business acquisitions (Note 26)		162,640			—			23,181			—			—			5,733
Changes in foreign currency exchange rates		207,561			(169,660	)		(25,153	)		(172,984	)		(8,055	)		(30,721	)
Other		9,867			—			(731	)		(8,940	)		—			(1,915	)
Balance, end of year		3,267,034			(146,215	)		709,201			3,401,656			17,187			776,940

d) Interest paid and received and income taxes paid are classified within operating activities and are as follows for the years ended September 30:

	2022		2021
	$		$
Interest paid		115,408		131,646
Interest received		28,247		15,929
Income taxes paid		435,558		382,833

e) Cash and cash equivalents consisted of unrestricted cash as at September 30, 2022 and 2021.

124 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

28. Segmented information

The following tables present information on the Company’s operations based on its revised management structure. Segment results are based on the location from which the services are delivered - the geographic delivery model. The company has restated the segmented information for the comparative period to conform to the new segmented information structure (Note 12).

																	Year ended September 30, 2022
	Western and Southern Europe		U.S. Commercial and State Government		Canada		U.S. Federal		Scandinavia and Central Europe		U.K. and Australia		Finland, Poland and Baltics		Northwest and Central- East Europe		Asia Pacific		Eliminations			Total
	$		$		$		$		$		$		$		$		$		$			$
Segment revenue		2,152,113		2,075,321		1,981,380		1,750,902		1,571,118		1,291,125		729,024		692,859		799,661		(176,302	)		12,867,201
Segment earnings before acquisition-related and integration costs, net finance costs and income tax expense1		289,730		304,767		463,289		276,395		125,728		200,117		96,651		88,287		241,672		—			2,086,636
Acquisition-related and integration costs (Note 26c)																							(27,654	)
Net finance costs (Note 25)																							(92,023	)
Earnings before income taxes																							1,966,959

¹  Total amortization and depreciation of $470,572,000 included in the Western and Southern Europe, U.S. Commercial and State Government, Canada, U.S. Federal, Scandinavia and Central Europe, U.K. and Australia, Finland, Poland and Baltics, Northwest and Central-East Europe and Asia Pacific segments is $62,922,000, $70,417,000, $57,528,000, $54,073,000, $91,435,000, $40,765,000, $33,219,000, $34,323,000 and $25,890,000, respectively, for the year ended September 30, 2022. Amortization in intangible assets of $3,359,000 includes impairments mainly from a business solution in Northwest and Central-East Europe for $2,131,000.These assets were no longer expected to generate future economic benefits.

																	Year ended September 30, 2021
	Western and Southern Europe		U.S. Commercial and State Government		Canada		U.S. Federal		Scandinavia and Central Europe		U.K. and Australia		Finland, Poland and Baltics		Northwest and Central- East Europe		Asia Pacific		Eliminations			Total
	$		$		$		$		$		$		$		$		$		$			$
Segment revenue		1,917,760		1,800,747		1,755,804		1,607,431		1,663,470		1,355,603		768,994		716,183		680,554		(139,753	)		12,126,793
Segment earnings before acquisition-related and integration costs, net finance costs and income tax expense1		269,350		281,217		390,370		252,657		138,191		218,624		114,358		79,898		207,496		—			1,952,161
Acquisition-related and integration costs (Note 26c)																							(7,371	)
Net finance costs (Note 25)																							(106,798	)
Earnings before income taxes																							1,837,992

¹  Total amortization and depreciation of $508,071,000 included in the Western and Southern Europe, U.S. Commercial and State Government, Canada, U.S. Federal, Scandinavia and Central Europe, U.K. and Australia, Finland, Poland and Baltics, Northwest and Central-East Europe and Asia Pacific segments is $60,186,000, $71,037,000, $65,038,000, $49,636,000, $102,474,000, $57,888,000, $39,275,000, $35,298,000 and $27,239,000, respectively, for the year ended September 30, 2021. Amortization includes impairments of $8,713,000 from business solutions and contract costs which are mainly included in Western and Southern Europe for $3,058,000 related to a business solution and in Finland, Poland and Baltics for $3,490,000 related to contract costs. These assets were no longer expected to generate future economic benefits.

The accounting policies of each operating segment are the same as those described in Note 3, Summary of significant accounting policies. Intersegment revenue is priced as if the revenue was from third parties.

FISCAL 2022 RESULTS — 125

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

28. Segmented information (continued)

GEOGRAPHIC INFORMATION

The following table provides external revenue information based on the client’s location which is different from the revenue presented under operating segments, due to the inter-segment revenue, for the years ended September 30:

	2022		2021
	$		$
Western and Southern Europe
France		1,846,832		1,721,622
Spain		111,515		33,490
Portugal		105,225		105,776
Others		52,510		42,332
	2,116,082		1,903,220
U.S.1		3,987,025		3,510,193
Canada		2,143,211		1,892,246
Scandinavia and Central Europe
Germany		811,458		786,426
Sweden		697,941		782,581
Norway		143,259		166,127
		1,652,658		1,735,134
U.K. and Australia
U.K.		1,397,161		1,487,774
Australia		75,746		67,916
		1,472,907		1,555,690
Finland, Poland and Baltics
Finland		727,853		754,412
Others		34,676		37,660
		762,529		792,072
Northwest and Central-East Europe
Netherlands		494,227		479,597
Denmark		114,849		124,553
Czech Republic		54,621		55,821
Others		64,632		73,493
		728,329		733,464
Asia Pacific
Others		4,460		4,774
		4,460		4,774
		12,867,201		12,126,793

¹  External revenue included in the U.S Commercial and State Government and U.S. Federal operating segments was $2,226,473,000 and $1,760,552,000, respectively in 2022 ($1,889,999,000 and $1,620,194,000, respectively in 2021).

126 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

28. Segmented information (continued)

GEOGRAPHIC INFORMATION (CONTINUED)

The following table provides information for PP&E, right-of-use assets, contract costs and intangible assets based on their location:

	As at September 30, 2022		As at September 30, 2021
	$		$
U.S.		556,075		488,262
Canada		374,757		388,408
France		217,261		120,360
U.K.		112,924		132,897
Sweden		100,088		140,409
Finland		97,486		89,451
Germany		89,527		105,998
India		71,942		70,288
Netherlands		47,274		45,082
Rest of the world		114,966		94,499
		1,782,300		1,675,654

INFORMATION ABOUT SERVICES

The following table provides revenue information based on services provided by the Company for the year ended September 30:

	2022		2021
	$		$
Managed IT and business process services		6,980,988		6,722,967
Business and strategic IT consulting and systems integration services		5,886,213		5,403,826
		12,867,201		12,126,793

MAJOR CLIENT INFORMATION

Contracts with the U.S. federal government and its various agencies, included within the U.S. Federal operating segment, accounted for $1,705,173,000 and 13.3% of revenues for the year ended September 30, 2022 ($1,550,345,000 and 12.8% for the year ended September 30, 2021).

FISCAL 2022 RESULTS — 127

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

29. Related party transactions

During the year ended September 30, 2021, the Company entered into a share conversion transaction with a related party as described in Note 19. As a result, the Company and related subsidiaries are controlled by the Founder and Executive Chairman of the Board.

a) Transactions with subsidiaries and other related parties

Balances and transactions between the Company and its subsidiaries have been eliminated on consolidation. The Company owns 100% of the equity interests of its principal subsidiaries.

The Company’s principal subsidiaries whose revenues, based on the geographic delivery model, represent more than 3% of the consolidated revenues are as follows:

Name of subsidiary	Country of incorporation
CGI Technologies and Solutions Inc.	United States
CGI France SAS	France
CGI Federal Inc.	United States
CGI IT UK Limited	United Kingdom
CGI Information Systems and Management Consultants Inc.	Canada
Conseillers en gestion et informatique CGI Inc.	Canada
CGI Deutschland B.V. & Co KG	Germany
CGI Sverige AB	Sweden
CGI Suomi OY	Finland
CGI Information Systems and Management Consultants Private Limited	India
CGI Nederland BV	Netherlands

b) Compensation of key management personnel

Compensation of key management personnel, currently defined as the executive officers and the Board of Directors of the Company, was as follows for the year ended September 30:

	2022		2021
	$		$
Short-term employee benefits		34,430		30,325
Share-based payments		23,819		19,727

128 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

30. Commitments, contingencies and guarantees

a) Commitments

As at September 30, 2022, the Company entered into long-term service agreements representing a total commitment of $250,049,000. Minimum payments under these agreements are due as follows:

	$
Less than one year		146,662
Between one and three years		83,065
Between three and five years		20,322
Beyond five years		—

b) Contingencies

From time to time, the Company is involved in legal proceedings, audits, litigation and claims which primarily relate to tax exposure, contractual disputes and employee claims arising in the ordinary course of its business. Certain of these matters seek damages in significant amounts and will ultimately be resolved when one or more future events occur or fail to occur. Although the outcome of such matters is not predictable with assurance, the Company has no reason to believe that the disposition of any such current matter could reasonably be expected to have a materially adverse impact on the Company’s financial position, results of operations or the ability to carry on any of its business activities. Claims for which there is a probable unfavourable outcome are recorded in provisions.

In addition, the Company is engaged to provide services under contracts with various government agencies. Some of these contracts are subject to extensive legal and regulatory requirements and, from time to time, government agencies investigate whether the Company’s operations are being conducted in accordance with these requirements. Generally, the governments agencies have the right to change the scope of, or terminate, these projects at its convenience. The termination or reduction in the scope of a major government contract or project could have a materially adverse effect on the results of operations and the financial condition of the Company.

c) Guarantees

Sale of assets and business divestitures

In connection with the sale of assets and business divestitures, the Company may be required to pay counterparties for costs and losses incurred as the result of breaches in contractual obligations, representations and warranties, intellectual property right infringement and litigation against counterparties, among others. While some of the agreements specify a maximum potential exposure, others do not specify a maximum amount or a maturity date. It is not possible to reasonably estimate the maximum amount that may have to be paid under such guarantees. The amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. No amount has been accrued in the consolidated balance sheets relating to this type of indemnification as at September 30, 2022. The Company does not expect to incur any potential payment in connection with these guarantees that could have a materially adverse effect on its consolidated financial statements.

Other transactions

In the normal course of business, the Company may provide certain clients, principally governmental entities, with bid and performance bonds. In general, the Company would only be liable for the amount of the bid bonds if the Company refuses to perform the project once the bid is awarded. The Company would also be liable for the performance bonds in the event of default in the performance of its obligations. As at September 30, 2022, the Company had committed a total of $19,259,000 of these bonds. To the best of its knowledge, the Company is in compliance with its performance obligations under all service contracts for which there is a bid or performance bond, and the ultimate liability, if any, incurred in connection with these guarantees, would not have a materially adverse effect on the Company’s consolidated results of operations or financial condition.

Moreover, the Company has letters of credit for a total of $67,566,000 in addition to the letters of credit covered by the unsecured committed revolving credit facility (Note 14). These guarantees are required in some of the Company’s contracts with customers.

FISCAL 2022 RESULTS — 129

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31. Financial instruments

FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Valuation techniques used to value financial instruments are as follows:

- The fair value of the 2014 U.S. Senior Notes, the 2021 U.S. Senior Notes, the 2021 CAD Senior Notes, the unsecured committed revolving credit facility, the unsecured committed term loan credit facility and the other long- term debt is estimated by discounting expected cash flows at rates currently offered to the Company for debts of the same remaining maturities and conditions;

- The fair value of long-term bonds included in funds held for clients and in long-term investments is determined by discounting the future cash flows using observable inputs, such as interest rate yield curves or credit spreads, or according to similar transactions on an arm’s-length basis;

- The fair value of foreign currency forward contracts is determined using forward exchange rates at the end of the reporting period;

- The fair value of cross-currency swaps is determined based on market data (primarily yield curves, exchange rates and interest rates) to calculate the present value of all estimated cash flows;

- The fair value of cash, cash equivalents and cash included in funds held for clients and short-term investments included in current financial assets is determined using observable quotes; and

- The fair value of deferred compensation plan assets within long-term financial assets is based on observable price quotations and net assets values at the reporting date.

As at September 30, 2022, there were no changes in valuation techniques.

The following table presents the financial liabilities included in the long-term debt (Note 14) measured at amortized cost categorized using the fair value hierarchy.

		As at September 30, 2022				As at September 30, 2021
	Level	Carrying amount		Fair value		Carrying amount		Fair value
		$		$		$		$
2014 U.S. Senior Notes	Level 2		550,177		539,752		888,307		936,084
2021 U.S. Senior Notes	Level 2		1,361,974		1,127,739		1,253,226		1,255,055
2021 CAD Senior Notes	Level 2		595,900		503,227		595,331		585,506
Other long-term debt	Level 2		71,278		68,991		31,169		30,345
			2,579,329		2,239,709		2,768,033		2,806,990

For the remaining financial assets and liabilities measured at amortized cost, the carrying values approximate the fair values of the financial instruments given their short term maturity.

During the year ended September 30, 2022, the Company entered into Canadian dollar to euro fixed for fixed cross-currency swap agreements for a notional amount of $600,000,000, related to the 2021 CAD Senior Notes, which has a maturity date of September 2028. The cross-currency swaps were designated as hedging instruments on the Company’s net investment in European operations.

130 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31. Financial instruments (continued)

FAIR VALUE MEASUREMENTS (CONTINUED)

The following table presents financial assets and liabilities measured at fair value categorized using the fair value hierarchy:

	Level	As at September 30, 2022		As at September 30, 2021
		$		$
Financial assets
FVTE
Cash and cash equivalents	Level 2		966,458		1,699,206
Cash included in funds held for clients (Note 5)	Level 2		504,726		456,525
Deferred compensation plan assets (Note 11)	Level 1		71,863		81,633
			1,543,047		2,237,364
Derivative financial instruments designated as hedging instruments
Current derivative financial instruments included in current financial assets	Level 2
Cross-currency swaps			8,740		4,146
Foreign currency forward contracts			18,934		12,745
Interest rate swaps			—		1,043
Long-term derivative financial instruments (Note 11)	Level 2
Cross-currency swaps			222,246		24,347
Foreign currency forward contracts			15,631		9,231
			265,551		51,512
FVOCI
Short-term investments included in current financial assets	Level 2		6,184		1,027
Long-term bonds included in funds held for clients (Note 5)	Level 2		94,113		136,629
Long-term investments (Note 11)	Level 2		16,826		19,354
			117,123		157,010
Financial liabilities
Derivative financial instruments designated as hedging instruments
Current derivative financial instruments	Level 2
Cross-currency swaps			—		5,762
Foreign currency forward contracts			5,710		735
Long-term derivative financial instruments	Level 2
Cross-currency swaps			1,685		39,918
Foreign currency forward contracts			4,795		1,866
			12,190		48,281

There have been no transfers between Level 1 and Level 2 for the years ended September 30, 2022 and 2021.

FISCAL 2022 RESULTS — 131

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31. Financial instruments (continued)

MARKET RISK

Market risk incorporates a range of risks. Movements in risk factors, such as interest rate risk and currency risk, affect the fair values of financial assets and liabilities.

Interest rate risk

During the year ended September 30, 2022, the Company had interest rate swaps whereby the Company received a fixed rate of interest and paid interest at a variable rate of its 2011 U.S. Senior Note. These swaps were being used to hedge the exposure to changes in the fair value of the debt. In December 2021, the Company repaid the last tranche of the 2011 U.S. Senior Note and settled the related interest rate swaps (Note 14). The following table summarizes the fair value of these swaps.

As at September 30, 2022

As at September 30, 2021

Interest rate swaps

Notional amount

Receive Rate

Pay Rate

Maturity

Fair value

Fair value

$

$

Fair value hedges of 2011 U.S. Senior Note

U.S.$250,000

4.99%

LIBOR 1 month + 3.26%

December 2021

—

1,043

In addition, the Company designates cross-currency interest rate swaps as cash flow hedges for changes in both interest rates and foreign exchange rates of foreign currency denominated long-term debt as described below.

The Company is also exposed to interest rate risk on its unsecured committed revolving credit facility carrying amount.

The Company analyzes its interest rate risk exposure on an ongoing basis using various scenarios to simulate refinancing or the renewal of existing positions. Based on these scenarios, a change in the interest rate of 1% would not have had a significant impact on net earnings.

Currency risk

The Company operates internationally and is exposed to risk from changes in foreign currency exchange rates. The Company mitigates this risk principally through foreign currency denominated debt and derivative financial instruments, which includes foreign currency forward contracts and cross-currency swaps.

The Company hedges a portion of the translation of the Company’s net investments in its U.S. operations into Canadian dollar, with Senior U.S. unsecured notes. As of September 30, 2022, the Senior U.S. unsecured notes of a carrying value of $1,547,617,000 and a nominal amount of $1,547,680,000 have been designated as hedging instruments to hedge portions of the Company’s net investments in its U.S. operations.

The Company also hedges a portion of the translation of the Company’s net investments in its European operations with cross-currency swaps.

132 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31. Financial instruments (continued)

MARKET RISK (CONTINUED)

Currency risk (continued)

The following tables summarize the cross-currency swap agreements that the Company had entered into in order to manage its currency:

								As at September 30, 2022		As at September 30, 2021
Receive Notional		Receive Rate	Pay Notional		Pay rate	Maturity		Fair value		Fair value
								$		$
	Hedges of net investments in European operations
	$759,400	From 1.62% to 3.81%		€521,337	From (0.14%) to 2.51%		From September 2023 to 2028		78,647		12,859
	$136,274	From 3.57% to 3.63%		£75,842	From 2.67% to 2.80%		September 2024		24,247		9,814
	$58,419	From 3.57% to 3.68%		Skr371,900	From 2.12% to 2.18%		September 2024		12,625		5,820
	Hedges of net investments in European operations and cash flow hedges on unsecured committed term loan credit facility
	U.S.$500,000	LIBOR 1 month + 1.00%		€443,381	From 1.13% to 1.17%		December 2023		104,330		(27,819	)
	Cash flow hedges of 2014 U.S Senior Notes
	U.S.$265,000	From 3.74% to 4.06%		$354,093	From 3.45% to 3.81%		From September 2023 to 2024		9,452		(17,861	)
	Total								229,301		(17,187	)

During the year ended September 30, 2022, the Company settled cross-currency swaps with a notional amount of $69,300,000 for a net amount of $6,258,000. The related amounts recognized in accumulated other comprehensive income will be transferred to earnings when the net investment is disposed of.

The Company enters into foreign currency forward contracts to hedge the variability in various foreign currency exchange rates on future revenues. Hedging relationships are designated and documented at inception and quarterly effectiveness assessments are performed during the year.

As at September 30, 2022, the Company held foreign currency forward contracts to hedge exposures to changes in foreign currency, which have the following notional, average contract rates and maturities:

			Average contract rates				As at September 30, 2022			As at September 30, 2021
Foreign currency forward contracts	Notional		Less than one year		More than one year		Fair value			Fair value
							$			$
USD/INR		U.S.$227,289		80.99		83.17		(7,803	)		4,002
CAD/INR		$302,557		62.40		64.41		7,865			882
EUR/INR		€67,895		96.28		95.93		11,690			6,650
GBP/INR		£61,686		106.91		105.62		12,753			2,390
SEK/INR		Skr49,908		9.04		7.40		1,047			(10	)
EUR/GBP								—			1,033
EUR/MAD		€22,190		11.00		10.70		(201	)		2,064
EUR/CZK		€7,082		26.80		26.87		611			758
EUR/SEK		€7,241		10.77		10.36		(148	)		1,396
Others		$65,935						(1,754	)		210
Total								24,060			19,375

FISCAL 2022 RESULTS — 133

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31. Financial instruments (continued)

MARKET RISK (CONTINUED)

Currency risk (continued)

The following table details the Company’s sensitivity to a 10% strengthening of the Swedish krona, the U.S. dollar, the euro and the British pound foreign currency rates on net earnings and comprehensive income. The sensitivity analysis on net earnings presents the impact of foreign currency denominated financial instruments and adjusts their translation at period end for a 10% strengthening in foreign currency rates. The sensitivity analysis on other comprehensive income presents the impact of a 10% strengthening in foreign currency rates on the fair value of foreign currency forward contracts designated as cash flow hedges and on net investment hedges.

										2022												2021
	euro impact			U.S. dollar impact			British pound           impact			Swedish krona impact			euro               impact			U.S. dollar impact			British pound           impact			Swedish krona impact
	$			$			$			$			$			$			$			$
Increase in net earnings		2,835			3,604			622			883			1,294			1,416			1,227			171
Decrease in other comprehensive loss		(183,986	)		(179,780	)		(31,700	)		(8,577	)		(83,334	)		(187,587	)		(25,622	)		(8,287	)

LIQUIDITY RISK

Liquidity risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial assets. The Company’s activities are financed through a combination of the cash flows from operations, borrowing under existing unsecured committed revolving credit facility, the issuance of debt and the issuance of equity. One of management’s primary goals is to maintain an optimal level of liquidity through the active management of the assets and liabilities as well as the cash flows. The Company regularly monitors its cash forecasts to ensure it has sufficient flexibility under its available liquidity to meet its obligations.

134 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31. Financial instruments (continued)

LIQUIDITY RISK (CONTINUED)

The following tables summarize the carrying amount and the contractual maturities of both the interest and principal portion of financial liabilities. All amounts contractually denominated in foreign currency are presented in Canadian dollar equivalent amounts using the period-end spot rate or floating rate.

As at September 30, 2022	Carrying amount		Contractual cash flows			Less than one year			Between one and three years			Between three and five years			Beyond     five years
	$		$			$			$			$			$
Non-derivative financial liabilities
Accounts payable and accrued liabilities		1,016,407		1,016,407			1,016,407			—			—			—
Accrued compensation and employee-related liabilities		1,130,726		1,130,726			1,130,726			—			—			—
2014 U.S. Senior Notes		550,177		591,467			90,680			500,787			—			—
2021 U.S. Senior Notes		1,361,974		1,537,370			24,623			49,246			862,639			600,862
2021 CAD Senior Notes		595,900		675,600			12,600			25,200			25,200			612,600
Unsecured committed term loan credit facility		687,705		721,807			27,053			694,754			—			—
Lease liabilities		709,201		808,445			182,815			295,017			166,848			163,765
Other long-term debt		71,278		80,324			25,843			11,919			42,557			5
Clients’ funds obligations		604,431		604,431			604,431			—			—			—
Derivative financial liabilities
Cash flow hedges of future revenue		10,505
Outflow				304,698			110,827			193,871			—			—
(Inflow)				(311,446	)		(109,319	)		(202,127	)		—			—
Cross-currency swaps		1,685
Outflow				168,213			74,902			93,311			—			—
(Inflow)				(167,586	)		(74,762	)		(92,824	)		—			—
		6,739,989		7,160,456			3,116,826			1,569,154			1,097,244			1,377,232
As at September 30, 2021	Carrying amount		Contractual cash flows			Less than one year			Between one and three years			Between three and five years			Beyond five years
	$		$			$			$			$			$
Non-derivative financial liabilities
Accounts payable and accrued liabilities		891,374		891,374			891,374			—			—			—
Accrued compensation and employee-related liabilities		1,084,014		1,084,014			1,084,014			—			—			—
2011 & 2014 U.S. Senior Notes		888,307		955,768			410,738			545,030			—			—
2021 U.S. Senior Notes		1,253,226		1,439,360			22,690			45,380			805,940			565,350
2021 CAD Senior Notes		595,331		688,269			12,669			25,200			25,200			625,200
Unsecured committed term loan credit facility		633,623		649,498			7,043			642,455			—			—
Lease liabilities		776,940		877,498			192,750			318,993			180,593			185,162
Other long-term debt		31,169		32,071			13,133			18,337			595			6
Clients’ funds obligations		591,101		591,101			591,101			—			—			—
Derivative financial liabilities
Cash flow hedges of future revenue		2,601
Outflow				163,162			55,039			103,373			4,750			—
(Inflow)				(171,282	)		(55,756	)		(110,294	)		(5,232	)		—
Cross-currency swaps		45,680
Outflow				1,128,791			91,667			1,037,124			—			—
(Inflow)				(1,088,240	)		(85,776	)		(1,002,464	)		—			—
		6,793,366		7,241,384			3,230,686			1,623,134			1,011,846			1,375,718

FISCAL 2022 RESULTS — 135

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31. Financial instruments (continued)

LIQUIDITY RISK (CONTINUED)

As at September 30, 2022, the Company held cash and cash equivalents, funds held for clients, short-term investments and long-term investments of $1,588,307,000 ($2,312,741,000 as at September 30, 2021). The Company also had available $1,495,730,000 in unsecured committed revolving credit facility ($1,493,372,000 as at September 30, 2021). As at September 30, 2022, trade accounts receivable amounted to $1,106,187,000 (Note 4) ($938,417,000 as at September 30, 2021). Given the Company’s available liquid resources as compared to the timing of the payments of liabilities, management assesses the Company’s liquidity risk to be low.

CREDIT RISK

The Company takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, accounts receivable, work in progress, long-term investments and derivative financial instruments with a positive fair value. The maximum exposure of credit risk is generally represented by the carrying amount of these items reported on the consolidated balance sheets.

The Company is exposed to credit risk in connection with long-term investments through the possible inability of borrowers to meet the terms of their obligations. The Company mitigates this risk by investing primarily in high credit quality corporate and government bonds with a credit rating of A- or higher. The application of the low credit exemption had no material impact on the Company’s consolidated financial statements.

The Company has accounts receivable derived from clients engaged in various industries including government; financial services; manufacturing, retail & distribution; communications & utilities; and health that are not concentrated in any specific geographic area. These specific industries may be affected by economic factors that may impact trade accounts receivable. However, management does not believe that the Company is subject to any significant credit risk in view of the Company’s large and diversified client base and that any single industry or geographic region represents a significant credit risk to the Company. Historically, the Company has not made any significant write-offs and had low bad debt ratios. The application of the simplified approach to measure expected credit losses for trade accounts receivable and work in progress had no material impact on the Company’s consolidated financial statements.

The following table sets forth details of the age of trade accounts receivable that are past due:

	2022			2021
	$			$
Not past due		950,928			818,520
Past due 1-30 days		81,000			47,702
Past due 31-60 days		25,694			21,582
Past due 61-90 days		12,142			7,402
Past due more than 90 days		39,883			46,939
		1,109,647			942,145
Allowance for doubtful accounts		(3,460	)		(3,728	)
		1,106,187			938,417

In addition, the exposure to credit risk of cash, cash equivalents and cash included in funds held for clients and derivatives financial instruments is limited given that the Company deals mainly with a diverse group of high-grade financial institutions and that derivatives agreements are generally subject to master netting agreements, such as the International Swaps and Derivatives Association, which provide for net settlement of all outstanding contracts with the counterparty in case of an event of default.

136 — CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2022 and 2021

(tabular amounts only are in thousands of Canadian dollars, except per share data)

32. Capital risk management

The Company is exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth. The main objectives of the Company’s risk management process are to ensure that risks are properly identified and that the capital base is adequate in relation to these risks.

The Company manages its capital to ensure that there are adequate capital resources while maximizing the return to shareholders through the optimization of the debt and equity balance. As at September 30, 2022, total managed capital was $12,238,427,000 ($12,884,415,000 as at September 30, 2021). Managed capital consists of long-term debt, including the current portion (Note 14), lease liabilities, cash and cash equivalents, short-term investments, long-term investments (Note 11) and shareholders’ equity. The basis for the Company’s capital structure is dependent on the Company’s expected business growth and changes in the business environment. When capital needs have been specified, the Company’s management proposes capital transactions for the approval of the Company’s Audit and Risk Management Committee and Board of Directors. The capital risk policy remains unchanged from prior periods.

The Company monitors its capital by reviewing various financial metrics, including the following:

- Net Debt/Capitalization

- Debt/Adjusted EBITDA

Net debt, capitalization and adjusted EBITDA are additional measures. Net debt represents debt (including the current portion and the fair value of foreign currency derivative financial instruments related to debt) and lease liabilities less cash and cash equivalents, short-term investments and long-term investments. Capitalization is shareholders’ equity plus net debt. Adjusted EBITDA is calculated as earnings from continuing operations before finance costs, income taxes, depreciation, amortization, and acquisition-related and integration costs. The Company believes that the results of the current internal ratios are consistent with its capital management credit facility and unsecured committed revolving credit facilities. The ratios are as follows:

- Leverage ratios, which are the ratio of total debt to adjusted EBITDA for its 2014 U.S. Senior Notes and the ratio of total debt net of cash and cash equivalent investments to adjusted EBITDA for its unsecured committed revolving credit facility and unsecured committed term loan credit facility for the four most recent quarters^1.

- An interest and rent coverage ratio, which is the ratio of the EBITDAR for the four most recent quarters to the total finance costs and the operating rentals in the same periods. EBITDAR is calculated as adjusted EBITDA before rent expense¹.

- In the case of the 2011 U.S. Senior Notes, a minimum net worth is required, whereby shareholders’ equity, excluding foreign exchange translation adjustments included in accumulated other comprehensive income, cannot be less than a specified threshold.

These ratios are calculated on a consolidated basis.

The Company is in compliance with these covenants and monitors them on an ongoing basis. The ratios are also reviewed quarterly by the Company’s Audit and Risk Management Committee. The Company is not subject to any other externally imposed capital requirements.

¹  In the event of an acquisition, the available historical financial information of the acquired company will be used in the computation of the ratios.

Shareholder Information

Shareholder Information Listing

IPO: 1986

Toronto Stock Exchange, April 1992: GIB.A

New York Stock Exchange, October 1998: GIB

Number of shares outstanding as of September 30, 2022:

211,302,549 Class A subordinate voting shares

26,445,706 Class B shares

High/Low of share price from October 1, 2021 to September 30, 2022:

	TSX (CDN$)	NYSE (U.S.$)
High:	116.00	93.93
Low:	95.45	73.76

The certifications required by National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings whereby CGI’s Chief Executive Officer and Chief Financial Officer certify the accuracy of the information contained in CGI’s Annual Information Form, Annual Audited Consolidated Financial Statements, and Annual Management’s Discussion and Analysis are available on the Canadian Securities Administrators’ website at www.sedar.com. Similar certifications required by Rule 13a-14(a) of the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002 are attached as exhibits to our Form 40-F, which is available on EDGAR at www.sec.gov. The certification required by Section 303A.12(c) of the NYSE Listed Company Manual is also filed annually with the New York Stock Exchange. As a Canadian reporting issuer with a listing on the New York Stock Exchange, CGI is considered a foreign private issuer. As such, many of the corporate governance rules applicable to U.S. domestic companies are not applicable to CGI. However, CGI’s corporate governance practices generally conform to those followed by U.S. domestic companies under the New York Stock Exchange listing standards, other than with respect to certain specific rules, including that CGI requires shareholder approval of share compensation arrangements involving the issuances of new shares, but does not require such approval if the compensation arrangement involves only shares purchased in the open market, consistent with the laws applicable to CGI. A summary of these practices is provided in the report of the Corporate Governance Committee contained in CGI’s Management Proxy Circular, which is available on the Canadian Securities Administrators’ website at www.sedar.com, on EDGAR at www.sec.gov and on CGI’s website at www.cgi.com.

Auditors

PricewaterhouseCoopers LLP

Transfer Agent and Registrar

Computershare Investor Services Inc.

100 University Avenue, 8^th floor

Toronto, Ontario M5J 2Y1

Telephone: 1 800 564-6253

www.investorcentre.com/service

Investor Relations

For further information about the Company, additional copies of this report, or other financial information, please contact:

CGI Inc.

Investor Relations

Email: ir@cgi.com

Web: cgi.com/investors

1350 René-Lévesque Blvd West,

15^th floor

Montréal, Quebec H3G 1T4

Canada

Tel.: 514-841-3200

Annual General Meeting of Shareholders

The Annual General Meeting of Shareholders will be held virtually on February 1, 2023 at 11:00 a.m. (Eastern Standard Time) via live webcast at https://www.icastpro.ca/if5mwv (Password: CGI2022). This year, shareholders will not be able to attend the Meeting in person, but will have the opportunity to participate in real time and vote at the Meeting online in the manner set forth in CGI’s Management Proxy Circular, through a web-based platform, regardless of their geographic location.

Insights you can act on
Founded in 1976, CGI is among the largest IT and business consulting services firms in the world.
We are insights-driven and outcomes-based to help accelerate returns on your investments. Across hundreds of locations worldwide, we provide comprehensive, scalable and sustainable IT and business consulting services that are informed globally and delivered locally. cgi.com/investors
Contact: ir@cgi.com
© 2022 CGI Inc.

EX-99.2

Exhibit 99.2

Notice of Annual General Meeting of Shareholders and Management Proxy Circular To be held virtually on Wednesday, February 1, 2023 at 11:00 a.m. (Eastern Standard Time) These materials are being sent to both registered and non-registered owners of shares. Non-registered shareholders are either objecting beneficial owners who object that intermediaries disclose information about their ownership in the Company, or non-objecting beneficial owners, who do not object to such disclosure. The Company pays intermediaries to send proxy-related materials to both objecting and non-objecting beneficial owners. Please return your voting instructions as specified in the request for voting instructions.

Table of Contents

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS	I
LETTER TO SHAREHOLDERS	II
GENERAL INFORMATION	1
ATTENDING THE VIRTUAL MEETING	1
SUBMITTING QUESTIONS	1
NOTICE AND ACCESS	1
PROXIES	2
Solicitation of Proxies	2
Appointment and Revocation of Proxies	3
HOW TO VOTE	3
Registered Shareholders	3
Non-Registered Shareholders	3
Voting in Advance of the Meeting	4
By Internet	4
By Phone	4
By Mail	4
Voting at the Meeting	5
Changing your Vote	5
VOTING SHARES AND PRINCIPAL HOLDERS OF VOTING SHARES	5
Class A Subordinate Voting Shares and Class B Shares	6
Voting Rights	6
Subdivision or Consolidation	6
Rights upon Liquidation	6
Conversion Rights of Class A Subordinate Voting Shares in Specific Circumstances	6
Conversion of Class B Shares	6
Issue of Class B Shares	6
Dividends	7
Amendments	7
Rank	7
First Preferred Shares	7
Second Preferred Shares	7
Normal Course Issuer Bid	7
Principal Holders of Class A Subordinate Voting Shares and Class B Shares	8
BUSINESS TO BE TRANSACTED AT THE MEETING	10
NOMINEES FOR ELECTION AS DIRECTORS	11
REPORT OF THE HUMAN RESOURCES COMMITTEE	20
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS	20
Executive Compensation Process for the 2022 Fiscal Year	20
The Human Resources Committee of the Board of Directors	20
Executive Compensation Related Fees	22
Composition of Comparator Groups	22
Executive Compensation Components	23
Base Salary	24
Short-Term Incentive Plan – Profit Participation Plan	24
Performance Factors	24
Long-Term Incentive Plans	26
Share Option Plan	26
Performance Share Unit Plans	27
Award Date Fair Value	27
Performance Factors and Vesting Conditions	27
Long Term Incentive Plan Awards in Fiscal 2022	28

  2022 MANAGEMENT PROXY CIRCULAR        

Total At Risk Compensation and Actual Payouts	28
Incentive Plan Awards – Value Vested or Earned During the Year	29
Performance Graph	30
Defined Contribution Pension Plan and Deferred Compensation Plan	31
Defined Contribution Pension Plan	31
Deferred Compensation Plan	32
Compensation of Named Executive Officers	32
Summary Compensation Table	32
KEY FEATURES OF CGI’S LONG-TERM INCENTIVE PLANS	33
Share Option Plan	33
Blackout Periods	34
Extensions for Length of Service	34
Amendments to Share Option Plan	34
Equity Compensation Plan Information as at September  30, 2022	35
Performance Share Unit Plans	35
Blackout Periods	36
Termination Benefits	36
COMPENSATION OF DIRECTORS	36
Board of Directors and Standing Committee Fees	36
Directors’ Compensation Table	37
Deferred Stock Units Plan and Deferred Stock Units Granted to Directors	37
Stock Options Held by Directors	38
Incentive Plan Awards – Value Vested or Earned During the Year	38
Additional Disclosure relating to Directors and Named Executive Officers	39
REPORT OF THE CORPORATE GOVERNANCE COMMITTEE	40
CORPORATE GOVERNANCE PRACTICES	40
CGI’s Shareholders	40
Shareholder Satisfaction Assessment Program	41
Environmental, Social and Governance	41
Corporate Governance and Diversity	44
Majority Voting Policy	45
Clawback Policy	45
Insider Trading and Blackout Periods Policy	45
MANDATE, STRUCTURE AND COMPOSITION OF THE BOARD OF DIRECTORS	46
Board of Directors and Committee Charters	46
ROLE AND RESPONSIBILITIES OF THE FOUNDER AND EXECUTIVE CHAIRMAN OF THE BOARD AND OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER	47
ROLE AND RESPONSIBILITIES OF THE LEAD DIRECTOR AND STANDING COMMITTEE CHAIRS	47
Lead Director	47
Standing Committee Chairs	47
CRITERIA FOR TENURE ON CGI’S BOARD OF DIRECTORS	48
Independence	48
Expertise and Financial and Operational Literacy	48
Attendance at Board and Standing Committee Meetings	50
Share Ownership Guideline for Directors	52
Availability and Workload	53
Conflicts of Interest	53
Director Orientation and Continuing Education Program	54
New Director Orientation	54
Continuing Education Program	54
2022 Continuing Education Presentations	54
Self-Assessment and Peer Review	54
Retirement Age and Director Term Limits	55
NOMINATION PROCESS FOR THE BOARD OF DIRECTORS AND EXECUTIVE OFFICERS	55
Board of Directors	55
Succession Planning for Executive Officers	56

        2022 MANAGEMENT PROXY CIRCULAR  

BOARD OF DIRECTORS PARTICIPATION IN STRATEGIC PLANNING	56
GUIDELINES ON TIMELY DISCLOSURE OF MATERIAL INFORMATION	56
CODES OF ETHICS	57
REPORT OF THE AUDIT AND RISK MANAGEMENT COMMITTEE	58
EXTERNAL AUDITOR	58
AUDITOR INDEPENDENCE POLICY	58
PERFORMANCE OF SERVICES	58
GOVERNANCE PROCEDURES	59
MANAGEMENT AND COMMITTEE RESPONSIBILITIES	59
ANNUAL EXTERNAL AUDITOR ASSESSMENT	59
FEES BILLED BY THE EXTERNAL AUDITOR	60
RELATED PARTY TRANSACTIONS	60
OTHER BUSINESS TO BE TRANSACTED AT THE ANNUAL GENERAL MEETING OF SHAREHOLDERS	60
ADDITIONAL INFORMATION	61
SHAREHOLDER PROPOSALS	61
APPENDIX A	62
STOCK OPTIONS AND SHARE-BASED AWARDS HELD BY NAMED EXECUTIVE OFFICERS	62
APPENDIX B	64
STOCK OPTIONS AND SHARE-BASED AWARDS HELD BY DIRECTORS	64
APPENDIX C	68
SHAREHOLDER PROPOSALS	68

  2022 MANAGEMENT PROXY CIRCULAR        

Notice of Annual General Meeting of Shareholders

Date, Time and Place

Notice is hereby given that an Annual General Meeting of Shareholders (the “Meeting”) of CGI Inc. (“CGI” or the “Company”) will be held virtually on Wednesday, February 1, 2023, at 11:00 a.m. (Eastern Standard Time) via live webcast at https://www.icastpro.ca/if5mwv. Shareholders will not be able to attend the Meeting in person, but will have the opportunity to participate in real time and vote at the Meeting virtually in the manner set forth in CGI’s Management Proxy Circular, through a web-based platform, regardless of their geographic location.

Business to be Transacted at the Meeting

1. To receive the report of the directors, together with the Annual Audited Consolidated Financial Statements of the Company and the report of the auditor for the fiscal year ended September 30, 2022;

2. to elect directors;

3. to appoint the auditor for the fiscal year of the Company ending September 30, 2023 and authorize the Audit and Risk Management Committee to fix its compensation;

4. to consider and to vote on the shareholder proposals attached as Appendix C; and

5. to transact such other business as may properly come before the Meeting or any adjournment thereof.

Attendance and Voting by Shareholders at the Meeting

By logging on to https://www.icastpro.ca/if5mwv and following the instructions set forth in the Management Proxy Circular, shareholders will be able to attend the Meeting live, submit questions and vote their shares while the Meeting is being held.

Only shareholders shown on the register of shareholders of CGI at the close of business on December 5, 2022, and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholders), will be entitled to vote at the Meeting during the live webcast. CGI’s register of shareholders is kept by its transfer agent, Computershare Investor Services Inc.

Registered and non-registered shareholders entitled to vote at the Meeting may vote by proxy in advance of the Meeting. Non-registered shareholders who have not duly appointed themselves as proxyholders will be able to attend the Meeting and ask questions, but will not be able to vote. Guests will be able to attend the Meeting but will not be able to submit questions nor vote their shares (if any).

Proxy Voting

Proxies submitted by mail, phone or internet must be received by Computershare Investor Services Inc. by 11:00 a.m., Eastern Standard Time, on Tuesday, January 31, 2023.

We wish to have as many shares as possible represented and voted at the Meeting. For this reason, and regardless of whether you are able to attend the Meeting via the live webcast, shareholders are strongly encouraged to complete, date, sign and return the accompanying form of proxy or voting instruction form, as applicable, in accordance with the instructions set out on such form and in the Management Proxy Circular or, alternatively, vote by phone or vote using the internet. Instructions on how to vote by phone or by using the internet are provided on the form of proxy or voting instruction form and in the Management Proxy Circular.

CGI has opted to use the Notice and Access rules adopted by Canadian securities regulators to reduce the volume of paper in the materials distributed for the Meeting. Instead of receiving the enclosed Management Proxy Circular with the form of proxy or voting instruction form, shareholders received a Notice of Meeting with instructions on how to access the remaining Meeting materials online. CGI’s Management Proxy Circular and other relevant materials are available on the internet at www.envisionreports.com/gib2022 as well as on the Canadian Securities Administrators’ website at www.sedar.com. The webcast will be temporarily archived on the Company’s website afterwards.

If you are a registered shareholder or a non-objecting beneficial owner and have any questions regarding this Notice of Meeting, the Notice and Access procedures or the Meeting, please contact Computershare Investor Services Inc. at +1-866-962-0498 (Canada and U.S.) or +1-514-982-8716 (international). If you are an objecting beneficial owner, please contact Broadridge Investor Communication Corporation toll free at +1-855-887-2244 (Canada and U.S.), or at +1-303-562-9306 (international, in French) or at +1-303-562-9305 (international, in English).

Montréal, Quebec

Dated December 5, 2022

By order of the Board of Directors,

Benoit Dubé

Executive Vice-President, Legal and Economic Affairs, and Corporate Secretary

i         2022 MANAGEMENT PROXY CIRCULAR  

Letter to Shareholders

Dear fellow shareholders,

Fiscal 2022 marked another strong year as we continued to deliver solid growth and profitability. We are pleased by your company’s performance in the midst of profound changes taking place across our clients’ industries and geographies.

Each year, we consult with our three stakeholders – clients, employees and you, our shareholders – to better understand the major changes that have a long-term impact on the economic sectors we serve. As part of this consultation, we examined five macro trends, including geopolitical shifts, supply chain reconfiguration, the fight against climate change, demographic changes leading to workforce shortages, and digital acceleration. These trends are transforming the environment in which we operate and are materializing at an increased pace.

Never has technology played a more critical role. This year, 1,700 clients shared their views on these trends and cited digital acceleration as having the greatest impact on their business. A lesson learned from the pandemic, clients understand that they must accelerate investments in their digitization to emerge from challenging economic conditions in a stronger position. Information technology is no longer a discretionary spend – it is essential to business and government operations. As our clients seek to holistically transform their technology landscape, and extend that into their ecosystems, they rely on CGI to help accelerate their digital transformations.

We thank our 90,000 talented consultants and professionals, of whom 84% are shareholders, for building deep client relationships, delivering on our commitments, and expanding the business by winning new engagements. Looking ahead to fiscal 2023, we remain confident in CGI’s position as one of the few leading global firms with the scale, reach and capabilities, including industry and technology expertise, end-to-end services, and delivery excellence, to help clients drive forward their digital transformations.

We are committed to maintaining the best equilibrium among our three stakeholders. In doing so, we ensure all benefit from our efforts to help build more prosperous and sustainable communities. Our strategic objectives go beyond operational and financial performance to focus on our environmental, social and governance (ESG) commitments, and we will continue to ensure effective stewardship of our ESG strategy.

Finally, on behalf of our members and Board of Directors, we would like to warmly thank Alain Bouchard, who will not be seeking re-election this year as CGI director, for his invaluable advice, counsel and leadership throughout the years, as well as for his outstanding contribution to our success.

We also thank each of you for your investment, confidence and trust.

  2022 MANAGEMENT PROXY CIRCULAR         ii

General Information

This Management Proxy Circular is provided in relation to the solicitation of proxies by the management of CGI Inc. (“CGI” or the “Company”) for use at the Annual General Meeting of Shareholders (the “Meeting”) of the Company which will be held virtually, via live webcast, on February 1, 2023, and at any adjournment thereof. Unless otherwise indicated, the information provided in this Management Proxy Circular that relates to financial information is provided as at September 30, 2022, all other information is provided as at December 5, 2022, and all currency amounts are shown in Canadian dollars.

We encourage you to read our annual Management’s Discussion and Analysis, Annual Audited Consolidated Financial Statements, and this Management Proxy Circular to become better acquainted with CGI. We are confident that, as you come to know us, you will appreciate the strength of our commitment to our three stakeholders, including you, our shareholders.

Attending the Virtual Meeting

To attend the Meeting, registered and non-registered shareholders will need to login on to https://www.icastpro.ca/if5mwv and follow the instructions set forth in this Management Proxy Circular. The Meeting platform is fully supported across browsers and devices running the most updated version of applicable software plugins. You should ensure you have a strong, preferably high-speed, internet connection wherever you intend to attend the Meeting. The Meeting will begin at 11:00 a.m. (Eastern Standard Time) on February 1, 2023. You should allow ample time to check into the Meeting online and complete the related procedure. It is recommended that you login at least fifteen minutes prior to the Meeting. Attending the Meeting virtually enables shareholders to ask questions in real time. Registered shareholders and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder) can vote at the appropriate times during the Meeting. If you are a non-registered shareholder located in the United States and wish to attend, submit questions or vote at the Meeting, see the heading How to Vote – Non-Registered Shareholders later in this document for additional instructions. Shareholders and duly appointed proxyholders who participate in the Meeting virtually, must be connected to the internet at all times during the Meeting in order to vote when balloting commences and it is their responsibility to ensure connectivity during the Meeting.

Non-registered beneficial shareholders who have not duly appointed themselves as proxyholders can attend the Meeting and ask questions by joining the webcast at https://www.icastpro.ca/if5mwv, but are not able to vote. Guests will be able to attend the Meeting but will not be able to submit questions nor vote their shares (if any).

Submitting Questions

At the Meeting, the Company will hold a live Q&A session to answer written questions submitted either before the Meeting through https://www.icastpro.ca/if5mwv (using the control number and password (CGI2022) included on the form of proxy or voting instruction form, as applicable) or during the Meeting by shareholders participating via live webcast. Only shareholders and duly appointed proxyholders may submit questions at the Meeting, either before or during the Meeting.

The Chair of the Meeting reserves the right to edit questions or to reject questions he deems inappropriate in accordance with the rules of conduct of the Meeting, which are available at www.cgi.com/en/investors and on the Meeting web page at https://www.icastpro.ca/if5mwv. Any questions pertinent to the Meeting that cannot be answered during the Meeting due to time constraints will be posted online and answered at www.cgi.com/en/investors. The questions and answers will be available as soon as practicable after the Meeting and will remain available until one week after posting. The Chair of the Meeting has broad authority in all matters pertaining to the Meeting. To ensure that the Meeting is conducted in a timely manner, the Chair of the Meeting may exercise broad discretion with respect to, for example and without limitation, the questions and topics that will be addressed at the Meeting and the amount of time devoted to any question or topic.

Notice and Access

CGI uses the Notice and Access rules adopted by Canadian securities regulators to reduce the volume of paper in the materials distributed for the Annual General Meeting of Shareholders. Instead of receiving this Management Proxy Circular with the form of proxy or voting instruction form, shareholders received a Notice of Meeting with instructions on how to access the remaining materials online. CGI intends to pay for intermediaries to deliver the Notice of Meeting and voting instruction form and other materials to non-objecting beneficial owners and objecting beneficial owners.

  2022 MANAGEMENT PROXY CIRCULAR         1

General Information

This Management Proxy Circular and other relevant materials are available on the internet at www.envisionreports.com/gib2022 as well as on the Canadian Securities Administrators’ website at www.sedar.com. If you would like to receive a paper copy of the materials distributed for the Annual General Meeting of Shareholders by mail, you must request it. Requesting a paper copy is free of charge. Registered shareholders and non-objecting beneficial owners may request a paper copy of the materials by calling Computershare Investor Services Inc. (“Computershare”) toll free at +1-866-962-0498 (Canada and U.S.) or +1-514-982-8716 (international) and entering the control number indicated on the form of proxy or voting instruction form they received with the Notice of Meeting. Objecting beneficial owners may request a paper copy of the materials by calling Broadridge Investor Communication Corporation toll free at +1-844-973-0593 (Canada and U.S., in French), at +1-844-916-0609 (Canada and U.S., in English), at +1-303-562-9306 (international, in French), or at +1-303-562-9305 (international, in English) and entering the control number indicated on the voting instruction form they received with the Notice of Meeting.

To ensure you receive the materials in advance of the voting deadline and Meeting date, all requests must be received no later than January 18, 2023. If you do request a paper copy of the current materials, please note that another voting instruction form or proxy form will not be sent; please retain the one received with the Notice of Meeting for voting purposes.

To obtain a paper copy of the materials after the Meeting date, please contact CGI’s Investor Relations department by sending an e-mail to ir@cgi.com, by visiting the Investors section on the Company’s website at www.cgi.com or as follows:

Investor Relations

CGI Inc.

1350 René-Lévesque Boulevard West

15th Floor

Montréal, Quebec

Canada

H3G 1T4

Tel.: +1-514-841-3200

Proxies

Solicitation of Proxies

The solicitation of proxies will be made primarily by mail for registered and non-registered beneficial shareholders and by e-mail for participants in CGI’s Share Purchase Plan. Proxies may also be solicited personally by e-mail or by phone by members of the Company at minimal cost. The Company does not expect to pay any compensation for the solicitation of proxies, but will reimburse brokers and other persons holding shares for reasonable expenses for sending proxy materials to non-registered beneficial shareholders in order to obtain voting instructions.

The persons who may be appointed to act under the form of proxy or voting instruction form solicited by the management of the Company are all directors of the Company.

In order to be voted at the Meeting, a proxy must be received by Computershare by 11:00 a.m., Eastern Standard Time, on Tuesday, January 31, 2023. Proxies may also be received by the Corporate Secretary of the Company prior to the Meeting or any adjournment thereof at 1350 René-Lévesque Boulevard West, 25^th Floor, Montréal, Quebec, Canada, H3G 1T4 Attention: Corporate Secretary, at any time up to and including January 31, 2023, the last business day preceding the date of the Meeting.

The persons whose names are printed on the form of proxy or voting instruction form will vote all the shares in respect of which they are appointed to act in accordance with the instructions given on the form of proxy or voting instruction form. In the absence of a specified choice in relation to any matter to be voted on at the Meeting, or if more than one choice is indicated, the shares represented by the form of proxy or the voting instruction form will be voted:

FOR the election as directors of the fifteen persons nominated in this Management Proxy Circular;

FOR the appointment of PricewaterhouseCoopers LLP as auditor; and

AGAINST the shareholder proposals attached as Appendix C.

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General Information

Every proxy given to any person in the form of proxy or voting instruction form that accompanies the Notice of Meeting will confer discretionary authority with respect to amendments or variations to the items of business identified in the Notice of Meeting and with respect to any other matters that may properly come before the Meeting.

Appointment and Revocation of Proxies

Every shareholder has the right to appoint himself or herself or any person to act on his or her behalf at the Meeting other than the persons whose names are printed in the form of proxy or voting instruction form that accompanies the Notice of Meeting. To exercise this right, the shareholder should insert a proxyholder’s name in the space provided for that purpose in the form of proxy or voting instruction form, or provide a revised proxy in proper form appointing the proxyholder. Non-registered shareholders located in the United States must follow the instructions under the heading How to Vote – Non-Registered Shareholders later in this document.

In addition to the first step above, shareholders who wish to appoint a proxyholder (including shareholders who wish to appoint themselves as proxyholder) must visit https://www.computershare.com/CGI2022 and provide the required proxyholder contact information so that Computershare may provide the proxyholder with a four-letter code via email. Without the four-letter code, proxyholders will not be able to vote at the Meeting. Failure to register a proxyholder online will result in the proxyholder not being able to vote at the Meeting.

The steps described above must be completed prior to 11:00 a.m., Eastern Standard Time, on Tuesday, January 31, 2023, failing which a proxyholder will not be able to vote at the Meeting on the appointing shareholder’s behalf.

A proxy may be revoked at any time by the person giving it to the extent that it has not yet been exercised. If you are a registered shareholder and you want to revoke your proxy, you may do so by providing a new proxy form to Computershare at any time before by 11:00 a.m., Eastern Standard Time, on Tuesday, January 31, 2023. A proxy may also be revoked by a registered shareholder by delivering a written notice to the Corporate Secretary of the Company at 1350 René-Lévesque Boulevard West, 25th Floor, Montréal, Quebec, Canada, H3G 1T4 Attention: Corporate Secretary, which must be received at any time up to and including January 31, 2023, the business day preceding the date of the Meeting. A registered shareholder may also access the Meeting via the live webcast to vote at the Meeting, which will revoke any previously submitted proxy. If you do not wish to revoke a previously submitted proxy nor ask questions at the Meeting, you can attend the Meeting as a guest, as guests can listen to the Meeting, but are not able to vote nor to submit questions.

If you are a non-registered shareholder and you want to revoke your proxy, contact your broker or other intermediary to find out what to do. Please note that your intermediary will need to receive any new instructions sufficiently in advance of the Meeting to act on them.

How to Vote

Only persons shown on the register of shareholders at the close of business on Tuesday, December 5, 2022 and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholders), will be entitled to vote at the Meeting. The register of holders of Class A subordinate voting shares and Class B shares are kept by CGI’s transfer agent, Computershare.

Registered Shareholders

You are a registered shareholder if your name appears on your share certificate or your direct registration statement. Your proxy form tells you whether you are a registered shareholder. If you are a registered shareholder, you will receive a form of proxy containing the relevant details concerning the business of the Meeting, including a control number and password (CGI2022) that must be used in order to vote by proxy in advance of the Meeting or to join the live webcast the day of the Meeting to attend, ask questions and vote at the Meeting, as applicable.

Non-Registered Shareholders

Non-registered shareholders or “beneficial owners” are holders whose shares are held on their behalf through a “nominee” such as a bank, a trust company, a securities broker or other financial institution. When you receive a voting instruction form, this tells you that you are a non-registered shareholder. Most CGI shareholders hold their shares in this way. Non-registered shareholders must seek instructions from their nominees as to how to complete their voting instruction

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General Information

form if they wish to vote their shares themselves at the Meeting. Non-registered shareholders who received or who were given access to this Management Proxy Circular in a mailing from their nominee must adhere to the voting instructions provided to them by their nominee.

Non-registered shareholders must use the control number and password (CGI2022) on their voting instruction form to join the live webcast of the Meeting. Non-registered shareholders who wish to vote at the Meeting during the live webcast must appoint themselves by inserting their own name in the space provided on the voting instruction form and adhere to the signing and return instructions provided by their nominee. By doing so, non-registered shareholders are instructing their nominee to appoint them as proxyholder. In addition to the first step above, non-registered shareholders who wish to appoint a proxyholder (including non-registered shareholders who wish to appoint themselves as proxyholder) must visit https://www.computershare.com/CGI2022 and provide the required proxyholder contact information so that Computershare may provide the proxyholder with a four-letter code via email. Without the four-letter code, proxyholders will not be able to vote at the Meeting.

The steps described above must be completed prior to 11:00 a.m., Eastern Standard Time, on Tuesday, January 31, 2023, failing which a proxyholder will not be able to vote at the Meeting on the appointing shareholder’s behalf.

If you are a non-registered shareholder located in the United States and wish to attend, submit questions or vote at the Meeting or, if permitted, appoint a third party as your proxyholder, in addition to the steps described above and under the heading Attending the Virtual Meeting, you must obtain a valid legal proxy form from your intermediary. Follow the instructions from your intermediary included with the legal proxy form and the voting instruction form sent to you, or contact your intermediary to request a legal proxy form if you have not received one. The legal proxy form will be mailed to the person and address written on the voting instruction form. After obtaining a valid legal proxy form from your intermediary, you must then submit such legal proxy form to Computershare. Requests for registration from non-registered shareholders located in the United States that wish to attend, submit questions or vote at the Meeting or, if permitted, appoint a third party as their proxyholder must be sent by fax to +1-866-249-7775 or +1-416-263-9524, or, by courier to Computershare Investor Services Inc. at 100 University Ave, 8^th Floor, North Tower, Toronto, Ontario, Canada, M5J 2Y1, and in both cases, must be labeled as “legal proxy” and received by no later than 11:00 a.m., Eastern Standard Time, on Tuesday, January 31, 2023. You must allow sufficient time to Computershare for the mailing and return of the legal proxy form by this deadline. If you have any questions, please contact the person who services your account.

Non-registered shareholders who have not duly appointed themselves as proxyholders will be able to attend the Meeting and ask questions, but will not be entitled to vote their shares at the Meeting.

Voting in Advance of the Meeting

Shareholders are strongly encouraged to vote in advance of the Meeting whether or not they are able to attend the Meeting (or any adjournment thereof) via the live webcast. Below are the different ways in which registered and non-registered shareholders can give voting instructions, details of which are found on the form of proxy or voting instruction form provided, as applicable.

By Internet

If a shareholder elects to vote using the internet, the shareholder must access the following website: www.investorvote.com. Shareholders must follow the instructions that appear on the screen and refer to the form of proxy or voting instruction form, as applicable, for their control number.

By Phone

If a shareholder wishes to vote by phone, the shareholder must call the following toll-free number +1-866-732-VOTE (8683) (within North America) or +1-312-588-4290 (outside of North America). Shareholders must follow the instructions of the voice response system and refer to the form of proxy or voting instruction form, as applicable, for their control number.

By Mail

If a shareholder wishes to vote by mail, the shareholder must complete, date and sign the form of proxy or voting instruction form, as applicable, in accordance with the instructions set out on such form, and return it in the prepaid envelope provided to Computershare, Proxy Department, PO Box 300 RPO West Beaver Creek, Richmond Hill, Ontario, Canada, L4B 9Z9.

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General Information

Duly completed forms of proxy or voting instruction forms or internet or telephone voting instructions, as applicable, must be received by Computershare by 11:00 a.m., Eastern Standard Time, on Tuesday, January 31, 2023. Proxies may also be received by the Corporate Secretary of the Company prior to the Meeting or any adjournment thereof at 1350 René-Lévesque Boulevard West, 25^th Floor, Montréal, Quebec, Canada, H3G 1T4 Attention: Corporate Secretary, at any time up to and including Tuesday, January 31, 2023, the last business day preceding the date of the Meeting.

Voting at the Meeting

Registered shareholders who wish to vote at the Meeting do not need to complete or return their proxy form. Non-registered shareholders who wish to vote at the Meeting must appoint themselves as proxyholder. The day of the Meeting, registered shareholders and non-registered shareholders who have duly appointed themselves as proxyholders, will be able to vote via the live webcast by completing a ballot online during the Meeting by visiting https://www.icastpro.ca/if5mwv and logging in using the control number and password (CGI2022) included on their proxy form, in the case of registered shareholders, or entering the four-letter code provided by Computershare via email and password (CGI2022), in the case of the proxyholder of non-registered shareholders, as applicable, as further described under the heading Attending the Virtual Meeting.

Non-registered shareholders who have not duly appointed themselves as proxyholder will be able to attend the Meeting, but will not be able to vote their shares at the Meeting.

Even if you currently plan to attend and vote at the Meeting, you should consider voting your shares in advance so that your vote will be counted if you later decide not to attend the Meeting. You should note however that if you access and vote on any matter during the Meeting, you will revoke any previously submitted proxy. If you do not wish to revoke a previously submitted proxy nor ask questions at the Meeting, you can attend the Meeting as a guest, as guests can listen to the Meeting, but are not able to vote nor to submit questions.

If you wish to appoint someone as proxy to vote your shares for you at the Meeting during the live webcast, please follow the instructions found on either your proxy form or voting instruction form, as applicable. You will need to register your proxyholder (including registering yourself if you wish to appoint yourself as proxyholder) online at https://www.computershare.com/CGI2022 so that Computershare will provide a four-letter code to your proxyholder, which will allow your proxyholder to join the Meeting and vote your shares on your behalf, as further described under the heading Appointment and Revocation of Proxies.

Changing your Vote

If you are a registered shareholder and you change your mind about how you voted before the Meeting, you may provide new voting instructions at www.investorvote.com, or a new form of proxy to Computershare at any time before by 11:00 a.m., Eastern Standard Time, on Tuesday, January 31, 2023. A proxy may also be revoked by delivering a written notice to the registered office of the Company at 1350 René-Lévesque Boulevard West, 25^th Floor, Montréal, Quebec, Canada, H3G 1T4 Attention: Corporate Secretary, which must be received prior to or on January 31, 2023, the last business day preceding the date of the Meeting, or any adjournment thereof. A registered shareholder may also access the Meeting via the live webcast to vote at the Meeting, which will revoke any previously submitted proxy. If you do not wish revoke a previously submitted proxy, you should attend the Meeting as a guest. Guests can listen to the Meeting, but are not able to vote nor to submit questions.

If you are a non-registered shareholder and you change your mind about how you voted before the Meeting, contact your broker or other intermediary to find out what to do. Please note that your intermediary will need to receive any new instructions sufficiently in advance of the Meeting to act on them.

Voting Shares and Principal Holders of Voting Shares

The Company’s authorized share capital consists of an unlimited number of First Preferred Shares, issuable in series, an unlimited number of Second Preferred Shares, issuable in series, an unlimited number of Class A subordinate voting shares and an unlimited number of Class B shares (multiple voting), all without par value, of which, as at December 5, 2022, 211,759,994 Class A subordinate voting shares and 26,445,706 Class B shares were issued and outstanding.

The following summary of the material features of the Company’s authorized share capital is given subject to the detailed provisions of its articles.

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General Information

Class A Subordinate Voting Shares and Class B Shares

Voting Rights

The holders of Class A subordinate voting shares are entitled to one vote per share and the holders of Class B shares are entitled to ten votes per share. As at December 5, 2022, 44.47% and 55.53% of the aggregate voting rights were attached to the outstanding Class A subordinate voting shares and Class B shares, respectively.

Subdivision or Consolidation

The Class A subordinate voting shares or Class B shares may not be subdivided or consolidated unless simultaneously the Class B shares and the Class A subordinate voting shares are subdivided or consolidated in the same manner and in such an event, the rights, privileges, restrictions and conditions then attaching to the Class A subordinate voting shares and Class B shares shall also attach to the Class A subordinate voting shares and Class B shares as subdivided or consolidated.

Rights upon Liquidation

Upon liquidation or dissolution of the Company or any other distribution of its assets among its shareholders for the purposes of winding up its affairs, all the assets of the Company available for payment or distribution to the holders of Class A subordinate voting shares and holders of Class B shares will be paid or distributed equally, share for share.

Conversion Rights of Class A Subordinate Voting Shares in Specific Circumstances

Subject to what is hereinafter set out, if a take-over bid or exchange bid or an issuer bid, other than an exempt bid (as defined in the articles of the Company), for the Class B shares is made to the holders of Class B shares without being made simultaneously and on the same terms and conditions to the holders of Class A subordinate voting shares, each Class A subordinate voting share shall become convertible into one Class B share, from the date the offer is made, at the holder’s option, in order to entitle the holder to accept the offer. However, this right of conversion shall be deemed not to come into effect if the offer is not completed by its offeror or if the offer is rejected by one or several of the officers and full-time employees of the Company or its subsidiaries, and any corporate entity under their control, who are, as a group, owners, directly or indirectly, in any manner whatsoever, of more than 50% of the outstanding Class B shares.

The articles of the Company contain a complete description of the types of bids giving rise to the rights of conversion, provide certain procedures to be followed to perform the conversion and stipulate that upon such a bid, the Company or the transfer agent will communicate in writing to the holders of Class  A subordinate voting shares full details as to the bid and the manner of exercising the right of conversion.

Conversion of Class B Shares

Each Class B share may, from time to time, at the holder’s option, be converted into one Class A subordinate voting share.

Issue of Class B Shares

The Company’s articles provide for pre-emptive rights in favour of holders of Class B shares. Therefore, the Company may not issue Class A subordinate voting shares or securities convertible into Class A subordinate voting shares without offering, in the manner determined by the Board of Directors, to each holder of Class B shares, pro rata to the number of Class B shares it holds, the right to subscribe concurrently with the issue of Class A subordinate voting shares or of securities convertible into Class A subordinate voting shares, as the case may be, an aggregate number of Class B shares or securities convertible into Class B shares, as the case may be, sufficient to fully maintain its proportion of voting rights associated with the Class B shares. The consideration to be paid for the issuance of each Class B share or security convertible into Class B shares, as the case may be, shall be equal to the issue price of each Class A subordinate voting share or security convertible into Class A subordinate voting shares then issued.

The pre-emptive rights do not apply in the case of the issuance of Class A subordinate voting shares or securities convertible into Class A subordinate voting shares:

• in payment of stock dividends;

• pursuant to the stock option plans or share purchase plans of the Company;

• further to the conversion of Class B shares into Class A subordinate voting shares pursuant to the articles of the Company; or

• further to the exercise of the conversion, exchange or acquisition rights attached to securities convertible into Class A subordinate voting shares.

Any holder of Class B shares may assign its pre-emptive rights to other holders of Class B shares.

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General Information

Dividends

The Class A subordinate voting shares and Class B shares participate equally, share for share, in any dividend which may be declared, paid or set aside for payment thereon. In fiscal 2022, considering, among other matters, the needs for reinvestment in the Company’s operations, the scope of investment projects, the repayment of the Company’s debt, and the repurchase of outstanding Class A subordinate voting shares under the Company’s Normal Course Issuer Bid (“NCIB”), the Board of Directors determined that the Company, in keeping with its long-standing practice, would not pay a dividend. The Board of Directors re-evaluates the Company’s dividend policy not less than annually.

Amendments

The rights, privileges, conditions and restrictions attaching to the Class A subordinate voting shares or Class B shares may respectively be amended if the amendment is authorized by at least two-thirds of the votes cast at a meeting of holders of Class A subordinate voting shares and Class B shares duly convened for that purpose. However, if the holders of Class A subordinate voting shares as a class or the holders of Class B shares as a class were to be affected in a manner different from that of the other classes of shares, such amendment would, in addition, have to be authorized by at least two-thirds of the votes cast at a meeting of holders of shares of the class of shares so affected in a different manner.

Rank

Except as otherwise provided hereinabove, each Class A subordinate voting share and each Class B share carry the same rights, rank equally in all respects and are to be treated by the Company as if they constituted shares of a single class.

First Preferred Shares

The First Preferred Shares may be issued from time to time in one or more series and the Board of Directors of the Company has the right to determine, by resolution, the designation, rights, privileges, restrictions and conditions attaching to each series. The First Preferred Shares of each series rank equal to the First Preferred Shares of all other series and rank prior to the Second Preferred Shares, the Class A subordinate voting shares and Class B shares with respect to payment of dividends and repayment of capital. The holders of First Preferred Shares are entitled to receive notice of and attend any shareholders’ meetings and are entitled to one vote per share. As at December 5, 2022, no First Preferred Shares were outstanding.

Second Preferred Shares

The Second Preferred Shares may be issued from time to time in one or more series and the Board of Directors has the right to determine, by resolution, the designation, rights, privileges, restrictions and conditions attaching to each series. The Second Preferred Shares of each series rank equal to all other Second Preferred Shares of all other series and rank after the First Preferred Shares, but prior to the Class A subordinate voting shares and Class B shares with respect to payment of dividends and repayment of capital. The Second Preferred Shares are non-voting. As at December 5, 2022, no Second Preferred Shares were outstanding.

Normal Course Issuer Bid

On February 1, 2022, the Board of Directors authorized and subsequently received the approval from the Toronto Stock Exchange (“TSX”) for the renewal of its NCIB and the purchase for cancellation of up to 10% of the public float of the Company’s Class A subordinate voting shares as at January 24, 2022. The current NCIB enables the Company to purchase on the open market through the facilities of the TSX and the New York Stock Exchange (“NYSE”) and through alternative trading systems, as well as outside the facilities of the TSX by private agreements pursuant to exemption orders issued by securities regulators, up to 18,781,981 Class A subordinate voting shares for cancellation. As at January 24, 2022, there were 216,915,512 Class A subordinate voting shares of the Company outstanding of which approximately 87% were widely held. The Company was authorized to purchase Class A subordinate voting shares under the current NCIB commencing on February 6, 2022 and may continue to do so until February 5, 2023, or until such earlier date when the Company will either have acquired the maximum number of Class A subordinate voting shares allowable under the NCIB or elected to terminate the bid.

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General Information

As at December 5, 2022, the Company had purchased for cancellation 6,449,173 Class A subordinate voting shares under its current NCIB for an approximate aggregate cash consideration of $656.8 million at a weighted average price of $101.84 per share. The repurchased shares include 3,968,159 and 938,914 Class A subordinate voting shares purchased for cancellation on March 1, 2022 and on August 1, 2022 from Caisse de dépôt et placement du Québec for an aggregate cash consideration of $500 million, by way of private agreements. In the case of such repurchases, favourable decisions were obtained from the Quebec securities regulator to exempt the Company from issuer bid requirements and they are considered within the annual aggregate limit that the Company is entitled to purchase under its current NCIB. A copy of the Company’s Notice of Intention relating to the Company’s NCIB may be obtained free of charge from its Investor Relations department. See the heading Additional Information at the end of this document.

Principal Holders of Class A Subordinate Voting Shares and Class B Shares

As at December 5, 2022, to the knowledge of the directors and executive officers of the Company, the only persons who beneficially owned, directly or indirectly, or exercised control or direction over 10% or more of CGI’s outstanding Class A subordinate voting shares or Class B shares were Mr. Serge Godin and Caisse de dépôt et placement du Québec. Their holdings are set out in the tables that follow.

As at December 5, 2022, the Company and its related subsidiaries are controlled by Mr. Serge Godin, the Founder and Executive Chairman of the Board.

Name		Shares – Class “A”				Shares – Class “B”				Total Equity
	Number		%		Number		%		Total % of Equity		Total Number of Votes		Total % of Votes
Serge Godin		362,395		0.17%						0.15%		362,395		0.08%
						25,545,706		96.60%		10.72%		255,457,060		53.64%
Total		362,395		0.17%		25,545,706		96.60%		10.88%		255,819,455		53.72%

Name	Shares – Class “A”					Total Equity
	Number		%			Total % of Equity			Total Number of Votes		Total % of Votes
Caisse de dépôt et placement du Québec		22,523,361		10.64	%		9.46	%		22,523,631		4.73	%
Total		22,523,361		10.64	%		9.46	%		22,523,631		4.73	%

As at December 5, 2022, Mr. André Imbeau, the Founder and Advisor to the Executive Chairman of the Board, beneficially owned, directly or indirectly, or exercised control or direction over, 900,000 Class B shares.

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General Information

CGI’s Investor Relations department regularly surveys the Company’s largest institutional shareholders. The following table sets out, as at December 5, 2022, the top ten institutional holders of CGI’s Class A subordinate voting shares, based on the shareholder identification data available to the Company.

Name	Shares – Class “A”					Total Equity
	Number		%			Total % of Equity			Total Number of Votes		Total % of Votes
Caisse de dépôt et placement du Québec		22,523,361		10.64	%		9.46	%		22,523,361		4.73	%
Fidelity Investments Canada ULC		11,605,386		5.47	%		4.86	%		11,575,386		2.43	%
BlackRock Asset Management Canada		10,880,845		5.06	%		4.50	%		10,710,845		2.25	%
Mawer Investment Management Ltd.		10,297,000		4.46	%		3.97	%		9,450,000		1.98	%
The Vanguard Group, Inc.		7,069,697		3.38	%		3.01	%		7,069,697		1.51	%
Jarislowsky Fraser, Ltd.		6,938,644		3.34	%		2.97	%		7,068,644		1.48	%
RBC Dominion Securities, Inc.		4,147,646		1.96	%		1.74	%		4,147,646		0.87	%
Mackenzie Financial		3,950,000		1.89	%		1.68	%		4,000,000		0.84	%
Fiera Capital		3,747,714		1.70	%		1.51	%		3,602,714		0.76	%
MFS Investment Management		3,301,971		1.58	%		1.40	%		3,301,971		0.70	%

As at December 5, 2022, the directors and executive officers of the Company, as a group, beneficially owned, directly or indirectly, or exercised control or direction over, 1,750,933 Class A subordinate voting shares and 26,445,706 Class B shares representing respectively approximately 0.83% of the issued and outstanding Class A subordinate voting shares and 100% of the issued and outstanding Class B shares.

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Business to be Transacted at the Meeting

The following items of business will be presented to the shareholders at the Meeting:

1. Presentation of the Annual Audited Consolidated Financial Statements

The Annual Audited Consolidated Financial Statements of the Company for the fiscal years ended September 30, 2022 and 2021 and the report of the auditor will be tabled at the Meeting. The Annual Audited Consolidated Financial Statements were mailed with the Notice of Meeting to shareholders who requested them. Copies of the Annual Audited Consolidated Financial Statements of the Company for the fiscal years ended September 30, 2022 and 2021 may be obtained from the Company upon request and are available on the internet at www.envisionreports.com/gib2022 as well as on the Canadian Securities Administrators’ website at www.sedar.com.

2. Election of Directors

Fifteen directors are to be elected to hold office until the close of the next Annual General Meeting of Shareholders, unless the office is earlier vacated. Each of the fifteen persons presented in this Management Proxy Circular is nominated for election as a director of the Company and each nominee has agreed to serve as a director if elected.

The persons named as proxies in the proxy form or voting instruction form, as applicable, intend to cast the votes represented by proxy at the Meeting FOR the election as directors of the fifteen persons nominated in this Management Proxy Circular unless shareholders direct otherwise.

3. Appointment of Auditor

The Board of Directors recommends that PricewaterhouseCoopers LLP be appointed as the auditor of the Company to hold office until the next Annual General Meeting of Shareholders or until its successor is appointed. PricewaterhouseCoopers LLP was first appointed as the Company’s auditor at the Annual General and Special Meeting of Shareholders held on January 30, 2019.

The persons named as proxies in the proxy form or voting instruction form, as applicable, intend to cast the votes represented by proxy at the Meeting FOR the appointment of PricewaterhouseCoopers LLP as auditor and to vote to authorize the Audit and Risk Management Committee to fix the compensation of the auditor unless shareholders direct otherwise.

4. Shareholder Proposals

Three shareholder proposals were submitted by the Mouvement d’éducation et de défense des actionnaires (“MÉDAC”). MÉDAC is a not-for-profit company whose registered office is located at 82 Sherbrooke Street West, Montréal, Quebec, Canada, H2X 1X3, holding 32 Class A subordinate voting shares that were acquired on February 19, 2014.

One shareholder proposal was submitted by the Shareholder Association for Research & Education, on behalf of the Pension Plan of The United Church of Canada (“PP-UCC”). PP-UCC is a company whose registered office is located at 3250 Bloor Street West, Suite 300, Toronto, Ontario, Canada, M8X 2Y4, holding 100 Class A subordinate voting shares that were acquired on March 7, 2022.

The four proposals are enclosed as Appendix C hereto, along with the responses of CGI’s Board of Directors.

The persons named as proxies in the proxy form or voting instruction form, as applicable, intend to cast the votes represented by proxy at the Meeting AGAINST the adoption of each of the shareholder proposals attached as Appendix C unless shareholders direct otherwise.

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Nominees for Election as Directors

The persons whose names are printed in the form of proxy intend to vote for the election as directors of the proposed nominees whose names are set forth in the following pages. Each director elected will hold office until the next Annual General Meeting of Shareholders or until such director’s resignation, unless the office is earlier vacated.

The information below lists the name of each candidate proposed by the Board of Directors, on the recommendation of the Corporate Governance Committee, for election as a director; whether the candidate has been determined by the Board of Directors to be independent of, or related to, the Company; whether the candidate complies with the Company’s share ownership guideline; the candidate’s age; the principal occupation of the candidate; the city, province or state, and country of residence of the candidate; the year when the candidate first became a director, if currently a director; the voting results for the candidate in the previous year’s election, if applicable; the standing committee memberships of the candidate; the skills the candidate brings to the Board of Directors based on the Board of Directors’ skills matrix; the number of shares of the Company beneficially owned, directly or indirectly, or over which control or direction is exercised; the number of Deferred Stock Units (“DSUs”) of the Company held (see the heading Deferred Stock Units Plan and Deferred Stock Units Granted to Directors later in this document); the number of stock options of the Company held (see the heading Share Option Plan later in this document); the number of Performance Share Units (“PSUs”) of the Company held (see the heading Performance Share Unit Plans later in this document); as well as current and previous directorships.

Information relating to shares, DSUs, stock options and PSUs, if any, beneficially owned, or over which control or direction is exercised, is provided as at December 5, 2022.

George A. Cope Toronto, Ontario, Canada Director since: 2020 Age: 61 Independent director, complies with the share ownership guideline

Mr. Cope is a corporate director. Prior to his retirement in January 2020, he was President and Chief Executive Officer of BCE Inc. and Bell Canada, a position he had held since 2008. He was recognized as Corporate Citizen of the Year in the Report on Business CEO of the Year Awards (2019), one of the Top 100 Best-Performing CEOs in the World by Harvard Business Review (2019) and as Canada’s Outstanding CEO of the Year for 2015 by the Financial Post. Under his leadership, Bell announced the Bell Let’s Talk initiative in 2010, the largest-ever corporate commitment to Canadian mental health and now one of the country’s most prominent community investment campaigns. Mr. Cope was named Ivey Business Leader of the Year in 2013 and serves on the school’s advisory board. He has been awarded honorary Doctorate degrees by his alma mater, University of Windsor and Trent University, was Chair of United Way Toronto’s record-breaking 2013 campaign, and received the Queen’s Diamond Jubilee Medal for his work on Bell Let’s Talk. Mr. Cope is Chair of the board of the Bank of Montreal, and serves as a director of its U.S. subsidiary, BMO Financial Corp. In addition, he sits on the board of directors of the Brain Canada Foundation, and was a past board member of Maple Leaf Sports & Entertainment Ltd. (MLSE). Mr. Cope was appointed a Member of the Order of Canada in 2014 and was inducted into the Canadian Business Hall of Fame in 2018. Mr. Cope is a graduate of the Ivey School of Business at Western University. Lead Director, Member of the Corporate Governance Committee and Human Resources Committee Class A subordinate voting shares: 21,540 (*) Deferred Stock Units: 5,810 (+)

2022 votes in favour: 99.48%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓

  2022 MANAGEMENT PROXY CIRCULAR         11

Nominees for Election as Directors

Paule Doré Outremont, Quebec, Canada Director since: 1995 Age: 71 Independent director, complies with the share ownership guideline

Ms. Doré is a corporate director. She joined CGI in 1990 and served in a number of roles, including as Executive Vice-President and Chief Corporate Officer when she retired in 2006. Ms. Doré has served on the board of directors of other publicly listed companies, including Ault Food Limited, AXA Canada, Groupe Covitec Inc., Groupe Laperrière & Verreault Inc., Cogeco Inc. and Héroux-Devtek Inc. Ms. Doré currently serves as a director of the Institute for the Governance of Public and Private Organizations (IGOPP). Ms. Doré holds an honorary Doctorate degree in Philosophy from the Dominican University College in Ottawa. Member of the Corporate Governance Committee and the Human Resources Committee Class A subordinate voting shares: 54,274 (*) Deferred Stock Units: 15,324 (+) Stock options: 625 (‡)

2022 votes in favour: 93.75%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓

Julie Godin Westmount, Quebec, Canada Director since: 2013 Age: 47 Director related to CGI, complies with the share ownership guideline

Ms. Godin, as Co-Chair of the CGI Board of Directors, collaborates with the Board to set the strategic direction of the Company, including overseeing the development and execution of its rolling three-year strategic plan, which is updated annually. As part of this, she and the Board focus on achieving results for and maintaining equilibrium among CGI’s three stakeholders – clients, employees (whom we call members) and shareholders – to ensure each stakeholders’ long-term success. As Executive Vice-President of Strategic Planning and Corporate Development, Ms. Godin oversees the ongoing development of the CGI Management Foundation, which includes the key elements and best practices that define and guide the Company’s actions for the benefit of all three stakeholders. She also leads the strategic planning, marketing & communications and mergers & acquisitions functions. In this role, she directs the Company’s continuous improvement through structured stakeholder insights and metrics, and drives forward the successful execution of the Build and Buy Strategy, equipping leaders to bring forward CGI’s end-to-end services and merging with IT and business consulting firms that strengthen our footprint and capabilities. Before joining CGI, Ms. Godin founded Oxygen Corporate Health, a company that manages comprehensive health and wellbeing programs in the workplace, which merged with CGI. From 2017 to 2021, Ms. Godin was a member of the Board of Directors of Canadian National Railway Company, a transportation leader and the only transcontinental railroad in North America. Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development Class A subordinate voting shares: 10,887 (*) Stock options: 193,253 (‡) Performance Share Units: 52,288 (§)

2022 votes in favour: 99.12%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓

12         2022 MANAGEMENT PROXY CIRCULAR  

Nominees for Election as Directors                

Serge Godin Westmount, Quebec, Canada Director since: 1976 Age: 73 Director related to CGI, complies with the share ownership guideline

Mr. Godin founded CGI in 1976 and he is the controlling shareholder of the Company. Today, CGI is one of the largest IT and business consulting services firms in the world. Mr. Godin led CGI as its President and Chief Executive Officer from its founding until 2006, when he became Founder and Executive Chairman of the Board. Under his leadership, CGI has expanded through both organic growth and more than 100 acquisitions, growing from 2 employees in 1976 to 90,000 today. Mr. Godin is an Officer of the Order of Canada and an Officer of the Ordre national du Québec. In 2008, he was inducted into the Canadian Business Hall of Fame. In 2011, he was named an Honorary Associate by the Conference Board of Canada. In 2015, he became a lifelong member of the Horatio Alger Association. Mr. Godin has been awarded several honorary doctorate degrees, including from ÉTS (École de technologie supérieure) of Montréal, York University in Toronto, Montreal’s Concordia University, HEC (University of Montréal Business School) and Québec’s Université Laval. Mr. Godin has long been involved in charitable causes. In 2000, together with other members of his family, he established the Godin Family Foundation with a mission to alleviate poverty, promote education and improve the health of children and teens in need. Since its inception, the Foundation has helped more than 400 schools, hospitals and youth organizations. Mr. Godin owns a majority interest in CGI’s Class B shares and controls the Company and related subsidiaries (see the heading Principal Holders of Class A Subordinate Voting Shares and Class B Shares earlier in this document). Founder and Executive Chairman of the Board Class A subordinate voting shares: 362,395 (*) Class B shares: 25,545,706 (*) Performance Share Units: 309,763 (§)

2022 votes in favour: 99.04%

Operational Literacy				Governance Risk and Compliance
Executive Leadership	Consulting Services and IT Industry			Financial Literacy			Governance and Human
		Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓

André Imbeau Beloeil, Quebec, Canada

Mr. Imbeau is the Founder and Advisor to the Executive Chairman of the Board of CGI. He co-founded CGI with Mr. Serge Godin in 1976 and was, until 2006, Executive Vice-President and Chief Financial Officer and, until 2016, Founder, Vice-Chairman of the Board and Corporate Secretary of the Company. Mr. Imbeau’s financial and operational expertise and deep understanding of CGI’s operations enables him to provide valuable insight to management and the Board of Directors. Mr. Imbeau was awarded an honorary Doctorate degree from Université du Québec à Chicoutimi. Mr. Imbeau holds an interest in the Company’s Class B shares (see the heading Principal Holders of Class A Subordinate Voting Shares and Class B Shares earlier in this document). Founder and Advisor to the Executive Chairman of the Board Class A subordinate voting shares: 30,933 (*) Class B shares: 900,000 (*) Stock options: 89,607 (‡)

Director since: 1976 Age: 73 Director related to CGI, complies with the share ownership guideline

2022 votes in favour: 99.50%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓

  2022 MANAGEMENT PROXY CIRCULAR         13

Nominees for Election as Directors                

Gilles Labbé Outremont, Quebec, Canada Director since: 2010 Age: 66 Independent director, complies with the share ownership guideline

Mr. Labbé is the Executive Chairman of the Board of Héroux-Devtek Inc., an international company specializing in the design, development, manufacture, repair, and overhaul of landing gear systems and components for the aerospace market. Prior to June 2019, Mr. Labbé had been President and Chief Executive Officer of Héroux-Devtek Inc. since the acquisition of Devtek Corporation by Héroux Inc. in 2000 and previously, he was the President and Chief Executive Officer of Héroux Inc. since 1989. Mr. Labbé holds a Bachelor of Business Administration degree from Université de Montréal and is a Fellow Chartered Professional Accountant (FCPA, FCA). Chair of the Audit and Risk Management Committee Class A subordinate voting shares: 7,246 (*) Deferred Stock Units: 34,414 (+) Stock options: 20,717 (‡)

2022 votes in favour: 99.42%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Manufacturing, retail and distribution	✓	✓	✓	✓

Michael B. Pedersen Toronto, Ontario, Canada Director since: 2017 Age: 62 Independent director, complies with the share ownership guideline

Mr. Pedersen is a corporate director. Prior to his retirement in June 2018, he was Special Advisor to the Chief Executive Officer of The Toronto-Dominion Bank since June 2017 and Group Head, U.S. Banking of The Toronto-Dominion Bank as well as President and Chief Executive Officer and a director of TD Bank US Holding Company, TD Bank, N.A. and TD Bank USA, N.A. from 2013 to 2017, where he was responsible for leading the bank’s retail and commercial banking operations in the United States. Prior to joining TD Bank Group in 2007, Mr. Pedersen worked at Barclays plc in the United Kingdom where he was responsible for three global businesses and prior to that he worked at CIBC where he held senior executive roles in retail and business banking. Mr. Pedersen served as Chairman of the Canadian Bankers Association and currently serves as a director of SNC-Lavalin, as Chairman of the board of directors of the Business Development Bank of Canada and as Chair of the National Board of Directors of the Nature Conservancy of Canada. Mr. Pedersen holds a Bachelor of Commerce degree from University of British Columbia and a Master’s degree in Industrial Relations from University of Toronto. Chair of the Corporate Governance Committee and Member of the Human Resources Committee Class A subordinate voting shares: 24,350 (*) Deferred Stock Units: 12,499 (+)

2022 votes in favour: 99.82%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Financial services	✓	✓	✓	✓

14         2022 MANAGEMENT PROXY CIRCULAR  

Nominees for Election as Directors                

Stephen S. Poloz Orleans, Ontario, Canada Director since: 2020 Age: 67 Independent director, complies with the share ownership guideline

Mr. Poloz is a corporate director. A widely-recognized economist with nearly 40 years of experience in financial markets, forecasting and economic policy, Stephen S. Poloz served a seven-year term as the Governor of the Bank of Canada, starting in 2013. As Governor, he served as Chairman of the Bank’s board of directors. He was a director of the Bank for International Settlements (BIS) and the Canada Deposit Insurance Corporation. He was also Chair of the BIS Audit Committee and former Chair of the Consultative Council for the Americas. Previously, Mr. Poloz was President and CEO of Export Development Canada, a major public sector financial intermediary providing various forms of insurance and lending to facilitate international business on behalf of Canadian companies. Mr. Poloz currently serves as a director of Enbridge Inc. Member of the Audit and Risk Management Committee Deferred Stock Units: 2,327 (+)

2022 votes in favour: 99.81%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Financial services	✓	✓	✓	✓

Mary G. Powell Stinson Beach, California, United States Director since: 2020 Age: 62 Independent director, complies with the share ownership guideline

Ms. Powell is a corporate director. She currently serves as Chief Executive Officer of Sunrun Inc., the largest residential-solar company in the U.S. Recognized as an energy transformation visionary, Mary G. Powell has served as President and Chief Executive Officer for Green Mountain Power Corporation (GMP) in the state of Vermont from 2008 through 2019. She led GMP’s ambitious energy transformation program to provide low carbon, low cost and reliable power to Vermont citizens. Ms. Powell has received various accolades, including the prestigious Rachel Carson Award in 2018, which honors distinguished female leaders influencing the environment. Ms. Powell served as Chair of The Solar Foundation and director of the Rocky Mountain Institute. She has extensive experience as a board member, and board chair, and currently serves on the boards of Sunrun, Inc. and Energir. Member of the Corporate Governance Committee and Human Resources Committee Deferred Stock Units: 2,076 (+)

2022 votes in favour: 99.48%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Communications & Utilities	✓	✓	✓	✓

  2022 MANAGEMENT PROXY CIRCULAR         15

Nominees for Election as Directors                

Alison C. Reed London, United Kingdom Director since: 2018 Age: 65 Independent director, complies with the share ownership guideline

Ms. Reed is a corporate director. She previously held senior management roles at Marks and Spencer plc where she spent more than 20 years, including as Chief Financial Officer from 2001 to 2005, and at Standard Life Assurance Company and Standard Life plc, where she served as Chief Financial Officer from 2005 to 2006 and led the company’s listing on the London Stock Exchange. Ms. Reed has served on the board of directors of several companies, including Darty plc and HSBC Bank plc. She currently serves as Deputy Chairman of British Airways plc, as a director of NewDay Ltd and as a Member of Council of Exeter University. Ms. Reed holds a Bachelor of Arts degree from Exeter University and is a Chartered Accountant (ACA). Member of the Audit and Risk Management Committee Class A subordinate voting shares: 3,000 (*)

2022 votes in favour: 99.81%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Multiple vertical markets	✓	✓	✓	✓

Michael E. Roach Montréal, Quebec, Canada Director since: 2006 Age: 70 Independent director, complies with the share ownership guideline

Mr. Roach is a corporate director. Retired President and Chief Executive Officer of CGI (2006-2016) and President and Chief Operating Officer (2002-2006), he joined CGI in a senior management position in 1998, from a major telecommunications company. Mr. Roach was named CEO of the Year 2013 by the Québec-based business journal Les Affaires and Most Innovative CEO of the Year 2014 by Canadian Business magazine. He currently serves on the board of directors of CAE Inc. and is a past member of the National Advisory Board for Canada’s Outstanding CEO of the Year. He is the former Chair of Interac Inc. Mr. Roach holds a Bachelor of Arts in Economics and Political Science, as well as an Honorary Doctorate in Business Administration from Laurentian University in Sudbury, Ontario. Member of the Board of Directors Class A subordinate voting shares: 951,335 (*) Deferred Stock Units: 7,133 (+)

2022 votes in favour: 99.61%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓

16         2022 MANAGEMENT PROXY CIRCULAR  

Nominees for Election as Directors                

George D. Schindler Fairfax, Virginia, United States Director since: 2016 Age: 59 Director related to CGI, complies with the share ownership guideline

Mr. Schindler is the President and Chief Executive Officer of CGI. He joined the Company through its acquisition of American Management Systems, Inc. in 2004 and has since then held numerous leadership roles, including leading the strategy and growth of CGI’s end-to-end services and solutions for commercial and government clients in the United States and Canada. Prior to his appointment as President and Chief Executive Officer in 2016, Mr. Schindler served as President and Chief Operating Officer of CGI since 2015 and as President, United States and Canada Operations since 2011. A recognized industry leader, Mr. Schindler has twice been named a Top 100 Leader by Federal Computer Week. He holds a Bachelor of Science degree in Computer Science from Purdue University. President and Chief Executive Officer Class A subordinate voting shares: 67,088 (*) Stock options: 937,362 (‡) Performance Share Units: 265,821 (§)

2022 votes in favour: 99.65%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓

Kathy N. Waller Atlanta, Georgia, United States Director since: 2018 Age: 64 Independent director, complies with the share ownership guideline

Ms. Waller is a corporate director. She served as the Executive Vice President, Chief Financial Officer and President, Enabling Services of The Coca-Cola Company until March 2019 where she was responsible for leading the company’s global finance organization. Ms. Waller joined The Coca-Cola Company in 1987 as a senior accountant and held numerous accounting and finance roles. She was Vice President, Controller from August 2009 to September 2013 and Senior Vice President, Finance from September 2013 to April 2014, prior to becoming Executive Vice President and Chief Financial Officer. She assumed responsibility for the company’s strategic governance areas as Executive Vice President, Chief Financial Officer and President Enabling Services from May 2017 to March 2019. Ms. Waller currently serves on the board of directors of Beyond Meat, Inc., Delta Air Lines, Inc. and Cadence Bancorporation. Ms. Waller is the Executive Director of the Atlanta Committee for Progress, a public/private partnership that supports the City of Atlanta. Previously she served on the board of directors of Coca-Cola FEMSA, S.A.B. de C.V and Monster Beverage Corporation. She holds a Bachelor of Arts degree and a Master’s degree in Business Administration from the University of Rochester and is a Certified Public Accountant (CPA, CGMA). Ms. Waller was named one of the Most Influential Black Corporate Directors by Savoy Magazine in its Fall 2021 issue. Member of the Audit and Risk Management Committee Deferred Stock Units: 6,295 (+)

2022 votes in favour: 99.68%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Manufacturing, retail and distribution	✓	✓	✓	✓

  2022 MANAGEMENT PROXY CIRCULAR         17

Nominees for Election as Directors                

Joakim Westh Stockholm, Sweden Director since: 2013 Age: 61 Independent director, complies with the share ownership guideline

Mr. Westh is a corporate director. He served as Senior Vice-President of LM Ericsson AB until 2009 where he was responsible for strategy, operations and sourcing. Mr. Westh is well-known as a leading expert in the fields of technology and management, particularly in Scandinavia. He served on the board of directors of other publicly listed issuers, including Arcam AB. He currently serves as a director of Saab AB, Swedish Match AB and Absolent Air Care Group AB. Mr. Westh holds Master’s degrees in Science from the Royal Institute of Technology and the Massachusetts Institute of Technology. Chair of the Human Resources Committee and Member of the Corporate Governance Committee Class A subordinate voting shares: 15,000 (*)

2022 votes in favour: 99.13%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓

18         2022 MANAGEMENT PROXY CIRCULAR  

Nominees for Election as Directors                

Frank Witter Braunschweig, Germany Director since: 2021 Age: 63 Independent director, complies with the share ownership guideline

Frank Witter is a corporate director. A longtime executive with Volkswagen, Mr. Witter became Chief Executive Officer of Volkswagen Financial Services AG in September 2008, serving in that role until September 2015 when he became Chief Financial Officer for Volkswagen Group—a role from which he retired in 2021. With the responsibility for both finance and information technology, he also served as a member of Volkswagen Group’s Board of Management from October 2015 to March 2021. Mr. Witter joined the Volkswagen Group in 1992, overseeing the capital markets section of the company’s Group Treasury unit until 1998. He subsequently became Treasurer at Volkswagen of America and Volkswagen Canada. In 2001, Mr. Witter left Volkswagen to serve as Corporate Treasurer at SAirGroup in Zurich, Switzerland, returning to Volkswagen in 2002. From 2002 to 2005, Mr. Witter served as CFO of Volkswagen of America and Volkswagen Canada. At the beginning of 2005, he assumed the combined role of CEO and CFO for both subsidiaries. From October 2007 to September 2008, Mr. Witter was President and CFO of VW Credit, Inc. During this time, he also served as Regional Manager for the American markets of Volkswagen Financial Services AG. In May 2021, Mr. Witter became a member of the Supervisory Board of Deutsche Bank AG. He holds a business degree from the University of Hanover in Germany and lives in Braunschweig, Germany. Member of the Audit and Risk Management Committee Deferred Stock Units: 1,698 (+)

2022 votes in favour: 99.63%

Operational Literacy				Governance Risk and Compliance
Executive	Consulting Services and			Financial Literacy			Governance and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Manufacturing, retail and distribution	✓	✓	✓	✓

(*) Number of shares beneficially owned, controlled or directed, directly or indirectly.

(+) For more information concerning DSUs, please refer to the heading Compensation of Directors later in this document.

(‡) For more information concerning stock options, please refer to the headings Share Option Plan and Compensation of Directors later in this document.

(§) The number of PSUs includes PSUs that were awarded at the beginning of fiscal 2023 to Ms. Godin and Messrs. Godin and Schindler as part of their target compensation for fiscal 2023, but which have not yet become eligible to vest and remain subject to the achievement of performance conditions, which will be determined at end of fiscal 2023. For more information concerning PSUs, please refer to the heading Performance Share Unit Plans later in this document.

  2022 MANAGEMENT PROXY CIRCULAR         19

Report of the Human Resources Committee

Executive Compensation Discussion and Analysis

Executive Compensation Process for the 2022 Fiscal Year

CGI’s executive compensation policy emphasizes incentive compensation linked to the success of the Company to ensure that the financial interests of the Company’s executives are closely aligned with those of shareholders. CGI measures business success on the basis of profit and growth as well as the satisfaction of clients and employees, whom we call members.

CGI’s compensation policy is rooted in its fundamental belief that a company with an inspiring dream, uncompromising integrity, a caring human resources philosophy and solid values is better able to attract and respond to the profound aspirations of high-caliber, competent people. These individuals in turn will deliver high-quality services, in keeping with the Company’s profitability objectives. The growth and profitability generated as a result will allow CGI to continue to offer its shareholders value for their investment.

This belief drives the Company’s compensation programs, which are designed to attract and retain the key talent CGI needs to remain competitive in a challenging market and achieve continued and profitable growth for its shareholders.

As per CGI’s compensation policy, the principles used to determine the compensation of the named executive officers (the President and Chief Executive Officer, the Executive Vice-President and Chief Financial Officer and the three other most highly compensated executive officers of the Company, hereafter referred to as the “Named Executive Officers”) are also applied to all management team members, taking into account the results of their respective business units. In the case of CGI’s senior executives, there is an added emphasis on closely aligning executives’ financial interests with those of shareholders through incentive compensation.

The sections below outline the main features of CGI’s executive compensation policy and programs.

The Human Resources Committee of the Board of Directors

The Committee reviews management’s proposals and makes recommendations to the Board of Directors of the Company in relation to the compensation of certain senior executives, including the entitlements under short and long-term incentive and benefit plans and the corporate objectives that the Founder and Executive Chairman of the Board, the President and Chief Executive Officer and other senior executives are responsible for achieving. Similarly, the Committee is responsible for approving and making recommendations in relation to the compensation of the Company’s outside directors and succession plans for senior executives.

The Committee is composed of Messrs. Joakim Westh, Chair of the Committee, George A. Cope, Lead Director, and Michael B. Pedersen, and Mses. Paule Doré, and Mary G. Powell, all of whom are independent directors. Mr. Alain Bouchard ceased to be a member of the Committee on February 2, 2022. The Committee held four regular meetings in fiscal 2022. Mr. Westh’s role and responsibilities as Chair of the Committee are described later in this document in the report of the Corporate Governance Committee under the heading Role and Responsibilities of the Lead Director and Standing Committee Chairs. The members of the Committee have significant experience in matters relating to human resources management and executive compensation, which they have acquired in their role as senior executives or as members of the Human Resources Committee of other publicly listed issuers. Mr. Westh was Senior Vice-President of LM Ericsson AB, Ms. Doré was Executive Vice-President and Chief Corporate Officer of the Company, Mr. Pedersen was President and Chief Executive Officer of TD Bank US Holding Company, TD Bank, N.A. and TD Bank USA, N.A., Mr. Cope was President and Chief Executive Officer of BCE Inc. and Bell Canada and Ms. Powell was President and Chief Executive Officer of Green Mountain Power Corporation and now serves as Chief Executive Officer of Sunrun Inc.

The role and responsibilities of the Committee are contained in the Committee’s charter, which is incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of the Board of Directors later in this document). The Committee’s charter is available on CGI’s website at www.cgi.com. The role and responsibilities of the Committee include:

• Advising the Board of Directors on human resources planning, compensation of members of the Board of Directors, executive officers and other members, short and long-term incentive plans, benefit plans, and executive officer appointments;

20         2022 MANAGEMENT PROXY CIRCULAR  

Report of the Human Resources Committee

• Reviewing and advising the Board of Directors on management’s succession plans for executive officers, with special emphasis on the Chief Executive Officer succession;

• Reviewing and advising the Board of Directors on CGI’s compensation philosophy, including the compensation strategy and compensation policies for the executive officer level, as proposed by the Executive Chairman of the Board, the Co-Chair of the Board and the Chief Executive Officer;

• Making recommendations to the Board of Directors for the appointment of the Chief Executive Officer and other executive officers, while considering and promoting the diversity of the executive team’s background, including in terms of gender, ethnicity, age and experience, and the corporate objectives which the executive officers are responsible for meeting;

• Reviewing and advising the Board of Directors on CGI’s overall compensation plan including the adequacy and form of compensation realistically reflecting the responsibilities and risks of the position for the Executive Chairman of the Board and for the Chief Executive Officer of the Company and, in that regard, considering appropriate information, including information with respect to the overall performance of the Chief Executive Officer;

• Reviewing and advising the Board of Directors on the compensation of executive officers, annual adjustment to executive salaries, and the design and administration of short and long-term incentive plans, benefits and perquisites as proposed by the Executive Chairman of the Board and the Chief Executive Officer;

• Reviewing and advising the Board of Directors on any exceptional terms of senior executive’s employment and termination arrangements;

• Making recommendations on the adoption of new, or significant modifications to, pay and benefit plans;

• Recommending the appointment of new officers and executive officers as appropriate while considering and promoting the diversity of the executive team’s background, including gender, ethnicity, age and experience;

• Reviewing and advising the Board of Directors on significant organizational changes;

• Reviewing and approving the Committee’s executive compensation report to be contained in the Company’s annual Management Proxy Circular;

• Reviewing and advising the Board of Directors on management development programs for the Company;

• Reviewing and advising the Board of Directors on special employment contracts or arrangements with officers of the Company, including any contracts relating to change of control, if any; and

• Reviewing and advising the Board of Directors on the compensation of the members of the Board of Directors and its committees, including the adequacy and form of compensation realistically reflecting the responsibilities and risks of the positions, and recommending changes where applicable.

The Committee also performs such other duties from time to time as assigned by the Board of Directors, including those relating to compensation of officers and senior employees and the other members of the Company.

The Committee reports to the Board of Directors on its proceedings, the reviews it undertakes, and its recommendations.

In executing its mandate for fiscal 2022, the Committee retained the services of Willis Towers Watson, the Company’s external human resources consultant. Willis Towers Watson was first retained to provide consulting services in 1995. The services provided by Willis Towers Watson to the Committee include:

• Providing the Committee with information on market trends and good practices on executive and director compensation;

• Developing recommendations on the composition of the comparator groups of companies used as the basis for determining the compensation of the directors, the Founder and Executive Chairman of the Board, the President and Chief Executive Officer and other senior executives of the Company;

• Conducting market research and providing the Committee with data and analysis on compensation practices of companies in comparator groups to allow the Company to align its compensation policy with the market as it applies to the directors, the Founder and Executive Chairman of the Board, the President and Chief Executive Officer and other senior executives; and

• Reviewing the design of the annual and long-term incentive plans and providing data and analysis on comparator group company practices in this area.

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To ensure the quality of services provided to the Committee by external human resources consultants, as well as their independence, the Committee has established the following processes as part of its annual work plan:

• Once a year or as required, the Committee may request a statement of services from external selected consultants for the purpose of enabling the Committee to pre-approve all services that may be provided by such external consultants;

• The Committee may request from each external consultant information concerning the consultant’s organizational structure and employees who provide services to the Committee so that the Committee may agree with the external consultant on measures to address any real or perceived conflicts of interest that may arise from the services provided by the external consultant to the Company at the request of management; and

• The Committee reviews the external consultant independence policy annually to ensure that it continues to meet the Committee’s requirements.

Executive Compensation Related Fees

The fees of Willis Tower Watson, CGI’s external human resources consultant, for services rendered during the fiscal years ended September 30, 2022 and 2021 are detailed below:

	Fees billed
Service retained	2022		2021
Advice in relation to executive compensation and the compensation of directors(a)	$	110,000	$	131,000
All other fees(b)	$	341,000	$	278,500
Total fees billed	$	451,000	$	406,500

(a) All fees billed by the human resources consultant for the years ended September 30, 2022 and 2021 were related to annually recurring work for the Committee.

(b) The other fees billed by the human resources consultant for the years ended September 30, 2022 and 2021 were mainly in relation to pension, investment matters and a global data survey agreement.

Composition of Comparator Groups

To determine appropriate compensation levels, the Named Executive Officers’ positions are compared with similar positions within a comparator group made up of leading companies in a number of industries. These companies include information technology consulting firms and companies similar to CGI in terms of size, and operational and managerial complexity. With 83.3% of its 2022 revenues generated outside Canada and constant international expansion, CGI must offer competitive compensation in each of the challenging markets in which it operates in order to recruit and retain high-performing executives. Generally, the Company’s major competitors are based either in the U.S., Europe or in the Asia Pacific region and they compete against CGI both in Canada and internationally. In response to this market reality, for the year ended September 30, 2022, the compensation of Named Executive Officers based in the U.S. and Canada is compared to market information from competitors based in the U.S. and Canada, while the compensation of Named Executive Officers based in France is compared to market information from competitors based in France. The Committee reviews the composition of the comparator groups annually and changes were made to the comparator groups in fiscal 2022.

The selection criteria used to determine the companies included in the comparator groups are the following:

• Autonomous and publicly-traded companies;

• Large number of professionals;

• Growing companies;

• High-end IT and business consulting, systems integration, outsourcing services and intellectual property solution providers;

• International scope;

• Companies for which IT is very strategic; and

• Participation in the data bank for the relevant countries maintained by Willis Towers Watson, the Company’s external human resources consultant.

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Each company in the following table meets one or more of the foregoing criteria.

U.S. and Canada Comparator Group: Executives from 11 companies

Accenture plc Atos SE Booz Allen Hamilton Holding Corporation CACI International Inc Capgemini SE
Cognizant Technology Solutions Corporation DXC Technology Company HP Inc. International Business Machines Corporation Leidos Holdings, Inc. Science Applications International Corporation (SAIC)

France Comparator Group: Executives from 10 companies

Accenture plc Agilent Technologies, Inc. Atos S.E. Cap Gemini S.E. Cognizant Technology Solutions Corporation DXC Technology Company International Business Machines Corporation Indra Sistemas SA Sopra Steria Group SA Tieto OYJ

The foregoing comparator groups were used to determine the compensation of the Named Executive Officers for the fiscal year ended September 30, 2022.

Executive Compensation Components

CGI’s total executive compensation is made up of five components: base salary, short-term incentive, long-term incentive, benefits and perquisites. In keeping with the Company’s values, incentive compensation and share ownership are emphasized to ensure that executives’ interests are aligned with CGI’s profitability and growth objectives, which in turn results in increased value for all shareholders under normal market conditions. CGI’s Named Executive Officers do not participate in any defined benefit pension plans.

Component	Description	Policy Alignment with Comparator Groups
Base Salary	Annual base salary based on each executive’s responsibilities, competencies and contribution to the Company’s success.	Aligned with median base salary offered in the comparator group.
Short-Term Incentive	Annual payout based on the achievement of performance objectives in accordance with the Profit Participation Plan.	Aligned with median short-term incentives of the comparator group when performance objectives are met.
Long-Term Incentive	Grants under the Share Option Plan and/or awards under the Performance Share Unit Plans, as applicable in each case, based on achievement of performance objectives.	Aligned with median total compensation of the comparator group when business objectives are met, or above the median to recognize an executive’s exceptional performance.
Benefits	Group benefits and employer contributions under CGI’s Share Purchase Plan.	Aligned with median benefits of the comparator group.
Perquisites	Principal perquisites include company car and related expenses, relocation costs and medical exams.	Aligned with median perquisites of the comparator group.

Total compensation is aligned with the comparator groups by taking into account the number of years of experience in the role, aligned over time with the median of the total compensation of the comparator group when business objectives are met, while exceptionally allowing for compensation above the median as necessary to recognize an executive’s exceptional and sustained contribution to the Company’s success.

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The following table shows for each Named Executive Officer the compensation components as a percentage of their total compensation, at target levels, for the year ended September 30, 2022:

Name and title as at September 30, 2022	Base Salary	Short-Term Incentive	Long-Term Incentive	Benefits and   Perquisites
Serge Godin Founder and Executive Chairman of the Board	9.99%	19.99%	69.14%	0.88%
George D. Schindler President and Chief Executive Officer	13.07%	26.14%	60.10%	0.69%
François Boulanger(a) Executive Vice-President and Chief Financial Officer	20.93%	23.02%	55.08%	0.97%
Jean-Michel Baticle President and Chief Operating Officer	25.31%	27.84%	46.44%	0.41%
Julie Godin Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development	22.23%	24.45%	52.23%	1.09%

(a) Effective October 1, 2022, Mr. Boulanger was appointed President and Chief Operating Officer of the Company, and Mr. Steve Perron was appointed Executive Vice-President and Chief Financial Officer.

Base Salary

The base salaries paid to Named Executive Officers are reviewed every year based on each executive’s scope of responsibilities, competencies and contribution to the Company’s success. The objective of CGI’s compensation policy for base salaries is to align them over time with the median base salary in the relevant comparator group, taking into account the number of years of experience in the role, while allowing for compensation to rise above the median in recognition of a particular executive’s exceptional and sustained contribution to the Company’s success. As part of the methodology used for fiscal 2022, the positions of Named Executive Officers were compared with generic executive positions in the compensation databases for the relevant countries maintained by Willis Towers Watson, the Company’s external human resources consultant. When differences in the level and scope of responsibilities for the comparable generic executive position are observed, the value of the generic position is adjusted to ensure that there is an appropriate basis for comparison.

Short-Term Incentive Plan – Profit Participation Plan

The Named Executive Officers participate in the Profit Participation Plan, a short-term incentive plan that pays an annual cash payout based on achievement of performance objectives as approved at the beginning of the fiscal year by the Board of Directors on the recommendation of the Committee. The Profit Participation Plan is designed to provide CGI’s management and members with an incentive to increase the profitability and growth of the Company.

Individual payouts are based on the executive’s profit participation target under the Profit Participation Plan and the achievement of performance objectives. The profit participation target varies as a percentage of base salary depending on the executive’s position and is adjusted in accordance with the performance factors that are directly linked to the level of achievement of the performance objectives set out in the Company’s annual budget and strategic plan. The Profit Participation Plan provides that the Founder and Executive Chairman of the Board, the Co-Chair of the Board, the President and Chief Executive Officer or the Chief Financial Officer may recommend to the Committee and to the Board of Directors to modify payment amounts or propose revised targets based on the overall performance of the Company, an individual’s performance, exceptional market conditions and other factors.

Executive profit participation targets are reviewed annually to ensure they remain aligned with the Company’s compensation policy and continue to be competitive with CGI’s applicable comparator group.

Performance Factors

The performance factors used to adjust each Named Executive Officer’s profit participation target in fiscal 2022 were based on two separate measures: profitability and growth. The achievement of profitability and growth objectives determines the performance factors that are applied to calculate the annual payout under the Profit Participation Plan.

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Such adjustment may result in a reduction or an increase in the annual payout. In the latter case, the payout may not exceed two times the target. The relative performance of the companies in CGI’s comparator group is not a factor in determining the annual payout being paid under the Profit Participation Plan.

The profitability performance factor is based on the degree of achievement of the net earnings excluding specific items margin. The growth performance factor is based on the achievement of constant currency revenue growth. Both factors are approved by the Board of Directors as part of the Company’s annual budget and strategic plan approval.

Only items that are the result of actual management operation activities are taken into account in the calculation of performance factors for compensation purposes. The performance factors are prorated between target levels.

The profitability performance factor and growth performance factor are established by determining the actual level of achievement of the budgeted profitability and growth objectives which correspond to a pre-determined numerical performance factor.

Profitability			Growth
Net earnings excluding         specific items margin(a)	Profitability     Performance     Factor		Constant currency         revenue(a)	Growth     Performance     Factor
Budgeted margin objectives on a scale of five levels	0 0.25 0.50 1.00 1.25		Budgeted revenue objectives on a scale of five levels	0 2.00 3.00 3.50 4.00

(a) Net earnings excluding specific items is a non-generally accepted accounting principle (“non-GAAP”) measure of net earnings, excluding acquisition and integration related costs, restructuring costs and tax adjustments. Constant currency revenue is a non-GAAP measure of revenue excluding currency conversion effects. Management believes these measures are useful for executive compensation purposes as they best reflect the Company’s performance and allow for better comparability from period to period. These measures do not have any standardized meaning under International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures used by other companies. A reconciliation of the net earnings excluding specific items to its closest IFRS measure and a reconciliation of constant currency revenue to its closest IFRS measure can be found on page 27 of the Company’s Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021, which is available on the Canadian Securities Administrators’ website at www.sedar.com.

Once the profitability performance factor and the growth performance factor are established, the following formula is used to determine the payout under the Profit Participation Plan:

The effect of the formula is to place importance on achieving both the growth and the profitability objectives. If the minimum threshold for either profitability or growth is not met, there is no annual payout under the Profit Participation Plan.

The profit participation targets of each of the Named Executive Officers were based on the formula above as it pertains solely to the overall Company performance.

CGI does not disclose specific profitability and growth objectives because it considers that the information would place it at a significant competitive disadvantage if the objectives became known. Disclosing the specific performance objectives that are set as part of the Company’s annual budget and strategic planning process would expose CGI to serious prejudice and negatively impact its competitive advantage. For example, to the extent that the Company’s performance objectives became known, its ability to negotiate accretive business agreements could be significantly impaired, putting incremental pressure on its profit margins. In addition, CGI believes that disclosing performance objectives would be inconsistent with CGI’s policy of not providing guidance to the market and limiting the disclosure of forward-looking information.

The Founder and Executive Chairman of the Board, the Co-Chair of the Board, the President and Chief Executive Officer and the Chief Financial Officer may from time to time exercise their discretion to recommend to the Committee and the

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Board of Directors that incentive compensation under the Profit Participation Plan be adjusted in order to ensure that actual profit participation be equitable and balance the interests of each of the Company’s stakeholders based on the overall performance of the Company and exceptional market conditions.

For fiscal 2022, the profit participation targets and payouts received by the Named Executive Officers under the Profit Participation Plan are as follows:

Name and title as at September 30, 2022	Annual profit participation target		Annual profit participation payout
Serge Godin Founder and Executive Chairman of the Board		$2,602,000		$3,382,600
George D. Schindler(a) President and Chief Executive Officer		$3,312,620		$4,232,653
François Boulanger Executive Vice-President and Chief Financial Officer		$902,000		$1,173,000
Jean-Michel Baticle(b) President and Chief Operating Officer		$958,648		$1,246,381
Julie Godin Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development		$726,000		$944,000

(a) Mr. Schindler is paid in U.S. dollars. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.2777 for each U.S. dollar in fiscal 2022. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021.

(b) Mr. Baticle is paid in euros. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.3833 for each euro in fiscal 2022. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2022 and 2021.

Long-Term Incentive Plans

CGI’s long-term incentive plans are designed to ensure that executives’ interests are closely aligned with those of all shareholders and include the Share Option Plan for Employees, Officers and Directors of CGI Inc. and its Subsidiaries (the “Share Option Plan”) and the Performance Share Unit Plan for Designated Leaders of CGI Inc. and its Subsidiaries (the “2017 PSU Plan” and collectively with the 2014 Performance Share Unit Plan for Designated Participants of CGI Inc., the “PSU Plans”). In line with practices among certain of the Company’s comparator groups, the Company’s current compensation practice is to grant, on a case by case basis, PSUs awarded under the 2017 PSU Plan as the long-term incentive component of certain of its senior executives’ compensation. As a result, for fiscal 2022, Named Executive Officers’ target long-term incentive compensation was composed solely of PSUs awarded under the 2017 PSU Plan.

Share Option Plan

The Share Option Plan is designed to ensure that executives’ interests are closely aligned with those of all shareholders. The Company’s practice is to apply performance vesting conditions for all stock options granted under the Share Option Plan. The percentage of stock options that become eligible to vest is based on the degree of achievement of profitability and growth objectives determined following the completion of the fiscal year and subject to adjustment in accordance with the Share Option Plan. Stock options that do not become eligible to vest are forfeited and cancelled.

Stock options that have become eligible to vest then typically vest on a time basis as follows: one-quarter when the fiscal year results are approved, one quarter on the second anniversary of the grant, one-quarter on the third anniversary of the grant, and the final quarter on the fourth anniversary of the grant. For fiscal 2022, Named Executive Officers’ target long-term incentive compensation did not include any awards under the Share Option Plan.

See the heading Key Features of CGI’s Long-Term Incentive Plans later in this document for a summary of the features of the Share Option Plan.

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Performance Share Unit Plans

Each PSU entitles the holder to receive one Class A subordinate voting share subject to the achievement of performance and time vesting conditions and to the terms and conditions set out in the PSU Plans. Unlike Class A subordinate voting shares issued in connection with the exercise of stock options under the Share Option Plan, which are issued from treasury, the PSUs are settled with Class A subordinate voting shares purchased in the open market by the plan trustees with funds provided by CGI.

PSUs typically have performance conditions that are determined by the Board of Directors at the time of each grant. CGI’s annual long-term incentive awards of PSUs are made at the beginning of the fiscal year. The percentage of PSUs that become eligible to vest is based on the degree of achievement of profitability and growth objectives determined following the completion of the fiscal year and subject to adjustment in accordance with the PSU Plans. Both objectives are approved by the Board of Directors concurrently with the Company’s annual budget and strategic plan approval.

PSUs that become eligible to vest then vest on a time basis. PSUs that do not become eligible to vest under the PSU Plans are forfeited and cancelled.

See the heading Key Features of CGI’s Long-Term Incentive Plans later in this document for a summary of the features of the PSU Plans.

Award Date Fair Value

The accounting fair value of the PSUs was determined in accordance with IFRS 2 as the market value of the underlying Class A subordinate voting shares on the award date. The stock-based compensation cost related to PSUs recorded in costs of services, selling and administrative expenses takes into account the actual result of the performance-based vesting and amortizes the resulting net PSU value over the four-year vesting period. Since fiscal 2018, the Company has used the accounting fair value of the PSUs as the award date fair value for compensation purposes in order to align the earned compensation with performance results.

Performance Factors and Vesting Conditions

The performance factors used to determine the number of stock options or PSUs that will vest under CGI’s long-term incentive plans are based on two separate measures: profitability and growth. The achievement of profitability and growth objectives determines the performance factors that are applied to calculate the number of PSUs or stock options that vest under CGI’s long-term incentive plans. The total percentage of PSUs or stock options eligible to vest is capped at 100%.

The profitability performance factor is based on the degree of achievement of the net earnings excluding specific items margin. The growth performance factor is based on the degree of achievement of constant currency revenue growth. Both factors are approved by the Board of Directors concurrently with the Company’s annual budget and strategic plan approval. If the minimum threshold for profitability is not met, no PSUs or stock options become eligible to vest under the long-term incentive plans. The relative performance of the companies in CGI’s comparator groups is not a factor in determining the number of PSUs or stock options that will vest under CGI’s long-term incentive plans.

Only items that are the result of actual management operation activities are taken into account in the calculation of vesting conditions for compensation purposes. The performance factors are prorated between target levels.

The profitability performance factor and growth performance factor are established by determining the actual level of achievement of the budgeted profitability and growth objectives which correspond to a pre-determined numerical performance factor.

Profitability			Growth
Net earnings excluding specific items margin(a)	Profitability Performance Factor		Constant currency revenue(a)	Growth Performance Factor
Budgeted margin objectives on a scale of five levels	0 0.25 0.50 1.00 1.25		Budgeted revenue objectives on a scale of five levels	0 0.25 0.75 1.00 1.25

(a) Net earnings excluding specific items is a non-generally accepted accounting principle (“non-GAAP”) measure of net earnings, excluding acquisition and integration related costs, restructuring costs and tax adjustments. Constant currency revenue is a

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non-GAAP measure of revenue excluding currency conversion effects. Management believes these measures are useful for executive compensation purposes as they best reflect the Company’s performance and allow for better comparability from period to period. These measures do not have any standardized meaning under International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures used by other companies. A reconciliation of the net earnings excluding specific items to its closest IFRS measure and a reconciliation of constant currency revenue to its closest IFRS measure can be found on page 27 of the Company’s Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021, which is available on the Canadian Securities Administrators’ website at www.sedar.com.

Once the profitability performance factor and growth performance factor are established, the following formula is used to determine the proportion of performance-based vesting under CGI’s long-term incentive plans.

Long Term Incentive Plan Awards in Fiscal 2022

For fiscal 2022, an aggregate of 203,307 PSUs were awarded to the Named Executive Officers under the 2017 PSU Plan as part of their fiscal 2022 target compensation. The number of PSUs awarded was determined based on the long-term compensation value required to align the Named Executive Officer’s total compensation with the Company’s compensation policy. No stock options were granted to the Named Executive Officers as part of their fiscal 2022 target compensation. The details of these awards are shown in the Summary Compensation Table later in this document.

Based on the degree of achievement of profitability and growth objectives in fiscal 2022, 100% of the PSUs awarded to Ms. Godin and Messrs. Godin, Schindler, Boulanger and Baticle, in respect of the long-term incentive awards for fiscal 2022, became eligible to vest. PSUs granted in fiscal 2022 under the 2017 PSU Plan that are eligible to vest will vest on the fourth anniversary of the award.

A table showing all outstanding unvested PSU awards held as at September 30, 2022 by the Named Executive Officers as well as the market value of such unvested PSU as of such date is provided in Appendix A.

CGI does not disclose specific profitability and growth objectives because it considers that the information would place it at a significant competitive disadvantage if the objectives became known. Disclosing the specific performance objectives that are set as part of the Company’s annual budget and strategic planning process would expose CGI to serious prejudice and negatively impact its competitive advantage. For example, to the extent that the Company’s performance objectives became known, its ability to negotiate accretive business agreements could be significantly impaired, putting incremental pressure on its profit margins. In addition, CGI believes that disclosing performance objectives would be inconsistent with CGI’s policy of not providing guidance to the market and limiting the disclosure of forward-looking information.

Total At Risk Compensation and Actual Payouts

A significant portion of the Named Executive Officers’ compensation, namely payments under the Profit Participation Plan and awards under the PSU Plans, is performance-based and therefore “at risk”. The percentage of total compensation of the Named Executive Officers that was “at risk” in fiscal 2022 ranged from 74.28% to 89.12%.

The achievement of the performance factors under the Profit Participation Plan and the performance vesting conditions under the Share Option Plan and PSU Plans also present a meaningful challenge for the Company’s senior executives and management team because the Company consistently sets ambitious goals as part of its annual budget and strategic planning process. This is evidenced by the fact that the aggregate payout to the reported Named Executive Officers for fiscal 2022, 2021 and 2020 that was “at risk”, or subject to the achievement of performance factors or performance vesting conditions, can vary significantly and was respectively 108.14%, 84.12% and 33.98% of the target “at risk” compensation.

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The table below shows the portion of the total compensation “at risk” as well as the portion of that “at risk” compensation that was actually paid out to the Named Executive Officers for the 2022 fiscal year.

Name and title as at September 30, 2022	Percentage of total target compensation “at risk”(a)	Percentage payout of   “at risk” compensation(b)
Serge Godin Founder and Executive Chairman of the Board	89.12%	106.73%
George D. Schindler President and Chief Executive Officer	86.24%	108.42%
François Boulanger Executive Vice-President and Chief Financial Officer	78.10%	108.86%
Jean-Michel Baticle President and Chief Operating Officer	74.28%	111.25%
Julie Godin Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development	76.68%	109.57%

(a) This column shows the proportion of the Named Executive Officer’s total target compensation for fiscal 2022 that was “at risk” composed of the annual target payout under the Profit Participation Plan and awards under the 2017 PSU Plan.

(b) This column shows the proportion of the Named Executive Officer’s total target compensation “at risk” that was actually paid out in fiscal 2022.

The Committee is responsible for ensuring that CGI’s executive compensation policies do not expose the Company to significant risks such as providing incentives for senior executives to engage in business strategies that could yield compensation for the executives, while negatively impacting the interests of the Company.

The Committee considers that the Company’s executive compensation policies, including those that relate to the portion of compensation for which the achievement of performance measures apply, do not expose the Company to significant risks. The short-term and long-term incentive performance-based compensation components require that the Company’s profitability and growth objectives be met. Business strategies that impair the Company’s profitability or growth, whether in the short or long-term, will not result in payouts to senior executives or management.

All of the Company’s senior executives and directors are required to prepare and file reports disclosing their trading activities in the Company’s securities and the Company prepares and files the reports on their behalf. The Company therefore monitors all securities transactions by its senior executives and directors and also requires that they pre-clear their transactions with the Company.

Incentive Plan Awards – Value Vested or Earned During the Year

The table below shows the value of option grants (referred to as option-based awards) and PSU awards (referred to as share-based awards) made to the Named Executive Officers that vested in fiscal 2022 as well as the value of non-equity incentive plan compensation earned by the Named Executive Officers in fiscal 2022.

Name	Option-based awards – Value vested during the year(a) ($)	Share-based awards – Value vested during the year(b) ($)	Non-equity incentive plan   compensation – Value earned   during the  year(c) ($)
Serge Godin Founder and Executive Chairman of the Board	–	$5,821,636	$3,382,600
George D. Schindler(d) President and Chief Executive Officer	$2,973,976	$4,020,242	$4,232,653
François Boulanger Executive Vice-President and Chief Financial Officer	$   930,888	$1,264,076	$1,173,000
Jean-Michel Baticle(e) President and Chief Operating Officer	$   539,946	$   748,387	$1,246,381
Julie Godin Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development	$   478,223	$   665,712	$   944,000

(a) The option-based awards that vested during fiscal 2022 were the performance-based stock options granted to Ms. Godin and to Messrs. Schindler, Boulanger and Baticle during the 2018 and 2019 fiscal years that became eligible to vest and for which the

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exercise prices were $63.23 for fiscal 2018 and $85.62 for fiscal 2019. In fiscal 2022, one-quarter of such stock options eligible to vest for fiscal 2018 and one quarter of such stock options eligible to vest for fiscal 2019 vested on October 1, 2021 when the closing price of the Class A subordinate voting shares was $107.93.

(b) With respect to Mr. Godin, the share-based awards that vested during fiscal 2022 were the performance-based PSUs awarded to Mr. Godin for fiscal 2018 and 2019. In fiscal 2022, one-quarter of such PSUs awarded for fiscal 2018 and one quarter of such PSUs awarded for fiscal 2019 vested on October 1, 2021. With respect to the Named Executive Officers other than Mr. Godin, the share-based awards that vested during fiscal 2022 were the performance-based PSUs awarded to Ms. Godin and to Messrs. Schindler, Boulanger and Baticle for fiscal 2018. In fiscal 2022, such PSUs eligible to vest vested on October 1, 2021.

(c) This column shows the value of the annual payouts under the Profit Participation Plan received by the Named Executive Officers in respect of fiscal 2022.

(d) Mr. Schindler is paid in U.S. dollars. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.2777 for each U.S. dollar in fiscal 2022. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021.

(e) Mr. Baticle is paid in euros. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.3833 for each euro in fiscal 2022. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2022 and 2021.

Performance Graph

The Class A subordinate voting shares are listed for trading on the TSX under the symbol GIB.A and on the NYSE under the symbol GIB. The following graph compares the annual variations in the cumulative total shareholder return on the Class A subordinate voting shares with the cumulative total shareholder return of the S&P/TSX and the S&P 500 stock indexes for the past five fiscal years of the Company.

Value of $100 invested on September 30, 2017

Cumulative Total Shareholder Return

	September 30, 2017		September 30, 2018		September 30, 2019		September 30, 2020		September 30, 2021		September 30, 2022
CGI		100.00		128.72		161.92		139.69		166.29		160.73
S&P/TSX		100.00		102.80		106.55		103.11		128.37		117.97
S&P 500		100.00		115.66		118.15		133.49		170.98		142.32

CGI’s executive compensation policy emphasizes incentive compensation linked to the success of the Company to ensure that the financial interests of the Company’s executives are closely aligned with those of shareholders. CGI’s management team, including the Named Executive Officers, are compensated on the basis of metrics that the Company considers to be fundamental, namely the Company’s growth and profitability. Over the five-year period between October 1, 2017 and September 30, 2022, 59.19% of the aggregate compensation of the reported Named Executive Officers was linked to the share price, and to returns to shareholders.

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Since 1986, the year the Company became publicly listed, the price of CGI’s Class A subordinate voting shares has increased by on average approximately 16.8% per year. Over the five-year period between October 1, 2017 and September 30, 2022, the price of the Company’s shares increased by more than 60.7% and the cumulative total shareholder return outperformed the S&P/TSX by 43%.

The following graph illustrates the relationship between the net total compensation paid to the Company’s reported Named Executive Officers and cumulative total shareholder return over the period between October 1, 2017 and September 30, 2022.

Comparison of Net Total Compensation and Cumulative Total Shareholder Return

Trends in Compensation

The chart demonstrates the relationship between cumulative total shareholder return (as calculated on the performance graph earlier in this document) and the net total compensation of the Named Executive Officers. While cumulative total shareholder return and net total compensation have increased during this period, the net total compensation as a proportion of cumulative total shareholder return has in aggregate generally decreased since fiscal 2017, as the net total compensation of the Named Executive Officers is linked to the performance of the Company but not directly to shareholder return.

Defined Contribution Pension Plan and Deferred Compensation Plan

Defined Contribution Pension Plan

In fiscal 2022, Mr. George D. Schindler participated in a U.S. 401(k) Plan that is a benefit available to all eligible U.S. members. The following table sets out the amount contributed to the plan by the Company as well as the accumulated value of the plan at the beginning and the end of the Company’s fiscal year.

Name and title as at September 30, 2022	Accumulated value at start of year(a)	Compensatory(a)	Accumulated value  at year-end(a)
George D. Schindler President and Chief Executive Officer	$1,853,793	$5,111	$1,523,410

(a) The amount shown is in Canadian dollars converted on the basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.2777 for each U.S. dollar in fiscal 2022. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021.

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Deferred Compensation Plan

Mr. George D. Schindler has the opportunity to participate in CGI’s Non-Qualified Deferred Compensation Plan which allows participants to defer annually between 5% and 75% of their base salary, and between 5% and 90% of his awards under the Profit Participation Plan. The plan allows participants to withdraw amounts during employment and to elect, upon retirement, to receive either a lump sum payment, or instalment payments for a period of up to ten years. Decisions concerning withdrawals may be made each year at the time that the participant determines the amount of compensation to be deferred for the year. The plan offers an array of mutual funds for investment from which the plan participant may choose. Participants may change their investment directions from time to time during the plan year. The mutual fund investments are subject to market gains and losses.

Compensation of Named Executive Officers

The Summary Compensation Table that follows shows detailed information on actual net total compensation, and total compensation in the form provided for by securities regulation, respectively, for Ms. Julie Godin and Messrs. Serge Godin, George D. Schindler, François Boulanger, Jean-Michel Baticle for services rendered during the fiscal years ended September 30, 2022, 2021 and 2020.

The content of the table was adjusted to take into account an overstatement of the compensation awarded to CGI’s Named Executive Officers. The overstatement arises because securities regulation requires that for the PSU awards (referred to as share-based awards), the amount of compensation shown must be the grant date fair value. In the case of CGI’s compensation policies, all long-term incentive compensation is subject to performance vesting conditions. As a portion of PSUs awarded for fiscal 2021 and 2020 generally failed to become eligible to vest as a result of the degree of achievement of performance objectives, such portion of PSUs awarded has been forfeited and cancelled. Without the adjustment, the total compensation amount shown in this table would overstate the true total compensation received by the Company’s Named Executive Officers.

Summary Compensation Table

Name and Principal  Position  as at September 30,  2022	Year		Salary ($)		Share- based awards (if all budgeted objectives are met)(a) ($)		Option- based awards ($)		Non-equity incentive plan compensation Annual incentive plans(b) ($)	Pension value ($)	All other compen- sation(c) ($)	Compen- sation target (if all budgeted objectives are met) ($)		Reduction for budgeted objectives not met(d) ($)		Actual Net Total Compensation ($)
Serge Godin Founder and Executive Chairman of the Board		2022		1,302,138		9,000,657		–	3,382,600	–	115,122		13,800,517		–	13,800,517
		2021		1,004,808		9,352,071		–	2,997,500	–	38,120		13,392,499		(2,447,039)	10,945,460
		2020		687,500		10,552,161		–	–	–	27,479		11,267,140		(5,803,704)	5,463,436
George D. Schindler(e) President and Chief Executive Officer		2022		1,687,592		7,615,065		–	4,232,653	5,111	87,542		13,627,963		–	13,627,963
		2021		1,556,353		7,812,621		–	3,392,850	3,161	79,230		12,844,215		(2,044,278)	10,799,937
		2020		945,836		8,449,926		–	–	3,364	60,216		9,459,342		(4,647,497)	4,811,845
François Boulanger Executive Vice-President and Chief Financial Officer		2022		819,461		2,158,148		–	1,173,000	–	38,092		4,188,701		–	4,188,701
		2021		784,781		2,198,494		–	941,215	–	89,533		4,014,023		(575,269)	3,438,754
		2020		668,619		2,185,922		–	–	–	31,888		2,886,429		(1,202,226)	1,684,203
Jean-Michel Baticle(f) President and Chief Operating Officer		2022		871,498		1,598,895		–	1,246,381	144,660	14,101		3,875,535		–	3,875,535
		2021		906,600		1,440,296		–	988,194	114,056	11,940		3,461,086		(376,885)	3,084,201
		2020		712,294		1,284,148		–	–	91,766	13,883		2,102,091		(706,292)	1,395,799
Julie Godin Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development		2022		658,462		1,551,017		–	944,000	–	32,542		3,186,021		–	3,186,021
		2021		514,769		1,344,312		–	610,400	–	26,266		2,495,747		(351,759)	2,143,988
		2020		309,873		1,369,737		–	–	–	18,464		1,698,074		(753,329)	944,745

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(a) In fiscal 2022, 2021 and 2020, the award date fair value used for determining the number of PSUs awarded to the Named Executive Officers as a component of their total compensation was established using the accounting fair value, resulting in an award date fair value of $107.59, $90.38 and $104.76, respectively.

(b) This column shows the value received by the Named Executive Officers under the Profit Participation Plan as part of the short-term incentive plan of the Company.

(c) This amount includes the Company’s contribution under CGI’s Share Purchase Plan, the contribution towards health insurance benefits and related insurance coverage, but excludes the value of perquisites and other personal benefits which in the aggregate was less than $50,000 or 10% of the aggregate salary and bonus under the Profit Participation Plan for the particular fiscal year and which is therefore not required to be disclosed.

(d) The vesting eligibility conditions for the PSUs awarded as part of the long-term incentive plan for the fiscal year ended September 30, 2022 for Ms. Godin and for Messrs. Godin, Schindler, Boulanger and Baticle were based solely on the Company’s financial performance. Based on such factors, 100% of the PSUs awarded to each of them became eligible to vest.

(e) Mr. Schindler is paid in U.S. dollars. The amounts shown (other than those for option-based awards) are in Canadian dollars converted on the basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements, which was CAD1.2777, CAD1.2643 and CAD1.3457 for each U.S. dollar in fiscal 2022, 2021 and 2020 respectively. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021 and on page 18 of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2021 and 2020.

(f) Mr. Baticle is paid in euros. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.3833, CAD1.5110 and CAD1.5075 for each euro in fiscal 2022, 2021 and 2020 respectively. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2022 and 2021 and on page 18 of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2021 and 2020.

Key Features of CGI’s Long-Term Incentive Plans

Share Option Plan

The Share Option Plan is governed by the Board of Directors. The Committee makes recommendations to the Board of Directors in relation to the Share Option Plan and to grants of stock options, and is responsible for overseeing its administration. The Board of Directors has the ultimate and sole power and authority to grant stock options under the Share Option Plan and to interpret the terms and conditions of stock options that have been granted. The Board of Directors grants stock options by identifying the members, directors, and officers of eligible CGI entities who are to receive stock options, including the number of stock options, the subscription price, the stock option period and the vesting conditions. The determinations, designations, decisions and interpretations of the Board of Directors are binding and final. Management of the Company looks after the day-to-day administration of the Share Option Plan. The total number of Class A subordinate voting shares authorized to be issued under the Share Option Plan is 53,600,000, being 22.54% of the issued and outstanding Class A subordinate voting shares and Class B shares as at September 30, 2022. As at September 30, 2022, 6,880,944 stock options were outstanding under the Share Option Plan, representing approximately 2.89% of the issued and outstanding Class A subordinate voting shares and Class B shares, 5,837,921 of which were vested as of September 30, 2022. As at such date, a total of 15,329,587 stock options remained issuable under the Share Option Plan, representing approximately 6.45% of the issued and outstanding Class A subordinate voting shares and Class B shares.

The maximum number of stock options that may be issued in the aggregate to any single individual under the Share Option Plan cannot exceed 5% of the total number of Class A subordinate voting shares and Class B shares issued and outstanding at the time of the grant. The number of Class A subordinate voting shares issuable to insiders in the aggregate, at any time, pursuant to the Share Option Plan and any other securities-based compensation arrangement cannot exceed 10% of the Class A subordinate voting shares and Class B shares issued and outstanding. The number of Class A subordinate voting shares issued to insiders within any one-year period pursuant to the Share Option Plan and any other securities-based compensation arrangement cannot exceed 10% of the Class A subordinate voting shares and Class B shares issued and outstanding.

The following table discloses the burn rate for each of the three most recently completed fiscal years for the Share Option Plan of the Company:

Burn Rate	2022			2021			2020
Total number of stock options granted under the Share Option Plan during the applicable fiscal year, divided by the weighted average number of Class A subordinate voting shares and Class B shares outstanding for the applicable fiscal year.		0.00	%		0.39	%		0.35	%

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Under the Share Option Plan, the Board of Directors may at any time amend, suspend or terminate the Share Option Plan, in whole or in part, subject to obtaining any required approval from the TSX, the Company’s shareholders or other regulatory authorities. For more information concerning the rules to amend the Share Option Plan, please refer to the heading Amendments to Share Option Plan later in this document. Stock options may not be assigned, pledged or otherwise encumbered other than by will or in accordance with the laws relating to successions.

Under the Share Option Plan, the Board of Directors, on the recommendation of the Committee, may grant to eligible participants stock options to purchase Class A subordinate voting shares. The exercise price of the stock options granted is determined by the Board of Directors and cannot be lower than the closing price of the Class A subordinate voting shares on the TSX on the trading day immediately preceding the day on which the stock options are granted. The Board of Directors also determines the applicable stock option period and vesting rules.

Employees, officers, and directors of the Company may receive stock options under the Share Option Plan. The Board of Directors made the decision to cease granting stock options to outside directors effective October 1, 2015.

Stock options that have been granted under the Share Option Plan cease to be exercisable and all rights under those stock options lapse upon the expiry of their term, which cannot exceed ten years from their date of grant.

Upon resignation or termination, stock options that have not vested are forfeited and cancelled, and vested stock options must be exercised during a 90-day period following termination or resignation.

Retiring members who meet the eligibility criteria set out in the Share Option Plan, directors who leave the Board of Directors and the estates of deceased stock option holders benefit from the automatic vesting of stock options that have become eligible to vest in accordance with performance vesting rules, but that have yet to vest due to time-based vesting. Those stock options must be exercised within 90 days in the case of retirement or 180 days if the stock option holder dies, subject to the extension of the exercise periods explained in more detail below. The Board of Directors, on the recommendation of the Committee, has the discretion to vary these periods and to accelerate the vesting period, provided that the maximum term for any stock option is ten years from the time it is granted.

The Company does not provide any financial assistance to participants under the Share Option Plan.

Blackout Periods

In keeping with CGI’s Insider Trading and Blackout Periods Policy, stock options may not be exercised by insiders when a trading blackout period is in effect. If the date on which a stock option expires occurs during a blackout period or within ten business days after the last day of a blackout period, the date of expiry of the stock option will be the tenth business day following the termination of the blackout period.

Extensions for Length of Service

Retiring members who meet the eligibility criteria set out in the Share Option Plan, directors and officers, as well as the estates of deceased stock option holders earn one day of extension for every three days of service to the Company, up to a maximum extension period of three years. The extension period is earned pro-rata day by day during the stock option holder’s service to the Company. The extension period for length of service cannot extend the life of a stock option beyond the period of time determined by the Board of Directors as the stock option term and, which may not exceed ten years from the date of grant.

Amendments to Share Option Plan

The Board of Directors, on the recommendation of the Committee, may amend, suspend or terminate the Share Option Plan, or amend any term of an issued and outstanding stock option provided that no amendment, suspension or termination may be made without:

• obtaining approval of the shareholders of the Company, except when approval is not required under the terms of the Share Option Plan, as explained in more detail below;

• obtaining any required approval of any applicable regulatory authority or stock exchange; and

• in the case of issued and outstanding stock options, obtaining the consent or, subject to regulatory approval, the deemed consent of the concerned optionee in the event that the amendment materially prejudices the optionee’s rights.

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Shareholder approval is not required with respect to the following amendments, in as much as the amendment is in accordance with applicable regulatory requirements:

• changing the eligibility for, and limitations on, participation in the Share Option Plan;

• modifying the periods during which stock options may be exercised, subject to (i) the stock option period terminating on or before the tenth anniversary of the date of the grant of the stock option and subject to the effect of blackout periods, and (ii) a maximum stock option exercise period extension of three years;

• changing the terms on which stock options may be granted and exercised including, without limitation, the provisions relating to the price at which shares may be purchased under the Share Option Plan, to the extent that the subscription price is not reduced, vesting, expiry, assignment and the adjustments to be made in the event of certain changes such as stock splits that affect all shareholders;

• making amendments that are necessary to comply with applicable law or the requirements of any applicable regulatory authority or stock exchange;

• correcting or rectifying any ambiguity, defective provision, error or omission in the Share Option Plan; and

• changing the provisions of the Share Option Plan that relate to its administration.

Finally, any amendment that would reduce the subscription price of an issued and outstanding stock option, lead to a significant or unreasonable dilution of the issued and outstanding shares, extend the expiry date of stock options held by insiders beyond the exercise periods contemplated under the Share Option Plan, or provide additional material benefits to insiders of the Company, requires shareholder approval.

Equity Compensation Plan Information as at September 30, 2022

The following table shows the total number of shares to be issued upon the exercise of outstanding stock options under all of CGI’s equity-based compensation plans, their weighted average exercise price, and the number of shares available for future issuance.

Plan Category	Number of Class A subordinate voting shares to be issued upon the  exercise of outstanding stock options (#)	Weighted average exercise price of outstanding stock options ($)	Number of Class A subordinate voting shares remaining available for future issuance under equity compensation plans (excluding shares issuable under outstanding stock options) (#)
Equity compensation plans approved by shareholders	6,880,944	66.35	15,329,587
Equity compensation plans not approved by shareholders	–	–	–
Total	6,880,944	66.35	15,329,587

Performance Share Unit Plans

The PSU Plans are governed by the Board of Directors and the Committee may make recommendations to the Board of Directors in relation to the PSU Plans and to awards of PSUs. The Board of Directors has the ultimate and sole power and authority to award PSUs under the PSU Plans and to interpret the terms and conditions of PSUs that have been awarded.

Under the PSU Plans, the Board of Directors may at any time amend, suspend or terminate the PSU Plans, in whole or in part, or amend any term of any issued and outstanding awards including the earning, vesting and expiry of an outstanding award. PSUs may not be assigned, pledged or otherwise encumbered other than by will or in accordance with the laws relating to successions.

Under the PSU Plans, the Board of Directors may award PSUs to executives and to other eligible participants. Each PSU entitles the participant to receive one Class A subordinate voting share, subject to the achievement of performance and time vesting conditions.

Following an award of PSUs, the applicable plan trustee purchases in the open market the shares required to be delivered to the participants on settlement. The applicable plan trustee holds the shares in trust for the purposes of the PSU Plans.

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Subject to trading blackout periods, PSUs are settled within 30 days of vesting. On the settlement date, participants receive from the applicable plan trustee a number of Class A subordinate voting shares equal to the number of PSUs that have vested, less any Class A subordinate voting shares withheld to satisfy tax obligations. Participants under the 2014 PSU Plan may elect to defer the settlement of PSUs to a later date not later than the expiry date of the PSUs.

Upon resignation or termination, PSUs that have not become eligible to vest are forfeited and cancelled, and PSUs that have become eligible to vest are settled on the date of resignation or termination.

Participants who retire, and meet the eligibility criteria set out in the PSU Plans, and the estates of deceased participants benefit from the automatic vesting of PSUs that have become eligible to vest in accordance with performance vesting conditions, but that have yet to vest due to time-based vesting. Those PSUs are settled on the date of retirement or death.

PSUs expire on the business day preceding December 30 of the third calendar year following the end of the fiscal year during which the PSU award is made. On the expiry date, all remaining PSUs in the participant’s account that are eligible to vest but that have not yet vested are automatically vested and settled.

The Company does not provide any financial assistance to participants under the PSU Plans.

Blackout Periods

In keeping with CGI’s Insider Trading and Blackout Periods Policy, there cannot be any settlement of PSUs under the PSU Plans when a trading blackout period is in effect. If the date of settlement of a PSU falls during a blackout period, such date will be postponed until the first business day following the termination of the blackout period or the expiry of any regulatory notice period, as applicable.

Termination Benefits

The Named Executive Officers do not benefit from special contractual rights upon employment termination. They are therefore entitled to the same rights as those available to all members under the laws applicable to their employment. The provisions that apply to termination of employment under the Share Option Plan and under the PSU Plans apply in the same way to all participants under those plans and they are described above under the headings Share Option Plan and Performance Share Unit Plans.

Compensation of Directors

Board of Directors and Standing Committee Fees

For fiscal 2022, Ms. Julie Godin and Messrs. Serge Godin, André Imbeau and George D. Schindler were not compensated for their role as directors of the Company.

The compensation paid to the outside directors changed to a flat fee structure on October 1, 2015. The Board of Directors also decided to cease granting stock options to outside directors as of that date. The following table sets out the elements of the compensation paid to outside directors for the year ended September 30, 2022:

Component	Amount
Board Retainer (includes membership in Committees)		$225,000
Lead Director		$  65,000
Committee Chair Retainer		$  35,000

Directors must receive at least half of their Board retainer in DSUs, subject to the exceptions listed below. The remaining half of the Board retainer and the other retainers may also be payable in DSUs at the election of the director. A director can elect to receive the entire amount of the Board retainer in cash instead of in DSUs if (i) the director is not a resident of Canada for income tax purposes, (ii) the director purchased in the open market the same number of Class A subordinate voting shares he or she would have received in the form of DSUs, or (iii) the director is otherwise exempted by the Board of Directors. Directors who must travel significant distances to attend meetings of the Board of Directors and its standing committees also receive long distance travel allowances.

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For the year ended September 30, 2022, the compensation paid to directors was as follows:

Directors’ Compensation Table

Name(a)	Cash Fees(b) ($)	Share-Based Awards(c) ($)	All other compensation(d) ($)	Total ($)
Alain Bouchard(e)	–	225,000	–	225,000
George A. Cope(f)	–	267,907	–	267,907
Paule Doré	124,396	112,500	–	236,896
Gilles Labbé	–	260,000	–	260,000
Michael B. Pedersen	–	248,104	–	248,104
Stephen S. Poloz	112,500	112,500	–	225,000
Mary G. Powell(g)	150,932	136,558	–	287,490
Alison C. Reed(g)	287,490	–	6,389	293,879
Michael E. Roach	112,500	112,500	–	225,000
Kathy N. Waller(g)	143,745	143,745	6,389	293,879
Joakim Westh(g)	332,211	–	–	332,211
Frank Witter(g)	143,745	143,745	–	287,490

(a) Ms. Godin and Messrs. Godin, Imbeau and Schindler were not compensated for their role as directors of the Company. Mr. Imbeau received $615,892 in fiscal 2022 as compensation in respect of his services as an officer of the Company. Please refer to the Summary Compensation Table earlier in this document for a summary of Ms. Godin and Messrs. Godin and Schindler’s fiscal 2022 compensation.

(b) This column shows the retainer fees paid in cash to the directors for fiscal 2022. Messrs. Bouchard, Cope, Labbé and Pedersen elected to receive 100% of their total annual retainers in the form of DSUs. Mses. Powell, Reed and Waller and Messrs. Westh and Witter were exempted from the requirement to receive 50% of their Board retainers in DSUs as they are non-residents of Canada for income tax purposes.

(c) This column shows the value of the retainer fees paid in DSUs to the directors for fiscal 2022.

(d) The amounts shown as “All other compensation” are in respect of long-distance travel allowances.

(e) Mr. Bouchard is not seeking reelection on the Board of Directors and will therefore cease to be a director on February 1, 2023. Mr. Bouchard ceased to be a member of the Human Resources Committee on February 2, 2022.

(f) Mr. Cope was appointed as Lead Director on February 2, 2022.

(g) Messrs. Westh and Witter and Mses. Powell, Reed and Waller are paid in U.S. dollars at par, based on the same fee arrangement as other outside directors. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used to present expense information in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.2777 for each U.S. dollar for fiscal 2022. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021.

Deferred Stock Units Plan and Deferred Stock Units Granted to Directors

CGI’s deferred stock unit plan for members of the Board of Directors (the “DSU Plan”) provides non-cash compensation to directors. The DSU Plan is governed by the Board of Directors and the Committee may make recommendations to the Board of Directors in relation to the DSU Plan and to awards of DSUs. The Board of Directors has the ultimate and sole power and authority to award DSUs under the DSU Plan and to interpret the terms and conditions of DSUs that have been awarded. Management of the Company is responsible for the day-to-day administration of the DSU Plan.

The Board of Directors may at any time amend or terminate the DSU Plan, including to suspend or limit the right of directors to participate in the DSU Plan. DSUs may not be assigned, sold or otherwise disposed of, except by will or in accordance with the laws relating to successions.

The number of DSUs credited to a director on each retainer payment date is equal to the amount of the retainer due to be paid in DSUs divided by the closing price of the Class A subordinate voting shares on the TSX on the day immediately preceding the retainer payment date. Once credited, the value of the DSUs credited to a director’s DSU account is determined based on the market price of the Class A subordinate voting shares.

The value of DSUs credited to the director’s account is payable only after the director has ceased to be a member of the Board of Directors. The amount paid at the time of redemption corresponds to the number of DSUs accumulated by the member multiplied by the closing price of the Class A subordinate voting shares on the payment date. The amount is paid in cash and is subject to applicable withholding taxes.

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Stock Options Held by Directors

Up until fiscal 2015, members of the Board of Directors were entitled to grants of stock options under the Share Option Plan. Each such stock option was issued with a ten-year exercise period and a four-year vesting period and the exercise price of all options granted to directors was equal to the closing price of the Class A subordinate voting shares on the TSX on the trading day immediately preceding the date of the grant.

See the table in Appendix B for an overview of all outstanding stock options held as at September 30, 2022 by the members of the Board of Directors who are not Named Executive Officers as well as the in-the-money value of such stock options and the aggregate value of outstanding and vested DSUs held in respect of their services for completed fiscal years. For members of the Board of Directors who are Named Executive Officers, please refer to the table in Appendix A.

Incentive Plan Awards – Value Vested or Earned During the Year

The table below shows the value of stock option grants (referred to as option-based awards) and DSU awards (referred to as share-based awards) made to members of the Board of Directors who are not Named Executive Officers that vested in fiscal 2022. Outside directors did not receive any non-equity incentive plan compensation in fiscal 2022.

Name(a)	Option-based awards – Value vested during the  year(b) ($)	Share-based awards – Value vested during the year(c) ($)	Non-equity incentive plan compensation – Value earned during the year ($)
Alain Bouchard(d)	–	225,000	–
George A. Cope	–	267,907	–
Paule Doré	–	112,500	–
André Imbeau	325,684	–	–
Gilles Labbé	–	260,000	–
Michael B. Pedersen	–	248,104	–
Stephen S. Poloz	–	112,500	–
Mary G. Powell(e)	–	136,558	–
Alison C. Reed(e)	–	–	–
Michael E. Roach	–	112,500	–
Kathy N. Waller(e)	–	143,745	–
Joakim Westh(e)	–	–	–
Frank Witter(e)	–	143,745	–

(a) The value vested or earned during fiscal 2022 for Ms. Godin and Messrs. Godin and Schindler are set out in the table titled Incentive Plan Awards – Value Vested During the Year under the heading Compensation of Named Executive Officers earlier in this document as they are Named Executive Officers.

(b) This column shows the value of stock options held by Mr. Imbeau that vested during fiscal 2022. The values indicated in the table above relate to vested stock options he received until the end of fiscal 2022 as compensation for his services as an officer of the Company. The exercise prices for the stock options that vested during fiscal 2022 were as follows: (i) $63.23 for the grant made in fiscal 2018, (ii) $85.62 for the grant made in fiscal 2019, (iii) $110.73 for the grant made in fiscal 2020, and (iv) $97.84 for the grant made in fiscal 2021. Among the stock options that became eligible to vest, one quarter of the stock options granted for fiscal 2018, one quarter of the stock options granted for fiscal 2019 and one quarter of the stock options granted for fiscal 2020 vested on October 1, 2021 when the closing price of the Class A subordinate voting shares was $107.93, and one quarter of the stock options granted for fiscal 2021 vested on November 9, 2021 when the closing price for the Class A subordinate voting shares was $114.77.

(c) The share-based awards are DSUs. See the heading Deferred Stock Units Plan and Deferred Stock Units Granted to Directors earlier in this document for a description of DSUs granted to directors.

(d) Mr. Bouchard is not seeking reelection on the Board of Directors and will therefore cease to be a director on February 1, 2023.

(e) Messrs. Westh and Witter and Mses. Powell, Reed and Waller are paid in U.S. dollars at par, based on the same fee arrangement as other outside directors. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used to present expense information in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.2777 for each U.S. dollar for fiscal 2022. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021.

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Additional Disclosure relating to Directors and Named Executive Officers

As at December 5, 2022, no directors, Named Executive Officers, former directors or former senior officers of the Company were indebted to the Company.

To the best knowledge of the Company and based upon information provided by each nominee director, no such nominee is, as at the date of this Management Proxy Circular, or has been within ten years before the date of this Management Proxy Circular a director or executive officer of any company (including the Company) that, while such person was acting in that capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

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Report of the Corporate Governance Committee

The Committee has responsibility for all corporate governance matters including making recommendations to the Board of Directors in relation to the composition of the Board of Directors and its standing committees. The Committee also administers the self-assessment process for the Board of Directors, its standing committees and individual directors.

The Committee is composed of Messrs. Michael B. Pedersen, Chair of the Committee, George A. Cope, Lead Director, and Joakim Westh, and Mses. Paule Doré and Mary G. Powell, all of whom are independent directors. The Committee held four regular meetings during fiscal 2022.

The role and responsibilities of the Chair of the Committee are described under the heading Role and Responsibilities of the Lead Director and Standing Committee Chairs later in this document.

The role and responsibilities of the Committee are contained in the Committee’s charter, which is incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of CGI’s Board of Directors). The Committee’s charter is available on CGI’s website at www.cgi.com. The role and responsibilities of the Committee include:

• developing the Company’s approach to governance issues and the Company’s response to corporate governance requirements and guidelines;

• reviewing the composition and contribution of the Board of Directors, its standing committees and members, and recommending Board nominees;

• overseeing the orientation and continuing education program for directors;

• reviewing the Company’s policies and processes related to the Company’s purpose as an organization, which is to seek the best equilibrium between its three stakeholders and the communities in which its members live and work;

• carrying out the annual Board of Directors self-assessment process; and

• helping to maintain an effective interaction between the Board of Directors and management.

Corporate Governance Practices

Adherence to high standards of corporate governance is a hallmark of the way CGI conducts its business. The disclosure that follows sets out CGI’s corporate governance practices. As a Canadian reporting issuer with a listing on the NYSE, CGI is considered a foreign private issuer under applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). As such, many of the corporate governance rules applicable to U.S. domestic companies are not applicable to CGI. However, CGI’s corporate governance practices generally conform to those followed by U.S. domestic companies under the NYSE listing standards, other than with respect to certain specific rules, including that CGI requires shareholder approval of share compensation arrangements involving the issuances of new shares, but does not require such approval if the compensation arrangement involves only shares purchased in the open market, consistent with the laws applicable to CGI.

CGI’s Shareholders

CGI’s shareholders are the first and most important element in the Company’s governance structures and processes. At each Annual General Meeting of Shareholders, the Company’s shareholders elect the members of the Company’s Board of Directors and give them a mandate to manage and oversee the management of the Company’s affairs for the coming year. Shareholders have the option of withholding their votes for individual directors, should they wish to do so.

In the normal course of operations, certain corporate actions which may be material to CGI are initiated from time to time by the Company’s senior management and, at the appropriate time, are submitted to CGI’s Board of Directors for consideration and approval. When appropriate, such matters are also submitted for consideration and approval by CGI’s shareholders. All such approvals are sought in accordance with the charters of the Board of Directors and its standing committees, CGI’s corporate governance practices and applicable corporate and securities legislation and regulations. Mr. Serge Godin, CGI’s Founder and Executive Chairman of the Board, is a director of CGI and, as at December 5, 2022, beneficially owned, directly or indirectly, or exercised control or direction over, shares of CGI representing approximately 53.72% of the votes attached to all of the Company’s outstanding voting shares.

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As with CGI’s other stakeholders, its clients and its members, the Company constantly solicits feedback from shareholders as well as from the investment community. This feedback is an integral input to our strategic planning process and assists the Company to continuously improve its investor relations program, financial disclosure, and to compare its performance objectively against other publicly traded companies. Several years ago, the Company adopted the Shareholder Partnership Management Framework (“SPMF”) which describes the management of its information and relationship with its investors beyond the prescribed activities associated with corporate governance, transparency and the disclosure of results. The SPMF structures the processes and information flows between CGI and its shareholders as well as the investment community, including both buy-side (institutional investors) and sell-side (investment dealers) research analysts. Following the SPMF assessment, suggestions for improvement received are acted upon as a means of assuring continuous improvement. During fiscal 2022, the Company interacted with over 300 shareholders and other investors worldwide, as well as sell-side research analysts. The Company obtained ISO 9001 certification for the application of the SPMF in its operations and for the management of its relationship with its shareholders.

In addition to the SPMF process, any shareholder of CGI who wishes to contact CGI’s independent directors directly may do so by e-mail sent to the Lead Director at lead_director@cgi.com or by using the contact page for the Lead Director on CGI’s website at www.cgi.com.

Shareholder Satisfaction Assessment Program

Since fiscal 2019, the Company includes a Shareholder Satisfaction Assessment Program (“SSAP”) questionnaire to its SPMF processes. The SSAP questionnaire solicits direct feedback from shareholders on key corporate governance practices, including in respect of executive compensation, and requests shareholder ratings of governance practices on a 10-point scale. With respect to institutional investors, the SSAP is provided directly to the individuals responsible for the investment in the Company and not to proxy departments or external advisors who are less likely to have a complete understanding of the investment in CGI. The SSAP was provided to shareholders and other investors with whom SPMF meetings were held in fiscal 2022. The average SSAP score of the Company in fiscal 2022 was 8.6/10 and few concerns were raised by shareholders or investor with respect to the Company’s corporate governance practices, including its executive compensation practices. The Company is committed to maintaining an open and transparent dialogue with its shareholders and addressing their concerns with respect to executive compensation. The Company believes that the measures in place are more meaningful than a simple binary advisory vote.

The Company will continue to use the SSAP questionnaire in fiscal 2023 to solicit direct feedback on its corporate governance practices with a view to tracking shareholder feedback over time on key corporate governance issues, such as the appropriateness of executive compensation. Shareholders of CGI who wish to participate in the SSAP process directly may contact CGI’s Investor Relations department by sending an e-mail to ir@cgi.com or as follows:

Investor Relations

CGI Inc.

1350 René-Lévesque Boulevard West

15th Floor

Montréal, Quebec

Canada

H3G 1T4

Tel.: +1-514-841-3200

Environmental, Social and Governance

At CGI, we are committed to contributing to the development of an inclusive, collaborative and sustainable world. One of our strategic goals is to be recognized by our stakeholders as an engaged, ethical and responsible corporate citizen. Our core value of corporate social responsibility is a foundation that drives our Environmental, Social and Governance (“ESG”) strategy. As a global company and digital services leader, we have a responsibility to conduct business ethically and sustainably, and integrate these principles in our core operating practices. More specifically, we enable CGI members to be actively engaged in the communities where we live and work by prioritizing partnerships with clients, and also by collaborating, across CGI’s global footprint, with educational institutions and other local organizations, on three global priorities: people, communities and climate.

• Climate priority: We demonstrate our commitment to an environmentally sustainable world through projects delivered in collaboration with clients, our solutions, and through our operating and transportation practices, supply chain management and community service activities.

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• People priority: We champion digital inclusion for all citizens, taking actions locally to improve access to technology and business education and mentoring in order to help everyone be successful in a digital society.

• Communities priority: We commit to positively contribute to society by leveraging our members’ personal engagement and IT business expertise through investment in social impact projects, local economic growth initiatives, and by actively supporting local Business Unit pro bono engagements.

Our ESG commitment motivates us to help our clients satisfy the needs of their customers and citizens, enhance the lives and careers of our professionals and generate superior value for our shareholders through socially and environmentally sustainable and ethical business strategies and practices. In 2022, we continued to dedicate substantial efforts to our ESG engagement through various key initiatives, including the release of our yearly global ESG report (formerly called our Corporate Social Responsibility Report), and by the monitoring of our commitment to achieve net-zero carbon emissions by 2030 with respect to carbon emissions under our direct and indirect control as defined by the Greenhouse Gas Protocol.

Our ESG commitment engages the Company to:

• partner with our clients in developing environmentally sustainable solutions and collectively supporting the communities where we live and work;

• improve the environment through sustainable operating practices, community service activities and green IT offerings;

• provide our professionals with health, safety and wellbeing programs that positively influence their well-being and satisfaction;

• operate ethically through strong Codes of Ethics and strong corporate governance;

• ensure responsible supply chain management; and

• offer an ownership program (which both creates wealth within local communities, and provides every member the same rights and opportunities as all shareholders).

Environmental: accelerating our transition to net-zero

Climate strategic priority

Through our climate priority, we focus on embedding initiatives in our action plans to achieve our net-zero goal on scope 1, 2 and business travels for scope 3.

CGI combines our in-depth knowledge and end-to-end services to help our clients manage sustainability challenges and opportunities. These solutions seek to reduce environmental impact and energy costs while improving our clients’ regulatory compliance and the well-being of their employees, citizens and customers. Our reduction in carbon emissions is driven by many of our departments including facilities, data center management, procurement, and our members, all working together to embed their actions and initiatives into the way we operate.

As a managed IT services provider, infrastructure services and data centers are the core of our operations. Our continuous effort to increase renewable energy usage and to implement energy efficiency has dramatically reduced our energy consumption and carbon emissions.

In addition, CGI’s operations in the majority of European countries in which it operates are ISO 14001 certified for effective environmental management systems (France, Luxembourg, UK, Germany, Sweden, Finland, Netherlands, Denmark, Norway, Portugal, Spain, Czech Republic, Slovakia and Morocco). In doing so, these operations are reporting key performance metrics and local initiatives which contribute to the continuous improvement of the economic, social and environmental well-being of the communities in which they are based.

Social: nurturing our communities and talent to shape the digital future

At CGI, we believe a more diverse, equitable, and inclusive professional community drives value and innovation. We welcome a broad and diverse membership and invest in attracting new talent from communities currently underrepresented in IT.

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People strategic priority

Diversity, equity and inclusion

As a global company, we recognize the richness that diversity brings to the Company and welcome this diversity as part of CGI business culture. Valuing diversity, equity and inclusion (“DEI”) is an integral part of the way we do business.

CGI believes that creating a culture of belonging and inclusion requires conscious and intentional effort. In this context, the company has for many years built an ambitious DEI strategy, which focuses in particular on making inclusion a concrete value in the organization, enabling each person to remain themselves as well as to provide a framework and means in terms of living well together, conviviality, cooperation and conflict resolution.

CGI is committed to increasing diversity in all aspects and embracing the presence of differences in our workforce. This includes, but is not limited to, race and ethnicity, gender and gender identity, sexual orientation, socioeconomic status, language, culture, national origin, religious commitments, age, and disability status.

DEI is embedded in our strategic business units operations’ strategies, professional development, personal well-being and success planning. Diversity dashboards and key measures are published based on local compliance requirements and cultural practices.

Following are a few of our DEI initiatives in place around the globe:

• Local awareness trainings, webinars and tools on diversity, discrimination and harassment issues, for members and leaders to develop the right attitude, acquire the skills and use the tools to lead inclusively.

• All our strategic business units have programs to support the development of women, including through mentorship and sponsorship.

• Member resource groups (“MRGs”) that foster inclusion and empower our members to achieve their goals.

o CGI’s MRGs are member-driven groups supported by CGI leadership, cabinet-level executive sponsors and the DEI team.

o They are drawn together by common characteristics.

o Specific member-led networks provide an inclusive community where all members experiencing or affected by visible or non-visible disabilities, or long-term health conditions, or caring responsibilities, can find support.

• Surveys for members to listen to them about DEI topics.

o In France, with the signature of L’Autre Cercle’s LGBT+ Commitment Charter, we sent a survey that enabled more opened discussions between members.

o CGI members in Germany developed a new Teams app, also used now in Canada: the Diversity Feedback Form (DIFF). With DiFF, members now have the chance to comfortably share their DEI experiences, raise awareness on existing challenges, and most importantly, contribute to our DEI strategy.

A safe and empowering work environment

We continuously drive initiatives and provide services to support physical, mental, and social health. We recognize that the regular promotion of these factors is crucial to work-life balance and overall quality of life. We encourage members to make suggestions, ask questions and communicate issues and concerns through programs embedded in our Member Partnership Management Framework. We provide the tools and resources to all members for learning development, performance management and career development.

Educational initiatives

We are championing digital inclusion for students of all ages by improving access to technology education, mentoring, and reducing inequities by preparing students to succeed in a digital society. For example, in collaboration with our partners, our global flagship program, STEM@CGI, introduces young people, mainly from under-represented populations, to science, technology, engineering, and math. Students of the U’DEV program, our own coding school, in France and Morocco, enter into a work-study with CGI where they receive a recognized degree and CGI recruits qualified developers.

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Communities strategic priority

Our involvement in communities is fundamentally part of our DNA and we have always encouraged our members to get involved and volunteer their skills and experience to advance the well-being of the communities where they live and work. Once again this year, we have mobilized as an organization and through the actions of our members to respond to serious emergencies, including the war in Ukraine.

In fiscal 2021, CGI developed a digital employee volunteering platform to support communities in need. In fiscal 2022, the tool was deployed in Australia, England, France, India, Luxembourg, Malaysia, Morocco, Philippines, Portugal, Romania, and Spain. This tool gives our members access to a wide range of in-person and remote volunteering opportunities with local non-profit and charitable organizations, and also empowers members to create their own opportunities in response to the needs of the communities where they live and work. In fiscal 2022, the platform has empowered 3,468 of our professionals to support 515 community initiatives. Our remaining locations will be added in fiscal 2023.

Governance: creating value responsibly and ethically

We prioritize decision-making that creates value for our company and stakeholders through: responsible leadership and corporate governance, engagement with our stakeholders and ESG dialogue, business ethics, values and integrity, business resilience to systemic risks, profitable and sustainable growth, data privacy and cybersecurity, ESG governance and reporting, responsible procurement, and human rights.

The Corporate Governance Committee is responsible for the reviewing ESG policies and practices and updating the Board of Directors on ESG issues and risks. The Board of Directors oversees ESG initiatives and commitments, and considers health, safety, and environmental matters through various reports and presentations.

CGI has qualified for inclusion within top indices that cover the world’s most sustainable companies, including the Dow Jones Sustainability Indices for the past nine years and, the FTSE4 Good Index Series for over a decade. In fiscal 2022, CGI was awarded platinum rating by EcoVadis, placing CGI in the top 1% of companies for sustainable business practices The EcoVadis platinum rating reflects CGI’s ongoing implementation and integration of measurable and traceable initiatives in the categories of environment, labor and human rights, ethics and sustainable procurement practices. The previous four years, CGI received the gold sustainability rating, representing the top 5% of companies. The Company also responds annually to the Carbon Disclosure Project disclosing its progress in furthering steps to effectively reduce emissions to promote advanced environmental stewardship.

In March 2020, CGI joined the United Nations Global Compact with a commitment to mainstream its ten universal principles in the areas of human rights, labor, environment and anti-corruption in CGI’s strategy, culture and day-to-day operations. We seek to advance and engage in the United Nations’ broader priorities, particularly the Sustainable Development Goals.

Corporate Governance and Diversity

The notion of diversity is a core element to CGI’s values and it is included in its Board of Directors’ and standing committees’ charters and related work programs. The Corporate Governance Committee and the Board of Directors continue to believe in the importance of balancing all eligibility criteria, including appropriate competencies, skills, industry knowledge, financial experience and personal qualities of candidates, as well as the diversity of their background (including gender, ethnicity, age, experience and geographical representation), when considering director candidates and officer appointments. The mandates of the Human Resources Committee and Corporate Governance Committee specifically detail the criteria to be considered for board candidates and officer appointments to support diversity among the Board of Directors and the Company’s executives. The selection criteria for CGI’s Board of Directors and executive officers includes not only their skills and expertise required to achieve stewardship and management of CGI, their knowledge of the vertical markets in which the Company operates, and their operational and financial literacy, but also the diversity of their background, including gender, ethnicity, age, experience and geographical representation. CGI’s success is due in large measure to the Company’s experience and expertise in the vertical markets in which it operates. The selection criteria for CGI’s Board of Directors and executive officers recognize this important factor and are designed to ensure that the Company supports its diversity objective and continues to have the subject matter experts on the Board of Directors and among its executives who can effectively provide experience, expertise and business and operational insight into each of the vertical markets in which the Company operates.

The work program of the Corporate Governance Committee provides for an annual review of the measures applied by the Company to promote diversity, their effectiveness, and the annual and cumulative progress made in achieving their

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objectives, which results are then reviewed annually by the Board of Directors. The charters of the Board of Directors and of the Corporate Governance Committee include the Company’s objective of having a Board of Directors composed of at least 30% of women. CGI is very proud to have met this objective and we will continue to monitor our progress (see the heading Nomination Process for the Board of Directors and Executive Officers in this document).

Majority Voting Policy

The Company has adopted a Majority Voting Policy for Directors (the “Majority Voting Policy”) to ensure that the Board of Directors of the Company remains composed of directors elected by a majority of the votes cast in favour of their election.

In an uncontested election of directors of the Company, a nominee for election to the Board of Directors must immediately offer to resign by tendering a resignation letter to the Chairman of the Board of Directors following the shareholders meeting at which the election took place if the number of votes that have been withheld from the director is equal to or greater than the number of votes cast in favour of the director. The Committee will meet promptly following the receipt of the resignation to consider the director’s offer to resign.

The Committee will recommend to the Board of Directors that the resignation be accepted unless the Committee determines that exceptional circumstances exist that justify the Committee’s recommendation that the resignation not be accepted. The Board of Directors will act on the Committee’s recommendation within 90 days following the shareholders’ meeting at which the director was elected. In deciding whether to accept the recommendation of the Committee, the Board of Directors will consider the factors examined by the Committee and may in addition consider any information it determines in its sole discretion to be relevant to its decision. The Board of Directors will accept the resignation unless it determines that exceptional circumstances justify otherwise. Following its decision, the Board of Directors will issue a press release concerning its decision, and stating the reasons for not accepting the resignation if that is the case, a copy of which shall be promptly provided to the TSX.

A director who is required to offer a resignation in accordance with the Majority Voting Policy shall not participate in any manner in the meeting or meetings of the Committee and of the Board of Directors convened to consider the resignation. A director who fails to offer to resign in accordance with the Majority Voting Policy will not be re-nominated by the Board of Directors for election by the shareholders.

Clawback Policy

The Company has adopted an incentive compensation clawback policy (the “Clawback Policy”) which allows the Board of Directors to require the reimbursement of short-term and long-term incentive compensation received by certain officers and other employees, if such compensation was paid in whole or in part as a result of gross negligence, intentional misconduct, theft, embezzlement, fraud or other serious misconduct, or in the event of a restatement of the Company’s annual or interim financial statements resulting from material non-compliance with any financial reporting requirements under applicable laws, and in circumstances in which the Board of Directors determines that such individual would not have been entitled to such compensation had a restatement not been required.

The Clawback Policy applies to any officer of the Company and any other individual who may be designated from time to time by the Board of Directors and includes compensation under any short-term or long-term incentive plan, including the Profit Participation Plan, the Share Option Plan, the PSU Plans and any other contingent compensation. Recovery under the Clawback Policy is limited to compensation paid, granted or awarded to, or received or earned by, or vested in favour of any covered leader in the then current fiscal year and the immediately preceding three financial years and may be implemented through various forms, including direct reimbursement, deduction from salary or future payments, grants or awards of incentive compensation, or cancellation or forfeiture of vested or unvested stock options, PSUs or any other incentive awards held by the individual.

Insider Trading and Blackout Periods Policy

The Company has adopted an Insider Trading and Blackout Periods Policy which is designed to prevent improper trading in the securities of CGI and the improper communication of privileged or material information with respect to CGI that has not been generally disclosed, including compliance with insider trading and tipping rules. Under the policy, those who normally have access to material information that has not been generally disclosed may only trade in CGI securities within the period beginning on the third business day following the release of CGI’s quarterly financial results and fiscal year-end results and ending at the close of business on the fourteenth calendar day preceding the end of the following fiscal quarter. Discretionary blackout periods and restrictions on trading in securities applicable to certain designated members may also be prescribed from time to time for such period of time as is deemed necessary as a result of special circumstances relating to the Company. The policy also provides processes for the pre-clearance of trades in CGI securities and for reporting by the reporting insiders of the Company.

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The Insider Trading and Blackout Periods Policy contains anti-hedging restrictions to ensure that senior executives, including the Chief Executive Officer, are restricted from engaging in short sales, transactions in derivatives in respect of Company’s securities or any other hedging or equity monetization transaction in which the individual’s economic interest and risk exposure in Company securities are changed.

Mandate, Structure and Composition of the Board of Directors

The Committee and the Board of Directors are of the view that the size and composition of the Board of Directors and its standing committees are well suited to the circumstances of the Company and allow for the efficient functioning of the Board of Directors as an independent decision-making body.

Board of Directors and Committee Charters

Each standing committee operates according to its charter approved by the Board of Directors which sets out the committee’s duties and responsibilities.

The Board of Directors’ charter and the charter of each of the standing committees require that they be reviewed annually. As part of that process each standing committee undertakes a review of its mandate and tables any recommendations for changes with the Committee. The Committee reviews the submissions of the standing committees and also reviews the Board of Directors’ charter. The Committee then makes a recommendation to the Board of Directors based on the conclusion of the review. The Board of Directors takes the Committee’s recommendation into account in making such changes as it determines to be appropriate.

The Board of Directors and standing committee charters are attached as Appendix A to CGI’s Annual Information Form for the fiscal year ended September 30, 2022 (the “2022 Annual Information Form”) which is available on the Canadian Securities Administrators’ website at www.sedar.com and on CGI’s website at www.cgi.com. A copy of the 2022 Annual Information Form will be provided to shareholders by CGI upon request. The charters of the Board of Directors and its standing committees are hereby incorporated by reference from Appendix A to the 2022 Annual Information Form.

The key responsibilities of each standing committee are summarized in the reports contained in this Management Proxy Circular and each standing committee is composed entirely of independent directors. The following table summarizes the current membership of each of the Company’s standing committees.

Committee	Membership
Audit and Risk Management Committee
	Gilles Labbé (Chair) Stephen S. Poloz Alison C. Reed Kathy N. Waller Frank Witter
Corporate Governance Committee
	Michael B. Pedersen (Chair) George A. Cope Paule Doré Mary G. Powell Joakim Westh
Human Resources Committee
	Joakim Westh (Chair) George A. Cope Paule Doré Michael B. Pedersen Mary G. Powell

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Role and Responsibilities of the Founder and Executive Chairman of the Board and of the President and Chief Executive Officer

The Board of Directors has delegated to management the responsibility for day-to-day management of the business of the Company in accordance with the Company’s Operations Management Framework which was adopted by the Board of Directors. The Operations Management Framework sets out the overall authority of the Company’s management team as well as the level of management approval required for the various types of operations and transactions in the ordinary course of the Company’s business.

The role of Founder and Executive Chairman of the Board allows Mr. Serge Godin to devote his time to the development and implementation of strategic initiatives, including strengthening the Company’s partnerships with existing clients and fostering key relationships that lead to new business, including large outsourcing contracts and strategic mergers. The nature of the responsibilities of the Founder and Executive Chairman of the Board are such that he is a senior executive officer of the Company and is not an independent Chairman of the Board.

All operational and corporate functions, other than the office of the Founder and Executive Chairman of the Board which reports to the Founder and Executive Chairman of the Board, report to the President and Chief Executive Officer who reports directly to the Board of Directors. The President and Chief Executive Officer, jointly with the management team, develop the strategies and corporate objectives which are approved by the Board of Directors. Each year, the Human Resources Committee assesses the performance of executive officers in achieving the objectives and makes recommendations to the Board of Directors in relation to the grant and vesting of stock options, the award and vesting of PSUs and the payment of bonuses under the Profit Participation Plan to executive officers, including the Named Executive Officers.

Taken together, the Operations Management Framework and the corporate objectives approved by the Board of Directors annually define the scope of management’s authority and responsibilities, including those of the Founder and Executive Chairman of the Board and of the President and Chief Executive Officer, in relation to the Company’s day-to-day operations and the attainment of its objectives. At each regularly scheduled Board meeting the Founder and Executive Chairman of the Board and the President and Chief Executive Officer report on their stewardship of the Company’s operations, and their performance relative to fixed objectives is assessed annually. Ultimately, the Board of Directors reports to the shareholders at the Annual General Meeting of Shareholders.

Role and Responsibilities of the Lead Director and Standing Committee Chairs

Lead Director

The charter of the Board of Directors, which is incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of the Board of Directors earlier in this document), requires that the Board of Directors appoint a Lead Director from among the independent directors. The Lead Director is responsible for ensuring that the Board of Directors acts independently of the Company’s management and strictly in accordance with its obligations towards shareholders.

Mr. Cope, an independent member of the Board of Directors, was appointed as CGI’s Lead Director on February 2, 2022.

In fulfilling his responsibilities, the Lead Director provides input to the Founder and Executive Chairman of the Board in the preparation of the agendas of the meetings of the Board of Directors, sets the agenda for, and chairs the meetings of, the independent directors, and leads the annual self-evaluation process for the Board of Directors, including director peer review.

Together with the Founder and Executive Chairman of the Board, the Lead Director facilitates the effective and transparent interaction of Board members and management. The Lead Director also provides feedback to the Founder and Executive Chairman of the Board and acts as a sounding board with respect to strategies, accountability, relationships and other matters.

Standing Committee Chairs

The role and responsibilities of each of the Chairs of the standing committees of the Board of Directors are set forth in the charter of each committee. The standing committees’ charters are incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of the Board of Directors earlier in this document).

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The Chair of each committee is responsible for leading the committee’s work and, in that capacity, ensuring that the committee’s structure and mandate are appropriate and adequate to support the fulfilment of its responsibilities, that the committee has adequate resources as well as timely and relevant information to support its work, and that the scheduling, organization and procedures of committee meetings provide adequate time for the consideration and discussion of relevant issues. The committee Chair is responsible for ensuring that the effectiveness of the committee is assessed on a regular basis.

The Chair presides the committee’s meetings and works with the Founder and Executive Chairman of the Board, the Corporate Secretary and the Company’s relevant executive officers in setting the agendas for each meeting and has the authority to convene special meetings of the committee. The Chair of the Corporate Governance Committee also works with the Founder and Executive Chairman of the Board, the Corporate Secretary and the Company’s relevant executive officers in setting the calendars of the committees’ meetings. The committee Chair acts as liaison with the Company’s management in relation to the committee’s work program and ensures that the committee reports to the Board of Directors at each subsequent meeting of the Board of Directors in relation to the committee’s deliberations, decisions and recommendations.

Criteria for Tenure on CGI’s Board of Directors

Each year, the Committee reviews all of the Company’s corporate governance practices as part of an exercise that takes place well in advance of the annual preparation and review of the Company’s Management Proxy Circular, so that such practices, including those that govern the conditions for tenure on the Board of Directors, receive careful consideration in advance of the Company’s fiscal year end and the preparation of materials for the Annual General Meeting of Shareholders.

Independence

CGI’s corporate governance practices require that a majority of the members of the Board of Directors be independent, as per the requirements set forth in National Instrument 52-110 – Audit Committees. This means that they must be and remain free from any material ties to the Company, its management and its external auditor that could, or could reasonably be perceived to, materially interfere with the directors’ ability to act in the best interests of the Company, and otherwise in keeping with the definitions of independence applicable under the governance regulations, rules and guidelines of the relevant stock exchanges and securities regulators.

The Board of Directors has concluded that the position of Lead Director, which has existed since 1996, ensures that the Board of Directors is able to act independently of management in an effective manner. The Lead Director holds meetings of the outside directors after each regular meeting of the Board of Directors, without management and related directors present.

The Board of Directors has determined that the directors identified as being independent in this Management Proxy Circular do not have interests in or relationships with CGI or with any of CGI’s significant shareholders that could, or could reasonably be perceived to, materially interfere with the directors’ ability to act in the best interests of the Company, and that they are therefore independent under applicable regulations, rules and guidelines.

The independence of the Board of Directors and each standing committee is further enhanced by their ability to engage outside advisors as needed. In addition, individual directors may also retain the services of outside advisors with the authorization of the Chair of the Committee.

Shareholders of CGI, or any other person who has an interest in the Company, who wish to contact CGI’s non-management or independent directors may do so by e-mail sent to the Lead Director at lead_director@cgi.com or by using the contact page for the Lead Director on CGI’s website at www.cgi.com.

Expertise and Financial and Operational Literacy

CGI’s corporate governance practices require that all members of the Board of Directors be both financially and operationally literate. The financial literacy of individual directors who do not sit on the Audit and Risk Management Committee need not be as extensive as that of members who sit on such committee. Having operational literacy means that the director must have substantial experience in the execution of day-to-day business decisions and strategic business objectives acquired as a result of meaningful past experience, such as a Chief Executive Officer or as a senior executive officer in another capacity but with a broad responsibility for operations.

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The directors’ experience and subject matter expertise are examined by the Committee annually when it reviews and makes recommendations to the Board of Directors in relation to succession planning for the Board of Directors in the context of the Board of Directors and standing committee self-evaluation process (see the heading Self-Assessment and Peer Review). Expertise in the vertical markets in which the Company operates (financial services; government; health; communications and utilities; and manufacturing, retail and distribution), operational expertise and literacy, and financial literacy make up the key criteria that are used to select candidates for Board membership, to review and determine the composition of the Board of Directors, and to assess the performance of directors annually as part of the annual Board of Directors and standing committee self-evaluation process. The Board of Directors’ objective in relation to its composition is to ensure that it has expert representation for each of the Company’s targeted vertical markets.

The members of the Board of Directors who serve on the Audit and Risk Management Committee must be operationally literate and be financially literate in accordance with applicable governance standards under applicable securities laws, regulations and stock exchange rules, and in the sense of having the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues such as those which could reasonably be expected to be raised by CGI’s financial statements.

The Committee and the Board of Directors have determined that all members of the Audit and Risk Management Committee are financially literate and that the Chair, Mr. Gilles Labbé, Mr. Frank Witter, and Mses. Alison C. Reed and Kathy N. Waller have the necessary experience to qualify as financial experts under the NYSE corporate governance rules and the rules adopted by the SEC in accordance with the Sarbanes Oxley Act of 2002. Mr. Labbé is a Fellow of the Institute of Chartered Professional Accountants Canada (FCPA, FCA), Mr. Witter served as Chief Financial Officer of Volkswagen Group, Ms. Alison C. Reed is a Chartered Accountant (ACA) and served as Chief Financial Officer of Marks and Spencer plc, Standard Life Assurance Company and Standard Life plc, and Ms. Kathy N. Waller is a Certified Public Accountant (CPA, CGMA) and served as Executive Vice President, Chief Financial Officer and President, Enabling Services of The Coca-Cola Company.

Mr. Stephen S. Poloz, the remaining member of the Audit and Risk Management Committee who is a nominee director, is financially literate in the sense that he has the knowledge and skills necessary to allow him to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues such as those which could reasonably be expected to be raised by CGI’s financial statements. Mr. Poloz acquired his financial literacy while serving as the Governor of the Bank of Canada and Chairman of the Bank of Canada’s board of directors, as well as while serving as Chair of the BIS Audit Committee and President and CEO of Export Development Canada, a major public sector financial intermediary providing various forms of insurance and lending to facilitate international business on behalf of Canadian companies.

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The following table presents a skills matrix for each of the Company’s nominee directors:

	Operational Literacy				Financial Literacy			Governance and Human Resources
Director	Executive Leadership	Consulting Services and IT Industry	Geography	Vertical market	Finance	Accounting	Risk
George A. Cope	✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓
Paule Doré	✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓
Julie Godin	✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓
Serge Godin	✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓
André Imbeau	✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓
Gilles Labbé	✓	✓	Global	Manufacturing, retail and distribution	✓	✓	✓	✓
Michael B. Pedersen	✓		Global	Financial services	✓	✓	✓	✓
Stephen S. Poloz	✓		Global	Financial services	✓	✓	✓	✓
Mary G. Powell	✓		Global	Communications & Utilities	✓	✓	✓	✓
Alison C. Reed	✓		Global	Multiple vertical markets	✓	✓	✓	✓
Michael E. Roach	✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓
George D. Schindler	✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓
Kathy N. Waller	✓	✓	Global	Manufacturing, retail and distribution	✓	✓	✓	✓
Joakim Westh	✓	✓	Global	Multiple vertical markets	✓	✓	✓	✓
Frank Witter	✓		Global	Manufacturing, retail and distribution	✓	✓	✓	✓

Attendance at Board and Standing Committee Meetings

The Committee monitors director attendance in relation to the recommendation for directors to be proposed for election at the Annual General Meeting of Shareholders. The overall attendance rate for the nominee directors of CGI for fiscal 2022 was 97% for the Board of Directors, 98% for the Audit and Risk Management Committee, 93% for the Human Resources Committee and 96% for the Corporate Governance Committee. Detailed meeting and attendance information to regular meetings of the Board of Directors and its standing committees is provided in the following table.

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Board and Standing Committee Meetings and Attendance

Year ended September 30, 2022

	Board Meetings Attended		Committee Meetings Attended
			Audit	6 regular meetings
			Governance	4 regular meetings
Director	7 regular meetings		Human Resources	4 regular meetings
Alain Bouchard(a)	7 of 7	100%	Human Resources	2 of 2	100%
George A. Cope	7 of 7	100%	Human Resources	3 of 4	75%
			Governance	3 of 4	75%
Paule Doré(b)	7 of 7	100%	Human Resources	2 of 2	100%
			Governance	4 of 4	100%
Julie Godin (Co-Chair)	7 of 7	100%	N/A	–	–
Serge Godin (Executive Chair)	7 of 7	100%	N/A	–	–
André Imbeau	7 of 7	100%	N/A	–	–
Gilles Labbé	7 of 7	100%	Audit (Chair)	6 of 6	100%
Michael B. Pedersen(b)(c)	7 of 7	100%	Audit	3 of 3	100%
			Human Resources	2 of 2	100%
			Governance (Chair)	2 of 2	100%
Stephen S. Poloz	6 of 7	86%	Audit	6 of 6	100%
Mary G. Powell	6 of 7	86%	Human Resources	4 of 4	100%
			Governance	4 of 4	100%
Alison C. Reed	7 of 7	100%	Audit	6 of 6	100%
Michael E. Roach	7 of 7	100%	N/A	–	–
George D. Schindler	7 of 7	100%	N/A	–	–
Kathy N. Waller	7 of 7	100%	Audit	6 of 6	100%
Joakim Westh(d)	6 of 7	86%	Human Resources (Chair)	3 of 4	75%
			Governance	2 of 2	100%
Frank Witter	7 of 7	100%	Audit	5 of 6	83%

(a) Mr. Bouchard is not seeking reelection on the Board of Directors and will therefore cease to be a director on February 1, 2023. Mr. Bouchard ceased to be a member of the Human Resources Committee on February 2, 2022.

(b) Ms. Doré and Mr. Pedersen were appointed as members of the Human Resources Committee on February 2, 2022.

(c) Mr. Pedersen ceased to be a member of the Audit and Risk Management Committee on February 2, 2022.

(d) Mr. Westh was appointed as member of the Corporate Governance Committee on February 2, 2022.

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Share Ownership Guideline for Directors

CGI’s directors are required to hold Class A subordinate voting shares or DSUs having a value of $300,000 within five years of their election or appointment to the Board of Directors pursuant to the Company’s share ownership guideline for directors. All directors currently comply with the ownership guideline. The share ownership on the part of the Company’s outside directors as at December 5, 2022 and the date on which their holdings must meet the minimum level of share ownership are set out in the following table.

Outside Directors’ Share Ownership(a)
Director	Fiscal Year	Number of Class A subordinate voting shares		Number of DSUs		Total number of Class A subordinate voting shares and DSUs		Total “at risk” value of Class A subordinate voting shares and DSUs(b)		Value of Class A subordinate voting shares or DSUs to be acquired to meet minimum ownership level	Date by which minimum ownership level must be met
Alain Bouchard(c)	2022		25,000		24,897		49,897	$	5,896,827		Complies with the ownership guideline
	2021		25,000		22,747		47,747	$	5,231,161	N/A
	Change		0		2,150		2,150	$	665,666
George A. Cope	2022		21,540		5,810		27,350	$	3,232,223		Complies with the ownership guideline
	2021		21,540		3,255		24,795	$	2,716,540	N/A
	Change		0		2,555		2,555	$	515,683
Paule Doré	2022		54,274		15,324		69,598	$	8,225,092		Complies with the ownership guideline
	2021		54,274		14,249		68,523	$	7,507,380	N/A
	Change		0		1,075		1,075	$	717,712
Gilles Labbé	2022		7,246		34,414		41,660	$	4,923,379		Complies with the ownership guideline
	2021		931		31,930		32,861	$	3,600,251	N/A
	Change		6,315		2,484		8,799	$	1,323,128
Michael B. Pedersen	2022		24,350		12,499		36,849	$	4,354,815		Complies with the ownership guideline
	2021		24,350		10,131		34,481	$	3,777,738	N/A
	Change		0		2,368		2,368	$	577,076
Stephen S. Poloz	2022		0		2,327		2,327	$	275,005		June 8, 2025
	2021		0		1,252		1,252	$	137,169	24 995
	Change		0		1,075		1,075	$	137,836
Mary G. Powell	2022		0		2,076		2,076	$	245,342		June 8, 2025
	2021		0		750		750	$	82,170	54 658
	Change		0		1,326		1,326	$	163,172
Alison C. Reed	2022		3,000		0		3,000	$	354,540		Complies with the ownership guideline
	2021		3,000		0		3,000	$	328,680	N/A
	Change		0		0		0	$	25,860
Michael E. Roach	2022		951,335		7,133		958,468	$	113,271,748		Complies with the ownership guideline
	2021		951,335		6,058		957,393	$	104,891,977	N/A
	Change		0		1,075		1,075	$	8,379,771
Kathy N. Waller	2022		0		6,295		6,295	$	743,943		Complies with the ownership guideline
	2021		0		4,901		4,901	$	536,954	N/A
	Change		0		1,394		1,394	$	206,990
Joakim Westh	2022		15,000		0		15,000	$	1,772,700		Complies with the ownership guideline
	2021		15,000		0		15,000	$	1,643,400	N/A
	Change		0		0		0	$	129,300
Frank Witter	2022		0		1,698		1,698	$	200,670		June 30, 2026
	2021		0		303		303	$	33,197	99 330
	Change		0		1,395		1,395	$	167,473

(a) 2022 information is provided as at December 5, 2022 and 2021 information is provided as at December 7, 2021.

(b) Based on the closing prices of the Company’s Class A subordinate voting shares on the TSX on December 5, 2022 ($118.18) and December 7, 2021 ($109.56) respectively.

(c) Mr. Bouchard is not seeking reelection on the Board of Directors and will therefore cease to be a director on February 1, 2023.

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Availability and Workload

The Board of Directors has endorsed the Committee’s recommendation not to adopt formal guidelines on the number of boards or committees on which independent directors may sit on the basis that the contribution of each director to the work of the Board of Directors forms part of the Board of Directors’ self-assessment process and that arbitrary limits might not serve the interests of the Company.

Some nominee directors are presently directors of other public companies, as shown in the table below:

Director	Public Company	Committee(s)
George A. Cope	Bank of Montreal (TSX, NYSE and NASDAQ)	Chair of the Board, member of the Governance and Nominating Committee and the Human Resources Committee
Gilles Labbé	Héroux-Devtek Inc. (TSX)	–
Michael B. Pedersen	SNC-Lavalin (TSX)	Member of the Human Resources Committee and Chair of the Safety, Project Oversight and Technology Committee
Stephen S. Poloz	Enbridge Inc. (TSX and NYSE)	Chair of the Governance Committee and Member of the Audit, Finance and Risk Committee
Mary G. Powell	Sunrun Inc. (NYSE)	–
Michael E. Roach	CAE Inc. (TSX and NYSE)	Member of the Audit Committee and of the Governance Committee
Kathy N. Waller	Beyond Meat, Inc. (NASDAQ) Cadence Bancorporation (NYSE) Delta Air Lines, Inc. (NYSE)	Chair of the Audit Committee and Member of the Human Capital Management and Compensation Compensation Committee Member of the Credit Risk Committee and of the Executive Compensation and Stock Incentive Committee Member of the Corporate Governance Committee, the Audit Committee and the Safety & Security Committee and Compensation Committee
Joakim Westh	Absolent Air Care Group AB (Nasdaq Stockholm) Saab AB (Nasdaq Stockholm) Swedish Match AB (Nasdaq Stockholm)	– Chair of the Audit Committee Chair of the Audit Committee
Frank Witter	Deutsche Bank AG (Frankfurt Stock Exchange and NYSE) Traton SE (Nasdaq Stockholm)	Chair of the Audit Committee Chair of the Audit Committee

The Board of Directors and the Committee have determined that none of the nominee directors’ commitments impair their capacity to serve the Company, the Board of Directors or any standing committee effectively.

Conflicts of Interest

A process is in place for directors to annually acknowledge CGI’s Code of Ethics and Business Conduct in the same way as all officers and members do. All directors have also declared their interests in all other companies where they serve as directors or officers. The Board of Directors has endorsed the Committee’s recommendation to maintain the practice of having directors tender their resignation for consideration upon a major change in their principal occupation.

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Director Orientation and Continuing Education Program

New Director Orientation

Each new director participates in a formal orientation program. The program consists of a detailed presentation of the Company’s current three-year strategic plan, coupled with a series of meetings between the new director and each of the Founder and Executive Chairman of the Board, the Lead Director, the President and Chief Executive Officer, the Chair of any standing committee to which the director will be assigned and other key senior executives of the Company. Depending on the director’s experience and background and the results of the executive meetings, additional meetings may be scheduled. In addition to the executive briefings, new directors receive CGI’s Director Reference Materials, a comprehensive set of documents containing both public and non-public information concerning the Company, which includes detailed information in relation to the Company, its operations, financial condition and management structure; policies and public disclosure record; the work programs and minutes of past meetings of the Board of Directors and of its standing committees; biographies of CGI’s key senior executive officers; materials related to the director’s duties and responsibilities, including, a summary of the Company’s insurance coverage for directors and officers liability; and the Company’s process for reporting transactions in its securities carried out by its reporting insiders.

Continuing Education Program

In addition to the formal orientation program, the directors participate in a continuing education program which provides “in-depth” information on key issues relating to the Company’s business, including the material risks the Company faces and recent developments in the global information technology market. Detailed presentations are also made to the standing committees on technical subjects such as the application of key accounting principles in the preparation of the Company’s financial statements, corporate governance rules and practices, and trends in executive officers’ and directors’ compensation.

Directors also receive updates on business and governance initiatives as well as responses to questions raised by the members of the Board of Directors from time to time. Directors who wish to do so may make arrangements with the Corporate Secretary to participate, at CGI’s expense, in board-level industry associations or conferences, to attend continuing education courses that are relevant to their role as a director of the Company or otherwise to pursue activities that contribute in a meaningful way to the value they bring to the Board of Directors.

All members of the Board of Directors are invited to attend CGI’s annual Leadership Conference, a key part of the Company’s strategic planning cycle and can participate in sessions of CGI’s Leadership Institute management professional development program, including CGI 101, a three-day immersive seminar for CGI managers covering all aspects of the Company’s business.

2022 Continuing Education Presentations

The following table lists key presentations that were made available to directors of the Company in fiscal 2022 both by CGI members and external providers:

Date	Presentation Topic	Attendance
November 2021	Raising CGI’s Awareness	Board of Directors
April 2022	Corporate Governance Practices Update	Corporate Governance Committee
June 2022	Leadership Conference	Board of Directors
September 2022	2023 Growth Driver Managed Services	Board of Directors
September 2022	Policy Framework	Audit and Risk Management Committee
September 2022	Revenue Recognition	Audit and Risk Management Committee

Self-Assessment and Peer Review

The Lead Director, in concert with the Committee, coordinates an annual self-assessment of the effectiveness of the Board of Directors as a whole and of its standing committees, which includes a peer review of the independent directors. The Committee is also responsible for establishing the competencies, skills and qualities it seeks in new Board members and directors are assessed against the contribution they are expected to make by way of a questionnaire.

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Once responses are received, the Lead Director compiles and analyses the results and discusses the self-assessments, including director peer reviews, with each director. Following one-on-one discussions with directors, the Lead Director reviews the overall results of the annual self-assessment process, with the Founder and Executive Chairman of the Board and the Co-Chair of the Board. The Committee then meets to review the results of the annual self-assessment process, including director peer reviews, and subsequently presents the final results to the Board of Directors for discussion.

The Board of Directors annually reviews the assessment of its performance and the recommendations provided by the Committee with the objective of increasing the Board’s effectiveness in carrying out its responsibilities. The Board of Directors takes appropriate action based on the results of the review process.

Retirement Age and Director Term Limits

The Board of Directors has endorsed the Committee’s recommendation not to adopt a formal retirement age or term limits for directors.

CGI’s success is due in large measure to the Company’s experience and expertise in the vertical markets in which it operates. The selection criteria for CGI’s Board of Directors, which are explained earlier in this document under the heading Expertise and Financial and Operational Literacy, recognize this and are designed to ensure that the Company has subject matter experts on the Board of Directors who can effectively provide intelligence, experience, expertise, and business and operational insight into each of the Company’s vertical markets. Imposing a term limit or an arbitrary retirement age would unnecessarily expose the Company to losing valuable expertise and insight that could not be easily replaced. The Committee and the Board of Directors are therefore of the view that a mandatory retirement age or term limits might arbitrarily and needlessly deprive the Board of Directors of valuable talent.

As with the other aspects of CGI’s corporate governance practices, term limits and formal retirement age for directors are considered on a regular basis by the Board of Directors. In the event of a vote, the directors who would be affected if such limits were adopted withdraw from the meeting and abstain from voting on the matter. The Board of Directors believes that the effectiveness of this approach to board renewal is proven as 55% of the independent nominee directors were not directors five years ago.

Nomination Process for the Board of Directors and Executive Officers

Board of Directors

The shareholders are responsible for electing CGI’s directors. The responsibility for proposing candidates for election by the shareholders lies with the Board of Directors, which relies on the recommendations of the Committee.

Based on the results of the Board of Directors self-evaluation and director review process (see the heading Self-Assessment and Peer Review earlier in this document) and, from time to time, on its own assessment of the needs of the Company, the Committee may recommend that the composition of the Board of Directors or its standing committees be varied in order to continue to serve the best interests of the Company and to ensure an appropriate succession of directors. By way of example, when it is appropriate to do so, additional directors may be appointed to committees so that knowledge is transmitted to new members to facilitate a smooth transition as standing committee composition evolves.

When changes to the composition of the Board of Directors are required, potential candidates are identified either through referrals from directors or senior management, or with the assistance of third parties. The selection of nominees from among the potential candidates is based on the candidate’s expertise and knowledge in the vertical markets in which the Company operates and their operational and financial literacy based on the Board of Directors’ skills matrix (see the heading Expertise and Financial and Operational Literacy earlier in this document), taking into account criteria that promote diversity, including gender (with the objective of having a Board of Directors composed of at least 30% of women), ethnicity, age, experience and geographical representation. The Committee, the Founder and Executive Chairman of the Board, the Co-Chair of the Board and the Lead Director consult with each other with respect to the actions to be taken and the necessary steps are then taken to interview the candidates and confirm their willingness to serve on the Board of Directors.

Once the selection of candidates is completed, the Committee recommends to the Board of Directors that the candidate or candidates be either appointed by the Board of Directors if there is a vacancy to be filled or if there is a need to increase the size of the Board of Directors, or be nominated for election at the next Annual General Meeting of Shareholders.

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Five out of fifteen (or 33.33%) of CGI’s nominee directors are women. As previously mentioned (see the heading Corporate Governance and Diversity earlier in this document), the charters of the Board of Directors and of the Corporate Governance Committee include the Company’s objective of having a Board of Directors of which at least 30% are women. CGI is very proud to have met this objective and we will continue to monitor our progress.

Succession Planning for Executive Officers

Succession planning is a priority of the Board of Directors as part of its responsibility to ensure that CGI has a robust pipeline of leaders at executive and management levels, including for the President and Chief Executive Officer position. As provided in its charter, the Board of Directors oversees the succession planning, including the appointment, training and monitoring, of senior management. The Human Resources Committee plays a key role in supporting the Board of Directors in its oversight of talent management and succession planning by reviewing annually the succession plan for the Chief Executive Officer and other executive roles. The Human Resources Committee also provides annually a report to the Board of Directors on succession planning, which identifies key talent and potential successors’ capabilities, the roles that they can assume in the future and the development programs required to prepare them for these roles.

The charter of the Human Resources Committee also provides that in identifying potential candidates for appointment as executive officers, the Human Resources Committee will consider the diversity of the executive team’s background, including in terms of gender, ethnicity, age and experience. As at the date of this Management Proxy Circular, six out of twenty-four (or 25%) of the Company’s current executive officers, were women. In addition, a total of 17 women occupy senior management positions, which represents approximately 18% of the Company’s total number of senior managers.

Board of Directors Participation in Strategic Planning

The Board of Directors is directly and closely involved in the preparation and approval of CGI’s rolling three-year strategic plan which is reviewed and assessed annually by the Board of Directors.

CGI has adopted a consultative process for budgeting and strategic planning in order to ensure that the resulting business plan is as closely attuned as possible to maximizing the Company’s business opportunities and mitigating operational and other risks. The Board of Directors receives a detailed briefing early in the planning process covering all aspects of CGI’s strategic planning so that the directors are in a position to contribute to the process in a meaningful way before the final business plan has taken shape.

In keeping with CGI’s three-year rolling strategic planning process, the strategic plan begins with the initiatives, directions and priorities identified at the business unit level by the Company’s management team that are shared at the Company’s annual Leadership Conference. The Company’s rolling three-year strategic plan was presented to the directors in July for review and discussion. The Company’s fiscal 2023 business plan and budget was presented to, and approved by, the Board of Directors in September. The rolling three-year planning process provides a meaningful opportunity for the directors to contribute to the strategic planning process. In addition to the formal planning process, every Board of Directors meeting agenda features a standing item that serves as a forum for continuing free-ranging discussion between the Board of Directors and management in relation to the Company’s strategic direction.

Guidelines on Timely Disclosure of Material Information

CGI has adopted Guidelines on Timely Disclosure of Material Information (the “Disclosure Guidelines”) whose purpose is to ensure that communications with the investment community, regulator, the media and the general public about the Company, particularly in respect of material information, are timely, accurate, broadly released in accordance with, and otherwise responsive to, all applicable legal and regulatory requirements.

Under the Disclosure Guidelines, the Board of Directors has the responsibility to oversee the Company’s compliance with its continuous and timely disclosure obligations. The Board of Directors believes that it is management’s role to communicate on behalf of the Company with its shareholders and the investment community. The Company maintains an effective investor relations process to respond to shareholder questions and concerns. The Company also adopted the SPMF (which stands for Shareholder Partnership Management Framework, as defined under the heading CGI’s Shareholders earlier in this document), which structures the processes and how information flows between CGI and the investment community, including both buy-side (institutional investor) and sell-side (investment dealer) research analysts. CGI obtained an ISO 9001 certification for the application of the SPMF in the Company’s operations.

The Board of Directors reviews and, where required, approves statutory disclosure documents prior to their dissemination to the market and to the Company’s shareholders.

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Codes of Ethics

CGI’s Codes of Ethics are attached as Appendix A to CGI’s 2022 Annual Information Form which is available on the Canadian Securities Administrators’ website at www.sedar.com and on CGI’s website at www.cgi.com. A copy of the 2022 Annual Information Form will be provided to shareholders by CGI upon request.

The Codes of Ethics are comprised of CGI’s Code of Ethics and Business Conduct that applies to all members, officers and directors of CGI (and which incorporates CGI’s Anti-Corruption Policy) and CGI’s Executive Code of Conduct which supplements the Code of Ethics and Business Conduct for certain officers.

The Board of Directors monitors compliance with the Codes of Ethics and is, under its charter, responsible for any waivers of their provisions granted to directors or officers. No such waivers have been granted to date. The Corporate Governance Committee is principally responsible for the annual review of the Codes of Ethics, overseeing compliance therewith, reviewing any request for a waiver from their application, and making recommendations on these matters to the Board of Directors.

Under the terms of the Code of Ethics and Business Conduct, all of CGI’s members are required to comply with its content and to assist with its application. In particular, the Code of Ethics and Business Conduct requires that incidents be reported to human resources, legal departments, management, CGI’s Ethics Hotline, CGI’s Ethics Inbox or alternatively to any officer of the Company, especially when mandated by the Code of Ethics.

The Board of Directors has established procedures approved by the Audit and Risk Management Committee for the receipt, retention, and treatment of ethical incidents relating to, among others, accounting, internal accounting control or auditing matters, discrimination and harassment, corruption and data privacy, as well as other potential breaches of the Code of Ethics and Business Conduct (which incorporates CGI’s Anti-Corruption Policy) or of the Executive Code of Conduct. In that regard, the Company adopted an Ethics Reporting Policy, which allows members who wish to submit a report to do so via a third party ethics reporting hotline and secure website that ensures that members who wish to preserve their anonymity are able to do so with confidence. The Audit and Risk Management Committee is primarily responsible for the review and oversight of these incident reports. A quarterly report on incidents reported is provided by the Corporate Secretary to the Audit and Risk Management Committee.

An integration program has been designed for new members to become familiar with CGI’s policies, including CGI’s Ethics and Compliance policies, and their responsibilities as members. In order to ensure that all CGI members are aware of the importance that the Company attaches to compliance with the Code of Ethics and Business Conduct, each new member is informed of its content and the process for reporting ethical incidents, and is required to undertake in writing to comply with its provisions and to renew such undertaking on an annual basis. CGI’s Leadership Institute also provides new managers with an intensive curriculum of courses designed to allow them to become familiar with CGI’s methods of operation and its policies, including the Code of Ethics and Business Conduct and the process for reporting incidents. In addition, the Company provides an internet portal for all members to access the Company’s policies, including the Codes of Ethics and the process for reporting ethical incidents.

These measures are in addition to quarterly reports prepared by the internal audit department for the Audit and Risk Management Committee, the internal controls review function and the legal department. These quarterly reports may include reports of breaches of the Codes of Ethics when such breaches are raised in internal audit mandates or in claims made against the Company.

In addition to CGI’s Code of Ethics and Business Conduct, CGI’s principal executive and financial officers, including the Founder and Executive Chairman of the Board, the President and Chief Executive Officer, the Co-Chair of the Board and the Executive Vice-President and Chief Financial Officer, the principal accounting officer or controller, and other persons performing similar functions, are subject to CGI’s Executive Code of Conduct which they are required to review and acknowledge on an annual basis.

CGI Federal Inc., the Company’s operating subsidiary that provides services to the U.S. Federal government, has adopted separate policies and procedures to comply with specific requirements under U.S. Federal government procurement laws and regulations.

CGI has also developed a Third Party Code of Ethics which applies to its business partners, including but not limited to, its primes, subcontractors, independent contractors, consultants, distributors, licensees, suppliers and other agents to ensure that they understand and adhere to the Company’s commitment to integrity and high standards of business conduct.

  2022 MANAGEMENT PROXY CIRCULAR         57

Report of the Audit and Risk Management Committee

The Audit and Risk Management Committee of the Board of Directors is composed entirely of independent directors who meet the independence and experience requirements of National Instrument 52-110 – Audit Committees adopted by the Canadian securities regulators as well as those of the NYSE and of the SEC.

The Committee is composed of Messrs. Gilles Labbé, Chair of the Committee, Stephen S. Poloz and Frank Witter, and Mses. Alison C. Reed and Kathy N. Waller. The Committee met six times during fiscal 2022. Mr. Labbé’s role and responsibilities as Chair of the Committee are described earlier in this document in the report of the Corporate Governance Committee under the heading Role and Responsibilities of the Lead Director and Standing Committee Chairs.

The role and responsibilities of the Committee are contained in the Committee’s charter, which is incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of the Board of Directors) and is available on the Canadian Securities Administrators’ website at www.sedar.com and on CGI’s website at www.cgi.com. The role and responsibilities of the Committee include:

• reviewing all public disclosure documents containing audited or unaudited financial information concerning CGI;

• identifying and examining the financial and operating risks to which the Company is exposed, reviewing the various policies and practices of the Company that are intended to manage those risks, and reporting on a regular basis to the Board of Directors concerning risk management;

• reviewing and assessing the effectiveness of CGI’s accounting policies and practices concerning financial reporting;

• reviewing and monitoring CGI’s internal control procedures, programs and policies and assessing their adequacy and effectiveness;

• reviewing the adequacy of CGI’s internal audit resources including the mandate and objectives of the internal auditor;

• recommending to the Board of Directors the appointment of the external auditor, asserting the external auditor’s independence, reviewing the terms of its engagement, conducting an annual auditor performance assessment, and pursuing ongoing discussions with it;

• reviewing all related party transactions in accordance with the rules of IFRS and applicable laws and regulations;

• reviewing the audit procedures including the proposed scope of the external auditor examinations; and

• performing such other functions as are usually attributed to audit committees or as directed by the Board of Directors.

External Auditor

The Committee is required to assert the independence of CGI’s external auditor addresses the applicable criteria with the external auditor and obtains yearly confirmations from it as to its independence.

Auditor Independence Policy

In order to satisfy itself as to the independence of the external auditor, the Committee has adopted an auditor independence policy which covers (a) the services that may and may not be performed by the external auditor, (b) the governance procedures to be followed prior to retaining services from the external auditor, and (c) the responsibilities of management and the Committee. The following is a summary of the material provisions of the policy.

Performance of Services

Services are either acceptable services or prohibited services.

The acceptable services are audit and review of financial statements, prospectus work, the audit of pension plans, special audits on control procedures, tax planning services on mergers and acquisitions activities, due diligence relating to mergers and acquisitions, tax services related to transfer pricing, sales tax planning and returns, research and interpretation related to taxation, research relating to accounting issues, tax planning services, preparation of tax returns, and all other services that are not prohibited services. The prohibited services are: bookkeeping services, the design and implementation of financial information systems, appraisal or valuation services or fairness opinions, actuarial services, internal audit services, management functions, human resources functions, broker-dealer services, legal services, services based on contingency fees, and expert services.

58         2022 MANAGEMENT PROXY CIRCULAR  

Report of the Audit and Risk Management Committee

Governance Procedures

The following control procedures are applicable when considering whether to retain the external auditor services:

For all services falling within the permitted services category, whether they are audit or non-audit services, a request for approval must be submitted to the Committee through the Executive Vice-President and Chief Financial Officer prior to engaging the auditor to perform the services.

In the interests of efficiency, certain permitted services are pre-approved quarterly by the Committee and thereafter only require approval by the Executive Vice-President and Chief Financial Officer as follows:

• The Committee can pre-approve envelopes for certain services to pre-determined dollar limits on a quarterly basis;

• Once pre-approved by the Committee, the Executive Vice-President and Chief Financial Officer may approve the services prior to the engagement;

• For services not captured within the pre-approved envelopes and for costs in excess of the pre-approved amounts, separate requests for approval must be submitted to the Committee; and

• At each meeting of the Committee, a consolidated summary of all fees by service type is presented including a breakdown of fees incurred within each of the pre-approved envelopes.

Management and Committee Responsibilities

Management and the Committee are the Company’s two key participants for the purposes of the Company’s Auditor Independence Policy. The primary responsibilities of management are creating and maintaining a policy that follows applicable auditor independence standards, managing compliance with the policy, reporting to the Committee all mandates to be granted to the external auditor, and monitoring and approving services to be performed within the pre-approved envelopes.

The primary responsibilities of the Committee are nominating the external auditor for appointment by the Company’s shareholders, approving fees for audit services, approving the Auditor Independence Policy and amendments thereto, monitoring management’s compliance with the policy, obtaining yearly confirmations of independence from the external auditor, monitoring audit partner rotation requirements, monitoring the twelve month “cooling off” period when hiring members of the audit engagement team in a financial reporting oversight role, reviewing the appropriateness of required audit fee disclosure, interpreting the Auditor Independence Policy, and approving all mandates of the auditor or pre-approving envelopes for specific services.

Under the Auditor Independence Policy, the Committee has the ultimate responsibility to assert the independence of CGI’s external auditor.

Annual External Auditor Assessment

The Committee performs an annual assessment process to assist in making its recommendation to the Board of Directors in relation to the appointment of the Company’s external auditors. For fiscal 2023, the process was initiated in November and was completed prior to the Committee’s recommendation relating to the appointment of the Company’s external auditors that was made in December 2022.

The annual external auditors’ assessment is based on the recommendations of Chartered Professional Accountants Canada in collaboration with the Canadian Public Accountability Board. The process is expected to provide an additional element of structure for the Committee in making its recommendation and to help in identifying areas for improvement for the external audit firm and the Company’s audit processes.

  2022 MANAGEMENT PROXY CIRCULAR         59

Report of the Audit and Risk Management Committee

Fees Billed by the External Auditor

During the years ended September 30, 2022 and 2021, CGI’s external auditor invoiced the following fees for its services:

	Fees billed
Service retained	2022		2021
Audit fees		$7,708,142		$6,990,722
Audit related fees(a)		$942,671		$1,297,931
Tax fees(b)		$1,394,072		$2,078,521
All other fees(c)		$ 57,158		$17,145
Total fees billed		$10,102,043		$10,384,319

(a) The audit related fees billed by the external auditor for the fiscal years ended September 30, 2022 and September 30, 2021 were primarily in relation to service organization control procedures audits and assistance.

(b) The tax fees billed by the external auditor for the fiscal years ended September 30, 2022 and September 30, 2021 were in relation to tax compliance and advisory services.

(c) The other fees billed by the external auditor for the fiscal year ended September 30, 2022 were mainly in relation to corporate social responsibility advisory services. The other fees billed by the external auditor for the fiscal year ended September 30, 2021 were not significant.

Related Party Transactions

The Committee is responsible under its charter for reviewing and making recommendations to the Board of Directors in relation to any transaction in which a director or a member of senior management has an interest. To the extent that it is necessary to do so, the Committee may retain outside advisors to assist it in reviewing related party transactions.

For more important transactions, the Board of Directors generally establishes a special committee made up entirely of independent directors that is mandated to review the transaction and to make a recommendation to the Board of Directors. Such committee may retain independent legal and financing advisors to assist in reviewing the transaction.

Whether it is the Committee or a special committee, the committee mandated with reviewing the transaction tables its report with the Board of Directors and it is the Board of Directors that has the responsibility of approving the transaction if it determines that it is appropriate to do so.

No such ad hoc committee was established or required to be established in fiscal 2022.

Other Business to be Transacted at the Annual

General Meeting of Shareholders

Management of the Company is not aware of any matter to be submitted at the Meeting other than the matters set forth in the Notice of Meeting. Every proxy given to any person in the form of proxy that accompanied the Notice of Meeting will confer discretionary authority with respect to amendments or variations to the items of business identified in the Notice of Meeting and with respect to any other matters that may properly come before the Meeting.

60         2022 MANAGEMENT PROXY CIRCULAR  

Additional Information

The Company will provide to any person, upon request to the Corporate Secretary, a copy of this Management Proxy Circular, together with one copy of any document, or the pertinent pages of any document, incorporated by reference in this Management Proxy Circular.

Additional financial and other information relating to the Company is included in its 2022 Annual Audited and Quarterly Unaudited Consolidated Financial Statements, annual and quarterly Management’s Discussion and Analysis of Financial Position and Results of Operations and other continuous disclosure documents which are available on the Canadian Securities Administrators’ website at www.sedar.com and on EDGAR at www.sec.gov. For additional copies of this Management Proxy Circular, for a copy of the Company’s Notice of Intention in relation to its NCIB, or other financial information, please contact Investor Relations by sending an e-mail to ir@cgi.com, by visiting the Investors section on the Company’s website at www.cgi.com, or by contacting us by mail or phone:

Investor Relations

CGI Inc.

1350 René-Lévesque Boulevard West

15^th Floor

Montréal, Quebec, Canada

H3G 1T4

Tel.: +1-514-841-3200

Shareholder Proposals

The Company received four shareholder proposals for inclusion in this Management Proxy Circular for which the texts are reproduced in Appendix C hereto. The texts of such proposals have not been modified, except that the proposals have been translated from their original version.

To propose any matter for a vote by the shareholders at an annual meeting of CGI, a shareholder must send a proposal to the Corporate Secretary at CGI’s office at 1350 René-Lévesque Boulevard West, 25th Floor, Montréal, Quebec, Canada, H3G 1T4 at least 90 days before the anniversary date of the notice for the previous year’s annual meeting. Proposals for CGI’s 2023 annual meeting must be received no later than September 6, 2023. CGI may omit any proposal from its Management Proxy Circular and annual meeting for a number of reasons under applicable regulation.

Approval by the Directors

The Board of Directors has approved the content and the delivery of this Management Proxy Circular.

Serge Godin

Founder and Executive Chairman of the Board

  2022 MANAGEMENT PROXY CIRCULAR         61

Appendix A

Stock Options and Share-Based Awards held by Named Executive Officers

The following tables show all outstanding stock options (referred to as option-based awards) and PSUs (referred to as share-based awards) held by the Named Executive Officers as at September 30, 2022.

	Option-based Awards							Share-based Awards
Name and title	Number of securities underlying unexercised options(a) (#)		Option exercise price ($)		Option expiration date		Value of unexercised in-the-money options(b) ($)	Number of shares or units of shares that have not vested(c) (#)		Market or payout value of share-based awards that have not vested(b)(d) ($)		Market or payout value of vested share-based awards not paid out or distributed ($)
Serge Godin Founder and Executive Chairman of the Board							0		230,597		23,979,782
Total:							0		230,597		23,979,782
	Option-based Awards							Share-based Awards
Name and title	Number of securities underlying unexercised options(a) (#)		Option exercise price ($)		Option expiration date		Value of unexercised in-the-money options(b) ($)	Number of shares or units of shares that have not vested(c) (#)		Market or payout value of share-based awards that have not vested(b)(d) ($)		Market or payout value of vested share-based awards not paid out or distributed ($)
George D. Schindler President and Chief Executive Officer		53,226		36.15		September 30, 2023	3,610,852		211,331		20,316,686
		113,695		37.82		September 22, 2024	7,523,198
		117,000		48.16		September 22, 2025	6,532,110
		289,721		63.23		September 26, 2026	11,809,028
		168,884		63.23		September 24, 2027	6,883,712
		194,836		85.62		September 22, 2028	3,579,137
Total:							39,938,037		211,331		20,316,686
	Option-based Awards							Share-based Awards
Name and title	Number of securities underlying unexercised exercise options(a) (#)		Option price ($)		Option expiration date		Value of unexercised in-the-money options(b) ($)	Number of shares or units of shares that have not vested(c) (#)		Market or payout value of share-based awards that have not vested(b)(d) ($)		Market or payout value of vested share-based awards not paid out or distributed ($)
François Boulanger Executive Vice-President and Chief Financial Officer		35,495		48.16		September 22, 2025	1,981,686		59,010		6,136,450
		97,127		63.23		September 26, 2026	3,958,897
		53,725		63.23		September 24, 2027	2,189,831
		59,260		85.62		September 22, 2028	1,088,606
Total:							9,219,020		59,010		6,136,450

62         2022 MANAGEMENT PROXY CIRCULAR  

Appendix A

	Option-based Awards							Share-based Awards
Name and title	Number of securities underlying unexercised options(a) (#)		Option exercise price ($)		Option expiration date		Value of unexercised in-the-money options(b) ($)	Number of shares or units of shares that have not vested(c) (#)	Market or payout value of share-based awards that have not vested(b) ($)	Market or payout value of vested share-based awards not paid out or distributed ($)
Jean-Michel Baticle President and Chief Operating Officer		7,610		24.29		January 29, 2023	606,517	38,713	4,025,765
		27,153		36.15		September 30, 2023	1,842,060
		64,071		37.82		September 22, 2024	4,239,578
		58,500		48.16		September 22, 2025	3,266,055
		29,855		85.62		September 22, 2028	548,436
Total:							10,502,646	38,713	4,025,765
	Option-based Awards							Share-based Awards
Name and title	Number of securities underlying unexercised options(a) (#)		Option exercise price ($)		Option expiration date		Value of unexercised in-the-money options(b) ($)	Number of shares or units of shares that have not vested(c) (#)	Market or payout value of share-based awards that have not vested(b)(d) ($)	Market or payout value of vested share-based awards not paid out or distributed ($)
Julie Godin Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development		21,367		37.11		November 12, 2023	1,429,025	36,970	3,844,510
		37,898		37.82		September 22, 2024	2,507,711
		26,000		48.16		September 22, 2025	1,451,580
		50,639		63.23		September 26, 2026	2,064,046
		28,293		63.23		September 24, 2027	1,153,223
		29,056		85.62		September 22, 2028	533,759
Total:							9,139,344	36,970	3,844,510

(a) Shows stock options held as at September 30, 2022. Please refer to the headings Long Term Incentive Plan Awards in Fiscal 2022 and Performance Factors and Vesting Conditions earlier in this document for an explanation of stock options and performance factors.

(b) Based on $103.99, the closing price of the Company’s Class A subordinate voting shares on the TSX on September 30, 2022, the last trading day in fiscal 2022.

(c) Shows PSUs held as at September 30, 2022 and which have not vested, and include PSUs that had been awarded on October 1, 2021 as part of the Named Executive Officers’ target compensation for fiscal 2022 and for which performance-based vesting was only determined after September 30, 2022. Please refer to the headings Long Term Incentive Plan Awards in Fiscal 2022 and Performance Factors and Vesting Conditions earlier in this document for an explanation of PSU awards in fiscal 2022 and performance factors.

(d) Shows the market value for the aggregate number of PSUs held as at September 30, 2022 and which had not vested, as indicated in footnote (c) above. For Ms. Godin and Messrs. Serge Godin, François Boulanger and Jean-Michel Baticle, the market value was calculated based on $103.99, the closing price of the Company’s Class A subordinate voting shares on the TSX on September 30, 2022, the last trading day in fiscal 2022. For Mr. George D. Schindler, the market value was calculated using the closing price of the Company’s Class A subordinate voting shares on the NYSE on September 30, 2022 multiplied by the average foreign exchange rates used for financial reporting purposes on page 17 of the Management’s Discussion and Analysis for the years ended September 30, 2022 and 2021.

  2022 MANAGEMENT PROXY CIRCULAR         63

Appendix B

Stock Options and Share-Based Awards held by Directors

The following tables show all outstanding stock options (referred to as option-based awards) held by the members of the Board of Directors who are not Named Executive Officers as at September 30, 2022 as well as the in-the-money value of such stock options. For outside members of the Board of Directors, the following tables also show the market value of outstanding and vested DSUs (referred to as share-based awards) granted in respect of fiscal 2022 and previous fiscal years. For more information, please refer to the headings Stock Options Held by Directors and Deferred Stock Units Plan and Deferred Stock Units Granted to Directors earlier in this document. All DSUs are fully vested at the time of issuance.

The corresponding information for directors who are also Named Executive Officers may be found in Appendix A.

	Option-based Awards						Share-based Awards
Name	Number of securities underlying unexercised options(a) (#)	Option exercise price ($)	Option expiration date		Value of unexercised in-the-money options(b) ($)		Number of shares or units of shares that have not vested (#)	Market or payout value of share-based awards that have not vested ($)	Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)
Alain Bouchard(d)	3,813	27.28		April 28, 2023		292,495			2,589,052
	650	30.79		July 10, 2023		47,580
	2,442	36.15		September 30, 2023		165,665
	1,198	38.41		October 16, 2023		78,565
	1,471	34.68		January 22, 2024		101,955
	1,410	36.17		April 16, 2024		95,626
	1,360	37.50		July 23, 2024		90,426
	2,500	37.82		September 22, 2024		165,425
	1,340	38.07		October 29, 2024		88,333
	1,077	47.36		January 21, 2025		60,991
	1,067	56.69		April 15, 2025		50,469
	1,286	50.94		July 22, 2025		68,222
	1,537	47.81		October 14, 2025		86,349
Total:						1,392,101			2,589,052
	Option-based Awards						Share-based Awards
Name	Number of securities underlying unexercised options(a) (#)	Option exercise price ($)	Option expiration date		Value of unexercised in-the-money options(b) ($)		Number of shares or units of shares that have not vested (#)	Market or payout value of share-based awards that have not vested ($)	Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)
George A. Cope	0	N/A		N/A		0			604,247
Total:						0			604,247
	Option-based Awards						Share-based Awards
Name	Number of securities underlying unexercised options(a) (#)	Option exercise price ($)	Option expiration date		Value of unexercised in-the-money options(b) ($)		Number of shares or units of shares that have not vested (#)	Market or payout value of share-based awards that have not vested ($)	Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)
Paule Doré	625	37.82		September 22, 2024		41,356			1,593,608
Total:						41,356			1,593,608

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Appendix B

	Option-based Awards								Share-based Awards
Name	Number of securities underlying unexercised options(a) (#)		Option exercise price ($)		Option expiration date		Value of unexercised in-the-money options(b) ($)		Number of shares or units of shares that have not vested (#)	Market or payout value of share-based awards that have not vested ($)	Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)
André Imbeau		2,500		39.47		November 11, 2024		161,300
		2,000		48.16		September 22, 2025		111,660
		9,250		52.63		November 9, 2025		475,080
		16,603		63.23		September 26, 2026		676,738
		17,525		63.23		September 24, 2027		714,319
		14,916		85.62		September 22, 2028		274,007
		6,350		110.73		November 30, 2029		0
		11,023		97.84		December 6, 2030		67,791
		11,940		110.10		December 5, 2031		0
Total:								2,480,895				0
	Option-based Awards								Share-based Awards
Name	Number of securities underlying unexercised options(a) (#)		Option exercise price ($)		Option expiration date		Value of unexercised in-the-money options(b) ($)		Number of shares or units of shares that have not vested (#)	Market or payout value of share-based awards that have not vested ($)	Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)
Gilles Labbé		3,813		23.65		November 26, 2022		306,336				3,578,798
		1,152		24.41		January 23, 2023		91,676
		277		27.12		February 13, 2023		21,293
		1,925		26.62		April 17, 2023		148,937
		1,665		30.79		July 10, 2023		121,878
		2,442		36.15		September 30, 2023		165,665
		1,334		38.41		October 16, 2023		87,484
		1,658		34.68		January 22, 2024		114,916
		1,590		36.17		April 16, 2024		107,834
		1,533		37.50		July 23, 2024		101,929
		2,500		37.82		September 22, 2024		165,425
		1,510		38.07		October 29, 2024		99,539
		1,214		47.36		January 21, 2025		68,749
		1,014		56.69		April 15, 2025		47,962
		1,129		50.94		July 22, 2025		59,893
		1,203		47.81		October 14, 2025		67,585
Total:								1,777,101				3,578,798
	Option-based Awards								Share-based Awards
Name	Number of securities underlying unexercised options(a) (#)		Option exercise price ($)		Option expiration date		Value of unexercised in-the-money options(b) ($)		Number of shares or units of shares that have not vested (#)	Market or payout value of share-based awards that have not vested ($)	Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)
Michael B. Pedersen		0		N/A		N/A		0				1,299,820
Total:								0				1,299,820

  2022 MANAGEMENT PROXY CIRCULAR         65

Appendix B

Option-based Awards

Share-based Awards

Name

Number of securities underlying unexercised options(a) (#)

Option exercise price ($)

Option expiration date

Value of unexercised in-the-money options(b) ($)

Number of shares or units of shares that have not vested (#)

Market or payout value of share-based awards that have not vested ($)

Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)

Stephen S. Poloz

0

N/A

N/A

0

242,065

Total:

0

242,065

Option-based Awards

Share-based Awards

Name

Number of securities underlying unexercised options(a) (#)

Option exercise price ($)

Option expiration date

Value of unexercised in-the-money options(b) ($)

Number of shares or units of shares that have not vested (#)

Market or payout value of share-based awards that have not vested ($)

Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)

Mary G. Powell

0

N/A

N/A

0

215,910

Total:

0

215,910

Option-based Awards

Share-based Awards

Name

Number of securities underlying unexercised options(a) (#)

Option exercise price ($)

Option expiration date

Value of unexercised in-the-money options(b) ($)

Number of shares or units of shares that have not vested (#)

Market or payout value of share-based awards that have not vested ($)

Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)

Alison C. Reed

0

N/A

N/A

0

0

Total:

0

0

Option-based Awards

Share-based Awards

Name

Number of securities underlying unexercised options(a) (#)

Option exercise price ($)

Option expiration date

Value of unexercised in-the-money options(b) ($)

Number of shares or units of shares that have not vested (#)

Market or payout value of share-based awards that have not vested ($)

Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)

Michael E. Roach

0

N/A

N/A

0

741,845

Total:

0

741,845

Option-based Awards

Share-based Awards

Name

Number of securities underlying unexercised options(a) (#)

Option exercise price ($)

Option expiration date

Value of unexercised in-the-money options(b) ($)

Number of shares or units of shares that have not vested (#)

Market or payout value of share-based awards that have not vested ($)

Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)

Kathy N. Waller

0

N/A

N/A

0

654,695

Total:

0

654,695

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Appendix B

Option-based Awards

Share-based Awards

Name

Number of securities underlying unexercised options(a) (#)

Option exercise price ($)

Option expiration date

Value of unexercised in-the- money options(b) ($)

Number of shares or units of shares that have not vested (#)

Market or payout value of share-based awards that have not vested ($)

Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)

Joakim Westh

0

N/A

N/A

0

0

Total:

0

0

Option-based Awards

Share-based Awards

Name

Number of securities underlying unexercised options(a) (#)

Option exercise price ($)

Option expiration date

Value of unexercised in-the- money options(b) ($)

Number of shares or units of shares that have not vested (#)

Market or payout value of share-based awards that have not vested ($)

Market or payout value of vested share-based awards not paid out or distributed(b)(c) ($)

Frank Witter

0

N/A

N/A

0

176,636

Total:

0

176,636

(a) Shows stock options held as at September 30, 2022.

(b) Based on $103.99, the closing price of the Company’s Class A subordinate voting shares on the TSX on September 30, 2022, the last trading day in fiscal 2022.

(c) Shows the aggregate payout value of DSUs granted in respect of fiscal 2022 and previous fiscal years.

(d) Mr. Bouchard is not seeking reelection on the Board of Directors and will therefore cease to be a director on February 1, 2023.

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Appendix C

Shareholder Proposals from the Mouvement d’éducation et de défense des actionnaires (“MÉDAC”)

Proposal Number One – Disclosure of Languages in Which Directors Are Fluent

Proposal

It is proposed that the languages in which the directors are fluent be disclosed in the skills and expertise matrix of the circular.

Over the last few years, several public debates over language¹ have tarnished the reputation of major publicly-traded corporations in terms of their social responsibility and how they interpret their duties and obligations with respect to the diversity that is rooted in our society. Language, which is a cornerstone of our democratic institutions, is indeed a fundamental aspect of the community.

Such situations, which are harmful from all perspectives, must be prevented from reoccurring. For this and several other reasons, it is appropriate for all interested parties (stakeholders) to know, through formal and official disclosure, the languages in which the directors of the Company are fluent. “Fluent” evidently refers to a level of language proficiency that is sufficient to allow the general use of such language in all spheres of activity of both legal and natural persons.

Board of Directors Response

CGI operates in 40 different countries through 90,000 consultants and professionals across 400 offices worldwide. We provide an inclusive and diverse work environment that reflects the communities in which we operate and our stakeholders, including our members and clients, communicate among themselves in their local language.

While French is used extensively in our head office located in Montreal, Quebec, and in our operations in the province, we use English in our global communications as it is the language in which international business is conducted.

We strive for linguistic diversity in all of our communications with our three stakeholders (our clients, shareholders and members) and the communities in which we live and work. With respect to our clients, linguistic diversity is part of our unique business model that combines client proximity with an extensive global delivery network. Our employees – whom we call members as 84% of them are also shareholders of the Company – speak more than 30 languages in their respective workplaces.

Our focus with respect to the composition of our Board of Directors is set out in our competency and experience matrix, which has been developed to ensure that the composition of the Board of Directors is appropriate and that the required skills and experience are adequately represented. As a multinational organization, we focus on relevant competencies that address our local and global needs, and search for directors with diverse backgrounds, experience and geographical representation, all of whom possess financial and/or operational literacy and knowledge in the vertical markets in which we operate (see headings Expertise and Financial and Operational Literacy and Nomination Process for the Board of Directors and Executive Officers in this Management Proxy Circular).

As a global organization, we comply with applicable laws and regulations relating to language in all jurisdictions in which we operate, including those applicable in Quebec. There are no disclosure requirements with respect to language proficiency of directors under any applicable law or regulation.

The Board of Directors does not believe that it is necessary or useful to disclose language proficiency of the directors in the skills and expertise matrix of our Management Proxy Circular.

The Board of Directors therefore recommends that shareholders VOTE AGAINST shareholder proposal number one.

¹  Language is a topic on which CGI has directly and publicly commented, see https://www.ledevoir.com/economie/669213/le-francais-est-important-pour-cgi-insiste-son-pdg.

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Appendix C

Proposal Number Two – Artificial Intelligence

Proposal

It is proposed that the Board of Directors reviews the mandate of the Corporate Governance Committee in order to include an ethical component concerning the use of artificial intelligence.

Artificial intelligence (AI) is becoming the key technology of the future. This technology refers to the ability of a machine to simulate human behaviour, such as reasoning, planning and creativity, in particular through learning algorithms. Companies are increasingly using it¹ to develop more automated, personalized and “customer-oriented” services. AI also creates new opportunities to strengthen and facilitate the detection and reduction of risk, fraud and to foster better regulatory compliance.

However, its use creates risks, as illustrated by the firm Deloitte in a study² [our translation]:

• Quality, quantity and relevance of the data used. The results of AI systems are dependent on the quality and quantity of data. If the datasets used to build the algorithms contain biases, the resulting algorithm will also likely reflect such biases, or even amplify them.

• Lack of transparency regarding operations (black box when referring to AI). Unlike older generations of AI, where systems made very clear, human-made decisions, new generations will rely on very complex statistical methods, based on thousands of parameters. All these factors will make the final decision difficult for humans to interpret, let alone explain.

• Possible malfunctions. Algorithms lack the human abilities of conceptual understanding and common sense that are needed to assess completely new situations.

As highlighted in the latest reports from the World Economic Forum, the topic of artificial intelligence is at a turning point. In the short term, it will be important that any AI development meets minimum criteria in terms of governance, ethics and risk management. Deloitte³ further finds that this ethical consideration should focus on the reliability of the algorithms used (for internal and external verification purposes), the intelligibility of the models and the interactions between humans and intelligent algorithms.

As such, it is crucial to review the mandate of the Corporate Governance Committee in order to integrate this ethical consideration and to develop a code for the use of artificial intelligence in order to assure shareholders and interested parties (stakeholders) that its development and its use are carried out by keeping humans at the heart of the machine and by guaranteeing the trustworthiness, security and confidentiality of the data input and by regulating algorithms so that they integrate diversity and surpass decision-making biases.

Board of Directors Response

CGI proudly helps its members and clients demystify and deliver responsible artificial intelligence (“AI”) solutions and frameworks. Our end-to-end capabilities in data science and machine learning combined with deep domain knowledge and technology engineering skills generate new insights, experiences and models powered by AI. We offer machine learning operations, performance monitoring and data stewardship to drive continuous AI improvements. We dedicate considerable efforts to grow our expertise in this field and strategically invest in advancing and scaling AI initiatives, always in line with best practices and the highest ethical standards.

We recently announced that we have been recognized as a leader in the Canadian AI marketplace by IDC MarketScape, which reinforces CGI’s in-depth knowledge of the evolving AI environment. To learn more about this recognition, you can visit our website: https://www.cgi.com/canada/en-ca/news/advanced-analytics/idc-marketscape-names-cgi-leader-canadian-artificial-intelligence-ai .

¹  … including several clients of CGI, which incidentally directly focuses a significant part of its activities to AI. https://www.cgi.com/en/technologies/artificial-intelligence and https://www.cgi.com/canada/en-ca/advanced-analytics-ai.

²  https://www2.deloitte.com/fr/fr/pages/risque-compliance-et-controle-interne/articles/intelligence-
artificielle-quelles-evolutions-pour-profils-de-risques-des-entreprises.html .

³  https://www2.deloitte.com/fr/fr/pages/risque-compliance-et-controle-interne/articles/intelligence-artificielle-dans-risque-de-credit.html and https://corpgov.law.harvard.edu/2020/06/25/artificial-intelligence-and-ethics-an-emerging-area-of-board-oversight-responsibility/ .

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Appendix C

CGI fosters a culture of integrity and security to uphold our reputation as a global world class information technology and business process services company. We maintain rigorous internal controls and monitoring procedures to address data biases and mitigate risks in the AI decision-making processes.

In addition, the CGI Code of Ethics, which is made publicly available on CGI’s website (https://www.cgi.com/sites/default/files/2022-05/code-of-ethics-2022-en.pdf ), is meant to evolve and adapt within its inherent limits through technological innovation and emergence of new technologies, including AI. Our Code of Ethics governs our business and ethical conduct in its entirety, including: compliance with laws and regulations, intellectual property, data privacy and confidentiality. It also reinforces CGI’s firm commitment to not only adhere to the law, but also to the highest standards of ethical conduct and compliance.

In terms of governance, the Corporate Governance Committee periodically reviews the Code of Ethics, and its compliance is monitored by the Board of Directors. The Board of Directors believes that the mandate of the Corporate Governance Committee sufficiently addresses global concerns related to the prevalence of AI, and to new technologies at large.

The Board of Directors therefore recommends that shareholders VOTE AGAINST shareholder proposal number two.

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Appendix C

Proposal Number Three – Updating the Role of the Human Resources Committee

Proposal

It is proposed that the Board of Directors reviews the mandate of the Human Resources Committee in order to include more responsibilities relating to employee health and well-being.

A review of the work done by the Human Resources Committee as presented in the 2022 Management Proxy Circular¹ does not allow to determine the importance given by the Human Resources Committee members to matters other than those relating to compensation. These issues relate to institutional strategies to promote the well-being, safety and mental health of employees, their engagement, their comfort with regard to new ways of working, the development of their skills in the digital age, the type of organizational culture promoted by the organization and other aspects that can assure shareholders and interested parties (stakeholders) that human resources management is carried out in light of future challenges.

We propose that the Board of Directors review the Human Resources Committee’s mandate in order for it to play a role in overseeing key strategies regarding organizational culture, human resources, engagement, health, well-being, equity, diversity and inclusion of employees and that it can ensure that such strategies and organizational culture include environmental, social and governance (ESG) principles.

Board of Directors Response

The Board of Directors believes that the information sought in the shareholder proposal is already well documented and made public:

• At CGI, we are dedicated to the well-being of our members and continue to implement health and wellness programs and initiatives, including Oxygen, the Company’s global health and wellness program launched in 2009. Oxygen provides a wide range of health-related services and resources to CGI members worldwide. Further information is made publicly available on CGI’s website (https://www.cgi.com/en/corporate-social-responsibility/cgi-oxygen-health-wellness-program).

• In terms of our culture, we strive to create an environment in which our members enjoy working together for the betterment of our communities. The defining elements are entrenched in what we call the CGI Constitution, which is also made publicly available on CGI’s website (https://www.cgi.com/en/overview/constitution).

• Moreover, our Corporate Social Responsibility Report is made publicly available on CGI’s website (https://www.cgi.com/en/brochure/corporate-social-responsibility/cgi-csr-report) and contains valuable information regarding our ESG priorities:

(1) People – to foster an inclusive workplace, attracting and retaining a diverse workforce to deliver greater innovation;

(2) Communities – to use our skills to support the communities in which we live and work; and

(3) Climate – to achieve net zero carbon emissions by 2030, build processes in support of change and support our clients with their ultimate goals.

In terms of governance, both our Human Resources Committee and Corporate Governance Committee play key roles with respect to these priorities. The Charter of the Human Resources Committee is made publicly available on CGI’s website (https://www.cgi.com/sites/default/files/2021-07/charter-hrc-en.pdf) and is also appended to our Annual Information Form. The Charter provides that the Human Resources Committee is responsible for advising the Board of Directors on various human resources-related matters, including human resources planning, executive compensation, management development programs, significant organizational changes and executive officer appointments.

The Charter of the Corporate Governance Committee is also made publicly available on CGI’s website (https://www.cgi.com/sites/default/files/2021-07/charter-cgc-en.pdf ) and is also appended to our Annual Information Form. The Charter provides that the Corporate Governance Committee is responsible for: reviewing the Company’s purpose as an organization (to seek the best equilibrium between its three stakeholders and the communities in which its members live and work); reviewing the measures applied by the Company to promote diversity, their effectiveness, and annual and cumulative progress made in achieving their objectives; and reviewing the Company’s ESG policies and practices. Both the Human Resources Committee and the Corporate Governance Committee play an integral role in organizational matters, under the overall stewardship of the Board of Directors.

¹  See “Committee Roles and Responsibilities” at page 22.

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Appendix C

The Board of Directors believes that the Company’s well-established governance structure ensures adequate treatment of human resources and ESG matters. As such, it is not necessary to review the role of the Human Resources Committee to include responsibilities that are already within the scope of the Board of Directors and its standing committees.

The Board of Directors therefore recommends that shareholders VOTE AGAINST shareholder proposal number three.

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Appendix C

Shareholder Proposal submitted by the Shareholder Association for Research & Education, on behalf of the Pension Plan of The United Church of Canada

Shareholder Proposal Number Four – Preparation of a Report to Address Racial Disparities and Equity Issues

Proposal

It is proposed that the Board of Directors of CGI Inc. (“CGI”) prepare a report, at reasonable expense and omitting proprietary information, on CGI’s plans to identify, address, mitigate, and dismantle racial disparities and racial equity issues within its workforce. At a minimum the report should include:

• Relevant details about the Company’s plans to identify potential racial disparities and inequities within the workforce;

• Relevant details about the Company’s diversity, equity and inclusion (“DEI”) strategy, programs, and policies to address potential racial disparities and inequities, especially as it relates to racial and ethnic representation and pay equity throughout the workforce;

• An assessment of the related strategy, programs, and policies’ effectiveness, through the disclosure of any relevant goals, metrics, and trends related to racialized employees;

The Information and Communications Technology Council estimates that the Canadian digital economy will see a significant demand for digitally-skilled workers by 2023. In order to meet the workforce growth of the technology sector, Canadian companies need to implement meaningful and effective DEI programs, initiatives, and commitments to attract and retain the best talent.

However, the Canadian technology sector falls short in efforts to recruit and retain a diverse workforce. A 2019 report found that racialized technology workers in Canada, particularly Black and Latine workers, face significant barriers in the workplace. This report also found that there is a significant racial pay gap between racialized and non-racialized technology workers—and pay disparities are starker for racialized women and Indigenous peoples. According to the consultancy firm McKinsey, companies that effectively advance DEI in their operations “are better able to win top talent and improve their customer orientation, employee satisfaction, and decision making, and all that leads to a virtuous cycle of increasing returns.”

In the past years, many companies have committed to improve racial representation and address workforce inequities. These commitments are often accompanied with efforts to identify, address and prevent biases and disparities and disclosure of key workforce metrics on hiring, retention, promotion or pay equity. While CGI has committed to greater diversity in its workforce, it has not demonstrated a sufficient degree of commitment to eradicate systemic racism in the workplace. For example, in contrast with many of its Canadian and U.S. peers, CGI has not disclosed workforce demographic statistics or established diversity goals beyond gender in the workforce, executive level or board of directors.

CGI’s lack of disclosure is concerning because 1) it indicates that the Company may underestimate the legal and reputational risks associated with the lack of racial diversity, equity and inclusion efforts and 2) failed to anticipate the opportunities arising from the hiring and retention of talents from under-represented demographic groups.

If CGI does not implement robust DEI policies to foster a positive and diverse workplace, it may find itself at odds with competitors and put shareholders’ long-term value at risk. By increasing transparency on this issue, CGI would allow investors assess the effectiveness of its DEI programmes, policies and initiatives and establish a more robust system of accountability to its shareholders.

Board of Directors Response

CGI embraces diversity as core to our culture as reflected in one of our values called “Respect”. We believe that diversity goes beyond gender and we encourage empowerment across multiple social identities and cultures. We foster an inclusive and positive work environment, where our members can grow personally and professionally through transparency, acceptance and openness.

Our efforts in diversity, equity and inclusion (“DEI”) are consistent with our desire to be part of a sustainable inclusive world. Our DEI strategy is comprised of global and local initiatives and programs to promote and advance diversity, educate and build understanding, foster inclusion and belonging, understand any potential barriers, prevent biases and disparities, and apply equitable practices for all. To ensure our practices are in line with our DEI aspirations and in

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Appendix C

compliance with all applicable local requirements in which we operate, we maintain a locally-focused strategy and a global commitment to accelerate DEI within CGI and within our communities. Examples of this include development programs, targeted talent management and recognition tools and solutions, member resource groups/networks and an ongoing dialogue with members, including listening sessions, feedback surveys, and open, transparent conversations with members. Information relating to our DEI initiatives can be found on our website (including at: https://www.cgi.com/canada/en-ca/diversity-equity-inclusion, https://www.cgi.com/us/en-us/diversity-equity-inclusion and at https://www.cgi.com/uk/en-gb/responsible-business/diversity-equity-inclusion).

We track our progress and journey to a more diverse, equitable and inclusive community. We publish yearly our Environmental, Social and Governance (ESG) Report, which is made publicly available on CGI’s website (https://www.cgi.com/en/brochure/corporate-social-responsibility/cgi-csr-report). While doing business globally means different sets of diversity disclosure rules, which may prevent us from publicly disclosing certain key DEI data and metrics, we focus on tailoring our practices to address our local needs and we strive to be as transparent as possible to all of our stakeholders as we are proud of our DEI commitments and our progress. It is our intention to continue to expand on our DEI disclosure in our forthcoming Environmental, Social and Governance (ESG) reports, the next of which will be published in early calendar 2023.

The Board of Directors believes that CGI has already a well-identified strategy to address, mitigate, and dismantle racial disparities and racial equity issues, and that it already has effective DEI programs, initiatives, and commitments in place. While the Board of Directors welcomes the shareholder proposal, it believes that information already disclosed and information to be disclosed in the future ESG reports will provide the most relevant disclosure to stakeholders.

The Board of Directors therefore recommends that shareholders VOTE AGAINST shareholder proposal number four.

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Insights you can act on Founded in 1976, CGI is among the largest IT and business consulting services firms in the world. We are insights-driven and outcomes-based to help accelerate returns on your investments. Across hundreds of locations worldwide, we provide comprehensive, scalable and sustainable IT and business consulting services that are informed globally and delivered locally.